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·HARLEM TENANTS ASSOCIATION, INC. HUD PROJECT NO. 066-92002

FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

FOR THE YEAR ENDED JANUARY 31, 2017

HARLEM TENANTS ASSOCIATION, INC. HUD PROJECT NO. 066-92002

CONTENTS

Page No.

INDEPENDENT AUDITORS' REPORT 1

FINANCIAL STATEMENTS Statement of Financial Position 3 Statement of Activities 5 Statement of Cash Flows 6 Notes to Financial Statements 8

SUPPLEMENTARY INFORMATION Supplementary Information Required by HUD 15 Schedule of Expenditures of Federal Awards 26

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 27

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 28

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE 30

SCHEDULE OF FINDINGS AND QUESTIONED COSTS 33

CERTIFICATION OF PROJECT OWNER 34

MANAGEMENT AGENT'S CERTIFICATION 35

INDEPENDENT ACCOUNTANTS' REPORT ON APPL YING AGREED-UPON PROCEDURES 36

599 C Steed Road

Ridgeland, MS 39157

601.898.8875

Fax: 601.898.2983

226 East Jefferson Street Yazoo City, MS 39194 662.746.4581 Fax: 662.746.5384

www.mclcpa.net

American Institute of Certified Public Accountants

Mississippi Society of Certified Public Accountants

Brett C. Matthews, CPA

J. Raleigh Cutrer, CPA/PFS/ ABV

Charles R. Lindsay, CPA

Matthew E. Freeland, CPA

Kenneth L. Guthrie, CPA

A. Joseph Tommasini, CPA

Matthew A. Turnage, CPA

Kimberly L. Hardy, CPA/CFF

William (Bill) McCoy, CPA

Michelle R. Stonestreet, CPA

Shannon L. Adams, CPA

Lisa H. Hammarstrom, CPA

Krisstel P. Hunt, CPA

Linden C. Potts, CPA

Tammy Burney Ray, CPA

Matthew C. Thiel, CPA

Proud member of

CPA~E~N~JI~~ - A Cravve Horwath International.

;a MATTHEWS ~ CUTRER and

• • LINDSAY, P.A. CERTIFIED PUBLI C ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT

To the Board of Directors Harlem Tenants Association, ln.c. Clewiston, Florida

Report on the financial statements

We have audited the accompanying financial statements of Harlem Tenants Association, Inc., HUD Project Number 065-35012, which comprise the statement of financial position as of January 31, 2017, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting polies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harlem Tenants Association, Inc., as of January 31, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information shown on pages 15 to 24 is presented for purposes of additional analysis as required by the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, Office of the Inspector General, and is not a required part of the financial statements. The accompanying schedule of expenditures of federal awards, a Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated April 1, 2017, on our consideration of Harlem Tenants Association, lnc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Harlem Tenants Association, lnc.'s internal control over financial reporting and compliance.

April 1, 2017

2


STATEMENT OF FINANCIAL POSITION AT JANUARY 31, 2017

CURRENT ASSETS Cash in bank - local Tenant rents receivable Accounts receivable - other Prepaid expenses

ASSETS

RESTRICTED DEPOSITS AND FUNDED RESERVES

Tenant security deposits Property insurance escrow Replacement reserve Residual receipts reserve

FIXED ASSETS

Land Buildings Building equipment - portable appliances Furnishings Maintenance equipment Motor vehicles Miscellaneous fixed assets

Less: Accumulated Depreciation

OTHER ASSETS Utility deposit

See Notes to Financial Statements.

3

$ 130,413 15,073 7,938

78,668

18,750 139,563 388,630

12,680

31,500 3,432,088

73,311 153,037 41,554 22,511 89,533

3,843,534 (2,968,381)

232,092

559,623

875,153

400

$1,667,268


STATEMENT OF FINANCIAL POSITION - CONTINUED AT JANUARY 31, 2017

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES Accounts payable - trade Accrued interest payable Mortgage payable - current portion Miscellaneous current liabilities Prepaid revenue

DEPOSIT LIABILITIES

Tenant security deposits

LONG TERM LIABILITIES Mortgage payable Capital recovery payable Less debt issuance cost

NET ASSETS Unrestricted net assets


4

$ 45,690 9,416 9,441 3,839 8,927

343,620 32,918

(54,476)

77,313

18,749

322,062

1,249,144

$ 1,667,268


STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JANUARY 31, 2017

REVENUES Rent Interest income Other income

EXPENSES Administrative Utilities Operating and maintenance Taxes and insurance Financial Depreciation and amortization

