Audit - 2005/2006HOUSING AUTHORITY OF THE CITY
OF SALI NA, KANSAS
MANAGEMENT'S DISCUSSION AND ANALYSIS,
FINANCIAL STATEMENTS
AND
REQUIRED SUPPLEMENTAL INFORMATION
Year Ended June 30, 2006
TABLE OF CONTENTS
Independent Auditor's Report
Required Supplemental Information:
Management's Discussion and Analysis
Financial Statements:
Statement of Net Assets — Proprietary Funds
Statement of Revenues, Expenses and Changes in Fund Net Assets,
Proprietary Funds
Statement of Cash Flows — Proprietary Funds
Notes to Financial Statements
Supplemental Data Required By HUD
Financial Data Schedule
SINGLE AUDIT SECTION
Schedule of Expenditures of. Federal Awards
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Governmental
Auditing Standards
Report on Compliance With Requirements
Applicable to Each Major Program and Internal Control Over
Compliance in Accordance With OMB Circular A -133
Summary Schedule of Prior Audit Findings
Schedule of Findings and Questioned Costs
Corrective Action Plan
Page No.
1
3
9
10
11
13
24
26
27
29
31
32
34
INDEPENDENT AUDITOR'S REPORT
Randal D. N iewedde, CIDA
Jeffrey J, Wiens, CIDA
Niewe d de
WienQs
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Housing Authority of the City of Salina, Kansas
We have audited the accompanying financial statements of the major funds and the aggregate
remaining fund information of the Housing Authority of the City of Salina, Kansas, as of and for
the year ended June 30, 2006, which collectively comprise the Housing Authority of the City of
Salina, Kansas' basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the Housing Authority of the City of Salina, Kansas'
management. Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of each major fund and the aggregate remaining fund
information of the Housing Authority of the City of Salina, Kansas, as of June 30, 2006, and the
respective changes in financial position and cash flows, for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing _Standards, we have also issued our report dated
October 24, 2006 on our consideration of the Housing Authority of the City of Salina, Kansas'
internal control over financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts and grants agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial
reporting on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our
audit.
The management's discussion and analysis as listed in the table of contents is not a required
part of the basic financial statements but is supplementary information required by accounting
principles generally accepted in the United States of America. We have applied certain limited
P.O. box 98 a York, Nebraska 68467 • Ph; 402 - 362 -44 t0 • Fax: 402-362 -441.0 -, nwcpa @alltel.net
procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the supplementary information. However, we did not audit
the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Housing Authority of the City of Salina, Kansas' basic financial
statements. The Financial Data Schedule is presented for purposes of additional analysis and
is not a required part of the basic financial statements. The accompanying schedule of
expenditures of federal awards is presented for purposes of additional analysis as required by
U.S. Office of Management and Budget Circular A -133, Audits of States, Local Governments,
and Non - Profit Organizations, and is also not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.
�ieuiedde �
W ew, �pj�
October 24, 2006
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the Housing Authority of the City of Salina, Kansas annual financial report
presents our managements analysis of the Authority's financial performance during the fiscal
year ended on June 30, 2006. This discussion and analysis is designed to assist the reader in
focusing on the significant financial issues and activities and to identify any significant changes
in financial position. Please read and consider the information presented in conjunction with the
financial statements as a whole.
FINANCIAL - HIGHLIGHTS
The term "Net Assets" refers to the difference between assets and liabilities. The Authority's
total net assets as of June 30, 2006 were $7,437,265.97. The net assets increased by
$172,180.02, an increase of less than of 2% from the prior year. Of this amount, $847,658.47
was reported as "unrestricted net assets ". Unrestricted net assets represent the amount
available to be used to meet the Authority's ongoing obligations to citizens, creditors and
operations of facilities.
Operating revenues for the Authority was $1,488,377.82 for the year ended June 30, 2006.
This was an increase of 13% over the prior year. This is due mostly to how the Housing Choice
Voucher program is funded which is discussed later.
Operating expenses for the Authority were 1,994,801.48 for the year ended June 30, 2006.
This was a decrease of 5% over the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report includes this Management Discussion and Analysis report, the Basic
Financial Statements and the Notes to the Financial Statements. This report also contains the
Financial Data Schedule (FDS) as referenced in the section of Supplemental Information
Required by HUD. The Authority's financial statements are presented as fund level financial
statements because the Authority only has proprietary funds.
Required Financial Statements
Proprietary Funds Financial Statements - The financial statements of the Housing Authority
report information of the Authority using accounting methods similar to those used by private
sector companies. These statements offer short- and longterm financial information about its
activities. The Statement of Net Assets includes all the Authority's assets and liabilities and
provides information about the nature and amounts of investments in resources (assets) and
obligations of the Authority creditors (liabilities). It also provides the basis for evaluating the
capital structure of the Authority and assessing the liquidity and financial flexibility of the
Authority.
469 South Fifth Street 1 P.O. Box 1202 I Salim, Kansas 67402 - 12021785.827.0441 1 fax 785.827.0442
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
Year Ended June 30, 2006
OVERVIEW of THE FINANCIAL STATEMENTS (CONT'D
All of the. current year's revenues and expenses are accounted for in the Statement of
Revenues, Expenses, and Changes in Fund Net Assets. This statement measures the success
of the Authority's operations over the past year and can be used to determine whether the
Authority has successfully recovered all its costs through its user fees and other charges,
profitability and credit worthiness.
The final required financial statement is the Statement of Cash Flows. The statement reports
cash receipts, cash payments, and net changes in cash resulting from operations, investing and
financing activities and provides answers to such questions as where did cash come from, what
was cash used for, and what was the change in the cash balance during the reporting period.
The Authority has two enterprise funds that are considered major proprietary funds for
presentation purposes and the remaining funds are aggregated as nonmajor enterprise funds.
The major enterprise funds are Public Housing program and Housing Choice Voucher program.
The nonmajor funds were the Homeownership program, and the Tenant Based Rental
Assistance program.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data
provided in the basic financial statements and provide more detailed. data.
Supplemental Information
This report also contains the Financial Data Schedule (FDS) as referenced in the section of
Supplemental Information Required By HUD. HUD has established Uniform Financial Reporting
Standards that require Housing Authority's to submit. financial information electronically to HUD
using the FDS format. This financial information was electronically transmitted to the Real
Estate Assessment Center (REAL) for the year ended June 30, 2006 and is required to be
included in the audit reporting package.
FINANCIAL ANALYSIS
Net assets may serve, over time, as a useful indicator of a government's financial position. In
the case of the Authority, assets exceeded liabilities by $7,437,265.97 at the close of the year
ended June 30, 2006. This represents an increase of $172,180.02.
As can been seen in table on the subsequent page, current assets and other assets increased
$210,028.43. This increase was made up of $228,795.86 increase in cash and cash
equivalents and investments. Public Housing's increase in cash and cash equivalents and
investments of $117,896.86 was a result of operations while the Section 8 Voucher program's
increase of $110,171.75 was due to how the Voucher program is now funded. HUD determines
the funding levels and advances the funds, however, the Authority is not allowed to overlease
4
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
Year Ended June 30, 2006
beyond its baseline number of units. Unused housing assistance payment advances stay with
the Authority to be used in future periods.
Capital assets decreased as current year depreciation expense exceeded current year capital
additions.
CONDENSED STATEMENTS
OF NET ASSETS
Dollar
Percent
FY 2006
FY 2005
Change
Change
Current and other assets $
11347,921.09 $
1,137,892.66 $
210,028.43
18.5%
Capital assets
61335,021.08
6,364;157.39
(29,136.31)
-0.5%
Total Assets
71682,942.17
7,502,050.05
1801892.12
2.4%
Current liabilities
194,128.98
191,496.76
21632.22
1.4%
Other noncurrent liabilities
51,547.22
45,467.34
61079.88
13.4%
Total Liabilities
245,676.20
2361964.10
81712.10
3.7%
Net Assets
Invested in capital assets,
net of related debt
61335,021.08
61364,157.39
(29,136.31)
-0.5%
Restricted
254,586.42
159,687.66
94,898.76
59.4%
Unrestricted
847,658.47
741,240.90
106,417.57
14.4%
Total Net Assets $
7,437,265.97 $
7,265,085.95 $
172,180.02
2.4%
While the Statement of Net Assets shows the change in financial position of net assets, the
Statements of Revenues, Expenses, and Changes in Net Assets provides answers as to the
nature and source of these changes.
