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HomeMy WebLinkAboutMINUTES - 01252000 - HA1-HA2 141 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS FROM: Robert J. McEwan, Executive Director DATE: January 25, 2000 SUBJECT: ACCEPTANCE OF AUDIT REPORT FOR FISCAL YEAR ENDING MARCH 31, 1999 SPECIFIC REQUEST(S) OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION I. RECOMMENDED ACTION: ACCEPT Financial and Compliance audit report for the period April 1, 1998 through March 31, 1999,performed by Wallace Rowe&Associates,Pleasant Hill, California,as recommended by the Advisory Housing Commission. II. FINANCIAL IMPACT: For the twelve months ending March 31$`, 1999 a surplus of$144,267.00 was added to the housing authority fund balance. III. REASONS FOR RECOMMENDATION/BACKGROUND Wallace Rowe&Associates completed their audit of the financial and program participants records of the Housing Authority of the County of Contra Costa and all financial and participants records of the Housing Authority are in order. No findings were made pertaining to tenant files and unexpended federal funds. Additionally, a separate management letter contains four items to strengthen the internal controls and operating efficiency of the Housing Authority. The Housing Authority agrees with the recommendations stated in the management letter IV. CONSEQUENCES OF NEGATIVE ACTION: Should the Board of Commissioners elect not to accept the Financial and Compliance audit report as performed by the certified public accountancy firm of Wallace Rowe&Associates, it would become necessary to expend additional funds to, either engage the accountancy firm again or contract with another certified public accountancy firm. CONTINUED ON ATTACHMENT: YES SIGNATURE —+!RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE x APPROVE OTHER SIGNATURE(S). W& ACTION OF BOARD ON APPROVED AS RECOMMENDED X OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF COMMISSIONERS ON THE DATE SHOWN. ATTESTED HIL BAT: LOR, CLERK OF BO OF COMMISSIONERS AND COUNTY ADMINISTRATOR BY �),DEPUTY PA-f 5-..CFO HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA GENERAL-PURPOSE FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 1999 (Including Auditors' Report Thereon) +Z f r- HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA GENERAL-PURPOSE FINANCIAL, STATEMENTS MARCH 31, 1999 TABLE OF CONTENTS Pane Independent Auditors'Report 1 Financial Statements: Combined Balance Sheet- All Fund Types and Account Groups, 3 Combined Statements of Revenues, Expenditures, and Changes in Fund Balances-All Governmental Fund Types 5 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances, Budget and Actual- Special Revenue Fund 6 Notes to the General-Purpose Financial Statements 7 Supplementary Data: Schedule of Expenditures of Federal Awards 17 Statement of Comprehensive Grant Program 18 Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of General-Purpose Financial Statements Performed in Accordance with Government Auditing Standards 19 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 21 Status of Prior Audit Findings 23 Findings and Recommendations 24 WALLACE ROWE & ASS. IATES Accowtting firm 2255 Morello Avenue, Suite 209 (925)686-6650 Pleasant Hill, CA 94528 Fax(925) 666-6814 E-mail wroweassoc0aol.com UNQUALIFIED OPINION ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEPENDENT AUDITORS' REPORT To the Board of Commissioners Housing Authority of the County of Contra Costa Martinez, California We have audited the accompanying general-purpose financial statements of the Housing Authority of the County of Contra Costa, California, as of and for the year ended March 31, 1999. These general-purpose financial statements are the responsibility of the Housing Authority of the County of Contra Costa, California, management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Suds, issued by the Comptroller General of the United States. Those standards require that we pian and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general- purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general-purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects,the financial position of the Housing Authority of the County of Contra Costa, California, as of March 31, 1999, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated September 3, 1999 on our consideration of the Housing Authority of the County of Contra Costa's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Housing Authority of the County of Contra Costa, California, taken as a whole. The accompanying supplementary schedules are presented for purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-profit Organizations, and the U.S. Department of Housing and Urban Development, and is not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general- purpose financial statements and, in our opinion, is fairly stated in all material respects, in relation to the general-purpose financial statements taken as a whole. September 3, 1999 2 Fd ` •� � V' %M w m W `W�1 V�i1 `.ell C4 \ yM'�% ♦ %0 i� c7N +i• `_ rVw wi Al /V� / � mom %n m_ _ `', W Q C4 05 �r 00 OSS i 1 1 I 1 1 1 1 1 00 O N CN N bo 78 i ON C"'1 � � � •� P tom► u z H ;T' � 1 1 I 1 O Lzl H 't 001 1 1 1 1 1 1 1 1 00 m C4N N C%4 1�Cii Mei H Oi ON to CV M In M 1 1 i h >8 ON V1 t- m 00 � � ._ CZ 2 1 u ti13 'D CR m wa p rn clr C; M c� ° [ •- o •'v a a, e coa -� 00 en N 00 t� h en u^► 00 r*t e t+ t- v. YJ W 'a 00 d emit h�i •�-+ 00 e�+f V1 t`• 00 �+ �d 00 N l+f.pp V"i M Cfi 00 m 14t Dei m 00 t- �.r t`• 00 ON 00 N 00 00 t- o � N %0 ON N In t- ON en et 00 4 elf 06 00 00 (r? 1 i 1 f I f e., e.., I 1 1 ( 1 (•.. N N N Com" Q\ tCT� y Q CN (0\ ON `� a+ a An cis ! 1 1 1 1 1 t 1 1 1 00 I 00 00 cON�r rmco w cc i �. . m m P4 Cs v; rr er^i c� �t' cn tr tiD p. U � � .M Z.. . ?S . -12 eC78 ,0 HOUSING Ali MORITY OF THE COUNTY OF CUNTRA COSTA COMBINED STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-ALL GOVERNMENTAL FUND TYPES FOR THE YEAR ENDED MARCH 31, 1999 Governmental Fund Teres Total Special Debt (Memorandum Revenues Revenue Servic Only) Grants $ 47,688,062 $ 344,234 $ 48,032,296 Rents 2,565,588 - 2,565,588 Interest 279,848 622 280,470 Loan proceeds 161,613 - 161,613 Cather 141.311 - 141.311 Total revenues 50,836,422 344.856 51.181.278 Expenditures Current: Administration 3,826,367 - 3,826,367 Tenant services 148,117 - 148,117 Utilities 899,209 - 899,209 Maintenance 2,307,040 - 2,307,040 Protective services 257,483 - 257,483 General 2,128,393 - 2,128,393 Rehabilitation loans 476,252 - 476,252 Dousing assistance payments 37,477,185 - 370477,185 Grants 54,475 - 54,475 Shelter costs 420,665 - 420,665 Debt service: Principal - 275,000 275,000 Interest - 64,605 64,605 Capital additions 2.696.969 2.696.969 Total expenditures 50.692.155 339.605 51,031.760 Excess of revenues over (under)expenditures 144,267 5,251 149,518 Other financing sources(uses). Excess of revenues and other sources over(under) expenditures and other uses 144,267 5,251 149$ 18 Fund balances, beginning of year 5,423.265 323.047 5.746.312 Fund balances, end of year $ 5,567.532 $ 328,298 $ 5.895.8.30 The accompanying notes are an integral pant of this statement 5 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA COMBINED STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL- SPECIAL REVENUE FUND FOR THE YEAR ENDED MARCH 31, 1999 Variance Favorable Revenues Budizet Actual (Unfavorahle) Grants $ 53,127,770 $ 47,688,062 $ (5,439,708) Rents 2,521,856 2,565,588 43,732 Interest 387,908 279,848 (108,060) Loan proceeds - 161,613 161,613 Other 319,278 141,311 (177,967) Total revenues 56,356,812 50,836.422 5.520,390) Expenditures Current: Administration 4,252,238 3,826,367 425,871 Tenant services 213,917 148,117 65,800 Utilities 857,500 899,209 (41,709) Maintenance 2,437,018 2,307,040 129,978 Protective services 461,490 257,483 204,007 General 2,469,298 2,128,393 340,905 Rehabilitation loans - 476,252 (476,252) Housing assistance payments 41,847,812 37,477,185 4,370,627 Grants - 54,475 (54,475) Shelter costs - 420,665 (420,665) Capital additions 3,438.494 2,696,969 741,525 Total expenditures 55,977,767 50,692,155 5,285,612 Excess of revenues over(under) expenditures 379,045 144,267 (234,778) Other financing sources (uses): Excess of revenues and other sources over(under) expenditures 379,045 144,267 (234,778) Fund balances, beginning of year 5.423.265 5,423,265 - Fund balances, end of year $ 5,802.310 $ 5.567.532 $ (234,778) The accompanying notes are an integral part of this statement. 6 HOUSING AUTHORITY OF THE COUNTY OF CONTRA. COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 Note 1 - DEFINITION OF REPORTING ENTITY The Mousing Authority of the County of Contra Costa(the Authority)was established pursuant to the laws of the State of California in 1941. The Authority's Board of Commissioners are appointed by the County of Contra Costa Board of Supervisors. The Authority has implemented the provisions of the Governmental Accounting Standards Board, codified in GASB section 2140, "Defining the Government Reporting". For financial reporting purposes the Authority's financial statements include all funds, account groups, and other organizations over which Authority officials exercise oversight responsibility. Oversight responsibility includes such duties as appointment of governing body members, budget review, approval of tax levies, responsibility for outstanding debt secured by the Authority's full faith and credit, or revenues, and the responsibility for funding deficits. During the year ended March 31, 1999, the Authority did not exercise oversight responsibility over any other organizations. Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial reporting policies of the Authority conform to general accepted accounting principles as applicable to governmental entities. The following is a summary of the more significant policies: (A) Basis of Presentation - Fund Accounting The accounts of the Authority are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped by fund type in the combined general purpose financial statements as follows: GOVERNMENTAL FUND TYPES S Mlal Revenue Funds - Special Revenue Funds are used to account for the proceeds of sp_ c revenue sources(other than debt service funds)that are legally restricted to expenditures for specified purposes. Debt Service Funds -Debt Service Funds account for the accumulation of resources for, and the payment of, general long-term debt obligation principal, interest and related costs.__ 7 A14, J HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 (Continued) Nate 2 (continued) FIDUCIARY FUND TYPES Trust-and nd Agency Funds -Trust and Agency Funds are used to account for assets held by the Authority in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. Those include Expendable Trust and Agency Funds. Expendable Trust Funds are accounted for in essentially the same manner as governmental funds. Agency Funds are custodial in nature(assets equal liabilities) and do not involve measurement of results of operations. The Authority accounts for deferred compensation funds in a trust fund. ACCOUNT GROUPS General Fixed Assets Account Group -This group of accounts is established to account for recorded fixed assets of the Authority. General Long-Term Debt Account Group - This group of accounts is established to account for all general long-term obligations of the Authority. (B) Basis of Accounting Governmental fund types are accounted for using the modified accrual basis of accounting. Revenues are recognized in the accounting period in which they become available and measurable; expenditures are recognized in the accounting period in which the liability is incurred, if measurable, except for unmatured interest in general long-term debt which is recognized when due. Significant revenue sources that have been treated as susceptible to accrual under the modified accrual basis include interest on investments and grants. The revenues from grants which are received as reimbursement for specific expenditures are recognized based upon the expenditures recorded. (C) Total Columns an Combined Statements Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns does not present financial position or results-of operations-in-conformity with-generallyaccepted----- accounting principles nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregate of this data. 8 3 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL.STATEMENTS MARCH 31, 1999 (Continued) Note 2 (continued) (D) Fixed Assets General fixed assets are valued at historical cost. Contributed general fixed assets are recorded at fair market value at the time received. Interest expense incurred during the development period is capitalized. The Authority records capital outlays in its respective funds as expenditures during the year and annually records the total capital outlay in the General Fixed Assets Account Croup. No depreciation has been provided on the general fixed assets. (E) Collection Losses The direct write-off method has been adopted for providing for uncollectible accounts. (F) Encumbrances Encumbrance accounting is not employed by the Authority. (G) Differing Year Ends The Authority's Homeless Programs operate on a fiscal year from July 1 through June 30. This differs from the Authority's other programs which have a fiscal year ending March 31. The reporting period for these programs was July 1, 1997 through June 30, 1998. The effect on the financial statements of these differing year ends is not material. Due, however, to these programs having differing fiscal year ends the due to/from other funds is not in exact agreement as reflected on the accompanying balance sheet. (J) Grant Restrictions The Authority has received loans and grants from the U.S. Department of Housing and Urban Development to build and improve housing projects. The grants require that only individuals