CHANGE IN NET ASSETS

NET ASSETS AT BEGINNING OF YEAR

NET ASSETS AT END OF YEAR


5

$1,300,986 1,412

17,918

217,716 95,822

508,651 225,718

41,318 109,845

1,320,316

1,199,070

121,246

1,127,898

$1,249,144


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JANUARY 31, 2017

CASH FLOWS FROM OPERATING ACTIVITIES Rental receipts Interest received Other

Administrative Management fees Utilities Salaries and wages Operating and maintenance Real estate taxes Property insurance Miscellaneous taxes and insurance Tenant security deposits Interest

Net Cash Provided By Operating Activities

CASH FLOW FROM INVESTING ACTIVITIES Deposits to reserve for replacements account Withdrawals from reserve for replacement Deposits to residual receipts account Withdrawals from residual receipts Net transfers from mortgage escrow account Purchase of fixed assets

Net Cash Used In Investing Activities

CASH FLOW FROM FINANCING ACTIVITIES Principal payments on mortgage payable

NET DECREASE IN CASH

CASH AT BEGINNING OF YEAR

CASH AT END OF YEAR


$ 1,298,658 1,412

17,918

82,705 80,892 95,565

199,279 367,393

19,809 170,629 29,759

1 37,439

(123,654) 104, 164

(1) 10

(31,346) (58,494)

6

1,317,988

1,083,471

234,517

(109,321)

(252,966)

(127,770)

258,183

$ 130,413


STATEMENT OF CASH FLOWS-CONTINUED FOR THE YEAR ENDED JANUARY 31, 2017

CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net

cash provided by operating activities

Depreciation Amortization Amortization of debt issuance cost (Increase) decrease in

Tenant accounts receivable Miscellaneous prepaid expenses Cash restricted for tenant security deposits

Increase (decrease) in Accounts payable - trade Accrued interest payable Accrued real estate taxes Prepaid revenue Tenant security deposits held in trust



7

$ 121,246

109,477 368

13,439

(538) 8,823

(294)

(3,645) (9,560) (3,302) (1 ,790)

293 $ 234,517


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JANUARY 31, 2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Harlem Tenants Association, Inc. (The Project) is a nonprofit organization incorporated under the laws of the State of Florida. The Project was formed January 2, 1970 to own and operate a residential community for the low-to-moderate income residents in Clewiston, Florida. The Project was financed and constructed under Section 221 (d)(3) of the National Housing Act, as amended, and is administered by the U.S. Department of Housing and Urban Development (HUD). Under this program, the Project is regulated by HUD as to rental charges and operating methods.

The Project was constructed on 18.13 acres of 54.37 acres donated to the Project by the Housing Authority of the City of Clewiston. The donated land is exempt from local city and county ad valorem taxes. However, the Project is not exempt from certain special taxing district/non-ad valorem assessments.

Federally Subsidized Rent Income

The Project is subject to Section 8 Housing Assistance Payments agreements with the U.S. Department of Housing and Urban Development (HUD), and a significant portion of the Project's rental income is received from HUD.

Basis of Presentation

The financial statements have been prepared using the accrual method of accounting.

Change in Accounting Principle

During 2016, the Partnership adopted the provisions of Accounting Standards Update No. 2015-03 Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). Under this new accounting policy, the Partnership has retrospectively presented all debt issuance costs as a direct deduction from the carrying amount of the related obligation in the balance sheet. Amortization of the debt issuance costs is calculated using the interest method and is included as a component of interest expense.

8



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Accounts Receivable

Accounts receivable are stated at the amount that management expects to collect on balances. Management closely monitors outstanding balances and writes off, as of yearend, all balances past due after a certain period of time for which all collection efforts have been exhausted.

No allowance for uncollectible accounts has been provided since management has determined that the potential for bad debts is not material at the balance sheet basis.

Fixed Assets and Depreciation

Property and equipment are recorded at cost and depreciated using the straight-line method over the useful life of the asset, ranging from 3 to 40 years.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Income Taxes

The Project is a tax-exempt organization as described in Section 501 (c)(3) of the Internal Revenue Code and is generally exempt from Federal and State income taxes pursuant to Section 501 (a) of the Code. Rules and regulations regarding unrelated business income tax apply to the Project. The Project believes it has no uncertain tax positions.

Distributions

The Projecrs regulatory agreement with HUD stipulates, among other things, that the Project will not make distributions of assets or income to any of its officers or directors.

Cash Equivalents

For the statement of cash flows, all unrestricted investment instruments with original maturities of three months or less are cash equivalents. The Project has no cash equivalents at January 31, 2017.

9



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Debt Issuance Costs

Debt issuance costs, net of accumulated amortization, are reported as a direct reduction of the obligation to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and is computed using the interest method.