The Public Housing occupancy rate changed very little, in fact, it was 98.71 % in 2005 or 1,907
of 1,932 unit months to 98.45% or 1908 of 1,938 unit months in 2006. Beyond the Public
Housing program, our business account reflects non - subsidized units that were 100% occupied
both years. Occupancy rate for the Section 8 program was 99.57% in 2005 and 98.18% in 2006
with over half of the funds assisting one - bedroom qualified families.
The Housing Choice Program funding for Housing Assistance Payments decreased by $6,689
from 2005 to 2006 (FDS line 706); however, this did not affect our ability to lease up vouchers or
our ability to recruit decent landlords. Administrative funds decreased from $156,806 in 2005 to
$150,243 in 2006 which is a 4.19% decrease. HUD decreased administrative funds and this
was not based on performance.
Housing Authorities were funded at 86.02% of their eligible funding in fiscal year 2006
compared to 98.1 % in fiscal year 2005. Despite this enormous unforeseen adjustment, our
Housing Authority was able to decrease administrative expenses, absorb the work of previous
employees and end the year with excess funding that will assure the long term viability of the
agency and allow for the expansion of further low income housing. The Public Housing
operating grant formula takes rental income into consideration along with the program costs.
The operating grant increased from $308,396 in 2005 to $360,453 in 2006 which is a 14.44%
increase. As rental income decreased and program expenses increased, the subsidy also
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
Year Ended June 30, 2006
increased. Rental income was $234,299 in 2004; $215,555 in 2005; and $210,710 in 2006
which was a 2.25% decrease the last year. $69,045 was transferred from the capital grant into
the Public Housing program which is all related to Capital Fund administrative work or
maintenance. Even with additional maintenance work charged to the Public Housing program in
2006, total salaries decreased from $397,415 to $375,321 which is a 5.6% decrease (admin -
$42,623 and labor +$20,529). Typically our housing authority does not transfer capital funds to
the public housing program for operations, however, some of the past allowable expense
p p
guidelines changed, therefore, it became necessary. Interest income increased as rates were
higher and additional funds were invested.
CONDENSED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
Revenues
Program revenues
Rental
HUD program contributions
HUD operating grants
Other grants
Other
General revenues
Interest
Total Revenues
Expenses
Depreciation
Operating
Nonoperating
Total Expenses
Excess (Deficiency) Before Contributions,
and Special Items
Contributions
Special Items
Changes in Net Assets
29,519.21
101612.73
Dollar
Percent
FY 2006
FY 2005
Change
Change
216,427.96
214,621.78
$ 217,696.19 $
223,089.01
$ (51392.82)
-2.4%
11166,436.00
1, 332, 812.66
(166, 376.66)
-12.5%
476,593.10
361,699.60
114,893.50
31.8%
40,042.31
40,447.14
(404.83)
-1.0%
80,432.48
1301720.90
(50,288.42)
-38.5%
29,519.21
101612.73
181906.48
2,0101719.29
210991382.04
(88,662.75)
216,427.96
214,621.78
1,806.18
11778,373.52
11887,971.27
(109,597.75)
16,229.16
149465.49
11763.67
21011,030.64
21117,058.54
106,027.90
(311.35)
(17,676.50)
17,365.15
163,020.17
173,857.29
(10,837.12)
91471.20
51776.20
31695.00
172,180.02
161,956.99
10,223.03
Beginning net assets, as restated 712651085.95 71103,128.96 161,956.99
Ending net assets $ 7,437,265.97 $ 71265,085.95 $ 1721180.02
Public Housing "other income" decreased by 67% from $24,172 to $7,973 which were funds
collected from the State of Kansas Setoff program for the collection of past due debts that
former tenants owed the housing authority and federal government. Other tenant revenue
decreased by 6% or $3,273 which is primarily funds collected from tenants for damages to
property or late fees. Administrative salaries decreased by 13.62% which is $42,623,
0
178.1%
--4.2%
0.8%
-5.8%
12.2%
-5.0%
- 98.2%
-6.2%
64.0%
6.3%
2.3%
2.4%
approximately the salary of a position that was vacant during the fiscal year. Other operating
expenses which includes: legal, travel, training, telephone, office supplies, postage, accounting
and auditing fees decreased by 17% or $26,199. Total operating expenses this year were
$835,062 compared to $879,421 in 2005, which is $44,359 less and 5% decrease. Excess
operating revenue over operating expenses was $1,338,678 compared to 2005 at $1,234,260
or $104,418 (7.8 %), however, that includes excess HAP funds. After Housing Assistance
Payments (HAP) and depreciation total expense were $2,011,030 compared to $2,117,058 in
2005 a decrease of $106,028 or 5 %. Again, this is due to the decrease in administrative
expenses ($61,967) and HAP payments ($63,475) and an increase in income of $60,058.
An additional factor in the increased net-assets is $9,471 insurance proceeds from hail damage
to vehicles.
HUD capital contributions were $163,020.17 for the year ended June 30, 2006. This was a
decrease from the prior year of $10,837.12. The Authority is allocated capital grant money each
year as determined by HUD and remains relatively consistent form year to year based on the
Authority's number of units. The amount presented will vary from year to year depending on the
timing of projects as outlined in the HUD approved capital grant budget.
CAPITAL ASSET
Capital Assets -- The Housing Authority of the City of Salina, Kansas' investment in capital
assets as of June 30, 2006 amounts to $6,335,021.08 (net of accumulated depreciation). This
investment in capital assets includes land, buildings, improvements, equipment and construction
in progress.
The total decrease in the Authority's investment in capital assets for the current fiscal year was
0.5% in terms of net book value. However, actual expenditures to purchase or construct capital
assets were $187,291.65 for the year. These expenditures include the following:
Gwava antivirus software $990
Replace tape drive $864
Memory upgrades, 2 computers $727
Desk d rawers$797
Computer & monitor $1,383
Laptop computer $2,125
Copier $5,209
Palm Pilot, Rent Reasonableness /HQS software $3,875
Carpentry $65,746
Roofs $6,991
Siding $6,063
Concrete $7,417
HVAC /Electrical $13,583
Plumbing $8,759
Doors $4,575
Grounds $12,000 for tree /shrub removal and lawn improvements
7
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
Year Ended June 30, 2006
The Authority has various contract commitments with contractors for the Implementation of the
HUD capital grants as outlined by the HUD approved Capital Grant Budget. Depreciation
charges for the year totaled $216,427.96. Additional information on the Authority's capital
assets can be found in Note H of the notes to the financial statements of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
The Board of Commissioners and Management of the Housing Authority considered many
factors when approving the fiscal year 2007 budget. The user charges are based on a tenant's
income as established by HUD guidelines and are not adjustable in the Public Housing
Program. Operating subsidy is based on rental income, other income and utility consumption
and costs. The amount of funding is also established and approved by HUD. In projecting the
amount of rental income, the Authority considered prior year rental income and occupancy
rates.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the Authority's finances for all
those with an interest in its finances. Questions concerning any of the information provided in
this report or request for additional financial information should be addressed to the Executive
Director, Housing Authority of the City of Salina, Kansas, P.O. Box 1202, Salina, Kansas
67402 -1 202
�
FINANCIAL STATEMENTS
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Investments
Accounts receivable
Interfunds receivable
Due from other governments
Accrued interest receivable
Deferred charges
Restricted.
Cash and cash equivalents
NONCURRENT ASSETS
Restricted.
Cash and cash equivalents
Capital Assets, non - depreciable.
