Cook & Hauge berg CERTIFIED PUBLIC ACCOUNTANTS LLC MOORE STREET SENIORS, INC. ANANCIAL STATEMENTS WITH ACCOMPANYING INFORMATION YEARS ENDED JUNE 30, 2016 AND 2015 and REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Cook & Hauge berg CERTIFIED PUBLIC ACCOUNTANTS LLC
MOORE STREET SENIORS, INC.
ANANCIAL STATEMENTS WITH ACCOMPANYING INFORMATION
YEARS ENDED JUNE 30, 2016 AND 2015
and
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MOORE STREET SENIORS, INC.
FINANCIAL STATEMENTS WITH ACCOMPANYING INFORMATION
Years Ended June 30, 2016 and 2015
TABLE OF CONTENTS
Report of Independent Certified Public Accountants
Financial Statements
Statement of Financial Position
Statement of Activities
Statement of Changes in Net Assets
Statement of Functional Expenses - 2016
Statement of Functional Expenses - 2015
Statement of Cash Flows
Notes to Financial Statements
Accompanying Information
Report of Independent Certified Public Accountants on Information Accompanying the Basic Financial Statements
Additional Information Required by HUD
Single Audit Information
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Independent Auditor's Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance
Schedule of Expenditures of Federal Awards
Schedule of Findings and Questioned Costs
Schedule of Prior Audit Findings and Questioned Costs
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36
37
Cook.;.~ Hauge berg CERTIFIED PUBLIC ACCOUNTANTS LLC
The Board of Directors Moore Street Seniors, Inc.
Report of Independent Certified Public Accountants
Report on the Financial Statements
We have audited the accompanying financial statements of Moore Street Seniors, Inc. (a nonprofit corporation), which comprise the statement of financial position as of June 30, 2016 and 2015, and the related statements of activities, changes in net assets, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the corporation's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the corporation's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Moore Street Seniors, Inc., as of June 30, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
119 North Cushman Street, Suite 300 • www.ch-cpa.com
Faif banks, Alaska 99701 • 907-456-7762 e-mail : [email protected]
Senior Consultants: James F. Dieringer, Jr., CPA and Michael T. Cook, CPA FAX 907-452-6184
The Board of Directors Moore Street Seniors, Inc.
Other Matters
Other Information
Page 2
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of the Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September 20, 2016 on our consideration of Moore Street Seniors, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Moore Street Seniors, Inc.'s internal control over financial reporting and compliance.
September 20, 2016
2
1120 1135 1140 1200
1100T
1191
1320 1340
1300T
1420 1450 1465
1400T
1495
1400N
lOOOT
2110 2116
2122T
2191
2000T
3131 3132
3130
2033T
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
STATEMENT OF FINANCIAL POSmON
June 30, 2016 and 2015
ASSETS
Cash - operations $ Accounts receivable - HUD Accounts receivable - operations Prepaid expenses
Total current assets
Tenant deposits held in trust
Replacement reserve Residual receipts reserve
Total restricted deposits
Building Furniture for project/tenant use Office furniture and equipment
Total fixed assets
Less accumulated depreciation
Net fixed assets
Total assets
LIABILmES
Accounts payable - operations Accounts payable - section 8 and other
Total current liabilities
Tenant deposits held in trust
Total liabilities
NET ASSETS
Unrestricted net deficit Temporarily restricted net assets
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these financial statements.
5
$
$
$
2016 2015
1,269 $ 7,797 659 1,385
1,176 10,554 11,130
13,658 20,312
10,408 8,911
25,228 48,831 4,006 3,358
29,234 52,189
1,645,376 1,616,255 4,774 4,774
14,151 14,151
1,664,301 1,635,180
(879,335) (845,122)
784,966 790,058
838,266 $ 871,470
40,778 $ 23,328 2,834
43,612 23,328
9,597 8,913
53,209 32,241
(760,000) (728,097) 1,545,057 1,567,326
785,057 839,229
838,266 $ 871,470
5120 5121
5100T
5220
5200T
5152N
5430 5440
5400T
5910 5970 5990
5900T
5000T
6210 6310 6311 6320 6330 6340 6350 6351 6390
6263T
6420 6450 6451 6453
6400T
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
STATEMENT OF ACTIVffiES
Years Ended June 30, 2016 and 2015
Description of Account
Rent revenue - gross potential Tenant assistance payments
Total rent revenue
Vacancy - apartments
Total vacancies
Net rental revenue (rent revenue less vacancies)
Revenue from investments - residual receipts Revenue from investments - replacement reserve
Total financial revenue
Laundry revenue Gifts Miscellaneous revenue
Total other revenue
Total revenue
Advertising Office salaries Office expense Management fees Manager salaries Legal expense - project Audit expense Bookkeeping fees/accounting services Miscellaneous administrative expense
Total administrative expenses
Heating fuel Electric Water Sewer
Total utilities expense
The accompanying notes are an integral part of these financial statements.
