Item 1. Business
Boston Financial Qualified Housing Tax Credits L.P. II (the "Partnership") is a limited partnership formed on March 10, 1988 under the Uniform Limited Partnership Act of the State of Delaware. The Partnership's partnership agreement ("Partnership Agreement") authorized the sale of up to 60,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain discounts. The Partnership raised $59,981,240 ("Gross Proceeds"), net of discounts of $18,760, through the sale of 60,000 Units. Such amounts exclude five unregistered Units previously acquired for $5,000 by the Initial Limited Partner, which is also one of the General Partners. The offering of Units terminated on October 28, 1988. No further sale of Units is expected.
The Partnership is engaged solely in the business of real estate investment. Accordingly, a presentation of information about industry segments is not applicable and would not be material to an understanding of the Partnership's business taken as a whole. As described more fully under Item 3 - Legal Proceedings, an affiliate of the Managing General Partner, BF Alabama, Inc., was assigned a 51% voting interest in the General Partner of Garden Cove Apartments, Ltd. In addition, an affiliate of the Managing General Partner, Boston Financial GP-1, L.L.C., assumed the Local General Partner interest in Shannon Creste Apartments, L.P. As a result, the Partnership is deemed to have control over Garden Cove and Shannon Creste, and the accompanying financial statements are presented in combined form to conform with the required accounting treatment under generally accepted accounting principles. However, this change only affects the presentation of the Partnership's operating results, not the business of the Partnership.
The Partnership originally invested as a limited partner in forty limited partnerships ("Local Limited Partnerships") which own and operate forty residential apartment complexes ("Properties") most of which benefit from some form of federal, state or local assistance programs and all of which qualify for the low-income housing tax credits ("Tax Credits") that were added to the Internal Revenue Code (the "Code") by the Tax Reform Act of 1986. The investment objectives of the Partnership include the following: (i) to provide current tax benefits in the form of Tax Credits which qualified limited partners may use to offset their federal income tax liability; (ii) to preserve and protect the Partnership's capital; (iii) to provide limited cash distributions from property operations which are not expected to constitute taxable income during the expected duration of the Partnership's operations; and (iv) to provide cash distributions from sale or refinancing transactions. There cannot be any assurance that the Partnership will attain any or all of these investment objectives.
Table A on the following page lists the properties owned by the Local Limited Partnerships in which the Partnership has invested. Item 7 of this Report contains other significant information with respect to such Local Limited Partnerships. As required by applicable rules, the terms of the acquisition of Local Limited Partnership interests have been described in supplements to the Prospectus and collected in the post-effective amendment to the Registration Statement and in a Form 8-K (collectively, the "Acquisition Reports"); such descriptions are incorporated herein by this reference.
* The Partnership's interest in profits and losses of each Local Limited Partnership arising from normal operations is 99%. Profits and losses arising from sale or refinancing transactions are allocated in accordance with the respective Local Limited Partnership Agreements.
** The Partnership has written off these investments.
Although the Partnership's investments in Local Limited Partnerships are not subject to seasonal fluctuations, the Partnership's equity in losses of Local Limited Partnerships, to the extent it reflects the operations of individual Properties, may vary from quarter to quarter based upon changes in occupancy and operating expenses as a result of seasonal factors.
The Partnership's primary source of working capital is investment income earned on the Reserves. Additionally, the Partnership expects to receive distributions from cash flow from operations of its Local Limited Partnership interests. It is expected that these sources of funds will provide adequate working capital to the Partnership. At March 31, 1998, the Managing General Partner has designated approximately $1,266,000 of cash, cash equivalents and marketable securities as such Reserve.
Each Local Limited Partnership has, as its general partners ("Local General Partners"), one or more individuals or entities not affiliated with the Partnership or its General Partners, with the exception of Garden Cove and Shannon Creste. In accordance with the partnership agreements under which such entities are organized ("Local Limited Partnership Agreements"), the Partnership depends on the Local General Partners for the management of each Local Limited Partnership. As of March 31, 1998, the following Local Limited Partnerships have a common Local General Partner or affiliated group of Local General Partners accounting for the specified percentage of the total capital contributions in Local Limited Partnerships: (i) B&C Housing II, B&C Housing III, Shadow Wood Housing, and Chaparral Housing, representing 9.31%, have Interstate Realty as Local General Partner; (ii) Waynesboro Properties, Monroe Properties, Bamberg Properties, Americus Properties, McKinley-Walker Ltd. and Willowpeg Village, representing 4.48%, have Norsouth Corporation as Local General Partner; (iii) Lamar Associates, Mulberry Associates, Paragould Associates, Ward Manor Associates, Blair Senior Housing, DeSoto Associates, La Center Associates, Strafford Associates, Warrenton Associates and Winona Associates, representing 2.66%, have Joseph A. Shepard and the Lockwood Group as Local General Partners; (iv) Buckfield Housing, Newport Housing, Milo Housing and Unity Family Housing, representing 2.65%, have Charles B. Mattson and Todd J. Mattson as Local General Partners; (v) Birch Associates, Linden Housing and Willow Creek Housing, representing 3.61%, have Robert F. Nielsen, Dennis F. Johnson and J. Michael Queenan as Local General Partners; and (vi) Springhill Housing I, Springhill Housing II and Springhill Housing III, representing 4.40%, have Delwood Ventures, Inc. as Local General Partner. The Local General Partners of the remaining Local Limited Partnerships are identified in the Acquisition Reports, which are incorporated herein by reference.
The Properties owned by Local Limited Partnerships in which the Partnership has invested are and will continue to be subject to competition from existing and future apartment complexes in the same areas. The continued success of the Partnership will depend on many outside factors, most of which are beyond the control of the Partnership and which cannot be predicted at this time. Such factors include general economic and real estate market conditions, both on a national basis and in those areas where the Properties are located, the availability and cost of borrowed funds, real estate tax rates, operating expenses, energy costs and government regulations. In addition, other risks inherent in real estate investment may influence the ultimate success of the Partnership, including: (i) possible reduction in rental income due to an inability to maintain high occupancy levels or adequate rental levels; (ii) possible adverse changes in general economic conditions and adverse local conditions, such as competitive over-building, a decrease in employment or adverse changes in real estate laws, including building codes; and (iii) possible future adoption of rent control legislation which would not permit increased costs to be passed on to the tenants in the form of rent increases or which would suppress the ability of the Local Limited Partnerships to generate operating cash flow. Since most of the Properties benefit from some form of government assistance, the Partnership is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits. Other future changes in federal and state income tax laws affecting real estate ownership or limited partnerships could have a material and adverse affect on the business of the Partnership.
The Partnership is managed by Arch Street, Inc., the Managing General Partner of the Partnership. The other General Partner of the Partnership is Arch Street Limited Partnership. To economize on direct and indirect payroll costs, the Partnership, which does not have any employees, reimburses The Boston Financial Group Limited Partnership, an affiliate of the General Partners, for certain expenses and overhead costs. A complete discussion of the management of the Partnership is set forth in Item 10 of this Report.
Item 2.
Item 2. Properties
The Partnership owns limited partnership interests in forty Local Limited Partnerships which own and operate forty properties, some of which benefit from some form of federal, state or local assistance programs and all of which qualify for the Tax Credit added to the Code by the Tax Reform Act of 1986. The Partnership's ownership interest in each Local Limited Partnership is 99%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits from its relevant state tax credit agency. In general, the Tax Credit runs for ten years from the date the Property is placed in service. The required holding period (the "Compliance Period") of the Properties is fifteen years. During these fifteen years, the Properties must satisfy rent restrictions, tenant income limitations and other requirements, as promulgated by the Internal Revenue Service, in order to maintain eligibility for the Tax Credit at all times during the Compliance Period. Once a Local Limited Partnership has become eligible for the Tax Credits, it may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the requirements.
In addition, some of the Local Limited Partnerships have obtained one or a combination of different types of loans such as: i) below market rate interest loans; ii) loans provided by a redevelopment agency of the town or city in which the property is located at favorable terms; or iii) loans that have repayment terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the Local Limited Partnership interests acquired by the Partnership.
* FmHA This subsidy, which is authorized under Section 515 of the Housing Act of 1949, can be one or a combination of different types of financing. For instance, FmHA may provide: 1) direct below-market-rate mortgage loans for rural rental housing; 2) mortgage interest subsidies which effectively lower the interest rate of the loan to 1%; 3) a rental assistance subsidy to tenants which allows them to pay no more than 30% of their monthly income as rent with the balance paid by the federal government; or 4) a combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title II of the Housing and Community Development Act of 1974, allows qualified low-income tenants to pay 30% of their monthly income as rent with the balance paid by the federal government.
(A) The Partnership's investment in Grayton Pointe Apartments, L.P. was written off as of October 7, 1997.
(B) The Partnership's investment in Snapfinger Creste Apartments, L.P. was written off as of March 31, 1997.
Two Local Limited Partnerships invested in by the Partnership each represent more than 10% of the total capital contributions to be made to Local Limited Partnerships by the Partnership. The first is Wayne Apartment Project Limited Partnership. Wayne, representing 28.12% of the total capital contributions in Local Limited Partnerships, is a 349-unit apartment complex located in Boston, Massachusetts.
Wayne is financed by a combination of private and public sources, including a first mortgage at 7% interest and financing for a completed rehabilitation program at 10.75% interest. In addition to this, additional financing for the rehabilitation program is being provided by the U.S. Housing and Urban Development at an interest rate of 9.25%.
The other Local Limited Partnership which represents more than 10% of the total capital contributions made to Local Limited Partnerships is Durham Park Limited Partnership. Durham Park, representing 10.88% of the total capital contributions in Local Limited Partnerships, is a 224 -unit apartment complex located in Tigard, Oregon.
Durham Park is financed through a mortgage secured through Travelers Insurance Company at 10.25%. The loan is amortized over 30 years, with a balloon payment due at maturity.
The duration of the leases for occupancy in the Properties described above are six to twelve months. The Managing General Partner believes the Properties described herein are adequately covered by insurance.
Additional information required under this Item, as it pertains to the Partnership, is contained in Items 1, 7 and 8 of the Report.
Item 3.
Item 3. Legal Proceedings
As previously reported, the Partnership, Garden Cove Apartments LTD. ("Garden Cove") and the Managing General Partner were involved in litigation with the former managing general partner of Garden Cove. On March 11, 1996 a jury trial began. Four days into the trial, an out of court settlement was reached, which was believed by management to be favorable for the Partnership. Briefly, the settlement involved a $262,500 payment by the Partnership to the former managing general partners and a $285,000 payment to a bank which had claims against both Garden Cove and the former local managing general partners. $375,000 of these payments were covered by the Partnership's insurance. However, the Partnership also incurred significant litigation expenses in this matter. The settlement agreement also included the mutual release of certain liabilities and made permanent the previously described injunction.
Garden Cove is again involved in litigation. In the current matter, the project's general contractor claims that there are amounts due it (about $225,000 plus interest) under the construction contract. The Partnership was aware of this potential claim when it settled the previous dispute with the former managing general partners and did not release them from liability with respect to it. It appears that a favorable settlement of the Saunders matter is achievable but only makes sense in the broader context of a mortgage restructuring for this property (which is experiencing substantial deficits). The Managing General Partner will soon learn whether a mortgage restructuring and settlement can be obtained.
The Partnership is not a party to any other pending legal or administrative proceeding, and to the best of its knowledge, no other legal or administrative proceeding is threatened or contemplated against it.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public market will develop. If a Limited Partner desires to sell Units, the buyer of those Units will be required to comply with the minimum purchase and retention requirements and investor suitability standards imposed by applicable federal or state securities laws and the minimum purchase and retention requirements imposed by the Partnership. The price to be paid for the Units, as well as the commissions to be received by any participating broker-dealers, will be subject to negotiation by the Limited Partner seeking to sell his Units. Units will not be redeemed or repurchased by the Partnership.
The Partnership Agreement does not impose on the Partnership or its General Partners any obligation to obtain periodic appraisals of assets or to provide Limited Partners with any estimates of the current value of Units.
As of June 15, 1998, there were $4,125 record holders of Units of the Partnership.
Cash distributions, when made, are paid annually. For the years ended March 31, 1998, 1997 and 1996, no cash distributions were made.
Item 6.
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the Partnership's financial position and operating results. This information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements and Notes thereto, which are included in Items 7 and 8 of this Report.
(A) Total assets include the net investment in Local Limited Partnerships.
(B) Income tax information is as of December 31, the year end of the Partnership for income tax purposes. The Low-Income Housing Tax Credit per Limited Partnership Unit for 1997, 1996, 1995, 1994 and 1993 represents the amount distributed to individual investors. Corporate investors received $131.82, $153.93, $154.11, $153.98 and $153.91 per Unit in 1997, 1996, 1995, 1994 and 1993, respectively.
(C) March 31, 1998 and 1997 revenue includes $1,926,634 and $1,145,805, respectively, of total revenue from Garden Cove and Shannon Creste that is included in combined revenue on the statement of operations. March 31, 1996, 1995 and 1994 revenue includes $775,200, $767,745 and $763,335, respectively, of total revenue from Garden Cove that is included in combined revenue on the Statement of Operations.
March 31, 1998 and 1997 equity in losses of Local Limited Partnerships does not include $702,467 and $267,382, respectively, of losses from Garden Cove and Shannon Creste that have been combined with the Partnership's loss in the statement of operations. March 31, 1996, 1995 and 1994 equity in losses of Local Limited Partnerships does not include $510,735, $568,887 and $514,225, respectively, of losses from Garden Cove that have been combined with the Partnership's loss in the Statement of Operations.
March 31, 1998 and 1997 cash and cash equivalents includes $36,819 and $18,660, respectively, of cash and cash equivalents from Garden Cove and Shannon Creste that has been combined with the Partnership in the balance sheet. March 31, 1996, 1995 and 1994 cash and cash equivalents includes $39,820, $17,488 and $13,642, respectively, of cash and cash equivalents from Garden Cove that has been combined with the Partnership's Balance Sheet.
For March 31, 1998 and 1997, the long-term debt is related to Garden Cove and Shannon Creste. For March 31, 1996, 1995 and 1994, the long- term debt is related to Garden Cove.
March 31, 1998 and 1997 total liabilities include $11,573,343 and $11,628,066, respectively, of liabilities from Garden Cove and Shannon Creste that have been combined with the Partnership on the balance sheet. March 31, 1996, 1995 and 1994 total liabilities include $5,248,781, $6,811,086 and $6,665,780, respectively, of liabilities from Garden Cove that have been combined with the Partnership's Balance Sheet.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1998, the Partnership, including the Combined Entities, had cash and cash equivalents of $722,737 as compared to $318,451 at March 31, 1997. The increase is primarily attributable to cash provided by operating activities, cash distributions received from Local Limited Partnerships, proceeds from sales of marketable securities in excess of purchases of marketable securities offset by purchases of rental property.
The Managing General Partner initially designated 3% of the Gross Proceeds to Reserves. The Reserves were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. The Managing General Partner may increase or decrease such Reserves from time to time, as it deems appropriate. During the year ended March 31, 1993, the Managing General Partner decided to increase the reserve level to 4%, and it transferred the additional funds to the Reserve account. To date, approximately $149,000 has been withdrawn from the Reserve account to pay legal and other costs related to the Mod Rehab issue. Additionally, legal fees relating to various property issues totaling approximately $39,000 have been paid from Reserves. The Partnership also advanced approximately $1,231,000 to four Local Limited Partnerships.
Management believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Partnership's ongoing operations. Reserves may be used to fund Partnership operating deficits, if the Managing General Partner deems funding appropriate. At March 31, 1998, approximately $1,266,000 of cash, cash equivalents and marketable securities has been designated as Reserves.
At March 31, 1998, the Partnership has committed to make future capital contributions and to pay future purchase price installments on its investments in Local Limited Partnerships. These future payments are contingent upon the achievement of certain criteria as set forth in the Local Limited Partnership Agreements and total $337,500.
Since the Partnership invests as a limited partner, the Partnership has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, as of March 31, 1998, the Partnership had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for, except as disclosed above.
In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Partnership's management might deem it in its best interest to provide such funds, voluntarily, in order to protect its investment.
Cash Distributions
No cash distributions were made during the three years ended March 31, 1998. Based on the results of 1997 operations, the Local Limited Partnerships are not expected to distribute significant amounts of cash to the Partnership because such amounts will be needed to fund Property operating costs. In addition, many of the Properties benefit from some type of federal or state subsidy and, as a consequence, are subject to restrictions on cash distributions. Therefore, it is expected that only a limited amount of cash will be distributed to investors from this source in the future.
Results of Operations
1998 versus 1997
The Partnership's results of operations for the year ended March 31, 1998 resulted in a net loss of $3,219,105 as compared to a net loss of $4,914,046 for the same period in 1997. The decrease in net loss is primarily due to an increase in rental and other income and a decrease in equity in losses of Local Limited Partnerships. In addition, during the year ended March 31, 1997, the Partnership wrote off its investment in two Local Limited Partnerships (Snapfinger Creste and Grayton Pointe). Also, the Partnership recognized cancellation of debt income during the year ended March 31, 1997 for one Combined Entity. These decreases to net loss are offset by increases to rental operations, property management fees, interest expense, depreciation and bad debt expense. Other income increased due to the return of an escrow the Partnership had funded for Grayton Pointe which was returned once the Local Limited Partnership was written off. The decrease in equity in losses is due to fewer losses being recognized in 1997 because more Local Limited Partnerships have cumulative equity in losses in excess of their total investments as compared to the previous year. The increases in rental income, rental operations, property management fees, interest expenses and depreciation are due to the combination of Shannon Creste, which was effective for only a portion of the year ended March 31, 1997. The increase in bad debt expense is due to the Partnership's write off of receivables from Snapfinger Creste and Grayton Pointe.
1997 versus 1996
The Partnership's results of operations for the year ended March 31, 1997 resulted in a net loss of $4,914,046 as compared to a net loss of $3,770,322 for the same period in 1996. The increase in net loss is primarily due to an increase in equity in losses of Local Limited Partnerships associated with two Local Limited Partnerships that were affected by weak rental markets, costs associated with unit turnover and increased maintenance issues. Another Local Limited Partnership had a significant increase in its loss due to the recognition of additional rental income and interest refund in the year ended March 31, 1996. The increase in equity in losses is offset by fewer losses being recognized in 1997 because more Local Limited Partnerships have cumulative equity in losses in excess of their total investments as compared to the previous year, cancellation of debt income recognized in the year ended March 31, 1997 for one Combined Entity and an increase in rental revenue. Additionally, during the year ended March 31, 1997, the Partnership wrote off its investment in one Local Limited Partnership (Snapfinger Creste) because there was evidence of a non-temporary decline in the recoverable amount of the investment (see section entitled "Property Discussions" for additional information). These increases to net loss are offset by an increase in rental revenue due to the combination of Shannon Creste, effective September 1, 1996.
Effect of recently issued Accounting Standards
The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. The standard requires that changes in comprehensive income be shown in a financial statement that is displayed with the same prominence as other financial statements. The standard is effective for fiscal years beginning after December 15, 1997. The Partnership will adopt the new standard beginning in the first quarter of the fiscal year ending March 31, 1999, but it is not expected to have a significant effect on the Partnership's financial position or results of operations.
Low-Income Housing Tax Credits
The 1997, 1996 and 1995 Low-Income Housing Tax Credits per Unit for individuals were $125.67, $146.77 and $146.67, respectively. The 1997, 1996 and 1995 Low-Income Housing Tax Credits per Unit for corporations were $131.82, $153.93 and $154.11, respectively. The Tax Credits per Limited Partnership Unit stabilized in 1991 at approximately $146.00 per Unit for individuals and $153.00 per Unit for corporations. The credits were expected to be stable for the six years subsequent to 1991 and then to decrease as certain properties reach the end of the ten-year credit period.