Capital Assets, depreciable, net
Mortgages receivable
LIABILITIES
CURRENT LIABILITIES:
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
June 30, 2006
Public
Section 8
Nonmajor
- $
Housing
Voucher
Funds
Totals
$ 213,791.84 $
1431675.63 $
28,789.14 $
386,256.61
286,103.09
-
217,515.00
503,618.09
11,860.78
-
-
11,860.78
28,718.84
3,500.00
313.00
32,531.84
28,970.43
-
2,692.20
31,662.63
1,638.28
358.40
1,347.38
3,344.06
30,451.66
-
-
30,451.66
64,556.53
-
113.00
64,669.53
TOTAL CURRENT ASSETS 666,091.45
147,534.03
250,769.72
1,0641395.20
-
260,118.19
-
260,118.19
1,974,805.04
25,000.00
3,000.00
2,002,805.04
4,260,290.48
11,071.08
60,854.48
4,332,216.04
-
-
23,407.70
23,407.70
TOTAL NONCURRENT ASSETS 6,2351095.52
296,189.27
87,262.18
6,618,546.97
TOTAL ASSETS $ 6,901,186.97 $
443,723.30 $
338,031.90 $
7,682,942.17
Accounts payable $
231849.26 $
5,304.09 $
- $
29,153.35
Accrued wages and benefits payable
1,682.26
-
-
1,682.26
Interfunds payable
-
14,184.20
18,347.64
32,531.84
Due to other governments
19,689.60
37,155.66
-
56,845.26
Deferred revenue
4,133.92
-
-
4,133.92
Compensated absences payable
3,626.46
1,326.84
159.52
5,112.82
Trust and deposit liabilities
64,556.53
-
113.00
64,669.53
TOTAL CURRENT LIABILITIES
1171538.03
57,970.79
18,620.16
194,128.98
NONCURRENT LIABILITIES
Trust and deposit liabilities
-
5,531.77
-
51531.77
Compensated absences payable
32,638.14
11,941.63
1,435.68
46,015.45
TOTAL NONCURRENT LIABILITIES
32,638.14
17,473.40
1,435.68
51,547.22
TOTAL LIABILITIES
150,176.17
75,444.19
20,055,84
245,676.20
NET ASSETS
Invested in capital assets
6,235,095.52
36,071.08
63,854.48
6,335,021.08
Restricted - Housing Assistance Payments
-
254,586.42
-
254,586.42
Unrestricted
5151915.28
77,621.61
254,121.58
847,658.47
TOTAL NET ASSETS $
6,751,010.80 $
368,279.11 $
317,976.06 $
7,437,265.97
See accompanying notes. 9
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN
FUND NET ASSETS - PROPRIETARY FUNDS
Year Ended June 30, 2006
See accompanying notes. 10
Public
Section 8
Nonmajor
Housing
Voucher
Funds
Totals
OPERATING REVENUES
Rental income
$ 210,709.71 $
-
$ 6,986.48 $
217,696.19
HUD Section 8 contributions
-
1,166,436.00
-
1,166,436.00
Tenant based rental assistance revenue
-
-
23,813.15
23,813.15
Other income
561820.99
23,611.49
-
80,432.48
TOTAL OPERATING REVENUES
267,530.70
1,1901047.49
30,799.53
1,488,377.82
OPERATING EXPENSES
Administrative
328,889.93
154,894.42
8,571.11
492,355.46
Tenant services
3,750.00
-
-
3,750.00
Utilities
14,247.69
-
-
14,247.69
Ordinary maintenance and operations
222,385.41
-
3,422.47
225,807.88
General expense
78,839.08
1,196.13
2,636.54
82,671.75
Housing assistance payments
-
937,004.74
-
937,004.74
Security deposit assistance payments
-
-
22,536.00
22,536.00
Depreciation
212,855.98
1,956.37
1,615.61
216,427.96
TOTAL OPERATING EXPENSES
8601968.09
1,095,051.66
38,781.73
1,994,801.48
OPERATING INCOME (LOSS)
- (593,437.39)
94,995.83
(7,982.10)
(506,423.66)
NONOPERATING REVENUES (EXPENSES)
HUD operating subsidy
3601453.00
-
-
360,453.00
HUD capital grants - operations
116,140.10
-
-
116,140.10
Nonfederal grant income
16,229.16
-
-
16,229.16
Nonfederal grant expenditures
(16,229,16)
-
-
(16,229.16)
Interest income
15,951.45
5,244.08
8,323.68
29,519.21
TOTAL NONOPERATING REVENUES (EXPENSES)
492,544.55
5,244.08
8,323.68
506,112.31
INCOME (LOSS) BEFORE CONTRIBUTIONS,
TRANSFERS AND SPECIAL ITEMS
(100,892.84)
100,239.91
341.58
(311.35)
CAPITAL CONTRIBUTIONS
HUD Capital Grants
163,020.17
-
-
163,020.17
TRANSFERS IN (OUT)
Transfer in
51,442.87
-
-
51,442.87
Transfer out
-
-
(51,442.87)
(51,442.87)
SPECIAL ITEMS
Insurance proceeds
90471.20
-
-
9,471.20
INCREASE (DECREASE) IN NET ASSETS
123,041.40
100,239.91
(51,101.29)
172,180.02
NET ASSETS:
Net assets, beginning balance
6,627,969.40
1081351.54
369,207.10
7,105,528.04
Prior period adjustments
-
159,687.66
(129.75)_
159,557.91
Beginning balance, restated
6,627,969.40
268,039.20
369,077.35
7,265,085.95
TOTAL NET ASSETS -ENDING BALANCE
$ 6,751,010.80 $
368,279.11
$ 317,976.06
$ 7,437,265.97
See accompanying notes. 10
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
Year Ended June 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Rental receipts
HUD Section 8 receipts
Tenant based rental assistance receipts
Other receipts
Tenant security deposits
Cash payments for goods and services
Cash payments to employees for services
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
HUD operating subsidy
HUD capital grants- operations
Nonfederal grant receipts
Nonfederal grant expenditures
Special items insurance proceeds
Net change in interfund borrowing
NET CASH PROVIDED (USED) BY NONCAPITAL
FINANCING ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Purchases and construction of capital assets
HUD - capital grants
NET CASH PROVIDED (USED) BY CAPITAL
AND RELATED FINANCING ACTIVITIES
Public
Section 8
Nonmajor
Housing
Voucher
Funds
Totals
212,211.82 $
- $
61986.48 $
219,198.30
-
1,166,436.00
-
1,166,436.00
-
-
21, 908.45
21, 908.45
63,538.87
32,480.83
-
96,019.70
(3,416.56)
1,566.87
(340.00)
(2,189.69)
(276,645.68)
(967,937.94)
(27,796.25)
(1,272,379.87)
. (362,791.0
(122,961.49)_
_ (6,137.89)
(491,890.43)
(367,102.60)
109,584.27
(5,379.21)
(262,897.54)
360,453.00
-
-
360,453.00
116,140.10
-
-
116,140.10
17,444.74
-
-
170444.74
(16,229.16)
-
-
(16,229.16)
91471.20
-
-
9,471.20
(1 ,116.85)
2,279.87
1,163.02
-
486,163.03
2,279.87
(1,163.02)
487,279.88
(181,103.58)
(6,578.07)
-
(187,681.65)
164,235.54
-
-
164,235.54
(16,868.04)
(6,578.07)
-
(23,446.11)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (deposits) withdrawals to investments
(28,951.15)
75,000.00
(4,621.81)
411427.04
Interest received
15,704.47
4,885.68
7,269.48
27,859.63
NET CASH PROVIDED (USED)
IN INVESTING ACTIVITIES
_ (13,24fi.68)
19,885.68
2,647.67
69,286.67
NET INCREASE (DECREASE) IN CASH
88,945.71
185,171.75
(3,894.56)
270,222.90
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
189,402.66
218,622.07
32,796.70
440,821.43
CASH AND CASH EQUIVALENTS AT END OF YEAR
$ 2781348.37 $
403,793.82 $
28,902.14 $
711,044.33
See accompanying notes. 11
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS (CONT'D)
Year Ended ,tune 30, 2006
Public Section 8
Housing .._ Voucher
Nonmajor
Funds Totals
RECONCILIATION OF INCOME (LOSS) FROM
OPERATIONS TO NET CASH PROVIDED
(USED) BY OPERATING ACTIVITIES:
Operating income (loss) $
(593,437.39) $
94,995.83 $
(7,982.10) $
(506,423.66)
Adjustments to reconcile income from operations to
net cash provided by operating activities:
Depreciation
212,855.98
1,956.37
1,615.61
216,427.96
Change in assets and liabilities:
(Increase) decrease in accounts receivable
6,420.31
-
-
6,420.31
(Increase) decrease in deferred charges
7,481.55
933.52
-
81415.07
(Increase) decrease in due from other governments
-
8,704.02
(1,904.70)
6,799.32
(Increase) decrease in mortgage receivables
-
-
2,636.54
2,636.54
Increase (decrease) in accounts payable
6,090.92
3,527.46
235.25
9,853.63
Increase (decrease) in trust and deposit liabilities
(3,416.56)
1,566.87
(340.00)
(2,189.69)
Increase (decrease) in accrued wages and benefits payable
(11,727.64)
(2,848.85)
-
(14,576.49)
Increase (decrease) in accrued leave
8,181.91
583.73
360.19
9,125.83
Increase (decrease) in due to other governments
(1,351.36)
-
-
(1,351.36)
Increase (decrease) in deferred revenue
1,799.68
165.32
-
1,965.00
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES $
(367,102.60) $
109,584.27 $
(5,379.21) $ (262,897.54)
See accompanying notes. 12
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2446
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization,
The Authority was created under the laws of the State of Kansas. The purpose of the
Authority is to administer the Public Housing programs authorized by the United States
Housing Act of 1937, as amended. These programs are subsidized by the Federal
Government through the U.S. Department of Housing and Urban Development (HUD).
