HomeMy WebLinkAboutMINUTES - 12172002 - HA.2 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
TO: BOARD OF COMMISSIONERS f-I n
FROM: Robert McEwan, Executive Director
DATE: December 17, 2002
SUBJECT: ACCEPTANCE OF AUDIT REPORT FOR FISCAL YEAR ENDING MARCH 31, 2002
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
I. RECOMMENDED ACTION:
ACCEPT financial audit report for the period April 1, 2001 through March 31, 2002, performed by
Patel and Associates, Oakland, California, as recommended by the Advisory Housing Commission.
II. FINANCIAL IMPACT:
Funding has been provided in the Housing Authority's Fiscal Year 2001/2002 Consolidated
Operating Budget for the audit contract due the certified public accountancy firm of Patel and Associates
for performing this financial audit.
Ill. REASONS FOR RECOMMENDATION/BACKGROUND
Patel and Associates has completed their audit of the financial records of the Housing Authority of
the County of Contra Costa and all financial records of the Housing Authority are in order. There were no
findings or management concerns.
IV. CONSEQUENCES OF NEGATIVE ACTION:
Should the Board of Commissioners elect not to accept the financial audit report as performed by
the certified public accountancy firm of Patel and Associates, it would become necessary to expend
additional funds to either redo the financial audit report or contract with another certified public
accountancy firm.
t�
CONTINUED ON ATTACHMENT: YES SIGNATURE , • -
RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE
X APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON I7ecember 17, 2002 APPROVED AS RECOMMENDED x OTHER
VOTE OF COMMISSIONERS
I HEREBY CERTIFY THAT THIS IS A
x UNANIMOUS (ABSENT Norse } 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 December 17, 2002
JOHN SWEETEN,CLERK OF
THE BOARD OF COMMISSIONERS
AND COUNTY ADMINISTRATOR
a
BY . "i ,DEPUTY
H:\JudyHayes\MSOFFICE\WINWORD\BOARD\BO-AUDIT FYE 3-31-02.doc
HOUSING AUTHORITY OF THE
COUNTY OF CONTRA COSTA
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31,2002
Patel &
Associates
Certified Public Accountant
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MARCH 31,2002
TABLE OF CONTENTS
MANAGEMENT DISCUSSION AND ANALYSIS 1-10
INDEPENDENT AUDITOR'S REPORT 11-12
FINANCIAL STATEMENTS
Statement of Net Assets 13
Statement of Activities 14
Government-Wide Statement of Cash Flows 15
Statement of Net Assets-Proprietary Funds 16
Statement of Revenues,Expenses and Changes in Fund Net Assets-
Proprietary Funds 17
Notes to Financial Statements 18-29
SUPPLEMENTARY INFORMATION:
Combining Statement of Net Assets-Other Enterprise Funds 30
Combining Statement of Revenues,Expenses and Changes in Net Assets-
Other Enterprise Funds 31
Schedule of Expenditures of Federal Awards 32
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN
AUDIT OF FINANCIAL S'T'ATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS 33-34
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER.COMPLIANCE IN ACCORDANCE WITH OMB
CIRCULAR.A-133 35-36
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 37-38
STATUS OF PRIOR YEAR.FINDINGS AND RECOMMENDATIONS 39
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31,2002
The Housing Authority of the County of Contra Costa (the Authority) management discussion
and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b)
provide an overview of the Authority's financial activity, (c) identify changes in the Authority's
financial position(its ability to address the next and subsequent year challenges), and(d)identify
individual fund issues or concerns.
This Management Discussion and Analysis is new,and will now be presented at the front of each
year's financial statements.
The Management Discussion and Analysis (MD&A) is designed to focus on the current year's
activities, resulting changes and currently known facts. Please read MD&A in conjunction with
the Authority's financial statements(beginning on page 13).
FINANCIAL HIGHLIGHTS
+ The Authority's net assets decreased by $2.45 million (or 9.29%) during 2002. The
Authority engages only in business-type activities, therefore the decrease is attributable
to the Authority's business-type net assets. Net Assets were $26.36 million and$23.91
million for 2001 and 2002 respectively.
• The business-type activities revenue increased by $8.06 million (or 14.35%) during
2002.They were$56.15million for 2001 and$64.21 million for 2002.
• The total expenses of all Authority programs increased by $9.54 million (or 17.191/0)
during 2002. Total expenses were$55.50 million and$65.04 million for 2001 and 2002
respectively.
1
USING TIUS ANNUAL REPORT
This is a very different presentation of the Authority's financial statements from these of the
previous years. The following graphic outlining these changes is provided for your review:
YID&A
Management Discussion
and Analysis(new)
Basic Financial Statements
Authority-wide Financial Statements(new)--pgs 13-15 a
Fund Financial Statement(refocused)--pgs 16-17
Notes to Financial Statements(expanded/restructured)--pgs 18-29—
The primary focus of the Authority's financial statement (summarized fund-type information)
has been discarded. The new and clearly preferable focus is on both the Authority as a whole
(Authority-wide) and the major individual funds. Doth perspectives (authority-wide and major
fund) allow the user to address relevant questions, broaden a basis for comparison (year to year
or Authority to Authority)and enhance the Authority's accountability.
Authority-"Wide Financial Statements
The Authority-wide financial statements (see pgs 13-15) are designed to be corporate-like in that
all business type activities are consolidated into columns that add to a total for the entire
Authority.