and families that meet various income, age and employment standards be housed or aided. Nate 3 - CASH AND INVESTMENTS All cash and investments held by the Authority are maintained in checking or savings accounts and certificates of deposits. The California Government Code requires California banks and savings and loan associations to secure the Authority's deposits not covered by federal deposit insurance by pledging mortgages or-government securities as-collateral:--The market value-of mortgages must equal at least 150°1a of the face value of deposits. The market value of government securities must equal at least 110% of the face value of deposits. Such collateral must be held in the pledging bank's trust department in a separate depository in an account for the Authority. 9 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 (Continued) Note 4 - CASH WITH TRUSTEE Funds totaling $328,298 are maintained in the Authority's name by First Trust, which acts as the fiscal agent for previous bond issuances of the Authority. These funds are required to be invested in insured or registered U.S. Government securities and commercial paper. Note 5 - NOTES RECEIVABLE AND DEFERRED REVENUE At March 31, 1999 there were $1,390,204 of Community Development Block Grant, $900,195 of Rental Rehabilitation Grant, and $473,469 of other loans outstanding. The Community Development Block Grant and Rental Rehabilitation Grant Loans were issued to homeowners or owners of rental property to aide in unit rehabilitation and are secured by recorded deeds of trust. The other loans were loaned to the owners of two apartment complexes and are secured by recorded deeds of trust. There are various types of these loans. Some loans require monthly principal reductions, others are deferred over several years. Interest rates on the loans range from zero to 7% per annum. Many of these loans will be forgiven at some specific future date. The agency elects to record the loan and interest receivable on these notes as deferred revenue. Revenue is recognized as these loans are collected. Note 6 - FIXED ASSETS The following is a summary of the Authority's changes in fixed assets for the fiscal year ended March 31, 1999. Balance Balance 4/1/98 Additions Deletions_ 3/31/99 Conventional $ 71,416,136 $ 2,679,835 $ 43,058 $ 74,052,913 Section 8 1,603,501 17,134 173,998 1,446,637 Other 120.268 26.765 93,503 $ 73,139,905 $ 2,696.969 $ 243.821 $ 75.593,053 10 L` AJ 6i-c o HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 (Continued) Note 7 - LONGTERM DEBT Following is a summary of changes in long-term debt for the year ended March 31, 1999: Balance Balance 4 Additions Deletions 3 99 Bonds $ 2,010,000 $ - $ 275,000 $ 1,735,000 Compensated Absences (Note 8) _ 233,206 11.041 - 244,247 L,12L3,206 206 11 041 5,000 1,979,247 Following is a schedule of debt payment requirements to maturity for long-term obligations other than compensated absences: Year Ending March 31. 2000 $ 345,131 2001 350,356 2002 344,981 2003 233,913 2004 241,900 Thereafter 523.269 2,039,550 Less amount representing interest 304.550 $ L73 5.000 The Bonds accrue interest at 3-1/8%to 5% per annum. The Consolidated Omnibus Budget Act of 1986(COBRA) authorized the Secretary of the Department of Housing and Urban Development to forgive all permanent notes held by the U.S. Treasury. In the event that the notes are not forgiven by HUD, the Conventional Programs Annual Contributions Contract (ACC) states that all debt service requirements related to notes will be HUD's responsibility. It is management's opinion, that the Authority is not liable for these notes unless the federal government-fails to honor the ACC,therefore,they-should not-be--- -_- -- included on the Authority's financial statements. The Authority has no permanent notes, and interest on those notes, recorded on its books of accounts as of March 3'1, 1999. Per the financial reports received from HUD, there is actually$28,105,010 of permanent notes payable, and interest on these notes, that have not been forgiven as of March 31, 1999. We- 11 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 (Continued) Note 8 - COMPENSATED ABSENCES It is the Authority's policy to permit employees to accumulate earned but unused vacation leave up to a maximum of 240 to 560 hours depending on the employee's length of service. This leave will be used in future periods or paid to employees upon separation from the Authority. Accrued vacation leave has been valued by the Authority and has been'recorded in the General Long- Term Debt Account Group at $244,247 as of March 31, 1999. It is the Authority's policy to