Property Discussions
Prior to the transfer of two Local Limited Partnerships, Limited Partnership interests had been acquired in forty Local Limited Partnerships which own and operate rental properties located in fifteen states, Washington, D.C. and Puerto Rico. Thirty of the properties with 2,325 apartments were newly constructed, and eight properties with 733 apartments were rehabilitated. All of the properties have completed construction or rehabilitation and initial rent-up. Most of the properties have stable operations and are operating at break-even or generating operating cash flow.
Some of the properties are experiencing operating difficulties and cash flow deficits due to a variety of reasons. The Local General Partners of those properties have funded operating deficits through project expense loans, subordinated loans or payments from operating escrows. In instances where the Local General Partners have stopped funding deficits because their obligation to do so has expired or otherwise, the Managing General Partner is working with the Local General Partners to increase operating income, reduce expenses or refinance the debt at lower interest rates in order to improve cash flow.
As previously reported, despite high occupancy and a debt restructuring, Atlantic Terrace, located in Washington, D.C., continues to experience unstable operations due primarily to costs associated with unit turnover and increased maintenance and utility expenses. Deteriorating market conditions are also impacting the property. The managing agent is addressing these issues through enhanced tenant screening, social programs and more careful expense monitoring.
Chapparal, Nottingham Square, Patrick Henry and Shadow Wood, all of which are located in Oklahoma and have the same Local General Partner, are experiencing operating difficulties. In particular, Shadow Wood has experienced severe operating deficits due to high security costs, low Section 8 contract rates and high debt service payments. Given the severity of the operating deficits for Shadow Wood, it is possible that the Partnership will not be able to retain its interest in the property through 1998. A foreclosure would result in recapture for investors of one third of the cumulative tax credit benefits, the allocation of taxable income to the Partnership and loss of future benefits associated with this property. The Local General Partners are working to improve operating results for these properties through contract rent increases and debt service relief. Due to the Managing General Partner's concerns regarding the long term viability of these properties, negotiations are underway with the Local General Partner to develop a plan that will address these concerns.
Garden Cove, located in Huntsville, Alabama, remains unable to fully cover debt service from operating income due to depressed rents and collection problems. These deficits are being funded from Partnership Reserves. The Managing General Partner continues to work with the management agent to find further ways to decrease the operating deficits while implementing capital improvement strategies that will improve property marketability. Further, the Managing General Partner has entered into workout negotiations which include exploring opportunities to restructure the first mortgage. This restructure may result in converting a portion of the first mortgage into a cash flow second mortgage and increasing the replacement reserve monthly deposits. It is likely that without a modification, the lender will exercise its right to foreclose on the property. A foreclosure would result in recapture for investors of one third of the cumulative tax credit benefits.
As previously reported, Snapfinger Creste and Grayton Pointe, both of which are located in Georgia and share the same Local General Partner, were affected by a weak rental market and deferred maintenance issues. Although the initial foreclosure deadline was extended, the Partnership transferred its interests in Snapfinger Creste through a foreclosure on August 5, 1997. Despite further extensive negotiations, the lender exercised its option to foreclose on Grayton Pointe on October 7, 1997. These transfers resulted in recapture for investors of one third of the cumulative tax credit benefits in 1997, the allocation of taxable income to the Partnership and loss of future benefits associated with these properties. For financial reporting purposes, the Partnership's investment in Snapfinger Creste was written off as of March 31, 1997 and Grayton Pointe was written off as of October 7, 1997.
In accordance with Financial Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which is effective for fiscal years beginning after December 15, 1995, the Partnership has implemented policies and practices for assessing impairment of its real estate assets and investments in local limited partnerships. Each asset is analyzed by real estate experts to determine if an impairment indicator exists. If so, the current value is compared to the fair value, and if there is a significant impairment in value, a provision to write down the asset to fair value will be charged against income.
Inflation and Other Economic Factors
Inflation had no material impact on the operating or financial conditions of the Partnership for the years ended March 31, 1998, 1997 and 1996.
Since most of the Properties benefit from some form of government assistance, the Partnership is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits.
Certain of the Properties listed in this report are located in areas suffering from poor economic conditions. Such conditions could have an adverse effect on the rent or occupancy levels at such Properties. Nevertheless, management believes that the generally high demand for below market rate housing will tend to negate such factors. However, no assurance can be given in this regard.
Item 8.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this Report. See Index on page hereof.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Partnership is Arch Street, Inc., a Massachusetts corporation (the "Managing General Partner"), an affiliate of The Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts limited partnership. George Fantini, Jr., a Vice President of the Managing General Partner, resigned his position effective June 30, 1995. Donna Gibson, a Vice President of the Managing General Partner, resigned from her position on September 13, 1996. Georgia Murray resigned as Managing Director, Treasurer and Chief Financial Officer of the General Partner on May 25, 1997. Fred N. Pratt, Jr. resigned as Managing Director of the General Partner on May 28, 1997. William E. Haynsworth resigned as Managing Director, Vice President and Chief Operating Officer of the General Partner on March 23, 1998.
The Managing General Partner was incorporated in February 1988. Randolph G. Hawthorne is the Chief Operating Officer of the Managing General Partner and had the primary responsibility for evaluating, selecting and negotiating investments for the Partnership. The Investment Committee of the Managing General Partner approved all investments. The names and positions of the principal officers and the directors of the Managing General Partner are set forth below.
Name Position
Jenny Netzer Managing Director and President Michael H. Gladstone Managing Director, Vice President and Clerk Randolph G. Hawthorne Managing Director, Vice President and Chief Operating Officer James D. Hart Chief Financial Officer and Treasurer Paul F. Coughlan Vice President Peter G. Fallon, Jr. Vice President William E. Haynsworth Vice President
The other General Partner of the Partnership is Arch Street Limited Partnership, a Massachusetts limited partnership ("Arch Street L.P.") that was organized in August 1988. The General Partner of Arch Street L.P. are Messrs. A. Harold Howell and William E. Haynsworth.
The Managing General Partner provides day-to-day management of the Partnership. Compensation is discussed in Item 11
Item 11. Management Remuneration
Neither the directors or officers of Arch Street, Inc., the partners of Arch Street L.P. nor any other individual with significant involvement in the business of the Partnership receives any current or proposed remuneration from the Partnership.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Partnership to be the beneficial owner of more than 5% of the outstanding Units.
The equity securities registered by the Partnership under Section 12(g) of the Act consist of 60,000 Units, all of which have been sold to the public. Holders of Units are permitted to vote on matters affecting the Partnership only in certain unusual circumstances and do not generally have the right to vote on the operation or management of the Partnership.
As of March 31, 1998, Arch Street L.P. owns five (unregistered) Units not included in the 60,000 Units sold to the public.
Except as described in the preceding paragraph, neither Arch Street, Inc., Arch Street L.P., Boston Financial nor any of their executive officers, directors, partners or affiliates is the beneficial owner of any Units. None of the foregoing persons possesses a right to acquire beneficial ownership of Units.
The Partnership does not know of any existing arrangement that might at a later date result in a change in control of the Partnership.
Item 13.
Item 13. Certain Relationships and Related Transactions
The Partnership was required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates (including Boston Financial) in connection with the organization of the Partnership and the offering of Units. The Partnership is also required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates (including Boston Financial) in connection with the administration of the Partnership and its acquisition and disposition of investments in Local Limited Partnerships. In addition, the General Partners are entitled to certain Partnership distributions under the terms of the Partnership Agreement. Also, an affiliate of the General Partners will receive up to $10,000 from the sale or refinancing proceeds of each Local Limited Partnership, if it is still a limited partner at the time of such transaction. All such fees, expenses and distributions paid in the three years ending March 31, 1998 are described below and in the sections of the Prospectus entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions". Such sections are incorporated herein by reference.
The Partnership is permitted to enter into transactions involving affiliates of the Managing General Partner, subject to certain limitations established in the Partnership Agreement, as follows:
Organizational fees and expenses and selling expenses
In accordance with the Partnership Agreement, the Partnership was required to pay certain fees to and reimburse expenses of the General Partners and others in connection with the organization of the Partnership and the offering of its Limited Partnership Units. Selling commissions, fees and accountable expenses related to the sale of the Units totaling $7,056,416 have been charged directly to Limited Partners' equity. In connection therewith, $4,781,240 of selling expenses and $2,275,176 of offering expenses incurred on behalf of the Partnership have been paid to an affiliate of the General Partner. The Partnership has capitalized an additional $50,000 of organizational costs which was reimbursed to an affiliate of the General Partner. These costs are fully amortized as of March 31, 1998. Total organization and offering expenses exclusive of selling commissions and underwriting advisory fees did not exceed 5.5% of the Gross Proceeds and organizational and offering expenses, inclusive of selling commissions and underwriting advisory fees, did not exceed 15.0% of the Gross Proceeds. No organizational fees and expenses and selling expenses were paid during the three years ended March 31, 1998.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Partnership was required to pay acquisition fees to and reimburse acquisition expenses of the Managing General Partner or its affiliates for selecting, evaluating, structuring, negotiating and closing the Partnership's investments in Local Limited Partnerships. Acquisition fees totaled 8% of the gross offering proceeds. Acquisition expenses include such expenses as legal fees and expenses, travel and communications expenses, costs of appraisals and accounting fees and expenses. Acquisition fees totaling $4,800,000 for the closing of the Partnership's Local Limited Partnership Investments have been paid to an affiliate of the Managing General Partner. Acquisition expenses totaling $761,180 were incurred and have been reimbursed to an affiliate of the Managing General Partner. No acquisition fees or expenses were paid during the three years ended March 31, 1998.
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing General Partner is paid an annual fee for services in connection with the administration of the affairs of the Partnership. The affiliate currently receives the base amount of $6,979 per property (as adjusted by the CPI factor) of Gross Proceeds annually as the Asset Management Fee. Fees earned in each of the three years ended March 31, 1998 are as follows:
1998 1997 1996 ------------ ----------- ------------
Asset management fees $ 277,743 $ 272,905 $ 265,722
Salaries, benefits and administrative expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the Partnership's salaries and benefits. The reimbursements are based upon the size and complexity of the Partnership's operations. Reimbursements paid or payable in each of the three years ended March 31, 1998 are as follows:
1998 1997 1996 -------- -------- --------
Salaries and benefits $118,425 $107,933 $114,145
Property Management Fees
On August 20, 1996, Boston Financial Property Management ("BFPM"), an affiliate of the Managing General Partner, became the management agent for Grayton Pointe Apartments, a property in which the Partnership has invested. The property management fee charged is 4% of the property's gross revenues. Included in operating expenses in the summarized income statements in Note 4 to the Combined Financial Statements is $8,864 of fees earned by BFPM for the period ended December 31, 1996.
Additionally, BFPM is the management agent for Garden Cove and Shannon Creste, properties in which the Partnership has invested. The property management fee charged is equal to 5% and 4%, respectively, of cash receipts. Included in the Combined Statements of Operations for the three years ended March 31, 1998 are fees earned by BFPM for the years ended December 31, 1997, 1996 and 1995, respectively, are as follows:
1998 1997 1996 ------------ ----------- -----------
Property management fees $79,942 $50,797 $36,328
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the Partnership, Arch Street, Inc. and Arch Street Limited Partnership, receive 1% of cash distributions made to partners. No cash distributions have been paid to the General Partners during the three years ended March 31, 1998.
Additional information concerning cash distributions and other fees paid or payable to the Managing General Partner and its affiliates and the reimbursement of expenses paid or payable to Boston Financial and its affiliates during each of the three years ended March 31, 1998 is presented in Note 6 to the Financial Statements.
Information required under this Item is contained in Note 6 to the Financial Statements presented as a separate section of this Report.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial statement schedules and the auditors' reports relating thereto are submitted as a separate section of this Report. See Index on page hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits of the financial statements of such Local Limited Partnerships appear in Exhibit (28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under related instructions or are inapplicable and therefore have been omitted.
(a)(3) Exhibit Index contained herein (a)(3)(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended March 31, 1998.
(a)(3)(c) Exhibits
Number and Description in Accordance with Item 601 of Regulation S-K
27.Financial Data Schedule
28.Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(b) Audited financial statements of Local Limited Partnerships
Wayne Apartments Project Limited Partnership
(a)(3)(d) None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
By:Arch Street Inc. its Managing General Partner
By: /s/Randolph G. Hawthorne Date: 6/29/98 Randolph G. Hawthorne, Managing Director, Vice President and Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Managing General Partner of the Partnership and in the capacities and on the dates indicated:
By: /s/ Randolph G. Hawthorne Date: 6/29/98 Randolph G. Hawthorne, Managing Director, Vice President and Chief Operating Officer
By: /s/Michael H. Gladstone Date: 6/29/98 Michael H. Gladstone, A Managing Director
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II (A Limited Partnership)
Annual Report on Form 10-K for the Year Ended March 31, 1998 Index
Page No.
Reports of Independent Accountants For the years ended March 31, 1998, 1997 and 1996
Financial Statements
Combined Balance Sheets - March 31, 1998 and 1997
Combined Statements of Operations - Years Ended March 31, 1998, 1997 and 1996
Combined Statements of Changes in Partners' Equity (Deficiency) - Years Ended March 31, 1998, 1997 and 1996
Combined Statements of Cash Flows - Years Ended March 31, 1998, 1997 and 1996
Notes to the Combined Financial Statements
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation
See also Index to Exhibits on Page K-24 for the financial statements of the Local Limited Partnerships included as a separate exhibit in this Annual Report on Form 10-K.
Other schedules have been omitted as they are either not required or the information required to be presented therein is available elsewhere in the financial statements and the accompanying notes and schedules.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners Boston Financial Qualified Housing Tax Credits L.P. II:
We have audited the accompanying combined balance sheets of Boston Financial Qualified Housing Tax Credits L.P. II (A Limited Partnership) (the "Partnership") as of March 31, 1998 and 1997 and the related combined statements of operations, changes in partners' equity (deficiency) and cash flows and the financial statement schedule listed in Item 14(a) of this Report on Form 10-K, for each of the three years in the period ended March 31, 1998. These financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. As of March 31, 1998 and 1997, 76% and 75% of total assets, and for the years ended March 31, 1998, 1997 and 1996, 85% , 88% and 100% of the equity in losses, reflected in the financial statements of the Partnership, relate to Local Limited Partnerships for which we did not audit the financial statements. The financial statements of these Local Limited Partnerships were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to those investments in Local Limited Partnerships, is based solely on the reports of other auditors.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the financial statements and financial statement schedule referred to above present fairly, in all material respects, the combined financial position of the Partnership as of March 31, 1998 and 1997, and the combined results of its operations and its cash flows for each of the three years in the period ended March 31, 1998, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
Coopers & Lybrand L.L.P. Boston, Massachusetts June 11, 1998
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II (A Limited Partnership)
COMBINED BALANCE SHEETS
MARCH 31, 1998 AND 1997
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
COMBINED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
COMBINED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
COMBINED STATEMENTS OF CASH FLOWS (continued) FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
Notes to the Combined Financial Statements
1. Organization
Boston Financial Qualified Housing Tax Credits L.P. II (the "Partnership") was formed on March 10, 1988 under the laws of the State of Delaware for the primary purpose of investing, as a limited partner, in other limited partnerships ("Local Limited Partnerships"), each of which owns and operates apartment complexes benefiting from some form of federal, state or local assistance, and each of which qualifies for low-income housing tax credits. The Partnership's objectives are to: (i) provide current tax benefits in the form of tax credits which qualified investors may use to offset their federal income tax liability; (ii) preserve and protect the Partnership's capital; (iii) provide limited cash distributions which are not expected to constitute taxable income during Partnership operations; and (iv) provide cash distributions from sale or refinancing transactions. The General Partners of the Partnership are Arch Street, Inc., which serves as the Managing General Partner, and Arch Street Limited Partnership, which also serves as the Initial Limited Partner. Both of the General Partners are affiliates of The Boston Financial Group Limited Partnership ("Boston Financial"). The fiscal year of the Partnership ends on March 31.
The Partnership's partnership agreement ("Partnership Agreement") authorized the sale of up to 60,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain discounts. The Partnership raised $59,981,240 ("Gross Proceeds"), net of discounts of $18,760, through the sale of 60,000 Units. Such amounts exclude five unregistered Units previously acquired for $5,000 by the Initial Limited Partner, which is also one of the General Partners. The offering of Units terminated on October 28, 1988.
Generally, profits, losses, tax credits and cash flows from operations are allocated 99% to the Limited Partners and 1% to the General Partners. Net proceeds from a sale or refinancing will be allocated 95% to the Limited Partners and 5% to the General Partners after certain priority payments.
Under the terms of the Partnership Agreement, the Partnership initially designated 3% of the Gross Proceeds from the sale of Units as a reserve for working capital of the Partnership and contingencies related to ownership of Local Limited Partnership interests. During the year ended March 31, 1993, the Managing General Partner decided to increase the Reserve level to 4%, and accordingly, it transferred the additional funds to the Reserve. At March 31, 1998, the Managing General Partner has designated approximately $1,266,000 of cash, cash equivalents and marketable securities as such Reserve.
2. Significant Accounting Policies
Basis of Presentation and Combination
The Partnership accounts for its investments in Local Limited Partnerships, with the exception of the Combined Entities (defined below), using the equity method of accounting, because the Partnership does not have a majority control of the major operating and financial policies of the Local Limited Partnerships in which it invests. Under the equity method, the investment is carried at cost, adjusted for the Partnership's share of income or loss of the Local Limited Partnerships, additional investments and cash distributions from the Local Limited Partnerships. Equity in income or loss of the Local Limited Partnerships is included currently in the Partnership's operations. The Partnership has no obligation to fund liabilities of the Local Limited Partnerships beyond its investment, therefore, a Local Limited Partnership's investment will not be carried below zero. To the extent that equity losses are incurred when a Local Limited Partnership's respective investment balance has been reduced to zero, the losses will be suspended to be used against future income. Distributions received from Local Limited Partnerships whose respective investment balance has been reduced to zero are included in income.
Notes to the Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Excess investment costs over the underlying net assets acquired have arisen from acquisition fees paid and expenses reimbursed to an affiliate of the Partnership. These fees and expenses are included in the Partnership's Investments in Local Limited Partnerships and are being amortized on a straight-line basis over 35 years.
The Partnership recognizes a decline in the carrying value of its investment in Local Limited Partnerships when there is evidence of a non-temporary decline in the recoverable amount of the investment. There is a possibility that the estimates relating to reserves for non-temporary declines in carrying value of investments in Local Limited Partnerships may be subject to material near term adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility for tax credits. If the cost of operating a property exceeds the rental income earned thereon, the Partnership may deem it in its best interest to voluntarily provide funds in order to protect its investment.
The Managing General Partner has elected to report results of the Local Limited Partnerships on a 90-day lag basis because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying combined financial statements is as of December 31, 1997, 1996 and 1995.
On July 25, 1991, an affiliate of the Partnership's General Partners, SLP, Inc., deemed it necessary to take control of the management of Garden Cove Apartments, Ltd. ("Garden Cove"), a Local Limited Partnership in which the Partnership has invested. SLP, Inc. organized BF Alabama, Inc. which was admitted as an additional General Partner with a 51% voting interest in management matters related to Garden Cove Apartments, Ltd. and is responsible for the management of the property. BF Alabama, Inc. replaced the previous management agent with Boston Financial Property Management, an affiliate of the General Partner. Since the General Partner of Garden Cove is an affiliate of the Partnership and has a controlling financial interest in Garden Cove, as set forth in paragraph 22 of ARB 51, these combined financial statements include all financial activity of Garden Cove Apartments, Ltd. for the years ended December 31, 1997, 1996 and 1995. All significant inter-company balances and transactions have been eliminated.
On August 20, 1996, an affiliate of the Managing General Partner, Boston Financial GP-1, L.L.C., became the Local General Partner, responsible for all management decisions in Shannon Creste Apartments, L.P. ("Shannon Creste"). Boston Financial GP-1 L.L.C. replaced the previous management agent with Boston Financial Property Management, an affiliate of the General Partner. Since the Local General Partner of Shannon Creste is now an affiliate of the Partnership and has a controlling financial interest in Shannon Creste, as set forth in paragraph 22 of ARB 51, these combined financial statements include financial activity of Shannon Creste for the year ended December 31, 1997 and for the period from September 1, 1996 through December 31, 1996. All significant intercompany balances and transactions have been eliminated.