These Statements include a Statement of Net Assets, which is similar to a Balance Sheet. The
Statement of Net Assets reports all financial and capital resources for the Authority. The
statement is presented in the format where assets,minus liabilities, equal "Net Assets", formerly
known as equity. Assets and liabilities are presented in order of liquidity.
The focus of the Statement of Net Assets (the "Unrestricted Net Assets") is designed to present
the net available liquid(non-capital)assets,net of liabilities, for the entire Authority. Net Assets
(formerly equity)are reported in three broad categories:
Net Assets Invested in Capital Assets Net of Related Debt: This component of Net
Assets consists of all Capital Assets, reduced by the outstanding balances of any bonds,
mortgages, notes or other borrowings that are attributable to the acquisition,
construction,or improvement of those assets.
2
Restricted Net Assets: This component of Net Assets consists of restricted assets,when
constraints are placed on the asset by creditors (such as debt covenants), grantors,
contributors, laws,regulations,etc.
Unrestricted Net Assets: Consists of Net Assets that do not meet the definition of"Net
Assets Invested in Capital Assets,Net of Related Debt",or"Restricted Net Assets".
The Authority-wide financial statements also include a Statement of Revenues Senses and
Changes in Fund Net Assets (similar to an income Statement). This Statement includes:
Operating Revenues; such as rental income, grant revenue, fees and laundry income. Operating
Expenses, such as administrative, utilities, and maintenance, and depreciation; and, Non-
Operating Revenue and Expenses,such as investment income and interest expense.
The focus of the Statement of Revenues, Expenses and Changes in Fund Net Assets is the
"Change in Net Assets",which is similar to Net Income or Loss.
Finally, Statement of Cash Flaws is included, which discloses net cash provided by, or used for
operating activities, non-capital financing activities, and from capital and related financing
activities.
Fund.Financial Statements
The Fund Financial Statements presentation is similar to the traditional government financial
statements. The focus is novo on Major Funds, rather than fund types. The Authority's major
funds consist of exclusively Enterprise Funds. Enterprise funds utilize the full accrual basis of
accounting. The Enterprise method of accounting is similar to accounting utilized by the private
sector accounting.
Many of the funds administered by the Authority are provided by the Department of Housing
and Urban Development. Others are segregated to enhance accountability and control.
The Authority's Funds
Business Type_Funds
Conventional Public Housing--Under the Conventional Public Housing Program, (also titled as
`Low Rent-Aided Housing') the Authority rents units that it owns to very low & low-income
households. The Conventional Public Housing Program is operated under an Annual
Contributions Contract (ACC) with HUD. The ACC provides Operating Subsidy and Capital
improvement Grant funding to enable the PHA to provide the housing at a rent that is based upon
30%of household income or at a flat rate below market rate.
Housing, Choice Voucher Program -- Under the Housing Choice Voucher Program, (hereunder
titled as `Voucher' Program) the Authority administers the program under an Annual
Contributions Contract(ACC)with HUD.The ACC provides funding to the Authority to provide
tenant based rental assistance to program participants. The rental assistance payment is
structured so as the rental payment that the participant is obligated to pay is 30% to 40% of
household income.
3
CDBG_Rental.Rehabilitation.Program(RRP)
Under the RRP, the Authority executes annual funding contracts with Contra Costa County and
the Cities of Antioch and Walnut Creek to fund operation of a program that assists rental
property owners with rehabilitation of housing units to help assure a supply of affordable rental
apartments and homes for its Section 8Noucher users and other low-income .households.
Technical assistance in determining repairs is provided by Authority staff and below-market-rate
loans are made to cover part of rehabilitation costs. Program administrative costs are shared by
the funding providers and the Authority.
Other Non-Maior Funds—In addition to the major funds above, the Authority also maintains the
following non-major funds. Non-major funds are defined as funds that have assets, liabilities,
revenues, or expenses of less than 1.0% or more of the Authority's total assets, liabilities,
revenues or expenses:
Shelter flus Care program — is designed to provide rental assistance and supportive
services to homeless and disabled individuals and their families. It is cooperatively
administered by the County Health Services Department and the Housing Authority of
Contra Costa County, and has capacity to serve 200 households. Participants receive
rental assistance through;the section 8 Housing Choice Voucher program funded by U.S
Department of Housing and Urban Development.
Economic Development and Supportive Services Program— a grant program funded by
the Department of Housing and Urban Development that encourages economic self-
sufficiency
elfsufficiency among the Authority's public housing resident population.
ROSS—The Resident Opportunities and Self Sufficiency Program is a grant program for
the benefit of public housing residents. It is designed to provide residents empowerment
activities and assistance in becoming economically self sufficient; provide resource to
enhance independent living for the elderly and persons with disabilities, and improve
overall quality of life. Funding for the program primarily comes from the:department of
Housing and Urban Development
Section 8, Pension —"The Coggins Square family Apartments (150 Units) in the City of
Pleasant Hill, California, was developed under Section 8 Community Investment
Demonstration (Pension Fund) Program of the U.S. Department of Housing and Urban
Development. HUD is responsible for the contract administration; however, HUD has
contracted with the Housing Authority to carry out the contract administrative functions
for five of the units under this program. The administrative functions relate to the five
project based Section 8 certificates at Coggins Square.
Drug Elimination Program--a grant program funded by the Department of Housing and
Urban Development that is intended to reduce the use of illegal drugs within the
Authority's properties
.Moderate Rehabilitation --is a Department of Housing and Urban Development funded
rehabilitation program that provides project based rental assistance based on the Housing
Choice Voucher methodology in determining subsidized rent and program compliance.