6
2016 2015
$ 109,476 $ 110,178 142,158 118,149
251,634 228,327
1,943 8,409
1,943 8,409
249,691 219,918
2 2 8 8
10 10
1,195 1,205 5,040
812 4,071
7,047 5,276
256,748 225,204
653 43,027 36,716 5,708 5,952
17,364 15,237 39,115 4,657
5,402 1,506 44,887 15,804 17,728 18,646 4,443 4,568
178,327 103,086
7,629 16,223 21,248 25,310 4,602 4,154 4,601 4,154
38,080 49,841
Description of Account 2016 2015
6515 Supplies 3,727 2,600 6520 Contracts 14,205 12,304 6525 Garbage removal 2,968 2,840 6548 Snow removal 1,250 1,074 6590 Miscellaneous operating and maintenance 13,425 10,749
6500T Total operating and maintenance expenses 35,575 29,567
6720 Property and liability insurance 13,461 11,868 6790 Miscellaneous taxes, insurance and licenses 25
6700T Total insurance expense 13,486 11,868
6000T Total cost of operations before depreciation 265,468 194,362
5060T Income (loss) before depreciation (8,720) 30,842
6600 Depreciation expense 45,452 41,892
5060N Operating loss $ {54,172} $ (11,050}
7
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
STATEMENT OF CHANGES IN NET ASSETS
Years Ended June 30, 2016 and 2015
Balance, June 30, 2014
Changes in net assets from operations
Replacement reserves additions/withdrawals (net)
Residual receipts reserve additions/withdrawals (net)
Tenant security deposits
Total other changes
Total changes in net assets
Balance, June 30, 2015 Sll00-060
Changes in net assets from operations 3247
Replacement reserve additions/withdrawals (net) Sll00-065
Residual receipts reserve additions/withdrawals (net) Sll00-065
Tenant security deposits Sll00-065
Total other changes Sll00-065
Total changes in net assets
Balance, June 30, 2016 3131
The accompanying notes are an integral part of these financial statements.
8
Unrestricted
$ (708,719)
(11,060)
(15,938)
7,347
273
(8,318)
(19,378)
$ (728,097)
(54,182)
23,611
(646)
(686)
22,279
(31,903)
$ (760,000)
Temporarily Restricted Total
$ 1,558,998 $ 850,279
10 (11,050)
15,938
(7,347)
(273)
8,318
8,328 (11,050)
51100-070 $ 1,567,326 51100-050 $ 839,229
3248 10 3250 (54,172)
51100-075 (23,611) 51100-055
51100-065 646 51100-065
51100-075 686 51100-055
51100-075 (22,279) 51100-055
(22,269) (54,172)
3132 $ 1,545,057 3130 $ 785,057
9
Advertising Office salaries Office expense Management fees Manager salaries Legal expense - project Audit expense Bookkeeping/accounting services
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
STATEMENT OF FUNCTIONAL EXPENSES
Year Ended June 30, 2016
Program Services
$
5,402
Miscellaneous administrative expense Heating fuel 7,629 Electric 21,248 Water and sewer 9,203 Supplies 3,727 Contracts 14,205 Garbage removal 2,968 Snow removal 1,250 Miscellaneous operating and maintenance 13,425 Property and liability insurance 13,461 Miscellaneous taxes, insurance and licenses 25
Total expenses before depreciation 92,543
Depreciation expense 45,452
Total expenses $ 137,995
The accompanying notes are an integral part of these financial statements.
10
Support Services Total
$ 653 $ 653 43,027 43,027 5,708 5,708
17,364 17,364 39,115 39,115
5,402 44,887 44,887 17,728 17,728 4,443 4,443
7,629 21,248 9,203 3,727
14,205 2,968 1,250
13,425 13,461
25
172,925 265,468
45,452
$ 172,925 $ 310,920
Office salaries Office expense Management fees Manager salaries Legal expense - project Audit expense Bookkeeping/accounting services
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
STATEMENT OF FUNCTIONAL EXPENSES
Year Ended June 30, 2015
Program Services
$
4,657
Miscellaneous administrative expense
Heating fuel 16,223
Electric 25,310 Water and sewer 8,308
Supplies 2,600
Contracts 12,304
Garbage removal 2,840
Snow removal 1,074 Miscellaneous operating and maintenance 10,749
Property and liability insurance 11,868
Total expenses before depreciation 95,933
Depreciation expense 41,892
Total expenses $ 137,825
The accompanying notes are an integral part of these financial statements.