The Partnership has elected to report the results of Garden Cove and Shannon Creste on a 90-day lag basis, consistent with the presentation of the financial information of all Local Limited Partnerships. As used herein, the "Combined Entities" refers to Garden Cove and Shannon Creste after the transfer of control described above.
Cash Equivalents
Cash equivalents consist of short-term money market investments with original maturities of ninety days or less at acquisition and approximate fair value.
Notes to the Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.
Marketable Securities
Marketable securities consists primarily of U.S. Treasury instruments and mortgage-backed investment vehicles. The Partnership's marketable securities are classified as "Available for Sale" securities and are reported at fair value as reported by the brokerage firm at which the securities are held. Realized gains and losses from the sales of securities are based on the specific identification method. Unrealized gains and losses are excluded from earnings and reported as a separate component of partners' equity.
Effect of recently issued Accounting Standards
The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. The standard requires that changes in comprehensive income be shown in a financial statement that is displayed with the same prominence as other financial statements. The standard is effective for fiscal years beginning after December 15, 1997. The Partnership will adopt the new standard beginning in the first quarter of the fiscal year ending March 31, 1999, but it is not expected to have a significant effect on the Partnership's financial position or results of operations.
Deferred Fees
Garden Cove's deferred charges consist of financing fees, which are being amortized using the straight-line method over the 40-year term of the mortgage note, and organizational costs, which are being amortized using the straight-line method over a five-year period.
Shannon Creste's deferred charges consist of financing fees, which are being amortized using the straight-line method over the 10-year term of the mortgage note, and compliance monitoring fees, which are being amortized over the remaining 12 year term of the tax credit compliance period.
Rental Property
Real estate and personal property of the Combined Entities are recorded in accordance with SFAS 121. Depreciation is provided for in amounts sufficient to relate to the cost of depreciable assets to operations over their estimated service lives by use of the straight-line and accelerated methods for financial reporting purposes. For income tax purposes, accelerated lives and methods are used.
Rental Income
Rental income, principally from short-term leases on the Combined Entities' apartment units, is recognized as income as the rentals become due.
Notes to the Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"), Disclosures About Fair Value of Financial Instruments, requires disclosure for the fair value of most on- and off-balance sheet financial instruments for which it is practicable to estimate that value. The scope of SFAS No. 107 excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value and investments accounted for under the equity method, and all nonfinancial assets, such as real property. The fair values of the Partnership's assets and liabilities which qualify as financial instruments under SFAS No. 107 approximate their carrying amounts in the accompanying balance sheets except as otherwise disclosed.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is the obligation of the partners of the Partnership.
3. Marketable Securities
A summary of marketable securities is as follows:
Notes to the Combined Financial Statements (continued)
3. Marketable Securities (continued)
The contractual maturities at March 31, 1998 are as follows:
Cost Fair Value
Due in one year or less $ 399,121 $ 399,301 Due in one year to five years 340,552 345,493 Mortgage backed securities 218,970 221,874 ------------- ------------- $ 958,643 $ 966,668 ============= =============
Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Proceeds from sales and maturities were approximately $1,209,000, $1,366,000 and $3,174,000 in 1997, 1996 and 1995, respectively. Included in investment income are gross gains of $4,375, $8,957 and $19,251 and gross losses of $5,718, $14,430 and $18,528 which were realized on these sales in 1997, 1996 and 1995, respectively.
4. Investments in Local Limited Partnerships
The Partnership has acquired limited partner interests in thirty-six Local Limited Partnerships (excluding Snapfinger Creste and Grayton Pointe, which have been written off, and the Combined Entities) which own and operate multi-family housing complexes, most of which are government-assisted. The Partnership, as Investor Limited Partner pursuant to the various Local Limited Partnership Agreements, has acquired a 99% interest in the profits, losses, tax credits and cash flows from operations of each of the Local Limited Partnerships. Upon dissolution, proceeds will be distributed according to each respective partnership agreement.
The following is a summary of investments in Local Limited Partnerships, excluding the Combined Entities, Snapfinger Creste in 1998 and 1997 and Grayton Pointe in 1998, at March 31:
Notes to the Combined Financial Statements (continued)
4. Investments in Local Limited Partnerships (continued)
Summarized financial information for each of the three years ended December 31, 1997, 1996 and 1995 (due to the Partnership's policy of reporting the financial information of its Local Limited Partnership interests on a 90 day lag basis) of all Local Limited Partnerships in which the Partnership has invested as of that date (excluding the Combined Entities) is as follows:
Summarized Balance Sheets - as of December 31,
The summarized financial information of the Local Limited Partnerships does not include Garden Cove for the years ended December 31, 1997, 1996 and 1995 and does not include Shannon Creste for the year ended December 31, 1997 and for the period September 1, 1996 through December 31, 1996. The balance sheets and statements of operations of these Local Limited Partnership are combined with the Partnership's financial statements as of the dates control was taken over by an affiliate of the Partnership. As a result, this summarized information is not comparable from year to year.
Notes to the Combined Financial Statements (continued)
4. Investments in Local Limited Partnerships (continued)
For the years ended March 31, 1998, 1997 and 1996, the Partnership has not recognized $772,152, $1,036,207 and $486,718, respectively, of equity in losses relating to nineteen Local Limited Partnerships where cumulative equity in losses exceeds their total investment.
Snapfinger Creste and Grayton Pointe, located in Georgia, were affected by a weak rental market and deferred maintenance issues. The Local General Partner was obligated to fund deficits and had made advances and deferred management fees. Although the initial foreclosure deadline was extended, the Partnership transferred its interest in Snapfinger Creste through a foreclosure on August 5, 1997. In recent months, continuing negotiations did not provide for a satisfactory agreement between the parties. The transfer will result in recapture for investors of one third of the tax credit benefits in 1997, the allocation of taxable income to the Partnership and loss of future benefits associated with this property. For financial reporting purposes, the Partnership's investment in Snapfinger Creste was written off as of March 31, 1997.
Despite extensive negotiations, the lender exercised its option to foreclose on Grayton Pointe on October 7, 1997. This will result in recapture for investors of one third of the tax credit benefits, the allocation of taxable income to the Partnership on the 1997 tax return and loss of future benefits associated with this property. For financial reporting purposes, the investment in Grayton Pointe was written off as of October 7, 1997
The Partnership's equity as reflected by the Local Limited Partnerships of $(101,440) differs from the Partnership's Investments in Local Limited Partnerships before adjustment of $2,492,781 principally because: a) the Partnership has not recognized $2,241,841 of equity in losses relating to Local Limited Partnerships whose cumulative equity in losses exceeded their total investments; b) purchase prices paid to original Limited Partners by the Partnership have not been reflected in the balance sheets of certain Local Limited Partnerships; and c) cash distributions paid to the Partnership during the quarter ended March 31, 1998 are not reflected in the equity of certain Local Limited Partnerships at December 31, 1997.
5. Notes and Interest Receivable
On December 15, 1993, the Partnership executed promissory notes with Linden Housing Associates, Limited Partnership ("Linden") and Willow Creek Housing Associated, Ltd. ("Willow Creek"), two Local Limited Partnerships in which it has invested, for $87,294 and $56,742, respectively, for the reimbursement of expenses incurred by the Partnership on their behalf in relation to the Mod Rehab issue. Interest on the unpaid principal of these notes was calculated at the prime rate. The prime rate as of March 7, 1997 was 8.25%. The outstanding balance of the notes plus accrued interest was paid in full on March 7, 1997.
6. Transactions with Affiliates
An affiliate of the Managing General Partner currently receives the base amount of $6,979 (as adjusted by the CPI factor) per Local Limited Partnership annually as the Asset Management Fee for administering the affairs of the Partnership. Included in the Statements of Operations are Asset Management Fees of $277,743, $272,905 and $265,722 for the years ended March 31, 1998, 1997 and 1996, respectively. Included in accounts payable to affiliates is $482,980 and $205,237 of Asset Management Fees due to an affiliate of the Managing General Partner at March 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner is reimbursed for the actual cost of the Partnership's operating expenses. Included in general and administrative expenses for the years ended March 31, 1998, 1997 and 1996 is $118,425, $107,933 and $114,145, respectively, that the Partnership has paid as reimbursement for salaries and benefits. At March 31, 1998 and 1997, $17,173 and $26,677, respectively, is payable to an affiliate of the Managing General Partner.
Additionally, BFPM is the management agent for Garden Cove and Shannon Creste (effective August 20, 1996), properties in which the Partnership has invested. The property management fee charged is equal to 5% and 4%, Notes to the Combined Financial Statements (continued)
6. Transactions with Affiliates (continued)
respectively, of cash receipts. Included in the Combined Statements of Operations for the three years ended March 31, 1997 is $79,942, $50,797 and $36,328 of fees earned by BFPM for the year ended December 31, 1997, the period ended December 31, 1996 and the year ended December 31, 1995, respectively.
7. Rental Property
Real estate and personal property belonging to the Combined Entities are recorded in accordance with SFAS 121, the components of which are as follows at December 31:
1998 1997 ------------- -------------
Buildings $ 14,348,742 $ 14,725,712 Land and land improvements 1,980,744 1,287,465 Furniture and fixtures 414,612 325,005 ------------- ------------- 16,744,098 16,338,182 Less: accumulated depreciati 4,602,289 4,044,444 ------------- ------------- Total $ 12,141,809 $ 12,293,738 ============= =============
8. Mortgage Notes Payable
Garden Cove
During 1994, Garden Cove refinanced its mortgage note payable with an increase in principal of $32,864 and a reduction in the interest rate from 10.75% to 8.95%.
The mortgage note, collateralized by the land and buildings, is payable in monthly payments of $40,031 for principal and interest at 8.95% through February 2031. Additional monthly remittances are due for property insurance, real estate taxes and mortgage insurance escrows. In connection with the refinancing, $46,837 in fees were incurred and have been deferred. These fees are being amortized over the life of the loan.
Garden Cove is obligated by an agreement with HUD to make monthly deposits of $2,211 with the mortgagee to establish a reserve to cover costs of any future major replacements. The amount of the required deposit may be increased or decreased at the option of the mortgagee, and disbursements from the reserve are controlled by the mortgagee.
In December 1997, Garden Cove did not make its minimum debt service payment and is considered in default of the mortgage. Therefore, at December 31, 1997, the entire mortgage principal balance of $5,088,403 is considered current.
It is not practicable to estimate the fair value of this mortgage because neither current refinancing terms nor programs with similar characteristics are currently available.
Shannon Creste
The mortgage note payable in the original amount of $6,400,000 is collateralized by a deed of trust on the rental property. The note is payable to Citicorp, Mortgage Division and bears interest at the rate of 10.375% per annum. Principal and interest are payable by Shannon Creste in monthly installments of $57,946 based on an amortization period of 30 years.
Effective October 1, 1997, the mortgage note payable with Citicorp was modified. Commencing on November 1, 1997 and continuing on the first day of each and every month thereafter, up to and including April 1, 1999, interest
Notes to the Combined Financial Statements (continued)
8. Mortgage Notes Payable (continued)
at the rate of seven percent (7%) per annum shall be due and payable monthly. On April 1, 1999 the interest shall be adjusted and increased to the rate of nine and three-quarters percent (9.75%) per annum.
Commencing on May 1, 1999 and continuing on the first day of each and every month thereafter, up to and including February 1, 2001, principal and interest, at the adjusted interest rate, shall be due and payable in equal, consecutive monthly installments of $52,920. The entire remaining outstanding principal balance, together with all accrued but unpaid interest, shall be due and payable on February 1, 2001. The liability of Shannon Creste under the mortgage note is limited to the underlying value of the real estate collateral plus other amounts deposited with the lender.
Approximate principal payments to be made on the mortgage note for each of the next five years are as follows:
Year ended December 31:
1998 $ 0 1999 20,612 2000 38,171 2001 6,100,764 ------------- $ 6,159,547
As the terms of the mortgage were modified under current market conditions, management believes carrying value of the note approximates fair value as of March 31, 1998.
9. Due to Developer
Under the terms of the Development Agreement, the Developer agreed to advance to Garden Cove such funds as may be required to pay certain defined costs, which include certain operating expenses. Any funds so advanced are to be repaid by Garden Cove only in certain circumstances. In connection with the March 1996 settlement of the Garden Cove litigation (Note 11), Garden Cove was released of its obligation to repay the developer $1,543,475. For financial reporting purposes, $1,261,445 has been reflected as a reduction of Garden Cove's property basis, and $282,030, representing the developer's operating advances, was offset against the settlement loss in the year ended March 31, 1996.
10. Commitments
At March 31, 1998, the Partnership has committed to make future capital contributions and to pay future purchase price installments on its investments in Local Limited Partnerships. These future payments are contingent upon the achievement of certain criteria as set forth in the Local Limited Partnership Agreements and total $337,500.
11. Litigation
As previously reported, the Partnership, Garden Cove Apartments LTD. ("Garden Cove") and the Managing General Partner were involved in litigation with the former managing general partner of Garden Cove. On March 11, 1996 a jury trial began. Four days into the trial, an out of court settlement was reached, which was believed by management to be favorable for the Partnership. Briefly, the settlement involved a $262,500 payment by the Partnership to the former managing general partners and a $285,000 payment to a bank which had claims against both Garden Cove and the former local managing general partners. $375,000 of these payments were covered by the Partnership's insurance. However, the Partnership also incurred significant litigation expenses in this matter. The settlement agreement also included the mutual release of certain liabilities and made permanent the previously described injunction.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II (A Limited Partnership)
Notes to the Combined Financial Statements (continued)
11. Litigation (continued)
Garden Cove is again involved in litigation. In the current matter, the project's general contractor claims that there are amounts due it (approximately $225,000 plus interest) under the construction contract. The Partnership was aware of this potential claim when it settled the previous dispute with the former managing general partners and did not release them from liability with respect to it. It appears that a favorable settlement of the Saunders matter is achievable but only makes sense in the broader context of a mortgage restructuring for this property (which is experiencing substantial deficits). The Managing General Partner will soon learn whether a mortgage restructuring and settlement can be obtained.
The Partnership is not a party to any other pending legal or administrative proceeding, and to the best of its knowledge, no other legal or administrative proceeding is threatened or contemplated against it.
12. Extraordinary Gain on Cancellation of Indebtedness
During the year ended December 31, 1996, Shannon Creste's prior management agent forgave accrued management fees totaling $265,381.
13. Federal Income Taxes
A reconciliation of the losses reported in the Combined Statements of Operations for the periods ended March 31, 1998, 1997 and 1996 to the losses reported for federal income tax purposes for the years ended December 31, 1997, 1996 and 1995 is as follows:
Notes to the Combined Financial Statements (continued)
13. Federal Income Taxes (continued)
The differences in the assets and liabilities of the Partnership for financial reporting purposes and tax reporting purposes for the year ended March 31, 1998 are as follows:
The differences in the assets and liabilities of the Partnership for financial reporting purposes are primarily attributable to: i) for financial reporting purposes the Partnership combines the financial statements of two Local Limited Partnerships with its financial statements; for tax reporting purposes, these entities are carried on the equity method; ii) the cumulative equity in loss from Local Limited Partnerships, including the Combined Entities, for tax reporting purposes is approximately $3,359,000 lower than for financial reporting purposes, including approximately $2,242,000 of losses the Partnership has not recognized relating to nineteen Local Limited Partnerships whose cumulative equity in losses exceeded their total investments; iii) organizational and offering costs of approximately $7,056,000 that have been capitalized for tax reporting purposes are charged to Limited Partners' equity for financial reporting purposes; and iv) for financial reporting purposes, the Partnership wrote off its investment in two Local Limited Partnerships of $812,892; for tax purposes, the write off of investment for the two Local Limited Partnerships totaled $470,736.
The differences in the assets and liabilities of the Partnership for financial reporting purposes and tax reporting purposes for the year ended March 31, 1997 are as follows:
The differences in the assets and liabilities of the Partnership for financial reporting purposes are primarily attributable to: i) for financial reporting purposes the Partnership combines the financial statements of two Local Limited Partnerships with its financial statements; for tax reporting purposes, these entities are carried on the equity method; ii) the cumulative equity in loss from Local Limited Partnerships, including the Combined Entities, for tax reporting purposes is approximately $1,474,000 lower than for financial reporting purposes, including approximately $1,949,000 of losses the Partnership has not recognized relating to seventeen Local Limited Partnerships whose cumulative equity in losses exceeded their total investments; iii) organizational and offering costs of approximately $7,056,000 that have been capitalized for tax reporting purposes are charged to Limited Partners' equity for financial reporting purposes; and iv) for financial reporting purposes, the Partnership wrote off its investment in one Local Limited Partnership of $812,892.
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules
(A) March 31, 1998. (B) December 31, 1997.
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
Statements of Operations
(A) For the year ended March 31, 1998. (B) For the year ended December 31, 1997.
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
Statements of Cash Flows (Continued)
(A) For the year ended March 31, 1998. (B) For the year ended December 31, 1997.
(1) The aggregate cost for Federal Income Tax purposes is approximately $ 129,838,000.
* Mortgage notes payable generally represent non-recourse financing of low-income housing projects payable with terms of up to 40 years with interest payable at rates ranging from 7% to 11.5%. The Partnership has not guaranteed any of these mortgage notes payable. (A) Grayton Pointe was foreclosed upon on October 7, 1997. The Partnership wrote off its investment as of October 7, 1997. (B) The Partnership transferred its interest in Snapfinger Creste through a foreclosure on August 5, 1997. The investment was written off as of March 31, 1997.