Management Fund&County Programs--represents non-HUD resources developed from
a variety of activities,including County cost reimbursement projects.
4
AUTHORITY-WIDE STATEMENT
Statement of Net Assets
The following table reflects the condensed Statement of Net Assets compared to prier year. The
Authority is engaged only in Business-Type Activities.
TATTLE 1
STATEMENT OF NET ASSETS
2002 2001
(in millions (in millions
of dollars) of dollars
Current and Other Assets $ 16.66 $ 11.71
Capital Assets 17.58 19.18
Total Assets 34.24 30.89
Other Liabilities 10.33 4.53
Long-Term Liabilities 0 0
Total Liabilities 10.33 4.53
Net Assets:
Invested in Capital Assets,
Net of Related Debt 17.58 19.18
Restricted
Unrestricted 6.33 7.18
Total Net Assets $ 23.91 $ 26.36
For more detailed information see page 13 for the Statement of Net Assets.
Major Factors Affecting the Statement of Net Assets
Current assets & Other Assets were increased by $4.97 million, while liabilities were increased
by $5.61 million. The increase in current liabilities and current assets is primarily due to an
increase in unearned portion of the Housing Choice Voucher Program and CDBG & Rental
Rehabilitation program revenues.
Capital assets also changed significantly, decreasing from $19.18 million to $17.58 million. Of
which, $0.7 trillion decrease was attributed primarily to writing off of prior year construction
soft costs, that are now not considered as part of the capital costs, and current year depreciation
& amortization of$2.95 million. Additional purchases of capital assets, including construction
costs, in the year amounted to $2.05 million, net, after deletion. For more detail see "Capital
Assets and Debt Administration"below.
5
Table 2 presents details on the change in Unrestricted Net Assets
TABU 2
CHANGE OF UNRESTRICTED NET ASSETS
Millions
of Dollars
Unrestricted Net Assets 04/01/01 $ 7.18
Results of Operations (0.83)
Adjustments:
Depreciation(1) 2.95
Adjusted Results from Operations:
Prior period Adjustments (1.62)
Capital Expenditures: (1.35)
Unrestricted Net Assets 03/31/0.2 $ 6.33
(1)Depreciation is treated as an expense and reduces the results of operations but does not have
an impact on Unrestricted Net Assets
While the result of operations is a significant measure of the Authority's activities, the analysis
of the changes in Unrestricted Net Assets provides a clearer change in financial well-being.
6
TABLE 3
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN NET ASSETS
The following schedule compares the revenues and expenses for the current and previous fiscal
year. The Authority is engaged only in Business-Type Activities.
2002 2001
(Millions of (Millions
dollars) of dollars)
Revenues
Tenant Revenue--Rents and Other $ 3.54 $ 3.43
Operating Subsidies and Grants 57.36 48.27
Capital Grants 2.09 1.91
Investment Income 0.27 0.26
Other Revenues 0.95 2.28
Total Revenue 64.21 56.15
Expenses
Administrative 6.50 5.57
Tenant Services 0.30 0.13
Utilities 1.22 1.12
Maintenance 3.64 4.22
General 0.66 0.50
Housing Assistance Payments 49.77 41.21
Depreciation 2.95 2.75
Total Expenses 65.04 55.50
Net increase $ (0.83) $ 0.65
MAJOR FACTORS AFFECTING THE STATEMENT OF REVENUE,EXPENSES AND
CHANGES IN NET ASSETS
Tenant revenue has slightly increased due to increase in the tenant portion of the rent generated
mainly by increase in average household income during the year.
Operating Subsidies, Grants and Capital Grants increased substantially. This increase was
primarily due to:
• A higher level of activity in the areas of capital grants. The Authority is under-
taking an aggressive modernization program.
• Increased HUD reimbursements for the increased HAP payments mainly due to
hard rental market in the local Bay-Area and have placed more vouchers in
service and hence,increased the HAP expenditure for the year.
7
Other revenues have decreased mainly due to substantially fewer activities during the year
compared to prior year.Consequently,this also reduced the maintenance costs in the year.
Most expenses, (except maintenance & housing assistance payments expenditures as explained
above)increased moderately due to inflation and do reflect increased level of activity.
CAPITAL ASSETS AND DEBT ADMIMSTRATION
Cgpital Assets
As of year-end, the Authority had $17.58 million invested in a variety of capital assets as
reflected in the following schedule, which represents a net decrease (addition, deductions and
depreciation)of$1.59 million or 8.3%from the end of last year.
TABLE 4
CAPITAL ASSETS AT YEAR-END
(NET OF DEPRECIATION)
Business-type
Activities
2002 2001
Land and land rights $ 1,034,720 $ 1,034,720
Buildings 70,513,646 68,513,287
Equipment 885,030 792,440
Accumulated Depreciation (58,520,156) (55,615,074)
Construction In Progress 3,667,121 4,450,426
Total $ 17,580,361 $ 19,175,799
8
The following reconciliation summarizes the change in Capital Assets, which is presented in
detail an page 28 of the notes.
TABLE 5
CHANGE IN CAPITAL ASSETS
Business Type
Activities
Beginning Balance-4101/01 $ 19,175,799
Additions 2,135,690
Retirements,Net of Depreciation (779,059)
Depreciation (2,952,069)
Amortization
Ending Balance-3/31/02 $ 17,580,361
This year's major additions are:
Business—Type Activities
Capital Improvements Programs(modernization
(Modernization completed on variety of the
Authority's Public Housing complexes $ 1,996,110
Equipment Purchases 139,580
$2 WO
9
Notes Payable Outstanding
As of year-end, the Authority had$185,000 of notes payable outstanding, see Note 5 to the
financial statements.