The financial statements of the Authority have been prepared in accordance with accounting
principles generally accepted in the United States of America as applied to governmental
units. The Governmental Accounting Standards Board ( "GASB ") is the standard- setting body
for governmental accounting and financial reporting. As allowed in Section P80 of GASB's
Codification of Governmental Accounting- and Financial Reporting Standards the Authority
has elected not to apply to its proprietary activities Financial Accounting Standards Board
Statements and Interpretations, Accounting Principles Board Opinions, and Accounting
Research Bulletins of the Committee of Accounting Procedure issued after November 30,
1989.
Financial Reoortina Entit
In determining how to define the reporting entity, management has considered all potential
component units. The decision to include a component unit in the reporting entity was made
by applying the criteria set forth in Section 2100 and 2600 of the Government Accounting
Standards Board Codification. These criteria state that the financial reporting entity consist
of (a) the primary government, (b) organizations for which the primary government is
financially accountable, and (c) other organizations for which the primary government is not
accountable, but'for which the nature and significance of their relationship with the primary
government are such that exclusion would cause the reporting entity's financial statements to
be misleading or incomplete. Based on these criteria, there are no additional agencies or
entities which should be included in the financial statements of the Authority.
Basis of accounting, measurement focus and financial statement presentation
The accounts of the Authority are organized on the basis of funds, each of which is
considered a separate accounting entity. The operations of each fund are accounted for with
a separate set of self - balancing accounts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate.
Proprietary funds are accounted for using the "economic resources" measurement focus and
the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or
noncurrent) are included in the Statement of Net Assets. The Statement of Revenues,
Expenses and Changes in Fund Net Assets presents increases (revenues) and decreases
(expenses) in total net assets. Under the accrual basis of accounting, revenues are
recognized in the period in which they are earned while expenses are recognized in the
period in which the liability is incurred.
13
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE A — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
The Authority distinguishes between operating and nonoperating revenues and expenses in
its Statement of Revenues, Expenses and Changes in Fund Net Assets., For this purpose,
the Authority's operating revenues result from providing low- income housing services such
as tenant rent, HUD Section S funds earned and other tenant charges. Operating expenses
include the cost attributed to administration, tenant services, utilities, maintenance and
operations, housing assistance payments and depreciation on capital assets. All revenues
and expenses not meeting these definitions are reported as nonoperating revenues and
expenses.
Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of
revenues, Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for
each major proprietary fund and non -major funds aggregated.
Statement No. 34 established criteria (percentage of the assets, liabilities, revenues or
expend itureslexpenses of either fund category or the governmental and enterprise
combined) for determination of major Funds. If non -major funds exist, these funds are
combined in a single column in the fund financial statements.
The Authority reports the following major enterprise funds:
Public Housing Programs This fund accounts for the operation, maintenance, and
development of housing units which are owned by the Authority. The development of the
projects were funded primarily by the U.S. Department of Housing and Urban
Development through loans and bonds. The loans have been forgiven by HUD and the
bond debt service and repayment requirements are the responsibility of HUD and
therefore no outstanding liabilities are recorded. The program is subsidized annually by
operating subsidy from HUD and through Capital Grants for capital improvements.
Housing Choice Voucher. This fund accounts for the operation of the Housing Choice
Voucher program which is funded primarily by the U.S. Department of Housing and Urban
Development. The program funds housing assistance payments to eligible low- income
housing participants.
The nonmajor enterprise funds consist of the Homeownership fund and the Tenant -Based
rental assistance program.
Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make certain estimates
and assumptions that affect the reported amounts of certain assets, liabilities, revenues,
expenditures, expenses, and other disclosures. Accordingly, actual results could differ from
those estimates.
14
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE A — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTJD)
Budg,etau Process
The Authority establishes a budget for the fiscal year and is adopted by the Board of
Commissioners.
Cash and Investments
All investments are recorded at fair value based on quoted market prices. Fair value is the
amount at which a financial instrument could be exchanged in a current transaction between
willing parties. Cash and Cash Investments are available upon demand and are considered
to be It equivalents" when preparing these financial statements. In addition, any
marketable securities that are owned by a specific amount and that are purchased with a
maturity of ninety days or less are also considered to be "cash equivalents ".
The Authority's deposits can only be invested in the following HUD approved investments:
direct obligations of the federal government backed by the full faith and credit of the United
States, obligations of federal government agencies, securities of government- sponsored
agencies, demand and savings deposits, money - market deposit accounts, municipal
depository fund, super now accounts, certificate of deposit, repurchase agreements, sweep
accounts, separate trading of registered interest and principal securities (STRIPS), and
mutual funds that consist of securities purchased from the HUD approved list.
Accounts Receivable
All receivables are current and therefore due within one year. Receivables are reported net
of an allowance for uncollectible account and revenues net of uncollectibles. Allowances are
reported when account are proven to be uncollectible.
Prepaid Items
Prepaid balances are for payments made by the Authority in the current year to provide
services occurring in the subsequent fiscal year.
Capital Assets and Depreciation
Property and equipment are stated at actual or estimated historical cost, net of accumulated
depreciation. Contributions of assets are recorded at fair market value at the date donated.
The Authority generally capitalized assets with a cost of $500 or more as purchases and
construction outlays occur.
Depreciation has been calculated on each class of depreciable property using the straight -
line method. Estimated useful lives are as follows:
Buildings
20-40 years
Building improvements
10-40 years
Furniture and fixtures
5 -10 years
Equipment
3 -10 years
15
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE A — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTYD)
Use of Restricted /Unrestricted Net Assets
When an expense is incurred for purposes for which both restricted and unrestricted net
assets are available, the Authority's policy is to apply restricted assets first.
Due to and Due from Other Funds
Interfund receivables and payables arise from interfund transactions and are recorded by all
funds affected in the period in which transactions are executed. The balances result from the
time lag between the dates that interfund goods and services are provided or reimbursable
expenditures occur, transactions are recorded in the accounting system, and payments
between funds.
Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as
interfund transfers.
Grant Revenue
The Authority, a recipient of grant revenues, recognizes revenues (net of estimated
uncollectible amounts, if any), when all applicable eligibility requirements, including time
requirements are met in accordance with GASB Statement No. 33. Resources transmitted to
the Authority before the eligibility requirements are met are reported as deferred revenue.
Investment Income
Investment income from pooled cash and investments is allocated monthly based on the
percentage of a fund's average pooled cash and investments balance.
Compensated Absences
The Authority's policy allows employees to accumulate unused vacation leave. Sick leave
may be accrued but is not paid upon termination, except upon retirement.
Income Taxes
The Authority is a governmental subdivision of the State of Kansas and is exempt from
Federal and State income taxes.
Leases
The majority of leases and subleases are short -term operating leases.