permit employees to accumulate earned but unused sick leave, however, the value of unused sick leave is not payable to employees upon separation from the Authority. The cost of vacation and sick leave is recognized when payments are made to employees, in the special revenue fund. Note 9 - EMPLOYER RETIREMENT PLAN The Authority participates in a defined benefit retirement plan that is administered by the Centra Costa County Employees'Retirement Association. All full-time employees of the Authority participate in this plan. The plan provides death, disability and service retirement benefits. Benefits are based on the employee's highest level of annual salary, years of service and age at the time of retirement. The Authority's retirement plan had 81 participants at March 31, 1999. The Authority contributes 19.25% of eligible employees' annual compensation. In addition, the Authority also paid approximately 50% of the employees'basic annual contributions pursuant to agreements during salary negotiations. Employer contributions are vested (1) after 10 years of service and employee attain age 50 or(2) 30 years of service regardless of age or (3) at mandatory age regardless of the amount of service. Employees contribute to the retirement system through biweekly payroll deductions. The rate of contribution for employees is determined by age at the time of entrance into the system. Employee contributions and interest thereon may be withdrawn only at termination of employment or at retirement. Total payroll subject to contributions was$3,590,973 for the year ended March 31, 1999. Employer contributions were $652,441 and employee contributions were $121,276, representing 18.17% and 3.38% of payroll subject to contribution, respectively, for the fiscal year ended March 31, 1999. _._. The ten year trend analysis and other disclosures required-by-generally accepted accounting principles are described in the general purpose financial statements of the County of Contra Costa, California as of June 30, 1998. 12 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 (Continued) Note 14 - HEALTH INSURANCE Health care benefits for active and retired employees are financed by the beneficiaries and by the Authority. The Authority's contribution during the fiscal year ending March 31, 1999 for active employees was $424,699 and for retired employees $160,826: The Authority's liability for health care benefits is limited to its annual contribution. As of March 31, 1999, there were 99 active and 65 retired employees being covered by the Authority's health insurance. Note 11 - LEASE OBLIGATIONS The Authority is obligated under certain leases accounted for as operating leases. Operating leases do not give rise to property rights, therefore the results of the lease agreements are not reflected in the Authority's account groups. Total rental expense for the year ended March 31, 1999 for all operating leases amounted to $73,820. The following is a schedule of future minimum rental payments required under the Authority's noncancellable operating leases as of March 31, 1999: Year Ended March 31 2000 $ 81,666 2001 77.743 $ 159,409 Note 12 - MANAGEMENT AGREEMENTS Under agreements with the Housing Authority of the City of San Pablo, California and CDR Senior Housing Associates(a California limited partnership), the Authority manages rental units. Under these agreements, for the fiscal year ended March 31, 1999, the Authority received $47,844 in compensation for its management services. The result of operations and financial position of the Housing Authority of the City of San Pablo and CDR Senior Housing Associates are not presented or included in these statements. 13 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31t 1999 (Continued) Note 13- JOINT POWERS AGREEMENT-PROPERTY AND LIAB L 17Y INSURANCE The Authority participates in a joint venture under a joint powers agreement(JPA)with the California Housing Authority's Risk Management Agency(CHARMA). CHARMA was formed to provide general liability, property, and errors and omissions risk financing. In addition to the Authority there are five other members. The Authority's property insurance has a$10,000 deductible per occurrence. The Authority's liability insurance has a$250,000 deductible per occurrence. The relationship between the Authority and CHARMA is such that CHARMA is not a component unit of the Authority for financial reporting purposes. CHARMA's governing board controls the operations of the JPA, including selection of management and approval of operating budgets independent of any influence by member authorities beyond their representation