ECONOMIC FACTORS
Significant economic factors affecting the Authority are as follows:
• Federal funding of the Department of Housing and Urban Development
• Local labor supply and demand,which can affect salary and wage rates
• Local inflation,recession and employment trends,which can affect resident incomes and
therefore the amount of rental income
• Local rental market & economy that has direct effect on the ability to find viable
privately owned rental properties that are available to our Dousing Choice Voucher
participants.
• Inflationary pressure on utility rates,supplies and other costs
FINANCIAL CON'T'ACT
The individual to be contacted regarding this report is Bakulesh Patel, CPA,Director of Finance
of the Housing Authority of the County of Contra Costa, at (925) 372-7400. Specific requests
may be submitted to Bakulesh Patel,CPA,Director of Finance,housing Authority of the County
of Contra Costa.,P.O.Box 2759, 3133 Fstudillo Street,Martinez, CA 94553.
10
Pahl
Associates 2101
(514)452-5051
2141 Webster Street, Suite 1650 Facsimile: (514)452-3432
Certified Public Accountant Oakland,California 94612 E-mail: Patelcpaccaol.com
INDEPENDENT AUDITOR'S REPORT
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(the Authority)as of and for the year ended March 31,
2042, as listed in the table of contents. These general-purpose financial statements are the
responsibility of the Authority's 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 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 the 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 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
as of March 31, 2402, and the results of its operations and its 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 July
19, 2042 on our consideration of the Housing Authority of the County of Contra Costa's internal
control over financial reporting and on our tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. 'That report is an integral part of an audit performed in
accordance with (government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.
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 taken as a whole. The
accompanying financial information listed as supplementary information in the table of contents
is presented for purposes of additional analysis. Also, 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, weal Governments,
and Non-Profit Organizations. These are 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.
,4:5 J , 4�'�
Oakland,California
July 19,2002
12
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF NET ASSETS
MARCH 31,'290.2
Business-type
AdLywo
ASSETS
Cash and Cash Equivalents(Note 3) $ 6,947,181
Accounts Receivable-HUD 2,066,177
Accounts Receivable_Other 121,019
Accounts Receivable-Tenants 94,535
Accrued Interest Receivable 47,886
Prepaid Expenses and Deposits 133,760
Investments(Note 14) 5,593,219
Notes Receivable 1,658,518
Capital Assets,net of accumulated depreciation(Note 13)
Land 1,034,720
Construction in Progress 3,667,121
Buildings and Improvements 12,644,571
Furniture and Equipment 233,441
Total Assets 34,242,736
LIABILITIES
Accounts Payable 657,946
Accounts Payable- HUD 853,571
Accrued Compensated Absences(Note 8) 366,516
Deferred Revenue 7,706,146
Tenants Security Deposits 287,841
Accrued Liabilities 24,707
Other Liabilities 240,611
Note Payable(Note 5) 185,000
Total Liabilities 10,327,338
NET ASSETS
Invested in Capital Assets,net of related debt 17,580,361
Unrestricted Assets 6,335,037
Total Net Assets $ 23,115,318
The accompanying notes are an integral part of these financial statements
13
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HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
GOVERNt1 ZNT-WWE STA2'E11IEM OF CASH FLOWS
FDR-M Ut1$ NDEI3 MA&M 31 2M
Cash Flows from operating Activities
Cash collected from:
HUD $ 63,382,517
Dwelling Rental 3,564,326
Other Revenues and Loan Repayments 1,354,849
Cash Paid for:
Housing Assistance Payments (49,766,703)
Employee expenses (6,271,843)
Administrative Expenses (5,733,528)
Net Cash provided by Operating activities 6,529,618
Cash from Investing Activities:
Cash collected from:
Interest 286,398
Cash paid for:
Investments,net (1,102,915)
Net cash used for investing activities (816,517)
Cash flow from capital&related financing activities:
Cash paid for:
Acquisition of Capital assets (139,580)
Construction of Capital assets (1,908,201)
Net cash used for capital&related financing activities (2,047,781)
Net increase in cash and cash equivalents 3,665,320
Cash and cash equivalents at beginning of year 3,281,861
Cash and cash equivalents at end of year $ 6,947,181
Reconciliation of operating loss to net cash provided by operating activities:
Operating loss $ (953,649)
Adjustments to Reconcile Operating Loss to
Net Cash Provided by Operating Activities:
Prior year adjustments (620,358)
Depreciation expense 2,952,069
Sad debt expense 37,971
Increase in Accounts Receivable-HUD (1,176,040)
Decrease in Accounts Receivable-other 477,339
Increase in Accounts Receivable-tenants (21,618)
Decrease in prepaid expenses&other assets 49,580
Decrease in Intirftind receivable 603,495
Decrease in Notes receivable 167,400
Increase in Accounts payable 354,526
Decrease in Accounts payable-HUD (440,891)
Increase in deferred revenue 5,925,362
Decrease in accrued liabilities&other liabilities (234,415)
Decrease in Intezivnd Payable (603,495)
increase in Tenant security Deposits 12,342
Net cash provided by operating activities $ 6,529,618
The accompanying notes are an integral part of this financial statement
15
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HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31,_2002
NOTE 1: ORGANIZATION AND CONTRACTS
A. Organization
The Housing Authority of the County of Centra Costs. (the Authority) was
established pursuant to the State Health and Safety Code in 1941 to provide
affordable housing options to love and moderate-income families.The Authority's
Board of Commissioners are appointed by the County of Contra Costa Board of
Supervisors.