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1997 - ------------------------------------------------------------------------- Balance at beginning of period $130,912,714 Additions during period: Add prior year Garden Cove $7,333,547 Add prior year Shannon Creste 9,004,635 Less current year Garden Cove (7,333,547) Less current year Shannon Creste (9,410,551) Acquisitions through foreclosure 0 Other acquisitions 289,671 Improvements etc. 379,331 ---------------- 263,086 Deductions during period: Cost of real estate and fixed assets sold (5,884) Write off of properties transferred (18,076,482) Reclassification to intangible assets 0 ---------------- (18,082,366) --------------- Balance at close of period $113,093,434 ===============
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1996 - ------------------------------------------------------------------------- Balance at beginning of period $139,702,097 Additions during period: Add prior year Garden Cove $7,309,677 Less current year Garden Cove (7,333,547) Less current year Shannon Creste (9,004,635) Acquisitions through foreclosure 0 Other acquisitions 100,645 Improvements etc. 155,868 ---------------- (8,771,992) Deductions during period: Cost of real estate and fixed assets sold (17,391) Reclassification to intangible assets 0 ---------------- (17,391) --------------- Balance at close of period $130,912,714 ===============
Accumulated Depreciation December 31, 1997 - ------------------------------------------------- Balance at beginning of period $36,158,261 Additions during period: Add prior year Garden Cove 1,944,916 Add prior year Shannon Creste 2,099,528 Less current year Garden Cove (2,180,607) Less current year Shannon Creste (2,421,682) Write off of properties transferred (4,798,250) Depreciation 4,465,969 --------------- Balance at close of period $35,268,135 ===============
Accumulated Depreciation December 31, 1996 - ------------------------------------------------- Balance at beginning of period $ 33,408,280 Additions during period: Add prior year Garden Cove 1,664,005 Less current year Garden Cove (1,944,916) Less current year Shannon Creste (2,099,528) Depreciation 5,130,420 --------------- Balance at close of period $36,158,261 ===============
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1995 - ------------------------------------------------------------------------- Balance at beginning of period $139,464,764 Additions during period: Add prior year Garden Cove $8,470,614 Less current year Garden Cove (7,309,677) Acquisitions through foreclosure 0 Other acquisitions 157,978 Improvements etc. 179,863 ---------------- 1,498,778 Deductions during period: Cost of real estate and fixed assets sold 0 Reduction of Garden Cove property basis (1,261,445)
---------------- (1,261,445) --------------- Balance at close of period $139,702,097
===============
Accumulated Depreciation December 31, 1995 - ------------------------------------------------- Balance at beginning of period $28,752,072 Additions during period: Add prior year Garden Cove 1,384,922 Less current year Garden Cove (1,664,005) Depreciation 4,935,291 --------------- Balance at close of period $33,408,280 ===============
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS II (A Limited Partnership)
Annual Report on form 10-K For The Year Ended March 31, 1998 Reports of Independent Auditors
MACDONALD PAGE Certified Public Accountants 30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701 P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 5, 1998
Newport Housing Associates 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheets of Newport Housing Associates (a limited partnership) as of December 31, 1997 and 1996, and the related statements of profit and loss, changes in partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Newport Housing Associates as of December 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
MACDONALD PAGE Certified Public Accountants 30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701 P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 14, 1996
Newport Housing Associates (a Limited Partnership) 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheet of Newport Housing Associates (a Limited Partnership) as of December 31, 1995, and the related statements of profit and loss, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Newport Housing Associates (a Limited Partnership) as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
MACDONALD PAGE Certified Public Accountants 30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701 P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 5, 1998
Unity Family Housing Associates 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheets of Unity Family Housing Associates (a Limited Partnership) as of December 31, 1997 and 1996, and the related statements of profit and loss, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Unity Family Housing Associates as of December 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
MACDONALD PAGE Certified Public Accountants 30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701 P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 14, 1996
Unity Family Housing Associates (a Limited Partnership) 224 Maine Avenue Gardiner, Maine
We have audited the accompanying statement of assets, liabilities and partners' capital - income tax basis of Unity Family Housing Associates (a Limited Partnership) as of December 31, 1995, and the related statements of revenue and expenses - income tax basis, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Unity Family Housing Associates as of December 31, 1995, and the results of its operations and cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
MACDONALD PAGE Certified Public Accountants 30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701 P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 5, 1998
Buckfield Housing Associates 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheets of Buckfield Housing Associates (a limited partnership) as of December 31, 1997 and 1996, and the related statements of profit and loss, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Buckfield Housing Associates as of December 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
MACDONALD PAGE Certified Public Accountants 30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701 P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 14, 1996
Buckfield Housing Associates (a Limited Partnership) 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheet of Buckfield Housing Associates (a Limited Partnership) as of December 31, 1995, and the related statements of profit and loss, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Buckfield Housing Associates (a Limited Partnership) as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners Willow Creek Housing Associates, Ltd. dba Willow Creek Apartments HUD Project No. 125-94008 Reno, Nevada
We have audited the accompanying balance sheet of Willow Creek Housing Associates, Ltd., dba Willow Creek Apartments, HUD Project No. 125-94008, as of December 31, 1997, and the related statements of income, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of Willow Creek Housing Associates, Ltd. dba Willow Creek Apartments, HUD Project No. 125-94008 as of December 31, 1997, and the results of its operations, changes in partners' capital and cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 10, 1998, on our consideration of Willow Creek Housing Associates, Ltd. dba Willow Creek Apartments, HUD Project No. 125-94008, internal control and reports dated February 10, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 13 to 20 is presented for purpose of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 10, 1998
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners Willow Creek Housing Associates, Ltd. HUD Project No. 125-94008 Reno, Nevada
We have audited the accompanying balance sheet of Willow Creek Housing Associates, Ltd., dba Willow Creek Apartments, HUD Project No. 125-94008, as of December 31, 1996, and the related statements of income and partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of Willow Creek Housing Associates, Ltd. dba Willow Creek Apartments, HUD Project No. 125-94008 as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated February 10, 1997, on our consideration of Willow Creek Housing Associates, Ltd. dba Willow Creek Apartments, HUD Project No. 125-94006, internal control structure and reports dated February 10, 1997, on its compliance with laws and regulations.
To the General Partners Willow Creek Housing Associates, Ltd. The accompanying supplementary information shown on pages 13 to 21 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 10, 1997
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners Willow Creek Housing Associates, Ltd. HUD Project No. 125-94008 Reno, Nevada
We have audited the accompanying balance sheet of Willow Creek Housing Associates, Ltd., HUD Project No. 125-94008, as of December 31, 1995, and the related statement of income and partners' equity, and statement of cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements present fairly, in all material respects, the financial position of Willow Creek Housing Associates, Ltd., HUD Project No. 125-94008 as of December 31, 1995 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 31, 1996, on our consideration of Willow Creek Housing Associates, Ltd., HUD Project No. 125-94006, internal control structure and reports dated January 31, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the General Partners Willow Creek Housing Associates, Ltd.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 13 to 20 is presented for purpose of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada January 31, 1996
[Letterhead] INDEPENDENT AUDITORS' REPORT
To the General Partners Birch Associates Limited Partnership dba Reno Apartments I-IV HUD Project No. 125-94006 Reno, Nevada
We have audited the accompanying balance sheet of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, as of December 31, 1997, and the related statements of income, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, and the results of its operations, changes in partners' capital, and cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD programs issued by The U.S. Development of Housing and Urban Development, we have also issued a report dated February 10, 1998, on our consideration of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, internal control and reports dated February 10, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basis financial statements taken as a whole. The accompanying supplementary information shown on pages 13 to 20 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 10, 1998
[Letterhead] INDEPENDENT AUDITORS' REPORT To the General Partners Birch Associates Limited Partnership dba Reno Apartments I-IV HUD Project No. 125-94006 Reno, Nevada
We have audited the accompanying balance sheet of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, as of December 31, 1996, and the related statements of income and partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-9400, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated February 10, 1997, on our consideration of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, internal control structure and reports dated February 10, 1997, on its compliance with laws and regulations.
To the General Partners Birch Associates Limited Partnership The accompanying supplementary information shown on pages 13 to 21 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 10, 1997
[Letterhead] INDEPENDENT AUDITORS' REPORT
To the General Partners Birch Associates Limited Partnership dba Reno Apartments I-IV HUD Project No. 125-94006 Reno, Nevada
We have audited the accompanying balance sheet of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, as of December 31, 1995, and the related statements of income and partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006 as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated February 9, 1996, on our consideration of Birch Associates Limited Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, internal control structure and reports dated February 9, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the General Partners Birch Associates Limited Partnership Page 2
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The Accompanying supplementary information shown on pages 13 to 20 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 9, 1996
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners Linden Housing Associates, Ltd. dba Linden Apartments HUD Project No. 125-94007 Reno, Nevada
We have audited the accompanying balance sheet of Linden Housing Associates, Ltd., dba Linden Apartments, HUD Project No. 125-94007, as of December 31, 1997, and the related statements of income, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Linden Housing Associates, Ltd, dba Linden Apartments, HUD Project No. 125-94007 as of December 31, 1997, and the results of its operations, changes in partners' capital, and cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, and the Consolidated Audit Guide for Audits of HUD programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 10, 1998, on our consideration of Linden Housing Associates, Ltd., dba Linden Apartments, HUD Project No. 125-94007, internal control and reports dated February 10, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Fair Housing and Non-Discriminations, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 13 to 20 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 10, 1998
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners Linden Housing Associates, Ltd. dba Linden Apartments HUD Project No. 125-94007 Reno, Nevada
We have audited the accompanying balance sheet of Linden Housing Associates, Ltd., dba Linden Apartments, HUD Project No. 125-94007, as of December 31, 1996, and the related statement of income and partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Linden Housing Associates, Ltd, dba Linden Apartments, HUD Project No. 125-94007 as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued a report dated February 10, 1997, on our consideration of Linden Housing Associates, Ltd., dba Linden Apartments, HUD Project No. 125-94007, internal control structure and reports dated February 10, 1997, on its compliance with laws and regulations
To the General Partners Linden Housing Associates, Ltd. The accompanying supplementary information shown on pages 13 to 21 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada February 10, 1997
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners Linden Housing Associates, Ltd. dba Linden Apartments HUD Project No. 125-94007 Reno, Nevada
We have audited the accompanying balance sheet of Linden Housing Associates, Ltd., dba Linden Apartments, HUD Project No. 125-94007, as of December 31, 1995, and the related statement of income and partners' equity, and statement of cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Linden Housing Associates, Ltd, dba Linden Apartments, HUD Project No. 125-94007 as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 26, 1996, on our consideration of Linden Housing Associates, Ltd., dba Linden Apartments, HUD Project No. 125-94007, internal control structure and reports dated January 26, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the General Partners Linden Housing Associates, Ltd. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The Accompanying supplementary information shown on pages 13 to 20 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub PROCTOR & GAUB Reno, Nevada January 26, 1996
[Letterhead] [LOGO] RD HOAG & ASSOCIATES
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners Eastmont Estates Associates
We have audited the accompanying balance sheets of HUD No. 033-35194-PM-SR (the "Project") of Eastmont Estates Associates (A Limited Partnership) as of December 31, 1997 and 1996, and the related statements of operations and changes in partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We have conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HUD Project No. 033-35194-PM-SR of Eastmont Estates Associates as of December 31, 1997 and 1996, and the results of its operations and changes in partners' equity, and cash flows for the years then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 29, 1998, on our consideration of HUD Project No. 033-35194-PM-SR (The "Project") of Eastmont Estates Associates internal control, and reports dated January 29, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Fair Housing and Non-Discrimination.
/s/R.D. Hoag & Assoc. P.C. R.D. Hoag & Associates, A Professional Corporation January 29, 1998 Pittsburgh, Pennsylvania
[Letterhead] [LOGO] RD HOAG & ASSOCIATES
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners Eastmont Estates Associates
We have audited the accompanying balance sheets of HUD No. 033-35194-PM-SR (the "Project") of Eastmont Estates Associates (A Limited Partnership) as of December 31, 1996 and 1995, and the related statements of operations and changes in partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We have conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HUD Project No. 033-35194-PM-SR of Eastmont Estates Associates as of December 31, 1996 and 1995, and the results of its operations and changes in partners' equity, and cash flows for the years then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 7, 1997, on our consideration of HUD Project No. 033-35194-PM-SR (The "Project") of Eastmont Estates Associates internal control structure, and reports dated February 7, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
/s/R.D. Hoag & Assoc. P.C. R.D. Hoag & Associates, A Professional Corporation February 7, 1997 Pittsburgh, Pennsylvania
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates I, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates I, Ltd. (a limited partnership), HUD Project No. 109-94001, as of December 31, 1997, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Spring Hill Housing Associates I, Ltd., HUD Project No. 109-94001, as of December 31, 1997, and the results of its operations and the changes in its partners' equity (deficiency) and its changes in cash for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 28, 1998 on our consideration of Spring Hill Housing Associates, I, LTD's, internal controls and reports dated January 28, 1998 on its compliance with specific requirements applicable to major HUD Programs and specific requirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates Englewood, Colorado January 28, 1998
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates I, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates I, Ltd. (a limited partnership), HUD Project No. 109-94001, as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Spring Hill Housing Associates I, Ltd., HUD Project No. 109-94001, as of December 31, 1996, and the results of its operations and the changes in its partners' equity (deficiency) and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/Stark Tinter & Associates Englewood, Colorado January 30, 1997
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates I, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates I, Ltd. (a limited partnership), HUD Project No. 109-94001, as of December 31, 1995, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Spring Hill Housing Associates I, Ltd., HUD Project No. 109-94001 as of December 31, 1995, and the results of its operations and the changes in partners' equity (deficiency) and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/Stark Tinter & Associates Englewood, Colorado January 30, 1996
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates II, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates II, Ltd. (a limited partnership), HUD Project No. 109-94002 as of December 31, 1997, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spring Hill Housing Associates II, Ltd., HUD Project No. 109-94002, as of December 31, 1997, and the results of its operations and the changes in its partners' equity (deficiency) and its changes in cash for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated January 28, 1998 on our consideration of Spring Hill Housing Associates, II, LTD's, internal control structure and reports dated January 28, 1998 on its compliance with specific requirements applicable to major HUD Programs and specific requirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates Englewood, Colorado January 28, 1998
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates II, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates II, Ltd. (a limited partnership), HUD Project No. 109-94002 as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spring Hill Housing Associates II, Ltd., HUD Project No. 109-94002, as of December 31, 1996, and the results of its operations and the changes in its partners' equity (deficiency) and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/Stark Tinter & Associates Englewood, Colorado January 30, 1997
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates II, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates II, Ltd. (a limited partnership), HUD Project No. 109-94002 as of December 31, 1995, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spring Hill Housing Associates II, Ltd., HUD Project No. 109-94002, as of December 31, 1995, and the results of its operations and the changes in its partners' equity (deficiency) and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/Stark Tinter & Associates Englewood, Colorado January 30, 1996
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates III, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates III, Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31, 1997, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spring Hill Housing Associates III, Ltd., HUD Project No. 109-94003, as of December 31, 1997, and the results of its operations and the changes in its partners' equity (deficiency) and its changes in cash for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 28, 1998 on our consideration of Spring Hill Housing Associates, III, LTD's, internal controls and reports dated January 28, 1998 on its compliance with specific requirements applicable to major HUD Programs and specific requirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates Englewood, Colorado January 28, 1998
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates III, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates III, Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spring Hill Housing Associates III, Ltd., HUD Project No. 109-94003, as of December 31, 1996, and the results of its operations and the changes in its partners' equity (deficiency) and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/Stark Tinter & Associates Englewood, Colorado January 30, 1997
[Letterhead] [LOGO] STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Hill Housing Associates III, Ltd. Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates III, Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31, 1995, and the related statements of profit and loss, changes in partners' equity (deficiency) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spring Hill Housing Associates III, Ltd., HUD Project No. 109-94003, as of December 31, 1995, and the results of its operations and the changes in its partners' equity (deficiency) and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/Stark Tinter & Associates Englewood, Colorado January 30, 1996
[Letterhead] [LOGO] Floyd & Company 306 Commercial Drive Suite 202 Post Office Box 14251 Savannah, Georgia 31406 Savannah, Georgia 31416 Phone:(912)355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of Willowpeg Lane Limited Partnership
We have audited the accompanying balance sheets of Willowpeg Lane Limited Partnership (a Georgia limited partnership) as of December 31, 1997 and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Willowpeg Lane Limited Partnership (a Georgia limited partnership) as of December 31, 1997 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Floyd & Company, C.P.A. /s/R. Doug Floyd February 28, 1998
[Letterhead] [LOGO] Floyd & Company 306 Commercial Drive Suite 202 Post Office Box 14251 Savannah, Georgia 31406 Savannah, Georgia 31416 Phone:(912)355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of Willowpeg Lane Limited Partnership
We have audited the accompanying balance sheets of Willowpeg Lane Limited Partnership (a Georgia limited partnership) as of December 31, 1996 and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
The financial statement information for the year ending December 31, 1995 was audited by another independent certified public accountant who expressed and unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Willowpeg Lane Limited Partnership (a Georgia limited partnership) as of December 31, 1996 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Floyd & Company, C.P.A. /s/R. Doug Floyd February 28, 1997
[Letterhead] [LOGO] David C. Moja, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the General Partners of Willowpeg Lane Limited Partnership
We have audited the accompanying balance sheets of Willowpeg Lane Limited Partnership (a Georgia Limited Partnership) as of December 31, 1995 and December 31, 1994, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Willowpeg Lane Limited Partnership (a Georgia Limited Partnership), as of December 31, 1995 and December 31, 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for the portion marked "unaudited", on which we express no opinion, has been subjected to the procedures applied in the audits of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole.
/s/David C. Moja David C. Moja, C.P.A., P.C. March 12, 1996 Savannah, Georgia
[Letterhead] [LOGO] DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Americus Properties Limited Partnership
We have audited the accompanying balance sheets of AMERICUS PROPERTIES LIMITED PARTNERSHIP (a Limited Partnership), as of December 31, 1997 and 1996, and the related statement of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AMERICUS PROPERTIES LIMITED PARTNERSHIP as of December 31, 1997 and 1996 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated February 23, 1998 on our consideration of AMERICUS PROPERTIES LIMITED PARTNERSHIP internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants.
Our audit was made for the purpose of forming an opinion on the basic financial statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP taken as a whole. The accompanying financial information listed as supplementary data in the table of contents is presented for purposes of additional analysis as required by Farmers Home Administration. The information in these schedules has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP, taken as a whole.
/s/David G. Pellicione Savannah, Georgia February 23, 1998
[Letterhead] [LOGO] DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Americus Properties Limited Partnership
We have audited the accompanying balance sheets of AMERICUS PROPERTIES LIMITED PARTNERSHIP (a Limited Partnership), as of December 31, 1996 and 1995, and the related statement of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AMERICUS PROPERTIES LIMITED PARTNERSHIP as of December 31, 1996 and 1995 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP taken as a whole. The accompanying financial information listed as supplementary data in the table of contents is presented for purposes of additional analysis as required by Farmers Home Administration. The information in these schedules has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP, taken as a whole.
/s/David G. Pellicione Savannah, Georgia February 25, 1997
Coopers & Lybrand
Report of Independent Accountants
To the Partners of Atlantic Terrace Limited Partnership:
We have audited the accompanying balance sheet of Atlantic Terrace Partnership as of December 31, 1997, and the related statements of profit and loss, partners' capital (deficiency), and cash flows for the year then ended. These financial statements are the responsibility of the management of Atlantic Terrace Limited Partnership. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and 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 also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Atlantic Terrace Limited Partnership as of December 31, 1997, and the results of its operations, and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 30, 1998 on our consideration of Atlantic Terrace Limited Partnership's internal control and a report dated January 30, 1998 on its compliance with laws and regulations.
/s/ Coopers & Lybrand Boston, Massachusetts January 30, 1998
Coopers & Lybrand
Report of Independent Accountants
To the Partners of Atlantic Terrace Limited Partnership:
We have audited the accompanying balance sheet of Atlantic Terrace Partnership as of December 31, 1996, and the related statements of profit and loss, partners' capital (deficiency), and cash flows for the year then ended. These financial statements are the responsibility of the management of Atlantic Terrace Limited Partnership. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and 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 also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Atlantic Terrace Limited Partnership as of December 31, 1996, and the results of its operations, and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 31, 1997 on our consideration of Atlantic Terrace Limited Partnership's internal control structure and a report dated January 31, 1997 on its compliance with laws and regulations.
/s/ Coopers & Lybrand Boston, Massachusetts January 31, 1997
[Letterhead] [LOGO] Coopers & Lybrand L.L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Atlantic Terrace Limited Partnership:
We have audited the accompanying balance sheet of Atlantic Terrace Limited Partnership as of December 31, 1995, and the related statements of profit and loss, partners' capital (deficiency), and cash flows for the year then ended. These financial statements are the responsibility of the management of Atlantic Terrace Limited Partnership. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Atlantic Terrace Limited Partnership as of December 31, 1995, and the results of its operations, and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated February 9, 1996 on our consideration of Atlantic Terrace Limited Partnership's internal control structure and a report dated February 9, 1996 on its compliance with laws and regulations.
/s/Coopers & Lybrand L.L.P Boston, Massachusetts February 9, 1996
[Letterhead] [LOGO] Reznick Fedder & Silverman
Independent Auditors' Report
To the Partners Garden Cove Apartments, Ltd.
We have audited the accompanying balance sheet of Garden Cove Apartments, Ltd. as of December 31, 1997, and the related statements of profit and loss (on HUD Form No. 92410), partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Garden Cove Apartments, Ltd as of December 31, 1997, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information on pages 20 to 25 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 29, 1998 on our consideration of Garden Cove Apartments, Ltd.'s internal control and on its compliance with specific requirements applicable to major HUD programs, fair housing and non-discrimination, and laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman Boston, Massachusetts Federal Employer January 29, 1998 Identification Number 52-1088612 Audit Principal: Philip A. Weitzel
[Letterhead] [LOGO] Reznick Fedder & Silverman
Independent Auditors' Report
To the Partners Garden Cove Apartments, Ltd.