16
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE A — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
Schedule of Expenditures of Federal Awards
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant
activity of the Housing Authority .of the City of Salina, Kansas and is presented in accordance
with generally accepted accounting principles. The information in this schedule is presented
in accordance with the requirements of Office of Management and Budget Circular A -133,
Audits of States, Local Governments and Non - Profit Organizations.
NOTE B - DEPOSITS AND INVESTMENTS
Deposits
At June 30, 2006, the reported amount of the Authority's deposits was $690,978.15 and the
bank balance was $710,124.00. $632,105.47 of the bank balance was covered by federal
depository insurance or by collateral held by Authority's agent in the Authority's name.
$78,018.53 of the bank balance was neither insured or collateralized against loss. The
Authority had cash on hand of $50 at June 30, 2006.
Investments
At June 30, 2006, the Authority had the following investments and maturities:
Investment T pe
Kansas Pooled Money Investment
Fair
Value
523,634.27
523,634.27
Investment
Maturities
Less
Than 1 Year
523,634.27
523,634.27
Interest Rate Risk: The Authority does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to fair value losses arising from
increasing interest rates.
Credit Risk: The Authority has no investment policy that would limit its investment choices.
At June 30, 2006, the Authority had $523,634.27 invested in the pool. At June 30, 2006, the
Authority's investment in the Kansas Municipal Investment Pool was rated AAAFISI+ by
Standard & Poor's.
The State of Kansas offers a Local Government Investment Pool (LGIP) entitled "State of
Kansas Municipal Investment Pool" which is a voluntary investment alternative for
municipalities in the state of Kansas and is governed by the State of Kansas Pooled Money
Investment Board.
17
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE B - DEPOSITS AND INVESTMENTS (CONT'D)
All investments made for the Portfolio must comply with Kansas Statutes and the Rules and
Regulations of the Pooled Money Investment Board. The Portfolio primarily consists of
government securities (including U.S. Treasuries and Federal Agencies), certificates of
deposit in Kansas banks, and top -rated domestic commercial paper. U.S. Government
securities carry the highest industry ratings and are considered among the safest
investments in the world. Portfolio investments in commercial paper, are restricted to top -
rated (A!/P1 or better), highly credit - worthy corporations. All of these investments present
very limited risk to the investor. The maximum final maturity of any security purchased for the
portfolio is limited to four years. The Pool owns no securities itself, but rather all securities
are part of the Pooled Money Investment Portfolio. Pool deposits are not insured or
otherwise guaranteed by the State of Kansas.
A reconciliation of cash and investments as shown on the Statement of Net Assets is as
follows:
Statement of Net Assets
Cash and cash equivalents
$
386,256.61
Investments
503161-8.09
Restricted cash
324,787.72
$
1, 214, 662.42
Bank deposits
$
6901978.15
Investments
5237634.27
Cash on hand
50.00
$
1, 214, 662.42
NOTE C-- ACCOUNTS RECEIVABLE
A summary of accounts receivable as presented in the Statement of Net Assets at June 30,
2006 is as follows:
Public
Housing
Tenants $ 939.65
Fraud recoveries 12, 580.00
Repayment agreements 925.50
14,445.15
Allowance for uncollectible accounts (2,584.37}
$ 11, 860.78
18
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE D - INTERFUND RECEIVABLE /PAYABLE
The following is a summary of interfund receivable /payables at June 30, 2006:
Public Housing $
Section 8 Voucher
Nonmajor Funds
Receivable
28,718.84
31500.00
313.00
Payable
14,184.20
18, 347.64
$ 32, 531.84 $ 32, 531.84
The balances are a result of normal operating transactions and are expected to be paid
within one year.
NOTE E — DUE FROM OTHER GOVERNMENTS
A summary of due from other governments as presented in the Statement of Net Assets at
June 30, 2006 is as follows:
HUD — Capital Funds
Other
NOTE F DEFERRED CHARGES
Public
Housing
$ 28,970.43 $
Nonmajor
Funds Total
- - $ 28,970.43
21692.20 21692.20
$ 281970,43 $ 21692.20 $ 31,662.63
A summary of deferred charges as presented in the Statement of Net Assets at of June 30,
2006 is as follows:
Prepaid insurance
Materials inventory
Miscellaneous
Public
Housini
$ 22, 752.88
7,513.78
185.00
Total $ 301451.66
NOTE G — RESTRICTED ASSETS
Cash and cash equivalents of $64,556.53 at June 30, 2006 is restricted for Tenant Security
Deposits in the Public Housing Program.
Cash and cash equivalents of $5,531.77 are restricted for the Family Self- Sufficiency
program in the Section 8 Voucher program. The Housing Choice Voucher program had
additional restricted cash and cash equivalents of $254,586.42 which consisted of fund which
19
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE G — RESTRICTED ASSETS (CONT'D)
are restricted for future housing assistance payments in accordance with HUD PIH
Notice
2006 -3.
The restricted cash and cash equivalents in the
Nonmajor Fund is restricted for security
deposits.
NOTE H -- CAPITAL ASSETS
Capital assets consist of the following:
Balance
Balance
July 1, 2005
Increases Decreases
June 30, 2006
Non - depreciable assets;
Land $
11481,890.23 $
-- $ - $
1 1481 t890.23
Construction in progress
533,636.72
168,324.17 (181,046.08)
520,914.81
21015,526.95
168,324.17 (181,046.08)
21002,805.04
Depreciable assets
Land improvements
4661190.45
27,097.49 -
493,287.94
Buildings
51443,580.64
153,558.59 -
51597,139.23
Equipment - Dwelling
32,788.72
- -
32,788.72
.Equipment - Administration
259,956.23
19,357.48 -
279,313.71
61202,516.04
200,013.56 -
6,402,529.60
Capital Assets
81218,042.99
3681337.73 (181,046.08)
8,405,334.64
Accumulated depreciation
Land improvements
2081825.99
289922.34 -
237748.33
Buildings
11460,984.69
154,724.89 -
11615,709.58
Equipment - Dwelling
91189.84
4,684.06 -
13,873.90
Equipment - Administration
1741885.08
28,096.67 -
202,981.75
11853,885.60
216,427.96 -
21070,313.56
Depreciable assets, net
413482630.44
(161414.40) -
4,332,216.04
Capital assets, net $
61364,157.39 $
151,909.77 $ (181,046.08) $
61335,021.08
NOTE I —ACCOUNTS PAYABLE
A summary of accounts payable as presented in the Statement of Net Assets at
June 30,
2006 is as follows:
Public
Section 8
Housing
Voucher Totals
Vendors and contractors
$ 23,849.26
$ 51304.09 $ 29,163,35
20
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE J — DUE TO OTHER GOVERNMENTS
A summary of due to other governments as presented in the Statement of Net Assets at-
June 30, 2006 is as follows:
Payments in lieu of taxes
HUD
NOTE K-- DEFERRED REVENUES
Public
Housing
$ 19, 689.60 $ - -
- - 37,155.66
$ 19, 689.60 $ 377155.66
Section 8
Voucher
Total
$ 191689-60
37,155.66
$ 561845.26
A summary of deferred revenues as presented in the Statement of Net Assets at June 30,
2006 is as follows:
Prepaid rents
Local grants
Public
Housing
$ 11799.68
2,334.24
$ 41133.92
NOTE L--- ACCRUED COMPENSATED ABSENCES
A summary of accrued compensated absences as presented in the Statement of Net Assets
as of June 30, 2006 is as follows:
Beginning Net Ending Due within
Balance Increase Balance C)n Year
Compensated absences $ 42,002.44 $ 91125.83 $ 51,128.27 $ 511 12.82
NOTE M- PENSION PLAN
Plan description. The non - school municipality participates in the Kansas Public Employees
Retirement System (KPERS), a cost - sharing multiple- employer defined benefit pension plan
as provided by K.S.A. 74 -4901, et seq. KPERS provides retirement benefits, life insurance,
disability income benefits, and death benefits. Kansas law establishes and amends benefit
provisions. KPERS issues a publicly available financial report that includes financial
statements and required supplementary information. That report may be obtained by writing
KPERS (400 W 8th Avenue, Suite 200, Topeka, KS 66603 -3925) or by calling 1- 800 -228-
0366.