The Authority is a legally separate Agency maintaining separate accounting
records from those of the County and with its own employees. For purposes of
these financial statements the Authority is not considered to be a component unit
of the County. However, these financial statements are included in these of the
County as a non-discrete component unit. The Authority's financial statements
include all funds, and organizations over which Authority officials exercise
oversight responsibility.
The accompanying financial statements are those of the Low Rent Housing
Program (Contract SF477) and the Section 8 Housing Program (Contract SF-
473), which includes Existing Certificate, Moderate Rehabilitation Shelter Plus
Care and Voucher programs, and the Local Programs. A summary of the
programs administered by the Authority is provided below to assist the reader in
interpreting such financial statements.
Following is a summary of the major programs operated by the Authority:
B. Conventional
The Authority has contracted with the HUD (Contract No. SF - 477) to provide
housing for families of low-income in public housing facilities owned and
maintained, pursuant to the United. States Housing Act of 1937 and the
Department of Housing and Urban Development Act.
Under this program, the public housing agency develops and owns properties
which are rented to qualified low-income families. The Authority has financed
these housing developments through the issuance of notes, under which HUD has
guaranteed the debts and made specific annual debt and service contributions to
the Authority.
C. Section 8
The Authority has contracted with the HUD(Contract No. SF-473)to provide rent
subsidy payments to low and moderate income families pursuant to the United
States Housing Act of 1937 and the Department Of Housing and Urban
Development Act.
18
HUD makes annual contributions to the program for Dousing assistance payments
on behalf of the families. Included in this annual contribution is an allowance for
administrative costs. Under this program, tenants lease directly with private
owners after being certified as eligible under program guidelines. Tenants make
payments directly to owners for the tenant rent obligation (TRO) and the
Authority makes monthly subsidy payments (HAP) to the owners. Programs
included in this annual contribution are the Section 8 Existing Certificate,
"Voucher,Moderate Rehabilitation and Shelter Plus Gare.
NOTE Z. SUNDIAItYY OF SIGNMCANT ACCtJiTN'I'ING POLICIES
A. Basis of Presentation and Measurement.Panus
The basic financial statements of the Authority are composed of the following:
+ Government-wide financial statements
0 Fund financial statements
» Notes to the financial statements
Government-wide Financial Statements
Government-wide financial statements report information on the nonfiduciary
activities of the Authority. These statements, which include the statement of net
assets and the statement of changes in net assets,would if applicable have separate
columns for the government and business-type activities of the primary
government (including its blended component units), as well as its discreetly
presented component units. However, the Authority only has business-type
activities.
The government-wide financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting, as are the
proprietary fund financial statements. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the tinning of
related cash flows. Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met. Funds
received in advance for which services have not been performed are treated as
deferred revenue.
The statement of activities demonstrates the degree to which the direct expenses of
a givers function or segment are offset by program revenues, Direct expenses are
those that are clearly identifiable with a specific function of segment. Program
revenues include rent charges to tenants and grants and contributions that are
restricted to meeting the operational or capital requirements of a particular
function or program.
Interfund activity has been eliminated from the government-wide financial
statements.
19
Fund Financial Statements
The underlying accounting system of the Authority is organized and operated on
the basis of separate funds,each of which is considered to be 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, net assets, revenues and
expenses.
Fund financial statements for the Authority are presented after the government-
wide financial statements. These statements display information about major
funds individually and non-major funds in the aggregate for the. Authority's
proprietary funds. The combining statements of the non-major funds are presenter)
as supplementary information following the notes to the financial statements.
GASB 34 requires that all funds which report at least 10 percent of any of the
following: (a) total assets, (b) total liabilities, (c) total revenues, or (d) total
expenses, be shown in detail as a major fund in the fund-wide statements. All
other non-major funds may be combined and shown in one column as other funds.
In the fund financial statements, proprietary,funds are presented using the accrual
basis of accounting as described above for the government-wide financial
statements. Proprietary funds distinguish operating revenues and expenses from
non-operating items. Operating revenues and expenses generally result from
providing services in connection with a proprietary fund's principal ongoing
operations. Also these statements present increases and decreases in total net
assets.
Private-sector standards of accounting and financial reporting issued prior to
December 1, 1989, generally are followed in both the government-wide and
proprietary fund financial statements to the extent that those standards do not
contradict guidance of the Governmental Accounting Standards Board.
Governments also have the option of following subsequent private-sector guidance
for their business-type activities and enterprise funds, subject to this same
limitation. The Authority has elected not to follow subsequent private-sector
guidance.
The Authority has an established capitalization policy, which requires all
acquisitions of property and equipment in excess of$5,000 and all expenditures for
repairs, maintenance,renewals, and betterments that materially prolong the useful
lives of assets be capitalized. Property and equipment are carried at cost or, if
donated, at the approximate fair value at the date of donation. Depreciation is
computed on a straight-line basis over the useful lives of the assets generally as
follows:
Years
Computer Hardware and Software 3
Furniture and Equipment 5
Vehicles 5
Building Improvements 10
Buildings 27.5
Depreciation on Capital Grant equipment is included in Low Rent Aided Mousing.