2. HUD-RESTRICTED DEPOSITS

Under the regulatory agreement, the Project is required to set aside amounts for the replacement of property and other project expenditures approved by HUD. HUDrestricted deposits, which totaled $401,310 at January 31, 2017, are held in separate accounts and generally are not available for operating purposes.

3. MORTGAGE PAYABLE

Mortgage payable consisted of the following at January 31, 2017:

4.5% HUD-insured mortgage note, payable to the Department of Housing and Urban Development in annual installments on the payment date in the amount of 75% restricted surplus cash which includes interest, all in arrears for the immediately preceding payment periods will be paid with the payment first applied to accrued interest and then principal, matures May 1, 2038.

HUD-insured mortgage note, payable to First Housing Development, in monthly installments of $1,846, including interest at 7%, through May 1, 2038.

7% capital recovery note payable to First Housing Development, in monthly installments of $537, matures April 11, 2023.

Less current maturities

10

$ 108,056

245,005

32.918 385,979

9.441 $ 376.538



3. MORTGAGE PAYABLE (Continued)

Collateral consists of all rents, property, and improvements thereon. The mortgage has been insured by the Federal Housing Administration under the provisions of a related building loan agreement (regulatory agreement).

Maturities on the mortgage payable for the next five years and thereafter are approximately as follows:

2018 2019 2020 2021 2022 Thereafter

4. UNRESTRICTED NET ASSETS

$ 9,441 10, 123 10,855 11,640 12,480

331.440 $ 385.979

None of the Project's net assets are subject to donor-imposed restrictions. Accordingly, all net assets are accounted for as unrestricted net assets under FASB Accounting Standards Codification.

5. RENT INCREASES

Under the regulatory agreement, the Project may not increase rents charged to tenants without HUD approval.

6. MANAGEMENT FEE

The Project has contracted with a management company to manage operations. Effective May 1, 2011 the fee for this service is based on a $47 fee per unit cap, plus monthly fees of $6 per unit for bookkeeping and related services, $3. 75 per unit for remote location/single family homes/high crime area, and $2. 75 per unit due to the high density of complex.

11



7. RESIDUAL RECEIPTS

Use of the residual receipts account is contingent upon HUD's prior written approval.

8. FUNCTIONAL ALLOCATION OF EXPENSES

Expenditures incurred with project operations have been summarized on a functional basis in the statement of activities.

9. CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

During the year ended January 31, 2017, approximately 88% of the Project's gross rental income was received as subsidy payments from either a federal, state, or city agency. Elimination or reduction of these subsidy payments could adversely affect the operations of the Project. During the year ended January 31, 2017, amounts received from these assistance payments totaled $1, 149,720.

The Project's primary asset is the 126 unit residential community in Clewiston, Florida. The Projecrs operations are concentrated in the multifamily real estate market. In addition, the Project operates in a heavily regulated environment. The operations of the Project are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies, including, but not limited to, HUD. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by HUD. Such changes may occur with little notice or inadequate funding to pay for the related cost, including the additional administrative burden, to comply with a change.

10. INCENTIVE PERFORMANCE FEE

In accordance with the regulatory agreement under Section 223 (a)(7) an incentive performance fee is allowed to be paid to the entity when cash is available, and the incentive performance fee conditions are met. The incentive performance fee may be received annually and is computed at 3% of effective gross income derived from the project. There was no incentive performance fee payable at January 31, 2017.

11. SUBSEQUENT EVENTS

In accordance with FASB Accounting Standards Codification Topic 855, Subsequent Events, the Project has evaluated subsequent events through April 1, 2017, which is the date the financial statements were available to be issued. All subsequent events requiring recognition as of April 1, 2017 have been incorporated into these financial statements.

12

SUPPLEMENTARY INFORMATION

13


INDEX TO SUPPLEMENTARY INFORMATION

STATEMENT OF FINANCIAL POSITION DATA

STATEMENT OF ACTIVITIES DATA

STATEMENT OF CASH FLOWS DATA

COMPUTATION OF SURPLUS CASH

SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS

SCHEDULES OF RESERVE FOR REPLACEMENTS AND RESIDUAL RECEIPTS

14

Page No.