We have audited the accompanying balance sheet of Garden Cove Apartments, Ltd. as of December 31, 1996, and the related statements of profit and loss (on HUD Form No. 92410), partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Garden Cove Apartments, Ltd as of December 31, 1996, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information on pages 20 to 26 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
To the Partners Garden Cove Apartments, Ltd. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 20, 1997 on our consideration of Garden Cove Apartments, Ltd.'s internal control structure and on its compliance with specific requirements applicable to major HUD programs, affirmative fair housing, and laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman Boston, Massachusetts Federal Employer January 20, 1997 Identification Number 52-1088612 Audit Principal: Philip A. Weitzel
[Letterhead] [LOGO]
Reznick Fedder & Silverman Certified Public Accountants Business Consultants A Professional Corporation
745 Atlantic Avenue Suite 800 Boston, MA 02111-2735 (617) 423-5855 Fax (617) 423-6651
Independent Auditors' Report
To the Partners Garden Cove Apartments, Ltd.
We have audited the accompanying balance sheet of Garden Cove Apartments, Ltd. as of December 31, 1995, and the related statements of profit and loss (on HUD Form No. 92410), partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and 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 accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Garden Cove Apartments, Ltd. as of December 31, 1995, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 21 through 26 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects as a whole.
In accordance with Government Auditing Standards, we have also issued reports dated February 24, 1996 on our consideration of Garden Cove Apartments, Ltd.'s internal control structure and on its compliance with specific requirements applicable to major HUD programs, affirmative fair housing, and laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman Boston, Massachusetts Federal Employer Identification # 52-1088612 February 24, 1996
Audit Principal: Philip A. Weitzel
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners B & C Housing Associates, III Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, III, A Limited Partnership, HUD Project No. 117-94008, as of December 31, 1997, and 1996, and the related statements of income and expense, changes in partners' capital and cash flows for the year ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B & C Housing Associates, III, as of December 31, 1997 and 1996, and the results of its operations and the changes in partners' capital and cash flows for the year ended December 31, 1997, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 16, 1998 on our consideration of B & C Housing Associates, III's internal control structure and reports dated January 16, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 16, 1998
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners B & C Housing Associates, III Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, III, A Limited Partnership, HUD Project No. 117-94008, as of December 31, 1996, and 1995, and the related statements of income and expense, changes in partners' capital and cash flows for the year ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B & C Housing Associates, III, as of December 31, 1996 and 1995, and the results of its operations and the changes in partners' capital and cash flows for the year ended December 31, 1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1997 on our consideration of B & C Housing Associates, III's internal control structure and reports dated January 18, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the Partners B & C Housing Associates, III Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1997
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners B & C Housing Associates, III Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, III, A Limited Partnership, HUD Project No. 117-94008, as of December 31, 1995, and 1994, and the related statements of income and expense, changes in partners' capital and cash flows for the year ended December 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B & C Housing Associates, III, as of December 31, 1995 and 1994, and the results of its operations and the changes in partners' capital and cash flows for the year ended December 31, 1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1996 on our consideration of B & C Housing Associates, III's internal control structure and reports dated January 18, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the Partners B & C Housing Associates, III Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1996
[Letterhead] [LOGO] Horwath Velez, Semprit & Co. San Juan, PR
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
Partners San Antonio Limited Dividend Partnership S.E. San Juan, Puerto Rico
We have audited the accompanying balance sheets of San Antonio Limited Dividend Partnership S.E. as of December 31, 1997 and 1996, and the related statements of operations, partners' equity (deficiency) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of San Antonio Limited Dividend Partnership S.E. as of December 31, 1997 and 1996, and the results of its operations, its changes in partners' equity (deficiency) and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/Horwath Velez, Semprit & Co. February 2, 1998 Stamp number 1478597 was affixed to the original of this report
[Letterhead] [LOGO] Velez, Semprit, Nieves & Co. San Juan, PR
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
Partners San Antonio Limited Dividend Partnership S.E. San Juan, Puerto Rico
We have audited the accompanying balance sheets of San Antonio Limited Dividend Partnership S.E. as of December 31, 1996 and 1995, and the related statements of operations, partners' equity (deficiency) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of San Antonio Limited Dividend Partnership S.E. as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/Velez, Semprit Nieves & Co. February 4, 1997 Stamp number 1411418 was affixed to the original of this report
[Letterhead] [LOGO] Floyd & Company Savannah, Georgia
INDEPENDENT AUDITORS' REPORT
To the General Partners of Waynesboro Properties Limited Partnership
We have audited the accompanying balance sheets of Waynesboro Properties Limited Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and 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 assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Waynesboro Properties Limited Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Floyd & Company, CPA /s/R. Doug Floyd February 28, 1998
[Letterhead] [LOGO] Floyd & Company Savannah, Georgia
INDEPENDENT AUDITORS' REPORT
To the General Partners of Waynesboro Properties Limited Partnership
We have audited the accompanying balance sheets of Waynesboro Properties Limited Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
The financial statement information for the year ending December 31, 1995 was audited by another independent certified public accountant who expressed and unqualified opinion dated March 16, 1996.
We conducted our audit in accordance with generally accepted auditing standards and 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 assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Waynesboro Properties Limited Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Floyd & Company, CPA /s/R. Doug Floyd February 28, 1997
[Letterhead] [LOGO] David C. Moja, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the General Partners of Waynesboro Properties Limited Partnership
We have audited the accompanying balance sheets of Waynesboro Properties Limited Partnership (a Georgia Limited Partnership) as of December 31, 1995 and December 31, 1994, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and 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 assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Waynesboro Properties Limited Partnership (a Georgia Limited Partnership), as of December 31, 1995 and December 31, 1994, and the results of its operations and cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information. except for the portion marked "unaudited", on which we express no opinion, has been subjected to the procedures applied in the audits of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole.
/s/David C. Moja David C. Moja, C.P.A., P.C. March 12, 1996 Savannah, Georgia
[Letterhead] [LOGO] DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Monroe Properties Limited Partnership
We have audited the accompanying balance sheets of MONROE PROPERTIES LIMITED PARTNERSHIP (A Limited Partnership), as of December 31, 1997 and 1996, and the related statement of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MONROE PROPERTIES LIMITED PARTNERSHIP as of December 31, 1997 and 1996 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated February 23, 1998 on our consideration of MONROE PROPERTIES LIMITED PARTNERSHIP'S internal control over financial reporting and our test of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was made for the purpose of forming an opinion on the basic financial statements of MONROE PROPERTIES LIMITED PARTNERSHIP taken as a whole. The accompanying financial information listed as supplementary data in the table of contents is presented for purposes of additional analysis as required by Farmers Home Administration. The information in these schedules has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements of MONROE PROPERTIES LIMITED PARTNERSHIP, taken as a whole.
/s/David G. Pellicione Savannah, Georgia February 23, 1998
[Letterhead] [LOGO] DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Monroe Properties Limited Partnership
We have audited the accompanying balance sheets of MONROE PROPERTIES LIMITED PARTNERSHIP (A Limited Partnership), as of December 31, 1996 and 1995, and the related statement of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MONROE PROPERTIES LIMITED PARTNERSHIP as of December 31, 1996 and 1995 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements of MONROE PROPERTIES LIMITED PARTNERSHIP taken as a whole. The accompanying financial information listed as supplementary data in the table of contents is presented for purposes of additional analysis as required by Farmers Home Administration. The information in these schedules has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements of MONROE PROPERTIES LIMITED PARTNERSHIP, taken as a whole.
/s/David G. Pellicione Savannah, Georgia February 25, 1997
[Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITOR'S REPORT
To the Partners Mulberry Associates I, L.P. Mulberry, Arkansas
We have audited the accompanying balance sheet of Mulberry Associates I, L.P. (a Missouri limited partnership) Rural Development Case No: 03-017-431435777 as of December 31, 1997, and the related statements of loss, partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mulberry Associates I, L.P., as of December 31, 1997, and the results of its operations, changes in partners' deficit and cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas January 21, 1998
[Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners Ward Manor Associates Limited Partnership Ward, Arkansas
We have audited the accompanying balance sheet of Ward Manor Associates Limited Partnership (a Missouri limited partnership) Rural Development Case No: 03-043-431482892 as of December 31, 1996, and the related statements of loss, partners' equity and cash flows for the year ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ward Manor Associates Limited Partnership as of December 31, 1996 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas January 21, 1997
[Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard INDEPENDENT AUDITORS' REPORT
To the Partners Paragould Associates I, Limited Partnership Paragould, Arkansas
We have audited the accompanying balance sheet of Paragould Associates I, Limited Partnership (a Missouri limited partnership) Rural Development Case No.: as of December 31, 1996, and the related statements of loss, partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Paragould Associates I, Limited Partnership as of December 31, 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas January 21, 1997
[Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners Lamar Associates, Limited Partnership Lamar, Arkansas
We have audited the accompanying balance sheet of Lamar Associates, Limited Partnership (a Missouri limited partnership) Rural Development Case No.: 03-036-431424399 as of December 31, 1997, and the related statements of operations, partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lamar Associates, Limited Partnership as of December 31, 1997, and the results of its operations, changes in partners' deficit and cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas January 21, 1998
[Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners Lamar Associates, Limited Partnership Lamar, Arkansas
We have audited the accompanying balance sheet of Lamar Associates, Limited Partnership (a Missouri limited partnership) RECD Case No.: 03-036-431424399 as of December 31, 1995, and the related statements of loss, partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lamar Associates, Limited Partnership as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas February 7, 1996
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners B & C Housing Associates, II Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, II, a Limited Partnership, HUD Project No. 118-94005, as of December 31, 1997, and 1996, and the related statements of income and expense, changes in partners' (deficiency) and cash flows for the year ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B & C Housing Associates, II, as of December 31, 1997 and 1996, and the results of its operations and the changes in partners' (deficiency) and cash flows for the year ended December 31, 1997, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 16, 1998, on our consideration of B & C Housing Associates, II's internal control structure and reports dated January 16, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and Non-Discrimination and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 16, 1998
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners B & C Housing Associates, II Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, II, a Limited Partnership, HUD Project No. 118-94005, as of December 31, 1996, and 1995, and the related statements of income and expense, changes in partners' (deficiency) and cash flows for the year ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B & C Housing Associates, II, as of December 31, 1996 and 1995, and the results of its operations and the changes in partners' (deficiency) and cash flows for the year ended December 31, 1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1997, on our consideration of B & C Housing Associates, II's internal control structure and reports dated January 18, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the Partners B & C Housing Associates, II
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1997
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners B & C Housing Associates, II Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, II, a Limited Partnership, HUD Project No. 118-94005, as of December 31, 1995, and 1994, and the related statements of income and expense, changes in partners' (deficiency) and cash flows for the year ended December 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B & C Housing Associates, II, as of December 31, 1995 and 1994, and the results of its operations and the changes in partners' (deficiency) and cash flows for the year ended December 31, 1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1996, on our consideration of B & C Housing Associates, II's internal control structure and reports dated January 18, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the Partners B & C Housing Associates, II Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1996
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners Shadow Wood Housing Associates, Limited Marlton, New Jersey
We have audited the accompanying balance sheets of Shadow Wood Housing Associates, Limited, An Oklahoma Limited Partnership, HUD Project No. 117-94009, as of December 31, 1997 and 1996, and the related statements of income and expense, changes in partners' equity and cash flows for the year ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shadow Wood Housing Associates, Limited, as of December 31, 1997 and 1996, and the results of its operations and the changes in partners' equity and cash flows for the year ended December 31, 1997 in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 16, 1998 on our consideration of Shadow Wood Housing Associates, Limited's internal control structure and reports dated January 16, 1998 on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 16, 1998
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners Shadow Wood Housing Associates, Limited Marlton, New Jersey
We have audited the accompanying balance sheets of Shadow Wood Housing Associates, Limited, An Oklahoma Limited Partnership, HUD Project No. 117-94009, as of December 31, 1996, and 1995, and the related statements of income and expense, changes in partners' equity and cash flows for the year then ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shadow Wood Housing Associates, Limited, as of December 31, 1996, and 1995, and the results of its operations and the changes in partners' equity and cash flows for the year ended December 31, 1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1997, on our consideration of Shadow Wood Housing Associates, Limited's internal control structure and reports dated January 18, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the Partners Shadow Wood Housing Associates, Limited Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1997
[Letterhead] [LOGO] John D. Schuler
Independent Auditor's Report
To the Partners Shadow Wood Housing Associates, Limited Marlton, New Jersey
We have audited the accompanying balance sheets of Shadow Wood Housing Associates, Limited, An Oklahoma Limited Partnership, HUD Project No. 117-94009, as of December 31, 1995, and 1994, and the related statements of income and expense, changes in partners' equity and cash flows for the year then ended December 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shadow Wood Housing Associates, Limited, as of December 31, 1995, and 1994, and the results of its operations and the changes in partners' equity and cash flows for the year ended December 31, 1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1996, on our consideration of Shadow Wood Housing Associates, Limited's internal control structure and reports dated January 18, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
To the Partners Shadow Wood Housing Associates, Limited Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1997
Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners Wayne Senior Housing , A Limited Partnership Wayne, Nebraska
We have audited the accompanying balance sheet of Wayne Senior Housing, A Limited Partnership (a Kansas limited partnership) Rural Development Case No.: 32-090-481008237 as of December 31, 1997, and the related statements of loss, partners' equity and cash flows for the year ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Senior Housing , A Limited Partnership as of December 31, 1997, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas January 21, 1998
[Letterhead] [LOGO] Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners Wayne Senior Housing , A Limited Partnership Wayne, Nebraska
We have audited the accompanying balance sheet of Wayne Senior Housing, A Limited Partnership (a Kansas limited partnership) Rural Development Case No.: 32-090-481008237 as of December 31, 1996, and the related statements of loss, partners' equity and cash flows for the year ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Senior Housing , A Limited Partnership as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A. Topeka, Kansas January 21, 1997
Letterhead] [LOGO] ZINER & COMPANY, P.C. 7 Winthrop Street Boston, MA 02110-1256
INDEPENDENT AUDITORS' REPORT
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of December 31, 1997, and the related statements of changes in partners' capital, profit and loss, and cash flows for the year then ended. These financial statements are the responsibility of Wayne Apartments Project Limited Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Apartments Project Limited Partnership as of December 31, 1997, and the results of its operations, its cash flows and its changes in partners' capital for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD programs issued by The U.S. Department of Housing and Urban Development, we have also issued a report dated January 16, 1998 on our consideration of Wayne Apartments Project Limited Partnership's internal control and reports dated January 16, 1998 on its compliance with specific requirements applicable to major HUD programs, and specific requirements applicable to Fair Housing and Non-Discrimination.
/s/Ziner & Company, P.C. January 16, 1998
[Letterhead] [LOGO] ZINER & COMPANY, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of December 31, 1996, and the related statements of changes in partners' capital, profit and loss, and cash flows for the year then ended. These financial statements are the responsibility of Wayne Apartments Project Limited Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Apartments Project Limited Partnership as of December 31, 1996, and the results of its operations, its cash flows and its changes in partners' capital for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 23, 1997 on our consideration of Wayne Apartments Project Limited Partnership's internal control structure and a report dated January 23, 1997 on its compliance with laws and regulations.
/s/Ziner & Company, P.C. January 23, 1997 Boston, Massachusetts
[Letterhead] [LOGO] ZINER & COMPANY, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of December 31, 1995 and the related statements of changes in partners' capital, profit and loss, and cash flows for the year then ended. These financial statements are the responsibility of Wayne Apartments Project Limited Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Apartments Project Limited Partnership as of December 31, 1995, and the results of its operations, its cash flows and its changes in partners' capital for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 26, 1996 on our consideration of Wayne Apartments Project Limited Partnership's internal control structure and a report dated January 26, 1996 on its compliance with laws and regulations.
/s/Ziner & Company, P.C. January 26, 1996 Boston, Massachusetts
[Letterhead] [LOGO] John D. Schuler
Independent Auditors' Report
To the Partners Chaparral Housing Associates, Ltd. Marlton, New Jersey
We have audited the accompanying balance sheets of Chaparral Housing Associates, Ltd., An Oklahoma Limited Partnership, HUD Project No. 133-94005, as of December 31, 1997, and 1996, and the related statements of income and expense, changes in partners' capital and cash flows for the year ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chaparral Housing Associates, Ltd., as of December 31, 1997, and 1996, and the results of its operations and the changes in partners' capital and cash flows for the year ended December 31, 1997, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 16, 1998, on our consideration of Chaparral Housing Associates, Ltd.'s internal control structure and reports dated January 16, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 16, 1998
[Letterhead] [LOGO] John D. Schuler
Independent Auditors' Report
To the Partners Chaparral Housing Associates, Ltd. Marlton, New Jersey
We have audited the accompanying balance sheets of Chaparral Housing Associates, Ltd., An Oklahoma Limited Partnership, HUD Project No. 133-94005, as of December 31, 1996, and 1995, and the related statements of income and expense, changes in partners' capital and cash flows for the year ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chaparral Housing Associates, Ltd., as of December 31, 1996, and 1995, and the results of its operations and the changes in partners' capital and cash flows for the year ended December 31, 1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1997, on our consideration of Chaparral Housing Associates, Ltd.'s internal control structure and reports dated January 18, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1997
[Letterhead] [LOGO] John D. Schuler
Independent Auditors' Report
To the Partners Chaparral Housing Associates, Ltd. Marlton, New Jersey
We have audited the accompanying balance sheets of Chaparral Housing Associates, Ltd., An Oklahoma Limited Partnership, HUD Project No. 133-94005, as of December 31, 1995, and 1994, and the related statements of income and expense, changes in partners' capital and cash flows for the year ended December 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chaparral Housing Associates, Ltd., as of December 31, 1995, and 1994, and the results of its operations and the changes in partners' capital and cash flows for the year ended December 31, 1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 18, 1996, on our consideration of Chaparral Housing Associates, Ltd.'s internal control structure and reports dated January 18, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on pages 14 to 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/John D. Schuler Tulsa, Oklahoma January 18, 1996
[Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Snapfinger Creste Apartments, L.P.
We have audited the accompanying balance sheet of SNAPFINGER CRESTE APARTMENTS, L.P., as of December 31, 1996, and the related statements of changes in partners' equity (deficit), operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1 to the financial statements, the Partnership has been in default of its mortgage loan agreement with its lender since March of 1996 when the Partnership ceased making its monthly mortgage payment and required escrow deposits. The Partnership and the lender have been in negotiation regarding various workout arrangements; however, at this time no agreement has been reached and there is substantial doubt about the Partnership's ability to continue as going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SNAPFINGER CRESTE APARTMENTS, L.P., as of December 31, 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 21, 1997
[Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Snapfinger Creste Apartments, L.P.
We have audited the accompanying balance sheet of SNAPFINGER CRESTE APARTMENTS, L.P., as of December 31, 1995, and the related statements of changes in partners' equity, operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SNAPFINGER CRESTE APARTMENTS, L.P., as of December 31, 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 31, 1996
[Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Grayton Pointe Apartments, L.P.
We have audited the accompanying balance sheets of GRAYTON POINTE APARTMENTS L.P. [a Georgia Limited Partnership], as of December 31, 1996, and the related statements of changes in partners' equity (deficit), operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of GRAYTON POINTE APARTMENTS, L.P. as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
As discussed in Note H to the financial statements, the Partnership's first mortgage loan will mature on March 1, 1997. In addition, the Partnership has been in default of its second mortgage loan agreement with its lender since November of 1995 when the partnership ceased making its monthly mortgage payment. The Partnership and its lenders have been in negotiation regarding various extensions and workout agreements; however, at this time no agreement has been reached, and there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 31, 1997
[Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Grayton Pointe Apartments, L.P.