11
Support Services Total
$ 36,716 $ 36,716 5,952 5,952
15,237 15,237 4,657
1,506 1,506 15,804 15,804 18,646 18,646 4,568 4,568
16,223 25,310
8,308 2,600
12,304 2,840 1,074
10,749 11,868
98,429 194,362
41,892
$ 98,429 $ 236,254
51200-010 51200-020 51200-025 51200-030
51200-040
51200-050 51200-070 51200-090 51200-110 51200-140 51200-160
51200-230
51200-240
51200-250 51200-260 51200-330
51200-350
51200-470
S1200-480
51200T
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
STATEMENT OF CASH FLOWS
Years Ended June 30, 2016 and 2015
Increase (Decrease) in Cash
Cash flows from operating activities Rental receipts Interest received Gifts Miscellaneous income
Total receipts
Administrative Management fees Utilities Operating and maintenance Property insurance Tenant security deposits
Total disbursements
Net cash provided by operating activities
Cash flows from investing activities Net (deposits) to reserve for replacements Net (deposits) withdrawals to residual receipts reserve Net purchase of fixed assets
Net cash used in investing activities
Net increase (decrease) in cash
Cash at beginning of year
Cash at end of year
$
$
The accompanying notes are an integral part of these financial statements.
12
2016 2015
252,075 $ 218,533 10 10
1,000 2,007 5,276
255,092 223,819
(141,983) (100,720) (13,324) (14,904) (38,424) (49,077) (36,765) (27,551) (12,906) (12,366)
{813} 226
{244,215) {204,392)
10,877 19,427
23,603 (15,946) (648) 7,345
{ 40,360) {6,839)
(17,405) {15,440)
(6,528) 3,987
7,797 3,810
1,269 $ 7,797
2016 2015 Reconciliation of Changes in Net Assets to
Net Cash Provided by Operating Activities
3250 Changes in net assets $ (54,172) $ (11,050)
Adjustments to reconcile changes in net assets to net cash provided by operating activities
6600 Depreciation expense 45,452 41,892 (Increase) decrease in assets
51200-490 Accounts receivable - operations (1,176) 376 51200-500 Accounts receivable - HUD 726 (1,385) 51200-520 Prepaid expenses 576 (1,018) 51200-530 Tenant security deposit cash account (1,497) 273
Increase (decrease) in liabilities 51200-540 Accounts payable - operations 17,450 (9,446) 51200-550 Accounts payable - section 8 and other 2,834 51200-560 Accrued payroll liabilities (168) 51200-580 Tenant security deposit liability 684 {47}
Total adjustments 65,049 30,477
51200-610 Net cash provided by operating activities $ 10,877 $ 19,427
13
ORGANIZATION
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
NOTES TO FINANCIAL STATEMENTS
Moore Street Seniors, Inc. was formed on May 12, 1992 as a nonprofit corporation to construct and manage supportive housing for the elderly. The project is a 20-unit apartment complex located in Fairbanks, Alaska. The project is operated under Section 202 of the National Housing Act and administered by the U.S. Department of Housing and Urban Development (HUD). Under this program, housing is provided to the elderly subject to regulation by HUD as to rental charges and operating methods. Lower rental charges to tenants are recovered through rent subsidies provided by HUD.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - These financial statements have been prepared on the accrual basis of accounting. Under this method, expenses are recognized when incurred and revenue is recognized when earned.
Basis of Presentation - Resources are classified for accounting and reporting purposes according to externallyimposed or donor-imposed restrictions into the following three classes: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Accordingly, the net assets of the corporation are classified and reported as follows:
• Unrestricted net assets consist of contributions that are not subject to donor-imposed restrictions, restricted contributions whose restrictions are met in the same reporting period, and other net assets of the corporation that are not related to contributions.
• Temporarily restricted net assets consist of revenues and gains subject to donor-imposed restrictions that will be met either by the actions of the corporation or the passage of time.
• The corporation does not have any net assets that are permanently restricted by donors.