on the board. Each member pays a premium commensurate with the level of coverage requested and shares surpluses and deficits proportionately to their participation in CHARMA_ Condensed audited financial information for the year ended May 31, 1999, is as follows: Total assets $ 3,201,436 Total liabilities X95.30 } Total retained earnings 1 3,106.136 Total revenues $ 1,196,014 Total expenses (588.205) Net increase in retained earnings 1 607.809 CHARMA had no long-term debt outstanding at May 31, 1999. The Authority's share of year end assets, liabilities, or retained earnings has not been calculated. Note 14 - JOINT POWERS AGREEMENT-WORKERS' COMPENSATION INSURANCE The Authority participates in a joint venture under a joint powers agreement(JPA)with the California Housing Workers' Compensation Authority(CHWCA). CHWCA was formed to provide workers' compensation insurance coverage for member housing authorities. At December 31, 1998, there were thirty-two members. The relationship between the Authori"d- CHWCA is such that CHWCA is not a component unit of the Authority for financial reporting purposes. 14 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS MARCH 31, 1999 (Continued) Note 14 (Continued) Condensed audited financial information for the year ended December 31, 1998, is as follows: Total assets $ 9,767,890 Total liabilities [4.709.393) Total retained earnings $ 5 058.497 Total revenues $ 3,229,296 Total expenses (2.707.260) Net increase in retained earnings $ 522.036 CHWCA had no long-term debt outstanding at December 31, 1998. The Authority's share of year end assets, liabilities, or retained earnings has not been calculated. Note 15 - CONTINGENT LIAR LTTIE3 The Authority has received funds from various federal, state, and local grant programs. It is possible that at some future date it may be determined that the Authority was not in compliance with applicable grant requirements. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time although the Authority does not expect such disallowed amounts, if any, to materially affect the financial statements. Note 16 - YEAR 2000 ISSUE The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that may adversely affect the Authority's operations as early as fiscal year 1999- 2000. Because of the unprecedented nature of the year 2000 issue, its effects and success of related remediation efforts will not be fully determinable until the year 2000 and thereafter. Management cannot assure that the Housing Authority of the County of Contra Costa is or will be Year 2000 ready, that the Housing Authority of the County of Contra Costa's remediation efforts will be successful in whole or in part, or that parties whom the Housing'Authority of the County of---'---___- Contra Costa does business will be Year 2000 ready. 15 SUPPLEMENTARY DATA 16 HOUSING AUTHORITY OF THE COUNTY OF CONTRA.COSTA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED MARCH 31, 1999 Fedmi Grantor CFDA Number Expenditures ent of Housing and Urban Develg2mat(11—LTD) Direct Programs: Shelter Plus Care 14.238 1,586,830 Public and Indian Housing 14.850 4.980.600* Public Housing- Comprehensive Grant Program 14.852 2.561.892* Public Housing-Drug Elimination Program 14.854 378.384 Section 8 Rental Voucher Program 14.855 7.327.109* Lower Income Housing Assistance Program- Section 8 Moderate Rehabilitation 14.856 1-491,743 Section 8 Rental Certificate Program 14.857 31.512.120* Passed through the City of Antioch, CA: Community Development Block Grant 14.218 62,727 Passed through the County of Contra Costa: Community Development Block Grant 14.218 437.817 Total CDBG 14.218 500.544 Rental Housing Rehabilitation 14.230 144,330 Total HUD 50,483,552 De artment of Health and Human Services aMS) Passed Through the County of Contra Costa: Health Care for the Homeless Program 93.151 23,080 Total HH&S 23,080 Total federal expenditures $ 50,506.632 * Major federal financial assistance program. The accompanying notes are an integral part of this statement. 17 WALLACE ROWE & ASSOCIATES Accounting Fimt 2255 Morello Avenue, Suite 209 (925) 686-5550 Pleasant Hill,CA 84523 Fax(925) 686-5814 E-mail wroweassocCaol.com REPORT ON COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF GENERAL-PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners Housing Authority of the County of Contra Costa Martinez, California We have audited the general-purpose financial statements of the Housing Authority of the County of Contra Costa, California, as of and for the year ended March 31, 1999, and have issued our report thereon dated September 3, 1999. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the general-purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance which could have a 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 that are required to be reported herein under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Housing Authority of the County of Contra Costa's 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 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 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 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 a material weakness. 19 ":y.. J- This report is intended for the information of the Board of Commissioners, management and federal awarding agencies. However, this report is a matter of public record and its distribution is not limited. e September 3, 1999 20 f WALLACE ROWE & ASSOCIATES Accounting Firm 2255 Morello Avenue, Suite 209 (925) 686-ss5o Pleasant Hili, CA 94528 Fax(925) 686-5814 E-mail wroweassoc0aol.com 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 County of Contra Costa Martinez, California Compliance We have audited the compliance of the Housing Authority of the County of Contra Costa, California 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 March 31, 1999. 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 County of Contra Costa's management. Our responsibility is to express an opinion on the Housing Authority of the County of Contra Costa, California's compliance based on our audit. We conducted our audit of compliance with those requirements in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States;and(OMB)Circular A-133,Audits of States, Local Governments and Non-Prot Organizations. Those standards and OMB Circular A-13 3 require that we plan and perform the audit to obtain reasonable assurance about whether material 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 County of Contra Costa, California's compliance with those requirements and performing such other procedures as we considered 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 County of Contra Costa, California's compliance with those requirements. In our opinion, the Housing Authority of the County of Contra Costa, California complied, in all material respects, with the requirements referred to above that are applicable to each of its.majorfederal programs for the year ended March 31, 1999. w 21 r � Internal Control Over Compliance The management of the Housing Authority of the County of Contra Costa, California 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 County of Contra Costa, California's 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. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be a material weaknesses. 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. We noted no matters involving the internal control over compliance and its operation that we consider a material weakness. We did however note other matters involving the internal controls over compliance that we have reported to management of the Housing Authority of the County of Contra Costa, California in a separate letter dated September 3, 1999. This report is intended for the information of the Board of Commissioners, management, and federal awarding agencies. However, this report is a matter of public record and its distribution is not limited. September 3, 1999 22 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA STATUS OF PRIOR AUDIT FINDINGS MARCH 31, 1999 The previous audit report for the year ended March 31, 1998 contained no audit findings. 23 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA SCHEDULE OF FINDINGS AND RECOMMENDATIONS MARCH 31, 1999 Section I- Summary of Auditors' Results Financial Statements Type of auditors' report issued: unqualified Internal control over financial reporting: Material weaknesses identified? no Reportable conditions identified not considered material weaknesses? none reported Noncompliance material to financial statements? no Federal Awards Internal control over major programs: Material weaknesses identified? no Reportable conditions identified not considered material weaknesses? none reported Type of auditors' report issued on compliance for major programs: unqualified Any audit findings disclosed that are required to be reported in accordance with A-133, Section .510(a)? no Identification of major programs: Public and Indian Housing 14.850 Public Housing- Comprehensive Grant Program 14.859 Section 8 cluster: Rental Certificate Program 14.857 Moderate Rehabilitation 14.856 Rental Voucher Program 14.855 Dollar threshold to distinguish between Type A and Type B programs $ 1,515,199 Auditee qualified as low