We have audited the accompanying balance sheets of GRAYTON POINTE APARTMENTS L.P. [a Georgia Limited Partnership], as of December 31, 1995, and the related statements of changes in partners' equity, operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of GRAYTON POINTE APARTMENTS, L.P. as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 31, 1996
[Letterhead] [LOGO] HENICK & YLVISAKER, Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners of Durham Park Limited Partnership
We have audited the accompanying balance sheets of DURHAM PARK LIMITED PARTNERSHIP (an Oregon limited partnership) as of December 31, 1997, and the related statements of operations, partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. The Balance Sheet for the year ended December 31, 1996 and the related statements of operations, changes in partners' capital and cash flows for the years ended December 31, 1996 and 1995 were audited by other auditors whose report, dated February 12, 1997, expressed on unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Durham Park Limited Partnership as of December 31, 1997, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/HENICK & YLVISAKER Portland, Oregon February 8, 1998
[Letterhead] [LOGO] ARTHUR ANDERSON LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Durham Park Limited Partnership
We have audited the accompanying balance sheets of DURHAM PARK LIMITED PARTNERSHIP (an Oregon limited partnership) as of December 31, 1996 and 1995, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Durham Park Limited Partnership as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles.
/s/Arthur Anderson LLP Denver, Colorado February 12, 1997
[Letterhead] [LOGO] David G. Pelliccione, C.P.A., P.C.
INDEPENDENT AUDITOR'S REPORT
To the Partners Bamberg Properties Limited Partnership
We have audited the accompanying balance sheets of BAMBERG PROPERTIES LIMITED PARTNERSHIP (A Limited Partnership), as of December 31, 1997 and 1996, and the related statement of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BAMBERG PROPERTIES LIMITED PARTNERSHIP as of December 31, 1997, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ David G. Pelliccione Savannah, Georgia February 23, 1998
[Letterhead] [LOGO] David G. Pelliccione, C.P.A., P.C.
INDEPENDENT AUDITOR'S REPORT
To the Partners Bamberg Properties Limited Partnership
We have audited the accompanying balance sheets of BAMBERG PROPERTIES LIMITED PARTNERSHIP (A Limited Partnership), as of December 31, 1996 and 1995, and the related statement of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BAMBERG PROPERTIES LIMITED PARTNERSHIP as of December 31, 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ David G. Pelliccione Savannah, Georgia February 23, 1997
[Letterhead] [LOGO] Floyd & Company Savannah, Georgia
INDEPENDENT AUDITORS' REPORT
To the General Partners of McKinley-Walker Limited Partnership
We have audited the accompanying balance sheets of McKinley-Walker Limited Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and 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 assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of McKinley-Walker Limited Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Floyd & Company, CPA /s/R. Doug Floyd February 28, 1998
[Letterhead] [LOGO] Floyd & Company Savannah, Georgia
INDEPENDENT AUDITORS' REPORT
To the General Partners of McKinley-Walker Limited Partnership
We have audited the accompanying balance sheets of McKinley-Walker Limited Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
The financial statement information for the year ending December 31, 1995 was audited by another independent certified public accountant who expressed and unqualified opinion dated March 31, 1996.
We conducted our audits in accordance with generally accepted auditing standards and 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 includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of McKinley-Walker Limited Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Floyd & Company, CPA /s/R. Doug Floyd February 28, 1997
[Letterhead] [LOGO] David C. Moja, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the General Partners of McKinley-Walker Limited Partnership
We have audited the accompanying balance sheets of McKinley-Walker Limited Partnership (a Georgia Limited Partnership) as of December 31, 1995 and 1994, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and 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 includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of McKinley-Walker Limited Partnership (a Georgia Limited Partnership) as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information listed in the table of contents is presented for purpose of additional analysis and is not a required part of the basic financial statements. Such information except for the portion marked "unaudited", on which we express no opinion, has been subjected to the procedures applied in the audits of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole.
/s/David C. Moja David C. Moja, C.P.A., P.C. March 12, 1996 Savannah, Georgia
[Letterhead] [LOGO] MUELLER, WALLA & ALBERTSON, P.C. Kirkwood, Missouri
INDEPENDENT AUDITORS' REPORT
The Partners DeSoto Associates III, L.P. St. Louis, Missouri
We have audited the accompanying balance sheets of DeSoto Associates III, L.P. (a limited partnership) as of December 31, 1997 and 1996, and the related statements of operations, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of DeSoto Associates III, L.P. as of December 31, 1997 and 1996, and the results of its operations, changes in partners' capital and cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/Mueller, Walla & Albertson, P.C. Mueller, Walla & Albertson, P.C. Certified Public Accountants January 27, 1998
[Letterhead] [LOGO]
Mueller & Walla, P.C. Certified Public Accountants 10714 Manchester Road Suite 202 Kirkwood, Missouri 63122
(314) 822-6575
Accountants' Compilation Report
The Partners DeSoto Associates III, L.P. St. Louis, Missouri
We have compiled the accompanying balance sheet of DeSoto Associates III, L.P. (a limited partnership) as of December 31, 1995, and the related statements of operations, partners' capital, and cash flows for the year then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them.
The financial statements for the year ended December 31, 1994, were audited by us, and we expressed an unqualified opinion on them in our report dated February 3, 1995, but we have not performed any auditing procedures since that date.
/s/Mueller & Walla, P.C. Mueller & Walla, P.C. Certified Public Accountants February 9, 1996
Mueller & Walla, P.C. Certified Public Accountants 10714 Manchester Road Suite 202 Kirkwood, Missouri 63122
ACCOUNTANTS' COMPILATION REPORT
The Partners Warrenton Associates I, L.P. Warrenton, Missouri
We have compiled the accompanying balance sheets of Warrenton Associates I, L.P. (a limited partnership) as of December 31, 1997 and 1996, and the related statements of operations, partners' capital and cash flows for the year then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statement's information that is the representation of the management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them.
/s/Mueller, Walla & Albertson, P.C. Mueller, Walla & Albertson, P.C. Certified Public Accountants February 11, 1998
Mueller & Walla, P.C. Certified Public Accountants 10714 Manchester Road Suite 202 Kirkwood, Missouri 63122
INDEPENDENT AUDITORS' REPORT
The Partners Warrenton Associates I, L.P. Warrenton, Missouri
We have audited the accompanying balance sheet of Warrenton Associates I, L.P. (a limited partnership) as of December 31, 1995, and the related statements of operations, partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the 1995 financial statements referred to above present fairly, in all material respects, the financial position of Warrenton Associates, I, L.P. as of December 31, 1995, and the results of its operations, changes in partners' capital and cash flows for the year then ended in conformity with generally accepted accounting principles.
The 1994 financial statements were compiled by us and our report thereon, dated February 3, 1995, stated that we did not audit or review those financial statements and, accordingly, express no opinion or other form of assurance on them.
/s/Mueller & Walla, P.C. Mueller & Walla, P.C. Certified Public Accountants February 6, 1996
[Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Shannon Creste Apartments, L.P.
We have audited the accompanying balance sheet of SHANNON CRESTE APARTMENTS, L.P., [a Georgia Limited Partnership], as of December 31, 1997, and the related statements of changes in partners' equity (deficit), operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SHANNON CRESTE APARTMENTS, L.P. as of December 31, 1997, and the results of its operations, its changes in partners' equity (deficit), and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 30, 1998
[Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Shannon Creste Apartments, L.P.
We have audited the accompanying balance sheet of SHANNON CRESTE APARTMENTS, L.P., [a Georgia Limited Partnership], as of December 31, 1996, and the related statements of changes in partners' equity, operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SHANNON CRESTE APARTMENTS, L.P. as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 31, 1997
Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners Shannon Creste Apartments, L.P.
We have audited the accompanying balance sheet of SHANNON CRESTE APARTMENTS, L.P., [a Georgia Limited Partnership], as of December 31, 1995, and the related statements of changes in partners' equity, operations, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SHANNON CRESTE APARTMENTS, L.P. as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C. Atlanta, Georgia January 31, 1996
[Letterhead] [LOGO] MACDONALD PAGE South Portland, Maine
Independent Auditor's Report
February 5, 1998
Milo Housing Associates 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheets of Milo Housing Associates (a limited partnership) as of December 31, 1997 and 1996, and the related statements of profit and loss, changes in partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Milo Housing Associates as of December 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
[Letterhead] [LOGO] MACDONALD PAGE South Portland, Maine
Independent Auditor's Report
February 14, 1996
Milo Housing Associates (a Limited Partnership) 224 Maine Avenue Gardiner, Maine
We have audited the accompanying balance sheet of Milo Housing Associates (a Limited Partnership) as of December 31, 1995, and the related statements of profit and loss, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Milo Housing Associates (a Limited Partnership) as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co. Certified Public Accountants
[Letterhead] [LOGO] KPMG Peat Marwick LLP Atlanta, Georgia
Independent Auditors' Report
The Partners Brighton Manor Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Brighton Manor Apartments, A Limited Partnership as of December 31, 1997 and 1996, and the related statements of loss, partners' capital (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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 of the financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brighton Manor Apartments, A Limited Partnership as of December 31, 1997 and 1996 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/KPMG Peat Marwick LLP February 16, 1998
[Letterhead] [LOGO] KPMG Peat Marwick LLP Atlanta, Georgia
Independent Auditors' Report
The Partners Brighton Manor Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Brighton Manor Apartments, A Limited Partnership as of December 31, 1996 and 1995, and the related statements of loss, partners' capital (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards. 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 of the financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brighton Manor Apartments, A Limited Partnership as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/KPMG Peat Marwick LLP January 24, 1997
Wayne Apartments Project Limited Partnership (a Massachusetts Limited Partnership)
Financial Statements and Supplementary Information
For the Year Ended December 31, 1997
Page
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Changes in Partners' Capital 3
Statement of Profit and Loss 4
Statement of Cash Flows 7
Notes to Financial Statements 9
Independent Auditors' Report on Supplementary Information 12
Supplementary Information
HUD Supporting Data 13
Independent Auditors' Report on Internal Control 18
Independent Auditors' Report on Compliance with Specific Requirements applicable to Major HUD Programs 20
Independent Auditors' Report on Compliance with Specific Requirements applicable to Fair Housing and Non-Discrimination 21
Auditors' comments on audit resolution matters relating to HUD Programs 22
Management's Agent's Certificate 23
Mortgagor's Certificate 24
INDEPENDENT AUDITORS' REPORT
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of December 31, 1997, and the related statements of changes in partners' capital, profit and loss, and cash flows for the year then ended. These financial statements are the responsibility of Wayne Apartments Project Limited Partnership's management. Our responsibility is to express an opinion of these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Apartments Project Limited Partnership as of December 31, 1997, and the results of its operations, its cash flows and its changes in partners' capital for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 16, 1998 on our consideration of Wayne Apartments Projects Limited Partnership's internal control and reports dated January 16, 1998 on its compliance with specific requirements applicable to major HUD Programs, and specific requirements applicable to Fair Housing and Non-Discrimination.
//s// Ziner & Company, P.C. January 16, 1998
Wayne Apartments Project Limited Partnership (a Massachusetts limited Partnership) The accompanying notes are an integral part of the financial statements.
Statement of Changes in Partners' Capital For the Year Ended December 31, 1997
Statement of Profit and Loss For the Year Ended December 31, 1997
Statement of Profit and Loss (continued) For the Year Ended December 31, 1997
Statement of Profit and Loss (continued) For the Year Ended December 31, 1997
Statement of Cash Flows For the Year Ended December 31, 1997
Statement of Cash Flows (continued) For the Year Ended December 31, 1997
Wayne Apartments Project Limited Partnership (a Massachusetts limited Partnership)
Notes to Financial Statements December 31, 1997
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization Wayne Apartments Project Limited Partnership (Partnership) was organized on January 21, 1986 under the laws of the Commonwealth of Massachusetts to operate a 349 unit complex (the "Project") in Boston, Massachusetts. Operations of the Project, including the amount of monthly rental charges, are regulated by the U. S. Department of Housing and Urban Development (HUD). The Partnership acquired the Project from Wayne Apartments Company under a transfer of physical assets on December 27, 1988.
Method of Accounting Financial records are maintained on the accrual method of accounting in conformity with generally accepted accounting principles. Financial statements are presented in the regulatory format prescribed by HUD.
Property Depreciation and Amortization Building costs are being depreciated primarily on a straight line basis over the useful life of the buildings, which is estimated to be 27.5 years. Furnishings and equipment are being depreciated over 7 years using an accelerated method. Repairs and maintenance are expensed as incurred.
Financing costs of $349,724 are being amortized over 25 years on a straight line basis.
Income Taxes No provision has been made for income taxes or related credits in the Partnership's financial statements since the results of operations are included in each partner's tax return.
Low-Income Housing Tax Credit The Project is eligible for low-income housing tax credits over a ten year period which commenced in 1989 and which are calculated at approximately 4% of certain expenditures incurred in connection with the acquisition of the property and 9% of certain expenditures incurred in connection with the building rehabilitation.
Provisions of the enabling legislation regarding the credit restrict occupancy to qualified low-income tenants for a 15 year period. Recapture provisions of the legislation could result in a required repayment of a portion of the credits if these provisions are not met.
Allocation of Profits and Losses Operating profits and losses are allocated 1% to the general partner and 99% to Boston Financial Qualified Housing Tax Credits L.P. II (investor limited partner).
Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.
Notes to Financial Statements December 31, 1997
NOTE B - CAPITAL CONTRIBUTIONS
On December 27, 1988, the Partnership was syndicated and the investor limited partner was admitted. Under the terms of the partnership agreement, the investor limited partner has made capital contributions totaling $10,600,000. In the prior year financial statements, a capital contributions escrow of $300,000 with an offsetting development fee payable were presented on the balance sheet. It has been determined that this escrow is owned by the developer and therefore such transaction has been eliminated from the current year balance sheet presentation.
An additional $337,500 of capital contributions will be due in 2005 but has not been recorded because the investor limited partner is not required to pay if certain conditions have not been satisfied.
NOTE C - FINANCING
Permanent financing on the acquired assets is being provided by a mortgage which is secured by the property and is insured by HUD. This loan bears interest at the rate of 7% per annum and is payable in monthly installments of $41,203 for principal and interest until January 2015. Additional monthly remittances include escrow payments of $21,642 for real estate taxes, property insurance and mortgage insurance and payments of $2,210 to fund reserve for replacements. As of December 31, 1997, the outstanding balance amounted to $4,919,576.
HUD is assisting the project by making monthly interest reduction payments directly to the mortgagee in the amount of $26,447. The project received subsidies of $317,369 during 1997.
Financing for the completed rehabilitation program is in the form of a HUD insured mortgage under the Section 241 program, and is being amortized over a 25 year period. This loan bears interest at the rate of 10.75% per annum. Installments of $91,245 for principal and interest are due monthly through November 2015. Additional monthly remittances include $3,589 to fund a mortgage insurance escrow and $5,831 to fund reserve for replacements. As of December 31, 1997, the outstanding balance amounted to $8,675,013.
Additional financing for the completed rehabilitation program has been provided by HUD in the form of a flexible subsidy loan of $4,195,287. This loan bears simple interest at the rate of 9.25% per annum. Payments of principal and interest shall be made only to the extent the Project has surplus cash. The note matures on the earlier of November 2015 or upon sale, foreclosure, refinancing, and assignment or disposition of the project, at which time the entire principal and accrued interest is due. As of December 31, 1997, interest of $3,186,062 has accrued on this loan, including $388,064 in 1997.
HUD loaned $300,000 to the project in 1985 to pay for delinquent utility charges. This loan is evidenced by a residual receipts note which bears interest at 1% per annum. Accrued interest and principal on this note are payable from surplus cash, as defined by HUD, prior to distributions to the partners. The entire principal balance, plus any accrued interest, is due upon refinancing or maturity of the mortgage note, or upon the sale, foreclosure, or any disposition of the project. The note stipulates that no interest deduction may be claimed for income tax purposes until the amounts are actually paid. As of December 31, 1997, accrued interest of $9,598 is outstanding, including $3,000 expensed in 1997.
Notes to Financial Statements December 31, 1997
NOTE C - FINANCING (continued)
Annual maturities of long-term debt for the ensuing five years are summarized as follows:
1998 $ 326,495 1999 357,036 2000 390,569 2001 426,957 2002 466,895
Subject to HUD regulations, the Partnership is limited to a maximum annual distribution of $156,607, which is 6% of the Partnership's initial investment as determined by HUD. As of December 31, 1997, the Partnership has cumulative unpaid distributions totaling $1,078,847 and the Project had no surplus cash.
NOTE D - RENTAL REVENUE
Tenants' rents are being subsidized by HUD under its Section 8 Housing Assistance Payments program. This program restricts assistance to those tenants who qualify by meeting certain HUD established criteria, including maximum income limitations. The subsidy represents approximately 74% of the total rents of the Partnership. The assistance contract obligates HUD to provide rent subsidies through 2005.
NOTE E - OBLIGATIONS OF THE GENERAL PARTNER
Should the Partnership require funds after the rehabilitation period for any project expenses, the general partner is obligated to lend the required funds up to a maximum of $1,500,000.
NOTE F - RELATED PARTY TRANSACTIONS
Management services have been provided by an affiliate of the general partner at a fee of 5% of net collected income. During 1997, $170,088 was incurred for such services. Additional amounts have been paid to reimburse payroll, in-house legal counsel, and certain other office costs. As of December 31, 1997, this affiliate is owed $2,097 for management services and $22,197 for reimbursable expenses.
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
To the Partners of Wayne Apartments Project Limited Partnership
Our report on our audit of the basic financial statements of Wayne Apartments Project Limited Partnership for 1997 appears on page 1. That audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. HUD Supporting Data is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Ziner & Company, P.C. January 16,1998
Wayne Apartments Project Limited Partnership (a Massachusetts Limited Partnership)
SUPPORTING DATA REQUIRED BY HUD December 31, 1997
SUPPORTING DATA REQUIRED BY HUD - continued December 31, 1997
SCHEDULE OF ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS) NONE
SCHEDULE OF ACCRUED TAXES NONE
SCHEDULE OF NOTES PAYABLE - OTHER THAN MORTGAGES NONE ====
COMPENSATION OF PARTNERS No compensation was paid to the partners from operating funds in 1997.
LISTING OF IDENTITY OF INTEREST COMPANIES AND ACTIVITIES DOING BUSINESS WITH OWNER
Amount Company Name Type of Service Received
Cruz Management Company Management fees $192,868
Cruz Management Company Payroll reimbursement 451,432
Cruz Management Company Reimbursement for central office, maintenance, and other costs 214,222 $858,522
UNAUTHORIZED DISTRIBUTIONS There were no unauthorized distributions paid in 1997.
OTHER OPERATING AND MAINTENANCE EXPENSES Motor vehicle repairs $ 12,696 ========
BAD DEBTS Prior year receivable for vacancy reimbursement $ 60,000 Current year bad debt write offs 44,908 ---------- $104,908
MISCELLANEOUS ADMINISTRATIVE Neighborhood Network Learning Center operations $ 43,675 =========
Ziner & Company, P.C. 7 Winthrop Square Boston, MA 02110 617-542-8880 Fed. I.D. # 04-3174717 Lead Auditor: Robert P. Langley
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS For the Year Ended December 31, 1997
SUPPORTING DATA REQUIRED BY HUD - (continued) December 31, 1997
SUPPORTING DATA REQUIRED BY HUD - (continued) December 31, 1997
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1997, and have issued our report thereon dated January 16, 1998. We have also audited Beech Hill Development Company's compliance with requirements applicable to major HUD-assisted programs and have issued our report thereon dated January 16, 1998.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the Consolidated Audit Guide for Audits of HUD Programs (the "Guide"), issued by the U. S. Department of Housing and Urban Development, Office of the Inspector General. Those standards and the Guide require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether Wayne Apartments Project Limited Partnership complied with laws and regulations, noncompliance with which would be material to a major HUD-assisted program.
The management of the Project is responsible for establishing and maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that HUD-assisted programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of internal control to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of controls may deteriorate.
In planning and performing our audits we obtained an understanding of the design of relevant internal controls and determined whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the Partnership's basic financial statements and on its compliance with specific requirements applicable to its major HUD-assisted program and to report on the internal control in accordance with the provisions of the Guide and not to provide any assurance on internal control.