Funding Policy. K.S.A. 74 -4919 establishes the KPERS member - employee contribution rate
at 4% covered salary. The employer collects and remits member - employee contributions
21
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE M- PENSION PLAN (CONT'D)
according to the provisions of section 414(h) of the Internal Revenue Code. State law
provides that the employer contribution rate be determined annually based on the results of
an annual actuarial valuation. KPERS is funded on an actuarial reserve basis. State law
sets a limitation on annual increases in the contributions rates for KPERS employers. The
non - school municipality employer contributions to KPERS for the period. of July 1, 2005
through December 31, 2005 was 4.09 %, and from January 1, 2006 through June 30, 2006
was 4.61 %, equal to the statutory required contributions for each period. The total covered
payroll for the fiscal year ended June 30, 2006 was $379,559.00. The employer and
employee contributions were $17,046.84 and $15,152.36, respectively.
NOTE N NET ASSETS
The fund financial statements utilize a net assets presentation. Net assets are categorized
as invested capital assets (net of related debt), restricted and unrestricted.
• Invested in Capital Assets, Net of Related Debt -- This category groups all capital
assets, including infrastructure, into one component of net assets. Accumulated
depreciation and the outstanding balances of debt attributable to the acquisition,
construction or improvement of these assets reduce the balance in this category.
• Restricted Net assets — This category represents net assets of the Agency which
are restricted externally by creditors, grantors, contributors, laws or regulations of
other governments, imposed by law through constitutional provisions or enabling
legislation.
• Unrestricted Net Assets -- This category represents net assets of the Agency, not
restricted for any project or other purposes.
NOTE O -- COMMITMENTS
The Authority has various contract commitments with contractors for the implementation
of HUD Capital Grants as outlined by the HUD approved Capital Grant Budget.
NOTE P - RISK MANAGEMENT
The Authority is exposed to various risks of loss related to torts; theft of, damage to and
destruction of assets, errors and omissions; injuries to employees; and natural disasters for
which the Authority purchases commercial insurance.
During the year ended June 30, 2006, the Authority did not reduce insurance coverage from
levels in place during the prior year. No settlements have exceeded coverage levels in place
during the past three fiscal years.
22
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
NOTE Q — TRANSFERS
The Authority received HUD approved to transfer a house from the Homeownership program
to Public Housing. The book value of the home transferred was $81,442.87.
NOTE R -- PRIOR PERIOD ADJUSTMENTS
Prior period adjustment of $159,687.66 recorded to Housing Choice Voucher Net Assets
relates to an adjustment to the previous year -end settlement by HUD. In January, 2006,
HUD released HUD Notice 2006-3 which changed how the program is funded. This change
effected payments received staring January 1, 2005. Excess funds advanced are no longer
recaptured but are retained by the Agency for future housing assistance payments.
23
SUPPLEMENTAL INFORMATION - REQUIRED BY HUD
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
FINANCIAL DATA SCHEDULE
June 30, 2006
Line Item #
Account Description
Public
Housing
14.850
Capital Fund
14.872
State/Local
Housing
Choice
Voucher
14.871
Business
Activities
HOME 14.239
TOTAL
ASSETS:
CURRENT ASSETS:
Cash:
111
Cash - unrestricted
211,468
-
-
143,676
14,493
14,296
383,922
113
Cash - other restricted
-
2,334
260,118
-
-
262,452
114
Cash - tenant security deposits
64,557
-
-
-
113
-
64,670
100
Total cash
276,014
-
2,334
403,794
14,606
14,296
711,044
Accounts and notes receivables:
122
Accounts receivable - HUD other projects
-
28,970
-
-
-
-
28,970
124
Accounts receivable - other government
-
-
-
2,692
2.692
126
Accounts receivable- tenants - dwelling rents
940
-
-
-
-
940
126.1
Allowance for doubtful accounts - dwelling rents
(1,699)
-
-
-
-
(1,699)
128
Fraud recovery
13,506
-
-
-
-
-
13,506
128.1
Allowance for doubtful accounts - fraud
(885)
-
-
-
-
-
(885)
129
Accrued interest receivable
1,638
-
-
358
1,347.
-
3,344
120
Total receivables, net of allowances for doubtful accounts
13,499
28,970
-
358
1,347
2,692
46,867
Current investments
131
Investments - unrestricted
286,103
-
-
-
217,515
"
503,618
142
Prepaid expenses and other assets
22,938
-
-
-
-
22,938
143
Inventories
7,514
-
-
-
-
-
7,514
144
Interprogram - due from
57,669
-
-
3,500
-
313
61,502
150
TOTAL CURRENT ASSETS
663,757
28,970
2,334
407,652
233,468
17,301
1,353,484
NONCURRENT ASSETS:
Fixed assets:
161
Land _
1,453,890
-
-
25,000
3,000
-
1,481,890
162
Buildings
5,532,515
-
-
-
64,624
-
5,597.139
163
Furniture, equipment & machinery - dwellings
30,596
2,193
-
-
-
-
32,789
164
Furniture, equipment & machinery - administration
228,584
15,876
-
34,853
-
-
279,314
165
Leasehold improvements
493,288
-
-
-
493,288
166
Accumulated depreciation
(2,033,037)
(9,724)
-
(23,782)
(3,770)
-
(2,070,314)
167
Construction in progress
5,304
515,611
-
-
-
"
520,915
160
Total fixed assets, net of accumulated depreciation
5,711,140
523,956
-
36,071
63,854
-
6,335,021
171
Notes and mortgages receivable - non- current
-
-
-
-
23,408
-
23,408
180
TOTAL NONCURRENT ASSETS
5,711,140
523,956
-
36,071
87,262
-
6,358,429
190
TOTAL ASSETS
6,374,897
552,926
2,334
443,723
320,731
17,301
7,711,913
LIABILITIES AND EQUITY:
LIABILITIES:
CURRENT LIABILITIES
312
Accounts payable < 90 days
23,849
-
-
5,304
-
-
29,153
321
Accrued wagelpayroll taxes payable
1,682
-
-
-
-
"
1,682
322
Accrued compensated absences
3,626
-
-
1,327
160
-
5,113
331
Accounts payable - HUD PHA programs
-
-
-
36,990
-
-
36,990
333
Accounts payable - other government
19,690
-
-
165
-
-
19,855
341
Tenant security deposits
64,557
-
-
-
113
-
64,670
342
Deferred revenues
1,800
-
2,334
-
-
-
4,134
347
Inter- program - due to
-
28,970
-
14,184
947
17,401
61,502
310
TOTAL CURRENT LIABILITIES
115,204
28,970
2,334
57,971
1,219
17,401
223,099
NONCURRENT LIABILITIES:
353
Noncurrent liabilities- other
-
-
-
5,532
-
-
5,532
354
Accrued compensated absences - noncurrent
32,638
-
-
11,942
1,436
-
46,015
350
TOTAL NONCURRENT LIABILITIES
32,638
-
-
17,473
1,436
51,547
300
TOTAL LIABILITIES
147,842
28,970
2,334
75,444
2,655
17,401.