Revenue Recognition - The corporation recognizes revenue using the provisions in the Not-for-Profit Entities Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification, under which contributions are recognized as revenue when they are received or unconditionally pledged.
Use of Estimates - In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash - For purposes of the statement of cash flows, cash includes amounts held in unrestricted checking accounts and savings accounts.
Receivables - Receivables are stated at the amount management expects to collect from rents, subsidy payments and other sources. Management writes off receivables when it determines they are uncollectible based on historical experience.
14
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
NOTES TO FINANCIAL STATEMENTS (Continued)
Property and Equipment - Property and equipment are recorded at cost. Donated property and equipment are carried at fair market value at the time of receipt when there is a clearly measurable and objective basis for determining the fair market value. Depreciation is computed using the straight line method over the estimated useful life of the asset. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and improvements are capitalized. Deduction is made for retirements resulting from renewals or improvements.
Income Taxes - The corporation is a tax exempt corporation under Section 50l{c)(3) of the Internal Revenue Code and accordingly, no provision for income taxes is included in the financial statements. The corporation accounts for income taxes in accordance with the Income Taxes topic of the FASS Accounting Standards Codification which requires the recognition of a liability for uncertain tax positions when a liability would more likely than not be assessed by a taxing authority. Management evaluated the corporation's tax positions and determined there are no liabilities required to be recognized as a result of an uncertain tax position. Income tax returns are open for examination by the Internal Revenue Service for three years from the date they were filed.
Reclassifications - Certain reclassifications, which have no effect on changes in net assets, have been made to the June 30, 2015 financial statements to conform them to current classifications.
Subsequent Events - In preparing these financial statements, the corporation has evaluated events and transactions for potential recognition or disclosure through September 20, 2016, the date on which the financial statements were available to be issued.
RELATED PARlY TRANSACTIONS
The corporation contracts with MB Management Services, Inc. for all administrative work. The corporation pays MB Management Services, Inc. a management fee equal to 6.50% of gross revenue for this service. Management fees expense totaled $17,364 and $15,237 for the years ended June 30, 2016 and 2015, respectively. During 2016, a waiver of management fees totalling $4,040 is included as gift income. Additionally, Moore Street Seniors, Inc. reimbursed MB Management Services, Inc. for wages paid to employees performing bookkeeping, office and resident manager services totaling $99,870 and $60,019 for the years ended June 30, 2016 and 2015, respectively.
PROPERlY AND EQUIPMENT
The corporation depreciates its building and building improvements over estimated useful lives of 5-40 years. Furniture for project/tenant use is depreciated over estimated useful lives of 5-7 years. Office furniture and equipment are depreciated over the estimated useful life of 7 years. Depreciation expense was $45,452 and $41,892 for the years ended June 30, 2016 and 2015, respectively.
LEASES
The corporation's building located at 1420 Moore Street, Fairbanks, Alaska is on land leased from the City of Fairbanks. The term of the lease is through December 31, 2069 and the rent is $1 per year. The premises may be used solely as a senior citizens residential facility.
15
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
NOTES TO FINANCIAL STATEMENTS (Continued)
TEMPORARILY RESTRICTED NET ASSETS
A summary of temporarily restricted net assets follows:
Residual receipts reserve Replacement reserve Tenant deposits HUD Supportive Housing Program
$
$
June 30, 2016 2015
4,006 $ 3,358 25,228 48,831 9,597 8,911
1,506,226 1,506,226
1,545,057 $ 1,567,326 ========== Temporarily restricted net assets consist of a grant by HUD for the building and various HUD mandated cash accounts. Under the regulatory agreement, the organization is required to make monthly deposits to the replacement reserve account. This reserve is for the replacement of property and other project expenditures approved by HUD. Both reserve accounts require written HUD approval for disbursement and are maintained in separate interest bearing accounts. HUD also requires tenant deposits to be kept in a separate interest bearing account.
ECONOMIC DEPENDENCY
The corporation receives a significant amount of funding from a federal grant to maintain its present level of service. Under the regulatory agreement, the corporation may not increase rents charged to tenants without HUD approval.
COMMITMENTS AND CONTINGENCIES
The corporation completed the construction of the apartment building with funds from a HUD capital advance totaling $1,506,226.
The corporation must conform to a grant provision, which requires that the building constructed with HUD funds be available for elderly persons for 40 years. If not available to elderly persons for 40 years from July 1, 1995, the corporation may be required to repay HUD the original $1,506,226 capital advance.