20
B. Accounts Receivable
Receivables are principally amounts due from HUD and tenants. Allowance for
doubtful accounts has not been provided due to immateriality.
C. Estimates
Management uses estimates and assumptions in preparing financial statements.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the reported
revenues and expenses. Actual results could differ from those estimates.
D. Net Assets
Net Assets consist of investment in capital assets, net of related debt, restricted
net assets and unrestricted net assets. Restricted net assets include the
accumulation of contributions in the form of cash or other assets which generally
do not have to be returned to the contributor. These funds are restricted by HUD
as to use and must be approved before expending. The Authority does not have
any restricted net assets for the period ended March 31, 2002. Unrestricted assets
are designated for use for program expenditures in future periods.
E. Total Columns on Combined Financial Statements
Total columns on the accompanying general-purpose financial statements are
captioned "Memorandum Only" to indicate that they are presented only to
facilitate financial analysis. Such data is not comparable to a consolidation.
F. Taxes
The Authority is exempt from federal and state income taxes. The Authority is
also exempt from property taxes but makes payments in lieu of taxes on owned
housing.
G. Budgets andl Bud _ry Accountinm
The Board of Commissioners adopts an operating budget no later than April 1.
This budget is revised by the Board of Commissioners during the year to give
consideration to unanticipated revenue and expenditures primarily resulting from
events unknown at the time of budget adoption. The Authority employs budget
control by minor object and by individual appropriation accounts. Expenditures
cannot legally exceed appropriations by major object account.
NOTE 3: CASH AND CASH.EQUIVALENTS
All cash held by the Authority are maintained in checking or savings accounts. 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% of the face value of deposits. The market value of
21
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.
Cash equivalents are short term, highly liquid investments that are both readily
convertible to known amounts of cash and so near thein maturity that they do not
present significant risk of changes in value due to changes in interest rates.
NOTE 4: INTER-FUND 12ECES
Receivables Payables
Federal Programs:
Low Rent Aided Housing $ 657,717 $
Certificate Program 13,263
Moderate Rehabilitation 20,963
Shelter Plus Care 17,545
Voucher 30,000 811,662
Capital Grants 11,507 114,640
Drug Elimination 84,214
EDSS 52,976
CDBG 4,521 16,900
Rental Rehabilitation 4,521
County Program-
Homeless Shelter Maintenance 13,166
TOTAL FEDERAL PROGRAMS 730,174 1,123,721
Local Programs:
County Programs-Other 369,830
Management Fund 23,717
TOTAL LOCM,PROGRAMS 393,547
TOTAL FEDERAL AND LOCAL
PROGRAMS $ 1,123,721 $ 1,123,721
NOTE 5: NOTE PAYABLE
On June 30, 1994 the Authority signed a demand Promissory Note promising to pay to
the order of HACCC Casa Del Ria, Inc. a California Non Profit Public Benefit
Corporation on demand or in the event no demand has thereto-fore been made, on
December 31, 2059 (the maturity date), the amount of$185,000, and all accrued but
unpaid interest there on. The outstanding principal amount hereof shall bear interest
until the maturity date at the lesser of 7.52% and the maximum rate permitted by law.
As of the date of this report there is no interest accrued as it has been forgiven by
HACCC Casa lel Rio,Inc.
NOTE 6: PAYMENT IN LIEU OF TAXES
In connection with the Conventional Housing Program, the Authority is obligated to
make annual payments in lieu of property taxes based on the lesser of assessable value
of owned housing times the current tax rate or 10%of the dwelling rents net of utilities
expense. At March 31, 2002, accrued liabilities include $66,404 for payment in lieu of
takes.
22
NOTE 7: RETIREMENT PLAN
The Authority participates in a defined benefit retirement plan that is administered by
the Contra 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 96 participants at March 31, 2002. The Authority contributes 15%
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 $4,312,638 for the year ended March 31, 2002. Employer contributions were
$790,513 and employee contributions were $150,622, representing 18.33%and 3.49°lo
of payroll subject to contribution, respectively, for the fiscal year ended March 31,
2002.
The ten-year trend analysis and other disclosures required by accounting principles
generally accepted in the United States of America are described in the general-
purpose financial statements of the County of Contra Costa, California as of June 30,
2002.
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 at$366,516 as of March 31,2002.
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.
NOTE 9: CONTINGENT LIABILITIES AND RELA'T'ED PARTIES
The Authority has received funds from various Federal, 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 amounts, 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.
23
De Anza Gardens,Int./De Anza Gardens,Associates
The Authority is Co-General Partner of the limited partnership of De Anza Gardens,
Associates. As of the date of this report the Authority had incurred $100,680 in
expenses related to the formation of this partnership. 'These funds will be reimbursed
to the Authority when its formation has been completed and it has received the
necessary funding.
Casa del Ria Associates
Casa del.Rio, Senior Housing Associates (CDR) was formed as a limited partnership
on April 12, 1994 for the purpose of developing, owning and operating an 82-unit
affordable housing rental complex (the project) located in Antioch, California. The
Project qualifies for low-income housing tax credits under Section 42 of the Internal
Revenue Service Code. Such projects are regulated under terms of a Regulatory
Agreement,including rent charges,operating methods and other matters.
The general partner of the Partnership is HACCC Casa del Rio, Inc., a California
public benefit corporation. The officers and Hoard members of HACCC Casa Del Rio,
Inc. are employees of the Authority,which was the developer of the Project.