274,647
EQUITY:
508.1
Invested in Capital Assets, Net of Realted Debt
5,711,140
523,956
-
36,071
63,854
-
6,335,021
511.1
Restricted net assets
-
-
-
254,586
-
-
254,586
512.1
Unrestricted net assets
515,915
-
-
77,622
254,221
(100)
847,659
513
TOTAL EQUITY
6,227,055
523,956
-
368,279
318,076
(100)
7,437,266
600
TOTAL LIABILITIES AND EQUITY
6,374,897
552,926
2,334
443,723
320,731
17,301
7,711,913
24
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
FINANCIAL DATA SCHEDULE
Year Ended June 30, 2006
Public Housing Capital Fund Housing Choice Business
Line Item # Account Description 14.850 14.872 StatelLocal Voucher 14.871 Activities HOME 14.239 TOTAL
REVENUE:
703 Net tenant rental revenue
210,710
-
-
-
6,986
-
217,696
704 Tenant revenue - other
48,848
-
-
-
-
-
48,848
705 Total tenant revenue
259,558
-
-
-
6,986
-
266,544
706 HUD PHA grants
360,453
116,140
-
1,166.436
-
23,813
1,666,842
7061 Capital grants
-
163,020
-
-
-
-
163,020
708 Other government grants
-
-
16,229
-
-
-
16,229
711 Investment income - unrestricted
15,951
-
-
3,438
8,236
88
27,713
714 Fraud recovery
-
-
9,707
-
-
9,707
715 Other revenue
7,973
-
-
13,905
-
-
21,878
720 Investment income - restricted
-
-
-
1,807
-
-
1,807
700 TOTAL REVENUE
643,935
279,160
16,229
1,195,292
15,222
23,901
2,173,739
EXPENSES:
Administrative
911 Administrative salaries
142,254
29,155
-
93,571
4,169
1,147
270,296
912 Auditing fees
2,725
-
-
2,725
-
-
5,450
914 Compensated absences
8,182
-
-
584
360
-
9,126
915 Employee benefit contributions- administrative
43,028
9,433
-
26,542
947
88
80,038
916 Other operating- administrative
94,113
-
-
31,473
1,730
130
127,446
Tenant services
921 Tenant services - salaries
-
-
14,347
-
-
-
14,347
923 Employee benefit contributions- tenant services
-
-
1,098
-
-
-
1,098
924 Tenant services - other
3,750
-
784
-
-
-
4,534
Utilities
931 Water
2,166
-
-
-
-
-
2,166
932 Electricity
6,092
-
-
-
-
-
6.092
933 Gas
5,179
-
-
-
-
5,179
938 Other utilities expense
811
-
-
-
-
-
811
Ordinary maintenance & operation
941 Ordinary maintenance and operations - labor
104,342
-
-
-
683
-
105,025
942 Ordinary maintenance and operations - materials & other
40,538
8,503
-
116
-
49,157
943 Ordinary maintenance and operations - contract costs
46,151
-
-
-
2,573
-
48,724
945 Employee benefit contributions- ordinary maintenance
22,852
-
-
-
50
-
22,902
General expenses
961 Insurance premiums
59,149
-
-
934
-
60,083
962 Other General Expenses
-
-
-
263
2,637
2,899
963 Payments in lieu of taxes
19,690
-
-
-
-
-
19,690
969 TOTAL, OPERATING EXPENSES
601,G21
47,091
16,229
156,091
13,265
1,365
835,062
970 EXCESS OPERATING REVENUE OVER OPERATING EXPENSES
42,914
232,069
-
1,039,201
1,957
22,536
1,338,678
973 Housing assistance payments
-
-
-
937,004
-
22,536
959,540
974 Depreciation expense
209,932
2,924
-
1,956
1,616
-
216,428
900 TOTAL EXPENSES
810,953
50,015
16,229
1,095,051
14,881
23,901
2,011,030
OTHER FINANCING SOURCES (USES)
1001 Operating transfers in
69,049
-
-
-
-
-
69,049
1002 Operating transfers out
-
(69,049)
-
-
-
-
(69,049)
1008 Special items (net gain /loss)
9,471
-
-
-
-
-
9,471
1010 TOTAL OTHER FINANCING SOURCES (USES)
78,520
69,049)
-
_
-
-
9,471
1000 EXCESS (DEFICIENCY) OF TOTAL REVENUE OVER (UNDER) TOTAL EXPENSES
(88,49)
160,096
-
100,241
342
(0)
172,181
MEMO account information
1103 Beginning equity
6,074,516
553,453
-
108,352
369,177
30
7,105,528
1104 Prior period adjustments
-
-
159.687
-
(130)
159,557
1104 Equity transfers
241,037
(189,593)
-
-
(51,443)
-
1
1113 Maximum annual contributions commitment (per ACC)
-
-
-
1,166,436
-
1,166,436
1114 Prorata maximum annual contributions applicable to a
period of less than twelve months
-
-
-
-
_
1115 Contingency reserve, ACC program reserve
-
-
-
-
1116 Total annual contributions available
-
-
-
1,166,436
-
-
1,166,436
1120 Unit months available
1,938
-
-
3,664
18
60
5,680
1121 Number of unit months leased
1,908
-
-
3,664
18
60
5,650
25
SINGLE AUDIT SECTION
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2006
Federal Grantor
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Public and Indian Housing;
Public Housing
Capital Fund Grant
Public Housing
Section 8 Housing Choice Voucher
Section 8 Voucher
Home Investment Partnership Program
Passed through Kansas Housing Resources Corporation
Contract
Number
KC -1029
KC -1029
KC 7015V
Federal
CFDA Federal
Number Expenditures
14.850 $
360,453.00
14.872
279,160.27
14.871
1,166,436.00
Nonmajor funds - - 14.239 23,813.15
Total Federal Awards Expended $ 1,829,862.42
Significant Accounting Policies - The Schedule of Expenditures of Federal Awards was prepared in
accordance with the basis of accounting described in Note A to the financial statements.
26
Qandal D. Niewedde, CPA
Jeffrey J. dens, CPA
N
cide
W1en�
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS
To the Board of Commissioners
Housing Authority of the City of Salina, Kansas
We have audited the financial statements of the major funds and the aggregate remaining fund
information of the Housing Authority of the City of Salina, Kansas, as of and for the year ended
June 30, 2006, which collectively comprise the Housing Authority of the City of Salina, Kansas'
basic financial statements and have issued our report thereon dated October 24, 2006. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Re ortin
r
In planning and performing our audit we considered the Housing Authority of the City of Salina,
p g p g g
Kansas' internal control over financial reporting in order to determine our auditing procedures for
the purpose of expressing our opinion on the financial statements and not to provide assurance
on the internal control over financial reporting. Our consideration of the internal control over
financial reporting would not necessarily disclose all matters in the internal control over financial
reporting that might be material weaknesses. A material weakness is a reportable condition in
which the design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts
that would be material in relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of performing their assigned
functions. We noted no matters involving the internal control over financial reporting and its
operation that we consider to be material weaknesses.
Compliance
As part of obtaining reasonable assurance about whether the Housing Authority of the City of
Salina, Kansas' financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements,
noncompliance with which could have direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was
not an objective of our audit and, accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
27
P.O. box 98 • York, Nebraska 68467 • Ph: 402 -362 -4410 • Fax: 402 -362 -4410 • nwcpa @alltel.neL
However, we noted certain immaterial instances of noncompliance that we have reported to
management of the Housing Authority of the City of Salina, Kansas in a separate letter dated
October 24, 2006.
This report is intended solely for the information and use of the Board of Commissioners,
management, others within the organization and the U.S. Department of Housing and Urban
Development and is not intended to be and should not be used by anyone other than these
specified parties.
�ieuiedde � W eW, l,pjl
October 24, 2006
28
Qandal D. Niewedde, CPI
Jeffrey J. Wiens, CIDA
Niewecide,
W1en�
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A -133
To the Board of Commissioners
Housing Authority of the City of Salina, Kansas
Compliance
We have audited the compliance of the Housing Authority of the City of Salina, Kansas with the
types of compliance requirements described in the U. S. Office of Management and Budget
OMB Circular A -133 Compliance Supplement that are applicable to each of its major federal
programs for the year ended June 30, 2006. The Housing Authority of the City of Salina,
Kansas' major federal programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of
laws, regulations, contracts and grants applicable_ to each of its, major federal programs is the
responsibility of the Housing Authority of the City of Salina, Kansas' management. Our
responsibility is to express an opinion on the Housing Authority of the City of Salina, Kansas'
compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America; the standards applicable to financial audits contained
in Government Auditinq Standards issued by t[-ie Comptroller General of the United States; and
OMB Circular A -133, Audits of States Local Governments and Non - Profit Organizations.
Those standards and OMB Circular A -133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, 'on a test basis, evidence about the Housing Authority of
the City of Salina, Kansas' compliance with those requirements and performing such other
procedures as we consider necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion. Our audit does not provide a legal determination on the
Housing Authority of the City of Salina, Kansas' compliance with those requirements.