RESIDUAL RECEIPTS RECAPTURE
In June 2015, HUD issued a memorandum which notified projects subject to a Section 202 Project Rental Assistance Contract (PRAC) that the excess residual receipts would be recaptured. There were no residual receipts subject to recapture at January 1, 2016, the organization's contract renewal date.
16
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
INFORMATION ACCOMPANYING THE BASIC FINANCIAL STATEMENTS
The Board of Directors Moore Street Seniors, Inc.
We have audited the financial statements of Moore Street Seniors, Inc. (a nonprofit corporation) as of and for the years ended June 30, 2016 and 2015, and have issued our report thereon dated September 20, 2016, which contained an unmodified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The accompanying information shown on pages 21 through 25 is presented for the purposes of additional analysis as required by the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, Office of the Inspector General, and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
Fairbanks, Alaska September 20, 2016
19
~~~Lt& Certified Public Accountants
S1300-010 1135
S1300-040
S1300-075 2191
S1300-140
S1300-150
Cash
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
COMPUTATION OF SURPLUS CASH - ANNUAL
Year Ended June 30, 2016
cash (Account 1120, 1191) Accounts receivable - HUD
Total cash
Current obligations Accounts payable (due within 30 days) Tenant security deposits
Less total current obligations
Surplus (deficit) cash
$
See report of independent certified public accountants on information accompanying the basic financial statements.
21
11,677 659
12,336
37,149 9,597
46,746
$ {34,410)
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
Year Ended June 30, 2016
Beginning Balance July 1, 2015
Buildings 1420P $ 1,616,255 1420AT
Furniture for project/tenant use 1450P 4,774 1450AT
Office furniture and equipment 1465P 14,151 1465AT
Total 1400PT $ 1,635,180 1400AT
Accumulated depreciation 1495P $ 845,122 6600
Net book value
Schedule of Additions to Buildings account
1420A-010 Common area carpet
1420A-010 Exterior siding
1420A-010 Hot water heater
Total Additions
Schedule of Deductions to Buildings account
1420D-010 Carpet
Total Deductions
See report of independent certified public accountants on information accompanying the basic financial statements.
22
Additions
$ 40,360
$ 40,360
$ 45,452
Amount
$ 23,854
6,549
9,957
$ 40,360
Amount
$ 11,239
$ 11,239
Ending Balance Deductions June 30, 2016
1420DT $ (11,239) 1420 $ 1,645,376
1450DT 1450 4,774
1465DT 1465 14,151
1400DT $ (11,239) 1400T $ 1,664,301
1400ADT $ (11,239) 1495 $ 879,335
1400N $ 784,966
23
1320P
1320DT 13200DT 1320INT
1320WT
1320
1320R
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
SCHEDULE OF RESERVE FOR REPLACEMENTS
Year Ended June 30, 2016
Balance, July 1
Additions Current year monthly payments ($2,222 * 9) Prior year deposit Interest receipts
Withdrawals HUD approved withdrawals
Balance, June 30
Deposits suspended or waived indicator
See report of independent certified public accountants on information accompanying the basic financial statements.
24
$ 48,831
20,000 1,406
8 21,414
(45,017)
$ 25,228
Yes
1340
1340INT 13400DT
1340WT
1340
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
SCHEDULE OF RESIDUAL RECEIPTS RESERVE
Year Ended June 30, 2016
Balance, July 1
Additions Interest receipts Deposits made but not required
Withdrawals HUD approved withdrawals
Balance, June 30
See report of independent certified public accountants on information accompanying the basic financial statements.
25
$ 3,358
2 5,894
{5,248)
$ 4,006
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
OWNERS/OFACERS CERTIFICATION
We hereby certify that we have read the foregoing financial statements and additional information of Moore Street Seniors, Inc. and, to the best of our knowledge and belief, they are complete and accurate.
Officer:
Larry A. Morris Jr. S2900-020 Name of Signatory
Board President S2900-025 Title of Certifying Official
Melissa Bidwell S2900-030 Name of Signatory
Property Manager S2900-035 Title of Certifying Official
Date: September 20, 2016 S2900-050
26
MOORE STREET SENIORS, INC. (HUD Project Number 176-EEOOl)
MANAGEMENT AGENTS CERTIFICATION
I hereby certify that I have read the foregoing financial statements and additional information of Moore Street Seniors, Inc. and, to the best of my knowledge and belief, they are complete and accurate.