Financing for construction of the Project was obtained through loans from the
California Housing Finance Agency (CHFA) and Rental Housing Construction
:Program(RHCP).
The influence the Authority could potentially exercise over the partnership is limited
by the partnership agreement and the terms of the Regulatory Agreement. However, in
connection with the relationship with the HACCC Casa Del Rio, Inc. and CDR Senior
Housing Associates, the Authority has certain potential liabilities. The Authority's
potential liabilities are as follows.
Pursuant to the Indemnification Agreement dated July 1, 1994, by and among the
Authority,HACCC Casa Del Rio,Inc.,CDR Senior Housing Associates,and MHIFED
I Limited Partnership, the Authority could possibly be liable for deficiency, unpaid
taxes, interest and penalties, cost to contest, operating deficiency and expenses of
enforcement as identified in the Agreement.
Pursuant to the Operating Deficit Guaranty Agreement dated July 1, 1994 by the
Authority to and for the benefit of MHIFED I Limited Partnership, the Authority can
possibly be liable for operating deficit and expenses of enforcement as identified in the
Agreement.
Pursuant to the Indemnity Agreement, dated July 1, 1994,by the Authority to and for
the benefit of CDR Senior Housing Associates and MHIFED I Limited Partnership,the
Authority can possibly be liable for any costs, expenses, and liabilities arising out of
claims made by FPI (FPI Real Estate Croup, FPI Mortgage Co. and FP1 Management,
Inc.)under the.Development Agreement.
24
Pursuant to the Demand Note dated June 30, 1994,from.the Authority to HACCC Casa
Dei Rio, Inc., the Authority can possibly be liable to HACCC Casa Del Rio, Inc. for
$185,000. Although the note is due upon demand the maturity date is December 31,
2059,the note will be called prior to maturity only in the event that there are operating
deficits and there is not sufficient cash available to cover expenses.
Pursuant to the Assignment and Assumption Agreement,the Authority can possibly be
liable for any and all claims relating to the Assignment agreement arising prior to the
date of the Assignment Agreement.
Pursuant to the Department of Housing and Community Development Rental Housing
Construction Program First Amendment to Regulatory Agreement (the "Amended
HCD Agreement") dated November 14, 1994, by and among the Department of
Housing and Community Development, CDR Senior Housing Associates, and the
Authority, the Authority can possible be liable for a sponsor's operating guaranty to
provide sufficient staff or equipment to the general partner, as needed and remedies
against sponsor for default under the Amended HCD Agreement.
Summary financial information for CDR.Senior Housing Associates and HACCC Casa
Del Rio,Inc.as of December 31, 2001 is presented below.
Condensed Balance Sheet
HACCC CDR
Casa Del Rio, Senior
Inc. Housing Total
naudiAssociates
Assets.
Cash $ 77,682 49,215 126,897
Notes Receivable(Current) 185,000 185,000
Investment in CDR Housing 202,221 202,221
Other Current Assets 39,644 66,044 105,688
Property Plant and Equipment 5,524,908 5,524,908
Replacement/Operating Reserves 508,245 508,245
Deferred costs 85,245 85,245
Total Assets 504,547 6,233,657 6,738,204
Liabilities:
Current Liabilities 3,432 62,612 66,044
Accrued Interest Payable 681,488 681,488
Notes Payable,Net of current portion 3,170,982 3,170,982
Total Liabilities 3,432 3,915,082 3,918,514
Unrestricted Net Assets 501,115 501,115
Partners'capital 2,318,575 2,318,575
Total Unrestricted Net Assets/Partners'
Capital 501,115 2,318,575 2,819,690
Total Liabilities,Unrestricted Net Assets
and Partners'Capital $ 504,547 $ 6,233,657 $ 6,738,204
25
Condensed Statement of Operations
Revenues:
Rent,net of vacancy loss $ $ 374,630 $ 374,630
Interest and other income 27,833 20,745 48,578
Total Revenue 27,833 395,375 423,208
Project operating expenses 302,235 302,235
Partnership and financial expenses 137,316 137,316
Depreciation and Amortization 181,947 181,947
Other Expenses - - 14,873 _ 14,873
Total Expenses 14,873 621,498 � 636,371
Net Profit(Loss)/Change in Net
Assets $ 12,960 $ (226,123) $ (213,163)
Condensed Statement of Changes in
Partners' Capital
General Partner Limited Partner
HACCC MHIFED 94
Casa Del Rio, Limited
Inc Partnership
Partnership interest 1% 99%
Partners' capital,December 31,2000 $ 203,562 $ 2,341,136
Net Loss,December 31,2001 (2,261) (223,862)
Partners'capital December 31,2001 $ 201,301 $ 2,117,274
The financial statements of CDR Senior Housing Associates were audited by other
auditors whose report dated March 28, 2002 expressed an unqualified opinion on those
statements. The summarized information was derived from those statements.
NOTE 10: RISK MANAGEMENT
The Authority is exposed to all common perils associated with the ownership and
rental of real estate properties. A risk management program has been established to
minimize loss occurrence and to transfer risk through various levels of insurance.
Property,casualty,employee dishonesty and public official's liability forms are used to
cover the respective perils. Insurance for these perils is carried by California Housing
Authority Risk Management Agency(CHARMA),a Joint Powers Agreement(JPA).
Excess insurance from $250,000 to $5,000,000 is carried through, the Housing
Authorities Risk Retention Croup(HARRG),a Housing Authority Insurance Pool.