15

17

20

22

23

24


STATEMENT OF FINANCIAL POSITION DATA AT JANUARY 31, 2017

ASSETS

CURRENT ASSETS 1120 Cash - operations 1130 Tenant/member account receivable 1190 Miscellaneous current assets 1200 Prepaid expenses 1100T Total Current Assets

1191 Tenant deposits held in trust

RESTRICTED DEPOSITS 1310 Property insurance escrow 1320 Reserve for replacement 1340 Residual receipts reserve 1300T Total Deposits

FIXED ASSETS 1410 Land 1420 Buildings 1440 Building equipment- portable appliances 1460 Furnishings 1470 Maintenance equipment 1480 Motor vehicles 1490 Miscellaneous fixed assets 1400T Total Fixed Assets 1495 Accumulated depreciation 1400N Net Fixed Assets

OTHER ASSETS 1520 Intangible assets 1500T Total Other Assets

1000T Total Assets

15

$ 130,413 15,073 7,938

78.668

139,563 388,630

12.680

31,500 3,432,088

73,311 153,037 41,554 22,511 89.533

3,843,534 (2.968.381)

400

232,092

18,750

540,873

875,153

400

$1,667,268


STATEMENT OF FINANCIAL POSITION DATA- CONTINUED AT JANUARY 31, 2017

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES 211 O Accounts payable - operations 2131 Accrued interest payable - first mortgage 2132 Accrued interest other mortgages 2139 Accrued interest - capital recovery payment 2170 Mortgage payable - first mortgage, current maturities 2190 Miscellaneous current liabilities 2210 Prepaid revenue

2122T Total Current Liabilities

2191 Tenant security deposits

LONG TERM LIABILITIES 2320 Mortgage payable - first mortgage 2329 Capital recovery payable 2340 Debt issuance cost 2300T Total Long Term Liabilities

2000T Total Liabilities

NET ASSETS 3131 Unrestricted net assets

2033T Total Liabilities and Net Assets

16

$ 45,690 7,790 1,432

194 9,441 3,839 8,927

343,620 32,918

(54,476)

77,313

18,749

322,062

418,124

1,249,144

$1,667,268

REVENUES


STATEMENT OF ACTIVITIES DATA FOR THE YEAR ENDED JANUARY 31, 2017

5120 Rent revenue - gross potential $ 161,951 5121 Tenant assistance payments 11149,720

5100T Total Rent Revenue

5220 Vacancies - apartments

5152N Net Rental Revenue

5410 Financial revenue - project operations 33 5430 Revenue from investments - residual receipts 2 5440 Revenue from investments - reserve for replacement 1,377

5400T Total Financial Revenue

5920 Tenant charges 17,918 5900T Total Other Revenue

5000T Total Revenue

EXPENSES 6210 Advertising and marketing 3,653 6310 Office salaries 23,528 6311 Office expenses 31,078 6320 Management fee 80,892 6330 Manager/superintendent salaries 36,495 6331 Administrative rent free unit 11,406 6340 Legal expenses - project 4,775 6350 Audit expense 11,500 6351 Bookkeeping fees 14,388 6370 Bad debts 1 6263T Total Administrative Expenses

6450 Electricity 13,679 6451 Water 43,429 6453 Sewer 38,714 6400T Total Utilities Expense

17

1,311,671

(10,685)

1,300,986

1,412

17,918

1,320,316

217,716

95,822


STATEMENT OF ACTIVITIES DATA- CONTINUED FOR THE YEAR ENDED JANUARY 31, 2017

EXPENSES - Continued 6510 Payroll 139,256 6515 Supplies 198,371 6520 Contracts 53,950 6525 Garbage and trash removal 38,576 6530 Security 78,498

6500T Total Operating and Maintenance Expenses

6710 Real estate taxes 16,507 6711 Payroll taxes 17,516 6720 Property and liability insurance 179,452 6721 Fidelity bond 1,112 6722 Workmen's compensation 5,634 6723 Health insurance 5,497

6700T Total Taxes and Insurance

6820 Interest on mortgage payable 21,857 6830 Interest on other mortgages 17, 154 6845 Interest on capital recovery payment 21307 6800T Total Financial Expenses

6000T Total Cost of Operations before Depreciation

5060T Profit before Depreciation

6600 Depreciation expenses 6610 Amorization expenses

5060N Operating Profit

3247 Change in Unrestricted Net Assets

3250 Change in Total Net Assets

18

508,651

225,718

41,318

1,089,225

231,091

109,477 368

$ 121,246

$ 121,246

$ 1211246


STATEMENT OF ACTIVITIES DATA-CONTINUED FOR THE YEAR ENDED JANUARY 31, 2017

S1000-010Total mortgage principal payments required during the year.

S1000-020Total of 12 monthly deposits during the year into the replacement reserve account, as required by the regulatory agreement.