MB Management Services, Inc. S3000-020 Name of Management Agent
Melissa Bidwell S3000-030 Name of Management Agent's Representative
Melissa Bidwell S3000-050 Name of Property Manager
Date: September 20, 2016
27
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDfflNG STANDARDS
The Board of Directors Moore Street Seniors, Inc.
We have audited, 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, the financial statements of Moore Street Seniors, Inc. (a nonprofit corporation), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, changes in net assets, functional expenses and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated September 20, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Moore Street Seniors, Inc.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the corporation's internal control. Accordingly, we do not express an opinion on the effectiveness of the corporation's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the corporation's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Moore Street Seniors, Inc. 's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of the financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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The Board of Directors Moore Street Seniors, Inc.
Page 2
We noted certain matters that were reported to management of Moore Street Seniors, Inc. in a separate letter dated September 20, 2016.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the corporation's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the corporation's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Fairbanks, Alaska September 20, 2016
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Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON COMPUANCE FOR EACH MAJOR FEDERAL PROGRAM AND
ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
The Board of Directors Moore Street Seniors, Inc.
Report on Compliance for Each Major Federal Program
We have audited Moore Street Seniors, Inc.'s (a nonprofit corporation) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on Moore Street Seniors, Inc.'s major federal program for the year ended June 30, 2016. Moore Street Seniors, Inc.'s major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal program.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for Moore Street Seniors, Inc.'s major federal program based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 the major federal program occurred. An audit includes examining, on a test basis, evidence about Moore Street Seniors, Inc.'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 on compliance for the major federal program. However, our audit does not provide a legal determination of Moore Street Seniors, Inc.'s compliance.
Opinion on Each Major Federal Program
In our opinion, Moore Street Seniors, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2016.
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The Board of Directors Moore Street Seniors
Report on Internal Control over Compliance
Page 2
Management of Moore Street Seniors, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Moore Street Seniors, Inc.'s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Moore Street Seniors, Inc. internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of the federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Fairbanks, Alaska September 20, 2016
34
Certified Public Accountants
MOORE STREET SENIORS, INC.
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Federal Grantor/Pass-Through Grantor/Program or Cluster Title
Year Ended June 30, 2016
U.S. Department of Housing and Urban Development
Supportive Housing for the Elderly (Section 202)
Capital Advance Program (ll
Rental Assistance Program
Total Expenditures of Federal Awards
Federal CFDA
Number
14.157
Grant Identifying
Number
176-EEOOl
<1> Includes outstanding balance at June 30, 2015 of capital advance expended in a prior year.
Basis of Presentation
Federal Expenditures
$ 1,506,226 142,158
$ 1,648,384
The accompanying schedule of expenditures of federal awards includes the federal grant activity of Moore Street Seniors, Inc., HUD Project No. 176-EEOOl, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Moore Street Seniors, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Moore Street Seniors, Inc.
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MOORE STREET SENIORS, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2016
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued :
Internal control over financial reporting:
Material weakness( es) identified?
Significant deficiency(ies) identified?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
S3400-020 Unmodified
S3500-030
S3500-020
S3500-040
Yes
Yes
Yes
x No
x None reported
x No
Material weakness(es) identified?
Significant deficiency(ies) identified?
S3600-030 Yes X No
Type of auditor's report issued on compliance
for major programs:
Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200-516(a)
Identification of major program:
CDFA Numbers Name of federal program or cluster
S3600-020 Yes X None reported
Unmodified
S3700-010 Yes X No
14.157 U.S. Department of Housing and Urban Development -Supportive Housing for the Elderly (Section 202)
Dollar threshold used to distinguish between type A and type B programs:
Auditee qualified as low-risk auditee?
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S3700-020
53700-030
$ 750,000
Yes X No
MOORE STREET SENIORS, INC.
SCHEDULE OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS
Fiscal Year
Finding Number
Federal Financial Assistance
Year Ended June 30, 2016
Finding
Audit findings that have been fully corrected:
2015
2014
2013
2012
2015-001
2014-002
2013-002
2012-03
2011 11-03
2010 10-03
2009 09-03
2015
2014
2013
2012
2015-002
2014-003
2013-003
2012-05
2011 11-05
2010 10-06
During the year ended June 30, 2015, incorrect rents were charged to tenants based on their income and assets.
The audited financial statements for year ended June 30, 2014, were not published within 9 months due to various financial statement and compliance with federal awards findings identified.
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Comments
During the year ended June 30, 2016, we did not identify instances of incorrect rents being charged to tenants based on their income and assets.
The audited financial statements for year ended June 30, 2015 were submitted timely.