In our opinion, the Housing Authority of the City of Salina, Kansas complied, in all material
respects, with the requirements referred to above that are applicable to each of its major federal
programs for the year ended June 30, 2006. However, the results of our auditing procedures
disclosed instances of noncompliance with those requirements that are required to be reported
in accordance with OMB Circular A -133 and which are described in the accompanying schedule
of findings and questioned costs as Finding 2006 -1.
29
P.U. Box 98 • York, Nebraska 68467 • Ph: 402- 362 -4410 • Fax: 402 - 362 -44t0 * nwcPa @alltel.net
Internal Control Over Compliance
The management of the Housing Authority of the City of Salina, Kansas is responsible for
establishing and maintaining effective internal control over compliance with requirements of
laws, regulations, contracts and grants applicable to federal programs. In planning and
performing our audit, we considered the Housing Authority of the City of Salina, Kansas' internal
control over compliance with requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance and to test and report on internal control over compliance
in accordance with OMB Circular A -133.
We noted certain matters involving the internal control over compliance and its operation that
we consider to be reportable conditions. Reportable conditions involve matters coming to our
attention relating to significant deficiencies in the design or operation of the internal control over
compliance that, in our judgment, could adversely affect the Housing Authority of the City of
Salina, Kansas' ability to administer a major federal program in accordance with applicable
requirements of laws, regulations, contracts and grants. Reportable conditions are described in
the accompanying schedule of findings and questioned costs as Finding 2006 -1.
A material weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that noncompliance
with applicable requirements of laws, regulations, contracts and grants that would be material in
relation to a major federal program being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. Our
consideration of the internal control over compliance would not necessarily disclose all matters
in the internal control that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also considered to be material
weaknesses. However, we believe none of the reportable conditions described above is a
material weakness.
This report is intended solely for the information and use of the Board of Commissioners,
management, others within the organization and the U.S. Department of Housing and Urban
Development and is not intended to be and should not be used by anyone other than these
specified parties.
�iewedde � W ew, CPJI
October 24, 2006
30
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
June 30, 2006
The audit report for the year ended June 30, 2005 contained no findings and no questioned
costs.
31
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
June 30, 2006
Section 1- Summary of Auditors Results:
• We issued unqualified opinions on the financial statements of the Housing Authority of
the City of Salina, Kansas for the fiscal year ended June 30, 2006.
Financial Statements:
• The results of our audit procedures disclosed no noncompliance which is material to the
financial statements for the fiscal year ended June 30, 2006.
Federal Awards:
• We issued an unqualified opinion on compliance for major programs for the fiscal year
ended June 30, 2006.
• The results of our audit procedures disclosed one reportable condition that is not
considered to be material weaknesses in internal control over major programs for the
fiscal year ended June 30, 2006. This reportable condition is summarized in Section III
of this schedule.
• The results of our audit procedures disclosed one audit findings that is required to be
reported under code section .51 0(a) of the OMB A -133 Circular.
• The programs identified and audited as major are as follows: Housing Choice Voucher
program -- 14.871
• The dollar threshold used to distinguish between Type A and Type B programs was
$3001000.
• For the fiscal year ended June 30, 2006, the Housing Authority of the City of Salina,
Kansas qualified as a low -risk auditee.
Section 11- Financial Statement Findin s:
NONE
32
HOUSING AUTHORITY OF THE CITY OF SALINA, KANSAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
June 30, 2006
Section 111 - Federal award Findin s and Questioned Costs:
Finding 2006 -1
Section 8 Housing Choice Voucher Program, CFDA 14.871
Compliance Requirement— Special Tests and Provisions
Reportable Condition
Criteria: The Authority is required perform a rent reasonableness determination at the
time of the initial lease and any increase in the rent to the owner. The Authority must
maintain records to document the basis for the determination that the rent to the owner
is a reasonable rent.
Condition: During our audit, we tested 40 housing assistance payment transactions.
We noted 17 where the rent to the owner had increased and a rental reasonableness
certification was not performed. The Authority has a checklist to ensure all items are
included in the tenant file but we noted numerous instances of where the rental
reasonableness box was not checked. .
Effect: The Authority did. not adequately document that the rent to owners was
reasonable. Further, the internal control being used to ensure completeness in the
tenant file was being bypassed.
Cause: The Authority was not completing the checklist to ensure all items were
completed and documented in the tenant file.
Recommendation: We recommend the Authority review this with staff to stress the
importance of the checklist being completed to ensure all requirements are met.
33
December 5, 20o6
As Executive Director of the Salina. Housing Authority, I agree with the audit
finding regarding the incomplete documentation which is a compliance
requirement for the Housing Choice Voucher program.
The 17 files without the Rent Reasonableness form were immediately updated.
Additionally, all the files for new move -in tenants and annual recertifications
have been reviewed and corrected, if necessary, for the time period July 1 through
Nov 1, 2006.
This year, the Housing Authority invested in software that automatically
produces and prints the statements. Staff did not understand that rent
reasonableness statements were required in the files when landlords request rent
increases. The housing authority established a spreadsheet with all rent increases
requested by landlords to serve as a method of verifying file accuracy.
During each annual recertification, files will be reviewed for accuracy and the
checklist will be updated.
Sincerely,
Ann Rollins
Executive Director
469 South Fifth Street 1 P.O. Box 1202 I Salia Kansas 67402 -1202 l 785.827.0441 I fax 785.827.0442
Qandat D. N iewedde, CIDA
Jeffrey J. Wiens, CPA
To the Board of Commissioners
Housing Authority of Salina
469 South 5th Street
Salina, Kansas 67402 -1202
RE: Management Letter
N owe,dde
_�� Wiens
CERTIFIED PUBLIC ACCOUNTANTS
In planning and performing our audit of the financial statements of the Housing Authority of
the City of Salina, Kansas, for the year ended June 30, 2006, we considered the Authority's
internal control structure to determine our auditing procedures for the purpose of expressing
an opinion on the financial statements and not to provide assurance on the internal control
structure.
However, during our audit we became aware of the following matter that is an immaterial
instance of noncompliance of noncompliance with HUD regulations.
Collateral: The Authority shall require their depositories to continuously and fully secure
all deposits whether regular, savings, or time that are in excess of the $100,000 insured
amount as required by HUD PIH Notice 96 -33 which has been reinstated by HUD PIH
Notice 2000 -7. This- notice further states that this may be accomplished by the pledging
or setting aside collateral of identifiable U.S. Government securities as detailed in that
notice. We noted during our audit that the Authority did have collateral at the financial
institution where the bank balance exceeded the FDIC insurance, however, the collateral
was not adequate as $78,018.53 was uninsured and uncollateralized when compared to
the market value of the collateral at June 30, 2006. We recommend the Authority review
this with its financial institution.
We will review the status of this comment during our next audit engagement. We have
already discussed this comment and suggestion with the Authority's management, and we
will be pleased to discuss them in further detail at your convenience, to perform any
additional study of these matters, or to assist you in implementing the recommendations.
�iecuedde � UVien�, cpjf
October 24, 2006
P.O. box 98 • York, Nebraska 68467 • Ph: 402 -362 -4410 • Fax: 402 -362 -4410 • nwcpa @atttet.net
Qandat D. Niewedde, CPI
Jeffrey J. Wiens, CPA
December 11, 2006
Ann Rollins, Executive Director
Housing Authority of Salina, Kansas
PO Box 1202
Salina, Kansas 67402 -1202
Re: Audit Report
We have enclosed the following:
1. Eight (8) bound copies of the audit report along with the management letter for
your housing authority for the year ended June 30, 2006.
2
2. One (1) stapled copy of the audit report along with the management letter and
adjusting journal entries for your fee accountant.
3. One (1) copy of the schedule of adjustments made.
The required number of copies have been forwarded for your convenience to:
Federal Audit Clearing House
Bureau of the Census
1201 E. 10th Street
Jeffersonville, Indiana 47132
US Dept of HUD
Gateway Tower II
400 State Avenue
Room 200
Kansas City, KS 66101 -2406
Should you have any questions, please feel free to contact our office.
niewedde & wienj, CPAIJ
N I EWEDDE & WI ENS
Certified Public Accountants
P.O. Box 98 e York, Nebraska 68467 • Ph: 402 -362 -4410 e Fax: 402 -362 -4410 - nwcpa @alltel.net