risk auditee? Yes Section II-Financial Statement Findings none Section III-Federal Award Findings none PrP 24 T4s Hlfz HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS FROM: Robert McEwan, Executive Director DATE: January 25h, 2000 SUBJECT: ACCEPT INVESTMENT REPORT FOR THE QUARTER ENDING DECEMBER 31, 1999 SPECIFIC REGI ST(. ) OR RECOMMENDATIQN(S)&BALKGROUNl)ANIS JUSTIFICA110 L RECOMMENDED ACTION: ACCEPT the investment report of the Housing Authority of the County of Contra Costa for the quarter ended December 31st, 1999 as required by SB564 (Ch 783). II. FINANCIAL IMPACT: None. For Reporting Purposes Only. III. REASONS FOR RECOMMENDATIONtBACKGROUND The Housing Authority of the County of Contra Costa is required to comply with the new local government investment laws effective January 1, 1995. The quarterly investment report details all investments of the Housing Authority, including custodial institution, type of investment, amount invested, yield, investment date, maturity date, investment period, and estimated maturity value. The investments are in accordance with the Investment Policy, ensuring safety, liquidity and yield. All investments are held in authorized investment securities. IV. CONSEQUENCES OF NEGATIVE ACTION: Failure to accept report would result in an audit finding of non-compliance and could ultimately affect future funding from the U.S. Department of Housing and Urban Development. CONTINUED ON ATTACHMENT: YES SIGNATURE ' --QD RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF COMMISSIONER I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF COMMISSIONERS ON THE DATE SHOWN. ATTESTED ' PHIL BA HEL R, CLERK OF THE BOARD OF COMMISSIONERS CADVUNISTRATOR BY6'V'S DEPUTY H:\edsidetx\INVESTMENTS\INVBDODR12`99.doe HOUSING AUTHORITY , of the COUNTY OF CONTRA COSTA INVESTMENT QUARTERLY REPORT For ,uarter ina 12/31199 Investment Maturity Est. Maturity Amount Duration Valuers Maturity Custodial Institution Investment Types invested Yield Date Date Days Date ! Bank of America Certificate of Deposit 119,997.83 4.30% 12/17/99 1/18/00, 32 120,450.21 Certificate of Deposit 101,738.37 4.30%1 12128/99 3/11/001 74 102,623.29 Certificate of Deposit 150,760.83 4.15%. 10/8/99 2/28/001 143 153,212.04 Certificate of Deposit. 152,711.00 4.15% 10/21/99 3/26/00 157', 155,437.00 Certificate of Deposit 152,925.23 4.70% 12/31/99 6/16100 —T6-8-', 156,233.44 Certificate of Deposit 150,106.06 5.16% 8/27/99! 2/25/00 182 153,968.19 Certificate of Deposit 150,000.00 4.800A 12/10/99!, 3/20/00 101 151,992.33 'Certificate of Deposit 158,779.64 : 4.50% 8/11/99 1/3/001 145 161,618.10 iCertificate of Deposit 150,000.00 ! 4.25% 11/9199 3/25/00_; 137 152,392.81 Savings 6,250.65 2.00% 120 6,291.75 Savings 10,732.73 2.00%i 120 10,803.30 Savings 18,108.57 2.00% 120 18,227.64 Savings 18,233.41 2.00% 120 18,353.30 Savings 10,446.61 2.00% 120 10,515.30 Bank of America Totals $ 1,350,788.93 $ 1,372,118.68 Imperial Bank Certificate of Deposit 99,000.00 5.40%i 1111199 4/28/00 179 $ 101,621.74 West America Certificate of Deposit 28,723.53 4.70%i 10/1/99 1/3/00 94 $ 29,071.20 Certificate of Deposit 31,588.56 4.70% 10/1199 1/3/00 94 31,970.91 Certificate of Deposit 66,165.81 4.70% 10/1/99 1/3/00 94 66,966.69 $ 126,477.90 $ 128,008.80 Franklin Nat'l Bank Certificate of Deposit 100,000.00 j 4.25% 3/26199 2126/00 337 103,923.97 ! Capital Bank Certificate of Deposit $ 100,000.00 ' 4.50% 2/25/99 8/25/00 547 $ 106,743.84 National Bank of Canby Certificate of Deposit $ 100,000.00 4.85% 6116/99 6/16/00 366 $ 104,863.29 Farmers State Bank Certificate of Deposit $ 100,000.00 4.85% 6/17/99 6/12100 361 : $ 104,796.85 i i AES Financial Corporation. FNMA Discount Note 195,793.17 4.250°to 814199 2/2100 182 199,942.38 FNMA Discount Note 97,919.22 4.250% 8/13/99 219/00 180 99,971.50 FNMA Discount Note 97,907.90 4.250% 816/99 2/3/00 181 99,971.34 FNMA Discount Note 132,152.69 4.500% 7/19/99 7/7/00 354 137,920.34 $ 523,772.98 $ 537,805.56 AIM Financial ::Money Market 104,907.31 4.00% 120 106,286.91 Money Market 107,016.26-:: 4.00% 120 108,423.59 $ 211,923.56 $ 214,710.50 Community State Bank Certificate of Deposit $ 100,000.00 : 4.25% 2124/99 2/24/00 365 $ 104,250.00 US Clearing Brokerage Treasury Bill 186,641.73 4.80% 2/5199 6/6/99 121 189,611.63 GNMA 1,101,003.75 7.00%1; 8/13199 2/10/00 181 1,139,222.15 Treasury Bill 236,754.34 4.80% 8/13199 2/10/00 181 242,389.74 7reasury Bill 62,134.93 4.80%1 8/13199 2110/00 181 63,513.91 Treasury Bill 60,000.00 4.80% 8113/99 2/10/00 181! 61,428.16 Treasury Bill 40,000.00 4.80% 8/13/99 2/10/00 181 40,952.11 $ 1,686,534.75 $ 1,737;217.72 $4,498,498.12 $ 4,616,060.94 4THQTR'99