26
NOTE II.- PRIOR PERIOD ADJUSTMENTS
Prior period adjustments to Net Assets were made as follows:
Low Rent Aided Housing
Write-off prior years soft costs--CLAY 906&CGP 706 $ (691,147)
Capital Grant
Correct beginning equity balance (125,440)
(816,587)
CDBG
R.eclass Prior Year Net Assets to Deferred Revenue (230,782)
Rental Rehabilitation
Reclass Prior Year Net Assets to Deferred Revenue (389,576)
Management Fund
Record Note Payable from prior period(see Note 5) (185,000)
$ (1,621,945)
NOTE Its EQUITY TRANSFERS
This relates to the transfer of completed capital projects CTAP 906 $670,000 and CGP
706$2,164,687 to low rent aided housing program.
27
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Tr
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SCHEDULE OF EXPmTTUl~ s OF FEDERAL AWARDS
FOR THE YEAR ENDED Mnit w IL 2 =
FEDERAL
CFDA FEDERAL
FEMA 9HANIOEXASEILMO-UGH GRANIQMBWAA.M` 11U L'IMBER EN121TURES
U.S.Department of Rousing and Urban Development
Direct Awards
Moderate Rehabilitation 14.856 S 157,614
Housing Choice Voucher 14.871 51,105,661
Drug Elimination 14.854 166,374
EDSS 14.864 52,976
ROSS 14.870 9,344
Shelter Plus Care 14.238 1,554,276
Low Rent Aided Housing 14.850 2,784,415
Capital Fund 14.872 507,439
C1AP 14.852 265,750
Comprehensive Grant Program 14.859 1,317,008
Community Development Block Grant 14.218 267,812
Section 8 Certificate 14.857 204,411
Total U.S.Department of Housing and Urban Development 58,343,080
U.S.Department of Health and Daman Services
Health Care for Homeless-Shelter Maintenance 93.151 16,469
Total U.S.Department of Health and Human Services 16,469
Total Expenditures of Federal Awards S 58,409,549
Note: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the
Authority and is presented on the accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133,Audits of States,Local Governments,
and Non-Profit Organizations. Therefore,some amounts presented in this schedule may differ from amounts
presented in,or used in the preparation of,the general-purpose financial statements.
32
Patel &
AssociatesTelephone:(514)452-5451
m 2141 Webster Street,Suite 1654 Facsimile: (514)4523432
Certified Public Accountant Oakland,California 14612 E-mail: Patelcpac@r,aol.com
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GO VERNMENTAUDITING STANDARDS
Board of Commissioners
Dousing 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 (the Authority) as of and for the year ended March 31, 2002, and have
issued our report thereon dated. July 19, 2002. 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.
Compliance
As part of obtaining reasonable assurance about whether the Authority's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grants, noncompliance with 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 under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Authority'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 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 condition in which the design or operation of one
or more of the internal control components does not reduce to a relatively tow 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 material weaknesses.
33
This report is intended for the information of management, federal awarding gotheestand hese
through entities and is not intended to be and should not be used by anyone
specified parties.
y1 �
Oakland,California
July 19, 2002
34
Patel
Associates Telephone: (510)452-50351
2101 Webster.Street, Suite 16501 Facsimile: (510)452-3432
Certified Public Accountant Oakland, California 94612 E-mail: Patelcpa@aot.com
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUILREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMR CIRCULAR A-133
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 (the
Authority) with the types of compliance requirements described in the US 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, 2002. The Authority's 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 Authority's management. Our responsibility is to express an opinion on the
Authority's 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 Auditing Standards, issued by the Comptroller General of the united States, and
OMB Circular A-133,Audits of States, Local Governments, and Non-Profits Organizations and
the provisions of the Public and Indian Housing Compliance Supplement HUD Notices 96-32
and 97-301. Those standards and OMB 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 Authority'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 of the Authority's compliance with
those requirements.
In our opinion, the Authority 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 March 31,
2002.
35
Internal Control Over Compliance
The management of the Authority is responsible for establishing and maintaining effective
internal control over compliance with the requirements of laws,regulations, contracts,and grants
applicable to federal programs. In planning and performing our audit, we considered the
Authority'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 the internal control
over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all
matters in the internal control 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 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 to be material
weaknesses.
This report is intended for the information of management, federal awarding agencies and pass-
through entities and is not intended to be and should not be used by anyone ether than these
specified parties.
Oakland,California
July 19,2002
36
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED MARCH 31,2002
SECTION 1 -SUMIMIARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
• Material weaknesses identified? No
• Reportable conditions identified that are not considered to be
material weaknesses? None reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major programs:
• Material weaknesses identified? No
• Reportable conditions identified that are not considered to be
material weaknesses? None reputed
Type of auditor's report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in
accordance with section 510(a)of Circular A-133? No
Identification of major programs:
C,DA Number Name of Federal Pro ram
14.871 Housing Choice-"Voucher Program
14.850 Aided/Low Rent Public Rousing
14,238 Shelter flus Care
Dollar threshold used to distinguish between type A and type B
programs: $1,752,286
Auditee qualified as low-risk auditee? No
37
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED MARCH 31,21002
SECTION II-FINANCIAL STATEM—FNT FINDINGS
No matters were reported.
SECTION DI FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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gOUSING AUT110RITY OF THE COUNTY OF CONTRA COSTA
STATUS OF PRIOR YEAR FINDINGS
AND RFCOMWNDATIONS
FORT YEAR ENDED MARCH.3I 2QUZ
No findings were reported in the prior year.
39