We performed tests of controls, as required by the Guide, to evaluate the effectiveness of the design and operation of controls that we considered relevant to preventing or detecting material noncompliance with specific requirements applicable to the Partnership's major HUD-assisted program. Our procedures were less in scope than would be necessary to render an opinion on such internal control. Accordingly, we do not express such an opinion.
Our consideration of internal control would not necessarily disclose all matters in internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted the following matter involving internal control and its operation that we consider to be a material weakness as defined above. This condition as previously noted as a reportable condition and was considered in determining the nature, timing, and extent of the procedures to be performed in our audits of the financial statements of Wayne Apartments Project Limited Partnership and of its compliance with requirements applicable to its major program for the year ended December 31, 1997, and this report does not affect our reports thereon dated January 16, 1998.
This report is intended for the information of the general partners, management, and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 16, 1998
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1997, and have issued our report thereon dated January 16, 1998.
We have also audited the Partnership's compliance with the specific program requirements governing federal financial reports, mortgage status, replacement reserves, residual receipts, security deposits, cash receipts, cash disbursements, distributions to owners, management functions and tenant application, eligibility and rectification that are applicable to its major HUD-assisted program, for the year ended December 31, 1997. The management of the Partnership is responsible for compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the "Guide") issued by the U. S. Department of Housing and Urban Development, Office of Inspector General. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Partnership's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
The results of our audit procedures disclosed a material instance of noncompliance with the requirements referred to in the first paragraph of this report that are described in the accompanying Schedule of Auditors' Comments on Audit Resolution Matters Relating to HUD Programs. We considered this instance of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph.
In our opinion, except for the instance of material noncompliance with the requirements applicable to Wayne Apartments Project Limited Partnership referred to in the fourth paragraph of this report and identified in the accompanying Schedule of Auditors Comments on Audit Resolution Matters Relating to HUD Programs, Wayne Apartments Project Limited Partnership complied, in all material respects, with the requirements described above that are applicable to each of its major HUD-assisted programs for the year ended December 31, 1997.
This report is intended for the information of the general partners, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 16, 1998
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No.023-44269) as of and for the year ended December 31, 1997, and have issued our report thereon dated January 16, 1998.
We have also applied procedures to test Wayne Apartments Project Limited Partnership's compliance with the Fair Housing and Non-Discrimination requirements applicable to its HUD assisted programs for the year ended December 31, 1997.
Our procedures were limited to the applicable compliance requirement described in the Consolidated Audit Guide for Audits of HUD Programs (the Guide) issued by the U. S. Department of Housing and Urban Development, Office of Inspector General. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Wayne Apartments Project Limited Partnership's compliance with the Fair Housing and Non-Discrimination requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.
This report is intended for the information of the general partners, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 16, 1998
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
AUDITORS' COMMENTS ON AUDIT RESOLUTION MATTERS RELATING TO HUD PROGRAMS
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership as of and for the year ended December 31, 1997, and have issued our report thereon dated January 16, 1998.
During our audit, we noted that the project has not taken corrective action on findings from our report on compliance with specific requirements applicable to major HUD programs, dated January 23, 1997.
Finding #2 The auditee did not submit HUD claims for vacancy losses.
Status The auditee has not submitted vacancy loss claims for the year 1995 through 1997. The auditee intends to process and file such claims in 1998.
//s// Ziner & Company, P.C. January 16, 1998
MANAGEMENT AGENT'S CERTIFICATE
We hereby certify that we have examined the accompanying financial statements and supplementary information of Wayne Apartments Project Limited Partnership (Project No. 023-44269) and, to the best of our knowledge and belief, the same is complete and accurate.
Name Date
Management Agent Date
Management Company Federal Identification Number 04-3053950
For the Year Ended December 31, 1997 (Unaudited
MORTGAGOR'S CERTIFICATE
I hereby certify that I have examined the accompanying financial statements and supplementary information of Wayne Apartments Project Limited Partnership (Project No. 023-44269) and, to the best of my knowledge and belief, the same is complete and accurate.
John B. Cruz, Jr. Vice President of Gemini Housing Corporation Date
Partnership Federal Identification Number 04-3053950
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership)
FINANCIAL STATEMENTS
AND
SUPPLEMENTARY INFORMATION
PROJECT NO. 023-44269
For the Year Ended December 31, 1996
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Changes in Partners' Capital 4
Statement of Profit and Loss 5
Statement of Cash Flows 7
Notes to Financial Statements 9
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION 12
SUPPLEMENTARY INFORMATION
HUD Supporting Data 13
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE 19
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF FINANCIAL STATEMENTS 22
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS 23
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO AFFIRMATIVE FAIR HOUSING 24
AUDITORS' COMMENTS ON AUDIT RESOLUTION MATTERS RELATING TO HUD PROGRAMS 25
MANAGEMENT AGENT'S CERTIFICATE 26
MORTGAGOR'S CERTIFICATE 27
INDEPENDENT AUDITORS' REPORT
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of December 31, 1996, and the related statements of changes in partners' capital, profit and loss, and cash flows for the year then ended. These financial statements are the responsibility of Wayne Apartments Project Limited Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Apartments Project Limited Partnership as of December 31, 1996, and the results of its operations, its cash flows and its changes in partners' capital for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 23,1997 on our consideration of Wayne Apartments Project Limited Partnership's internal control structure and a report dated January 23,1997 on its compliance with laws and regulations.
/s/Ziner & Company, P.C.
January 23,1997
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) BALANCE SHEET December 31, 1996
ASSETS
The accompanying notes are an integral part of the financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) BALANCE SHEET (continued) December 31, 1996 LIABILITIES AND PARTNERS CAPITAL
The accompanying notes are an integral part of the financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) STATEMENT OF CHANGES IN PARTNERS' CAPITAL For the Year Ended December 31, 1996
The accompanying notes are an integral part of the financial statements.
U.S. Department of Housing and Urban Development Office of Housing Federal Housing Commissioner STATEMENT OF PROFIT AND LOSS For the Year Ended December 31, 1996
Public Reporting Burden for this collection of information is estimated to average 1.0 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer, Office of Information Policies and Systems, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-3600 and to the Office of Management and Budget, Paperwork Reduction Project (2502-0052), Washington, D.C. 20503. Do not send this completed form to either of these addressees.
For month /period Project Number Project Name Beginning Ending Wayne Apartments Project January 1, 1996 December 31, 1996 023-44269 Limited Partnership
he accompanying notes are an integral part of the financial statements.
Limited Partnership 023-44269
The accompanying notes are an integral part of the financial statements.
Part II 1. Total principal payments required under the mortgage, even if payments under a Workout Agreement are less or more than those required under the mortgage 272,524 2. Replacement Reserve deposits required by the Regulatory Agreement or Amendments thereto, even if payments may be temporarily suspended or waived 96,486
The accompanying notes are an integral part of the financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) STATEMENT OF CASH FLOWS For the Year Ended December 31, 1996
The accompanying notes are an integral part of the financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) STATEMENT OF CASH FLOWS - continued For the Year Ended December 31, 1996
The accompanying notes are an integral part of the financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) NOTES TO FINANCIAL STATEMENTS December 31, 1996
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization Wayne Apartments Project Limited Partnership (Partnership) was organized on January 21, 1986 under the laws of the Commonwealth of Massachusetts to operate a 349 unit complex (the "Project") in Boston, Massachusetts. Operations of the Project, including the amount of monthly rental charges, are regulated by the U. S. Department of Housing and Urban Development (HUD). The Partnership acquired the Project from Wayne Apartments Company under a transfer of physical assets on December 27, 1988.
Method of Accounting Financial records are maintained on the accrual method of accounting in conformity with generally accepted accounting principles. Financial statements are presented in the regulatory format prescribed by HUD.
Property Depreciation and Amortization Building costs are being depreciated primarily on a straight line basis over the useful life of the buildings, which is estimated to be 27.5 years. Furnishings and equipment are being depreciated over 7 years using an accelerated method. Repairs and maintenance are expensed as incurred.
Financing costs of $349,724 are being amortized over 25 years on a straight line basis.
Income Taxes No provision has been made for income taxes or related credits in the Partnership's financial statements since the results of operations are included in each partner's tax return.
Low-Income Housing Tax Credit The Project is eligible for low-income housing tax credits over a ten year period which commenced in 1989 and which are calculated at approximately 4% of certain expenditures incurred in connection with the acquisition of the property and 9% of certain expenditures incurred in connection with the building rehabilitation.
Provisions of the enabling legislation regarding the credit restrict occupancy to qualified low-income tenants for a 15 year period. Recapture provisions of the legislation could result in a required repayment of a portion of the credits if these provisions are not met.
Allocation of Profits and Losses Operating profits and losses are allocated 1% to the general partner and 99% to Boston Financial Qualified Housing Tax Credits L.P. II (investor limited partner).
Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) NOTES TO FINANCIAL STATEMENTS December 31, 1996
NOTE B - CAPITAL CONTRIBUTIONS
On December 27, 1988, the Partnership was syndicated and the investor limited partner was admitted. Under the terms of the partnership agreement, the investor limited partner has agreed to make capital contributions totaling $10,600,000, subject to adjustment during the construction phase and initial operating years. As of December 31, 1996, $300,000 of capital contributions remain in escrow to pay the remaining development fee.
An additional $337,500 of capital contributions will be due in 2005 but has not been recorded because the investor limited partner is not required to pay if certain conditions have not been satisfied.
NOTE C - FINANCING
Permanent financing on the acquired assets is being provided by a mortgage which is secured by the property and is insured by HUD. This loan bears interest at the rate of 7% per annum and is payable in monthly installments of $41,203 for principal and interest until January 2015. Additional monthly remittances include escrow payments of $20,238 for real estate taxes, property insurance and mortgage insurance and payments of $2,210 to fund reserve for replacements. As of December 31, 1996, the outstanding balance amounted to $5,064,101.
HUD is assisting the project by making monthly interest reduction payments directly to the mortgagee in the amount of $26,510. The project received subsidies of $318,183 during 1996.
Financing for the completed rehabilitation program is in the form of a HUD insured mortgage under the Section 241 program, and is being amortized over a 25 year period. This loan bears interest at the rate of 10.75% per annum. Installments of $91,245 for principal and interest are due monthly through November 2015. Additional monthly remittances include $3,301 to fund a mortgage insurance escrow and $5,831 to fund reserve for replacements. As of December 31, 1996, the outstanding balance amounted to $8,828,315.
Additional financing for the completed rehabilitation program has been provided by HUD in the form of a flexible subsidy loan of $4,195,287. This loan bears simple interest at the rate of 9.25% per annum. Payments of principal and interest shall be made only to the extent the Project has surplus cash. The note matures on the earlier of November 2015 or upon sale, foreclosure, refinancing, and assignment or disposition of the project, at which time the entire principal and accrued interest is due. As of December 31, 1996, interest of $2,797,998 has accrued on this loan, including $388,064 in 1996.
HUD loaned $300,000 to the project in 1985 to pay for delinquent utility charges. This loan is evidenced by a residual receipts note which bears interest at 1% per annum. Accrued interest and principal on this note are payable from surplus cash, as defined by HUD, prior to distributions to the partners. The entire principal balance, plus any accrued interest, is due upon refinancing or maturity of the mortgage note, or upon the sale, foreclosure, or any disposition of the project. The note stipulates that no interest deduction may be claimed for income tax purposes until the amounts are actually paid. During 1996, interest of $10,171 was paid from annual distributions. As of December 31, 1996, accrued interest of $6,598 is outstanding, including $3,000 expensed in 1996.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) NOTES TO FINANCIAL STATEMENTS December 31, 1996
NOTE C - FINANCING (continued)
Subject to HUD regulations, the Partnership is limited to a maximum annual distribution of $156,607, which is 6% of the Partnership's initial investment as determined by HUD. During 1996, cash distributions of $10,171 were paid. As of December 31, 1996, the Partnership has cumulative unpaid distributions totaling $922,240 and the Project had no surplus cash.
NOTE D - RENTAL REVENUE
Tenants' rents are being subsidized by HUD under its Section 8 Housing Assistance Payments program. This program restricts assistance to those tenants who qualify by meeting certain HUD established criteria, including maximum income limitations. The assistance contract obligates HUD to provide rent subsidies through 2005.
During 1996, the project had vacancies of $150,165. In accordance with HUD regulations, the project is entitled to be partially reimbursed for vacancies for a period up to two months after a unit becomes vacant. Management has estimated such reimbursements related to 1996 vacancy losses to be $60,000 for which a receivable has been recorded in these financial statements. As of December 31, 1996, application for reimbursement of vacancies has not been filed with HUD and such application when filed is subject to adjustment by HUD. Actual reimbursement could differ from estimated amount.
As of December 31, 1996, the Partnership is owed funding of $50,000 for services provided in connection with the Drug Elimination Program.
NOTE E - OBLIGATIONS OF THE GENERAL PARTNER
Should the Partnership require funds after the rehabilitation period for any project expenses, the general partner is obligated to lend the required funds up to a maximum of $1,500,000.
NOTE F - RELATED PARTY TRANSACTIONS
For its services in connection with the completed rehabilitation of the Project, the developer, an affiliate of the general partner, has earned development fees of which $300,000 remains payable at December 31, 1996. Unpaid development fees may be paid from proceeds of the capital contribution escrow once certain conditions are met.
Management services have been provided by an affiliate of the general partner at a fee of 5% of net collected income. During 1996, $167,818 was incurred for such services. Additional amounts have been paid to reimburse payroll, in-house legal counsel, and certain other office costs. As of December 31, 1996, this affiliate is owed $13,802 for management services and $31,849 for reimbursable expenses.
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
To the Partners of Wayne Apartments Project Limited Partnership
Our report on our audit of the basic financial statements of Wayne Apartments Project Limited Partnership for 1996 appears on page 1. That audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. HUD Supporting Data is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/Ziner & Company, P.C.
January 23,1997
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) SUPPORTING DATA REQUIRED BY HUD December 31, 1996
TENANT SECURITY DEPOSITS Tenant security deposits are held in a separate bank account in the name of the project.
RESERVE FOR REPLACEMENTS In accordance with the provisions of the regulatory agreements, restricted cash is held by Chemical Bank and Continental Wingate Associates to be used for replacement of property with the approval of HUD as follows:
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) SUPPORTING DATA REQUIRED BY HUD - continued December 31, 1996
SCHEDULE OF ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS) NONE
SCHEDULE OF ACCRUED TAXES NONE
SCHEDULE OF NOTES PAYABLE - OTHER THAN MORTGAGES NONE ====
COMPENSATION OF PARTNERS No compensation was paid to the partners from operating funds in 1996.
LISTING OF IDENTITY OF INTEREST COMPANIES AND ACTIVITIES DOING BUSINESS WITH OWNER
UNAUTHORIZED DISTRIBUTIONS There were no unauthorized distributions paid in 1996.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) SUPPORTING DATA REQUIRED BY HUD - continued December 31, 1996
Ziner & Company, P.C. 7 Winthrop Square Boston, MA 02110 617-542-8880 Fed. I.D. #04-3174717 Lead Auditor: Robert P. Langley
Computation of Surplus Cash, U.S. Department of Housing Distributions and Residual and Urban Development Receipts Office of Housing Federal Housing Commissioner
Project Name Fiscal Period Ended Project Number Wayne Apartments Project Limited Partnesrhip December 31, 1996 023-44269
Part B - Compute Distributions To Owners and Required Deposit To Residual Receipts
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) SUPPORTING DATA REQUIRED BY HUD - continued December 31, 1996
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) SUPPORTING DATA REQUIRED BY HUD - continued December 31, 1996
SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS
(1) Balances confirmed
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1996, and have issued our report thereon dated January 23,1997. We have also audited Wayne Apartments Project Limited Partnership=s compliance with requirements applicable to major HUD-assisted programs and have issued our reports thereon dated January 23,1997.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the Consolidated Audit Guide for Audits of HUD Programs (the "Guide"), issued by the U. S. Department of Housing and Urban Development, Office of the Inspector General in July 1993. Those standards and the Guide require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether Wayne Apartments Project Limited Partnership complied with laws and regulations, noncompliance with which would be material to a major HUD-assisted program.
The management of the Project is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that HUD-assisted programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.
In planning and performing our audit we obtained an understanding of the design of relevant internal control structure policies and procedures and determined whether they have been placed in operation and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the Partnership's basic financial statements and on its compliance with specific requirements applicable to its major HUD-assisted program and to report on the internal control structure in accordance with the provisions of the Guide and not to provide any assurance on the internal structure.
For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories:
Accounting Applications
. Cash Receipts/Revenue . Purchases/Cash Disbursements . General Ledger . External Financial Reporting
Specific Compliance Requirements
. Federal Financial Reports . Affirmative Fair Housing . Mortgage Status . Replacement Reserve . Residual Receipts . Security Deposits . Cash Receipts . Cash Disbursements . Tenant Application, Eligibility, and Recertification . Management Functions . Distributions to Owners
We performed tests of controls, as required by the Guide, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements applicable to the Partnership's major HUD-assisted program. Our procedures were less in scope than would be necessary to render an opinion on internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we considered to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgement, could adversely affect the organization's ability to record, process, summarize and report financial data consistent with management=s assertions in the financial statements or to administer HUD-assisted programs in accordance with applicable laws and regulations.
The auditee did not submit vacancy claims to HUD in 1996.
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited or that noncompliance with laws and regulations that would be material to a HUD-assisted program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted the following matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. This condition, as noted previously also as a reportable condition, and was considered in determining the nature, timing and extent of the procedures performed in our audit of the financial statements of Wayne Apartments Project Limited Partnership for the year ended December 31, 1996.
This report is intended for the information of the general partner, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23,1997
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF FINANCIAL STATEMENTS
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1996, and have issued our report thereon dated January 23,1997.
We conducted our audit in accordance with generally accepted auditing standards and 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.
Compliance with laws, regulations, contracts and grants applicable to the Project is the responsibility of the Project's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatements, we performed tests of the Project's compliance with certain provisions of laws, regulations, contracts and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.
This report is intended for the information of the general partner, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23, 1997
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1996, and have issued our report thereon dated January 23,1997.
We have also audited the Partnership's compliance with the specific program requirements governing federal financial reports, affirmative fair housing, mortgage status, replacement reserves, residual receipts, security deposits, cash receipts, cash disbursements, management functions, distribution to owners and tenant application, eligibility and recertification that are applicable to its major HUD-assisted program for the year ended December 31, 1996. The management of the Partnership is responsible for compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the "Guide") issued by the U. S. Department of Housing and Urban Development, Office of Inspector General in July 1993. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Partnership's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
The results of our audit procedures disclosed a material instance of noncompliance with the requirements referred to in the second paragraph of this report that are described in the Auditors' Comments on Audit Resolution Matters Relating to HUD Programs. We considered this instance of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph.
In our opinion, except for the instance of noncompliance referred to in the fourth paragraph of this report and identified in the Auditors' Comments on Audit Resolution Matters Relating to HUD Programs, the Partnership complied, in all material respects, with the requirements referred to in the second paragraph that are applicable to its major HUD assisted program for the year ended December 31, 1996.
This report is intended for the information of the general partner, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited. /s/Ziner & Company, P.C. January 23,1997
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO AFFIRMATIVE FAIR HOUSING
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1996, and have issued our report thereon dated January 23,1997.
We have also applied procedures to test Wayne Apartments Project Limited Partnership=s compliance with the Affirmative Fair Housing requirements applicable to its HUD assisted programs for the year ended December 31, 1996.
Our procedures were limited to the applicable compliance requirement described in the Consolidated Audit Guide for Audits of HUD Programs (the Guide) issued by the U. S. Department of Housing and Urban Development, Office of Inspector General in July 1993. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Wayne Apartments Project Limited Partnership=s compliance with the Affirmative Fair Housing requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.
This report is intended for the information of the general partner, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23,1997
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP SCHEDULE OF AUDITORS' COMMENTS ON AUDIT RESOLUTION MATTERS RELATING TO HUD PROGRAMS For the Year Ended December 31, 1996
The following are findings from the December 31, 1995 Schedule Findings and Questioned Costs.
Finding #1 During the year, the auditee maintained cash in excess of FDIC insured $100,000 limit.
Status Cash balances are now maintained below the $100,000 FDIC limit.
Finding #2 The auditee did not submit HUD claims for vacancy losses in 1995.
Status The auditee did not submit claims for 1995 or 1996 vacancy losses. However, the auditee is currently in the process of preparing applications for 1996 vacancy loss claims.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) December 31, 1996
MANAGEMENT AGENT'S CERTIFICATE
We hereby certify that we have examined the accompanying financial
statements and supplementary information of Wayne Apartments Project Limited
Partnership (Project No. 023-44269)and, to the best of our knowledge and belief,
the same is complete and accurate.
/s/Michael Rich 2/28/97 Michael Rich, Controller Date Cruz Management Company, Inc.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) December 31, 1996
MORTGAGOR'S CERTIFICATE
I hereby certify that I have examined the accompanying financial statements
and supplementary information of Wayne Apartments Project Limited Partnership
(Project No. 023-44269) and, to the best of my knowledge and belief, the same is
complete and accurate.
/s/John B. Cruz, Jr 2/28/97 John B. Cruz, Jr. (Date) Vice president of Gemini Housing Corporation
Partnership Federal Identification Number 04-3053950
Wayne Apartments Project Limited Partnership (a Massachusetts Limited Partnership)
Financial Statements and Supplementary Information For the Year Ended December 31, 1995
Page
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Changes in Partners' Capital 3
Statement of Profit and Loss 4
Statement of Cash Flows 7
Notes to Financial Statements 9
Independent Auditors' Report on Supplementary Information 12
Supplementary Information
HUD Supporting Data 13
Independent Auditors' Report on Internal Control Structure 18
Independent Auditors' Report on Compliance Based on an Audit of Financial Statements 20
Independent Auditors' Report on Compliance with Specific Requirements applicable to Major HUD Programs 21
Independent Auditors' Report on Compliance with Specific Requirements applicable to Affirmative Fair Housing 22
Schedule of Findings and Questioned Costs 23
Management's Agent's Certificate 24
Mortgagor's Certificate 25
INDEPENDENT AUDITORS' REPORT
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of December 31, 1995, and the related statements of changes in partners' capital, profit and loss, and cash flows for the year then ended. These financial statements are the responsibility of Wayne Apartments Project Limited Partnership's management. Our responsibility is to express an opinion of these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wayne Apartments Project Limited Partnership as of December 31, 1995, and the results of its operations, its cash flows and its changes in partners' capital for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 26, 1996 on our consideration of Wayne Apartments Projects Limited Partnership's internal control structure and report dated January 26, 1996 on its compliance with laws and regulations.
//s// Ziner & Company, P.C. January 26, 1996
Wayne Apartments Project Limited Partnership (a Massachusetts limited Partnership) Balance Sheet - December 31, 1995
Statement of Changes in Partners' Capital For the Year Ended December 31, 1995
Statement of Profit and Loss For the Year Ended December 31, 1995
Statement of Profit and Loss (continued) For the Year Ended December 31, 1995
Statement of Profit and Loss (continued) For the Year Ended December 31, 1995
Statement of Cash Flows For the Year Ended December 31, 1995
Statement of Cash Flows (continued) For the Year Ended December 31, 1995
Reconciliation of Net Loss to Cash Flow from Operating Activities
Net loss $ (1,323,473) Noncash items included in net loss Depreciation and amortization 1,131,354 Interest not payable currently 391,064 Reserve for replacement interest (15,066) Changes in: Accounts receivable and prepaid expenses 144,497 Accounts payable and accrued expenses 17,830 Prepaid rent (18,606) Tenants' security deposits, net 420 Change in deposits 1,400 Mortgagee escrow deposits 29,088 ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 358,508 =============
Notes to Financial Statements December 31, 1995
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization Wayne Apartments Project Limited Partnership (Partnership) was organized on January 21, 1986 under the laws of the Commonwealth of Massachusetts to operate a 349 unit complex (the "Project") in Boston, Massachusetts. Operations of the Project, including the amount of monthly rental charges, are regulated by the U. S. Department of Housing and Urban Development (HUD). The Partnership acquired the Project from Wayne Apartments Company under a transfer of physical assets on December 27, 1988.
Method of Accounting Financial records are maintained on the accrual method of accounting in conformity with generally accepted accounting principles. Financial statements are presented in the regulatory format prescribed by HUD.
Property Depreciation and Amortization Building costs are being depreciated primarily on a straight line basis over the useful life of the buildings, which is estimated to be 27.5 years. Furnishings and equipment are being depreciated over 7 years using an accelerated method. Repairs and maintenance are expensed as incurred.
Financing costs of $349,724 are being amortized over 25 years on a straight line basis.
Income Taxes No provision has been made for income taxes or related credits in the Partnership's financial statements since the results of operations are included in each partner's tax return.
Low-Income Housing Tax Credit The Project is eligible for low-income housing tax credits over a ten year period which commenced in 1989 and which are calculated at approximately 4% of certain expenditures incurred in connection with the acquisition of the property and 9% of certain expenditures incurred in connection with the building rehabilitation.
Provisions of the enabling legislation regarding the credit restrict occupancy to qualified low-income tenants for a 15 year period. Recapture provisions of the legislation could result in a required repayment of a portion of the credits if these provisions are not met.
Allocation of Profits and Losses Operating profits and losses are allocated 1% to the general partner and 99% to Boston Financial Qualified Housing Tax Credits L.P. II .
Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Notes to Financial Statements December 31, 1995
NOTE B - CAPITAL CONTRIBUTIONS
On December 27, 1988, the Partnership was syndicated and the investor limited partner was admitted. Under the terms of the partnership agreement, the investor limited partner has made capital contributions totaling $10,600,000, subject to adjustments during the construction phase and initial operating years. As of December 31, 1995, $300,000 of capital contributions remain in escrow to pay the remaining development fee.
An additional $337,500 of capital contributions will be due in 2005 but has not been recorded because the investor limited partner is not required to pay if certain conditions have not been satisfied.
NOTE C - FINANCING
Permanent financing on the acquired assets is being provided by a mortgage which is secured by the property and is insured by HUD. This loan bears interest at the rate of 7% per annum and is payable in monthly installments of $41,203 for principal and interest until January 2015. Additional monthly remittances include escrow payments of $23,833 for real estate taxes, property insurance and mortgage insurance and payments of $2,210 to fund reserve for replacements. As of December 31, 1995, the outstanding balance amounted to $5,198,882.
HUD is assisting the project by making monthly interest reduction payments directly to the mortgagee in the amount of $26,569. The project received subsidies of $318,829 during 1995.
Financing for the completed rehabilitation program is in the form of a HUD insured mortgage under the Section 241 program, and is being amortized over a 25 year period. This loan bears interest at the rate of 10.75% per annum. Installments of $91,245 for principal and interest are due monthly through November 2015. Additional monthly remittances include $3,595 to fund a mortgage insurance escrow and $11,581 to fund reserve for replacements. As of December 31, 1995, the outstanding balance amounted to $8,966,058.
Additional financing for the completed rehabilitation program has been provided by HUD in the form of a flexible subsidy loan of $4,195,287. This loan bears simple interest at the rate of 9.25% per annum. Payments of principal and interest shall be made only to the extent the Project has surplus cash. The note matures on the earlier of November 2015 or upon sale, foreclosure, refinancing, and assignment or disposition of the project, at which time the entire principal and accrued interest is due. As of December 31, 1995, interest of $2,409,934 has accrued on this loan, including $388,064 in 1995.
HUD loaned $300,000 to the project in 1985 to pay for delinquent utility charges. This loan is evidenced by a residual receipts note which bears interest at 1% per annum. Accrued interest and principal on this note are payable from surplus cash, as defined by HUD, prior to distributions to the partners. The entire principal balance, plus any accrued interest, is due upon refinancing or maturity of the mortgage note, or upon the sale, foreclosure, or any disposition of the project. The note stipulates that no interest deduction may be claimed for income tax purposes until the amounts are actually paid. During 1995, interest of $1,620 was paid from annual distributions. As of December 31, 1995, interest of $13,769 has accrued, including $3,000 in 1995.
Notes to Financial Statements December 31, 1995
NOTE C - FINANCING (continued)
Annual maturities of long-term debt for the ensuing five years are summarized as follows:
1996 $ 273,310 1997 298,669 1998 326,495 1999 357,036 2000 390,569 Management believes it is not practicable to estimate the fair value of mortgages payable because it is not determinate as to whether financing with similar characteristics is currently available to the Partnership.
Subject to HUD regulations, the Partnership is limited to a maximum annual distribution of $156,607, which is 6% of the Partnership's initial investment as determined by HUD. During 1995, cash distributions of $1,620 were paid. As of December 31, 1995, the Partnership has cumulative unpaid distributions totaling $775,804 and surplus cash of $20,342.
NOTE D - RENTAL REVENUE
Tenants' rents are being subsidized by HUD under its Section 8 Housing Assistance Payments program. This program restricts assistance to those tenants who qualify by meeting certain HUD established criteria, including maximum income limitations. The assistance contract obligates HUD to provide rent subsidies through 2005.
NOTE E - OBLIGATIONS OF THE GENERAL PARTNER
Should the Partnership require funds after the rehabilitation period for any project expenses, the general partner is obligated to lend the required funds up to a maximum of $1,500,000.
NOTE F - RELATED PARTY TRANSACTIONS
For its services in connection with the completed rehabilitation of the Project, the developers, an affiliate of the general partner, has earned development fees. During 1995, $150,000 of such fees were paid and $300,000 remains payable at December 31, 1995. Unpaid development fees may be paid from proceeds of the capital contribution escrow once certain conditions are met.
Management services have been provided by an affiliate of the general partner at a fee of 5% of net collected income. During 1995, $173,353 was incurred for such services. Additional amounts have been paid to reimburse payroll, in-house legal counsel, and certain other office costs.
The Partnership maintains cash balances at several banks and with the mortgage servicing agent. Accounts at these various financial institutions are insured up to $100,000 per depositor by the Federal Deposit Insurance Corporation (FDIC). At December 31, 1995, the Partnership had cash balances in the capital contributions escrow and reserve for replacement in excess of FDIC insured limits by $263,568.
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
To the Partners of Wayne Apartments Project Limited Partnership
Our report on our audit of the basic financial statements of Wayne Apartments Project Limited Partnership for 1995 appears on page 1. That audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. HUD Supporting Data is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
//s// Ziner & Company, P.C. January 26,1996
Wayne Apartments Project Limited Partnership (a Massachusetts Limited Partnership)
SUPPORTING DATA REQUIRED BY HUD December 31, 1995
Number Amount DELINQUENT TENANT ACCOUNTS RECEIVABLE of Tenants Past Due ---------- -------- Delinquent - 30 days and under 119 $ 18,508 - 31-60 days 39 6,962 - 61-90 days 29 4,709 - over 90 days 32 25,765 -------- $55,944
SCHEDULE OF ACCOUNTS RECEIVABLE - OTHER NONE ====
MORTGAGEE ESCROW DEPOSITS Estimated amount required for future payment of: City, state and county taxes $32,605 Mortgage insurance 32,129 Property insurance 20,858 -------- 85,592
Amount confirmed by mortgagee 85,293
Amount on deposit in excess of estimated requirements $ (299) ========
TENANT SECURITY DEPOSITS Tenant security deposits are held in a separate bank account in the name of the project.
RESERVE FOR REPLACEMENTS In accordance with the provisions of the regulatory agreements, restricted cash is held by Chemical Bank and Continental Wingate Associates to be used for replacement of property with the approval of HUD as follows:
Balance, January 1, 1995 $486,671 Monthly deposits ($11,580.66 x 12) ($2,210 x 12) 165,488 Interest earned 15,066 Withdrawals (42,721) -----------
Balance, December 31, 1995 - confirmed by mortgagees $624,504 * ========
* As of December 31, 1995, The Partnership has an approved withdrawal of $175,738 which has not been received.
SUPPORTING DATA REQUIRED BY HUD - continued December 31, 1995
SCHEDULE OF ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS) NONE
SCHEDULE OF ACCRUED TAXES NONE
SCHEDULE OF NOTES PAYABLE - OTHER THAN MORTGAGES NONE ====
COMPENSATION OF PARTNERS No compensation was paid to the partners from operating funds in 1995.
LISTING OF IDENTITY OF INTEREST COMPANIES AND ACTIVITIES DOING BUSINESS WITH OWNER
Amount Company Name Type of Service Received
Cruz Management Company Management fees $ 186,311
Cruz Management Company Payroll reimbursement 459,123
Cruz Management Company Reimbursement for central office, maintenance, and other costs 147,329 --------- $729,763 ========= UNAUTHORIZED DISTRIBUTIONS There were no unauthorized distributions paid in 1995.
MISCELLANEOUS ADMINISTRATIVE TAP program education costs $ 8,376 Handicap analysis report 4,700 Other 1,834 --------- $ 14,910 OTHER OPERATING AND MAINTENANCE EXPENSES ========= Motor vehicle repairs $ 18,510 =========
Ziner & Company, P.C. 7 Winthrop Square Boston, MA 02110 617-542-8880 Fed. I.D. # 04-3174717 Lead Auditor: John F. Mackey
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS For the Year Ended December 31, 1995
SUPPORTING DATA REQUIRED BY HUD - (continued) December 31, 1995
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
SUPPORTING DATA REQUIRED BY HUD - (continued) December 31, 1995
(1) Balances confirmed by Bank of Boston (2) Balances confirmed by U.S. Trust (3) Balances confirmed by Boston Bank of Commerce (4) Balances confirmed by Chemical Bank (5) Balances confirmed by Continental Wingate Associates
* Based upon HUD mortgagee letter 96-03, balances in excess of the $100,000 FDIC insurance limitation is permissible by the mortgage service agent. Therefore,this condition is not disclosed as a finding.
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1995, and have issued our report thereon dated January 26, 1996. We have also audited Wayne Apartments Project Limited Partnership's compliance with requirements applicable to major HUD-assisted programs and have issued our report thereon dated January 26, 1996.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the Consolidated Audit Guide for Audits of HUD Programs (the "Guide"), issued by the U. S. Department of Housing and Urban Development, Office of the Inspector General in July 1993. Those standards and the Guide require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether Wayne Apartments Project Limited Partnership complied with laws and regulations, noncompliance with which would be material to a major HUD-assisted program.
The management of the Project is responsible for establishing and maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that HUD-assisted programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of controls may deteriorate.
In planning and performing our audits we obtained an understanding of the design of relevant internal control structure policies and procedures and determined whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the Partnership's basic financial statements and on its compliance with specific requirements applicable to its major HUD-assisted program and to report on the internal control in accordance with the provisions of the Guide and not to provide any assurance on internal control.
For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:
Accounting Applications Cash receipts/revenue Purchases/cash disbursements General ledger External financial reporting
Specific compliance requirements
Affirmative fair housing Mortgage status Replacement reserve Security Deposits Cash receipts Cash disbursements Tenant application, eligibility, and recertifiation Management functions
We performed tests of controls, as required by the Guide, to evaluate the effectiveness of the design and operation of control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements applicable to the Partnership's major HUD-assisted program. Our procedures were less in scope than would be necessary to render an opinion on such internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we considered to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment , could adversely affect the organization's ability to record, process, summarize and report financial data consistent with management's ascertains in the financial statements or to administer HUD-assisted programs in accordance with applicable laws and regulations.
The auditee did not submit Vacancy claims to HUD in 1995.
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited or that noncompliance with laws and regulations that would be material to a HUD-assisted program may occur and not be detected with a timely period by employees in the normal course of performing their assigned functions.
Our consideration of internal control would not necessarily disclose all matters in internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted the following matters involving internal control structure and its operation that we consider to be material weaknesses as defined above. However, we believe the reportable condition described above is not a material weakness.
This report is intended for the information of the general partner, management, and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 26, 1996
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF FINANCIAL STATEMENTS
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1995, and have issued our report thereon dated January 26, 1996.
We conducted our audit in accordance with generally accepted auditing standards and 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.
Compliance with laws, regulations, contracts and grants applicable to the Project is the responsibility of the Projects management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatements, we performed test of the Project's compliance with certain provisions of laws, regulations, contracts and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.
This report in intended for the information of the general partner, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 26, 1996
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1995, and have issued our report thereon dated January 26, 1996.
We have also audited the Partnership's compliance with the specific program requirements governing affirmative fair housing, mortgage status, replacement reserves, residual receipts, security deposits, cash receipts, cash disbursements, management functions and tenant application, eligibility and recertification that are applicable to its major HUD-assisted program for the year ended December 31, 1995. The management of the Partnership is responsible for compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the "Guide") issued by the U. S. Department of Housing and Urban Development, Office of Inspector General in July 1993. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Partnership's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
The results of our audit procedures disclosed a material instance of noncompliance with the requirements referred to in the second paragraph of this report that are described in the accompanying schedule of findings and questioned costs. We considered this instance of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph.
In our opinion, except for the instance of noncompliance referred to in the fourth paragraph of this report and identified in the accompanying schedule of findings and questioned costs, the Partnership complied, in all material respects, with the requirements described above that are applicable to each of its major HUD-assisted programs for the year ended December 31, 1995.
This report is intended for the information of the general partners, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 26, 1996
Zinger & Company, P.C. Certified Public Accountants 7 Winthrop Square Boston, Massachusetts 02110-1256 Phone: (617) 542-8880 Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO AFFIRMATIVE FAIR HOUSING
To the Partners of Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited Partnership (a Massachusetts limited partnership) (Project No. 023-44269) as of and for the year ended December 31, 1995, and have issued our report thereon dated January 26, 1996.
We have also applied procedures to test Wayne Apartments Project Limited Partnership's compliance with the Affirmative Fair Housing requirements applicable to its HUD assisted programs for the year ended December 31, 1995.
Our procedures were limited to the applicable compliance requirement described in the Consolidated Audit Guide for Audits of HUD Programs (the Guide) issued by the U. S. Department of Housing and Urban Development, Office of Inspector General in July 1993. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Wayne Apartments Project Limited Partnership's compliance with the Affirmative Fair Housing requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.
This report is intended for the information of the general partner, management and the Department of Housing and Urban Development. However, this report is a matter of public record and its distribution is not limited.
//s// Ziner & Company, P.C. January 16, 1998
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS December 31 1995
Funding #1
Condition During the year, the auditee maintained cash balances in excess of FDIC insured $100,000 limited
Criteria Regulations of the Department of Housing and Urban Development (HUD) require that the entire cash balance must be federally insured.
Effect Auditee is not in compliance with the HUD regulations in regards to is cash accounts.
Cause Monthly HUD subsidy payments are greater than $100,000 and are wire transferred into a single project account.
Recommendation Auditee should consider temporarily transferring funds to another financial institution on the day the subsidy payment is received.
Finding #2
Condition The auditee did not submit to HUD claims for vacancy losses in 1995.
Criteria Regulations of the HUD require that claims for vacancy losses be submitted.
Effect Auditee is not in compliance with HUD regulations
Cause Lack of compliance in filing vacancy loss claims was on oversight of management.
Recommendation File vacancy loss claims for 1995 and implement a system to ensure timely filing in future years.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) December 31, 1995
MANAGEMENT AGENT'S CERTIFICATE
We hereby certify that we have examined the accompanying financial statements and supplementary information of Wayne Apartments Project Limited Partnership (Project No. 023-44269) and, to the best of our knowledge and belief, the same is complete and accurate.
- ------------------------------- ----------------------- Michael Rich, Controller Date Cruz Management Corporation, Inc.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP (a Massachusetts limited partnership) December 31, 1995
MORTGAGOR'S CERTIFICATE
I hereby certify that I have examined the accompanying financial statements and supplementary information of Wayne Apartments Project Limited Partnership (Project No. 023-44269) and, to the best of my knowledge and belief, the same is complete and accurate.
------------------------------------- ----------------- John B. Cruz/// President of Gemini Housing Corporation Date
Partnership Federal Identification Number 04-3053950