S1000-030 Replacement reserve or residual receipts releases which are

$ 252,966

$ 123,654

included as expense items on this profit and loss statement. $ ---== S1000-040 Project improvement reserve releases under the flexible subsidy

program that are included as expense items on this profit and loss statement. $ ---==

19


STATEMENT OF CASH FLOWS DATA FOR THE YEAR ENDED JANUARY 31, 2017

CASH FLOWS FROM OPERATING ACTIVITIES 81200-010 Rental receipts S 1200-020 Interest received S 1200-030 Other operating receipts

S1200-040 Total Receipts

81200-050 Administrative S1200-070 Management fees S 1200-090 Utilities S1200-100 Salaries and wages S 1200-110 Operating and maintenance S1200-120 Real estate taxes S1200-140 Property insurance 81200-150 Miscellaneous taxes and insurance S1200-160 Tenant security deposits 81200-180 Interest- first mortgage S1200-181 Interest other mortgages S1200-195 Interest on capital recovery payment

S1200-230 Total Disbursements S 1200-240 Net Cash Provided By Operating Activities

CASH FLOW FROM INVESTING ACTIVITIES S1200-245 Net transfer from mortgage escrow account 81200-250 Net deposits to reserve for replacement account S1200-260 Net deposits to residual receipts account 81200-330 Net purchase of fixed assets S1200-350 Net Cash Used In Investing Activities

CASH FLOW FROM FINANCING ACTIVITIES 81200-360 Mortgage principal payments 81200-460 Net Cash Used In Financing Activities

81200-470 Net decrease in cash S1200-480 Cash - beginning of period S1200T Cash - end of period

20

$1,298,658 1,412

17,918

(82,705) (80,892) (95,565)

(199,279) (367,393)

(19,809) (170,629)

(29,759) (1)

(17,932) (17,179)

(2,328)

(31,346) (19,490)

9 (58,494)

(252,966)

1,317,988

(1,083,471)

234,517

(109,321)

(252,966)

(127,770) 258,183

$ 130,413


STATEMENT OF CASH FLOWS DATA- CONTINUED FOR THE YEAR ENDED JANUARY 31, 2017

Reconciliation of change in net assets to net cash provided by operating activities

3250

6600 6610 S1200-486 S1200-490 S1200-520 S1200-530 S1200-540 S1200-560 S1200-570 S1200-580 S1200-590 S1200-610

Change in unrestricted net assets Adjustments to reconcile change in net assets to

net cash provided by operating activities Depreciation expenses Amortization expenses Amortization of debt issuance cost Increase in tenant/member accounts receivable Decrease in prepaid expenses Increase in cash restricted for tenant security deposits Decrease in accounts payable Decrease in accrued liabilities Decrease in accrued interest payable Increase in tenant security deposits held in trust Decrease in prepaid revenue


21

$ 121,246

109,477 368

13,439 (538)

8,823 (294)

(3,645) (3,302) (9,560)

293 (1,790)

$ 234,517


COMPUTATION OF SURPLUS CASH FOR THE YEAR ENDED JANUARY 31, 2017

COMPUTATION OF SURPLUS CASH - ANNUAL

Cash $ 149,163

Total Cash

Current Obligations Accrued mortgage interest payable Accounts payable due within 30 days Accrued expenses Prepaid revenue Tenant security deposits

Total Current Obligations

Surplus Cash

Required payments on restructuring note

Surplus cash available for distribution

22

1,626 45,690 3,839 8,927

18,749

149,163

78,831

70,332

52,749

$ 17,583


CHANGES IN FIXED ASSETS ACCOUNTS FOR THE YEAR ENDED JANUARY 31, 2017

ASSETS Balance

1/31/2016 Additions Deductions

Land $ 31,500 $ $

Buildings 3,373,594 58,494

Building Equipment - Portable 73,311

Furnishings 153,037

Maintenance equipment 41,554

Motor vehicles 22,511

Miscellaneous fixed assets 89,533

TOTAL $3,785,040 $ 58,494 $

Accumulated Depreciation $2,858,904 $ 109,477 $

NET BOOK VALUE

23

Balance 1/31/2017

$ 31,500

3,432,088

73,311

153,037

41,554

22,511

89,533

$3,843,534

$2,968,381

$ 875,153


SCHEDULES OF RESERVE FOR REPLACEMENTS AND RESIDUAL RECEIPTS FOR THE YEAR ENDED JANUARY 31, 2017

Schedule of Reserve for Replacements

Balance at beginning of period $ 369,140

Total monthly deposits 122,278

Other deposits - interest deposits 1,376

Approved withdrawals (104, 164)

Balance at end of period $ 388,630

Schedule of Residual Receipts

Balance at beginning of period $ 12,689

Other deposits - interest deposits 1

Other withdrawals (10)

Balance at end of period $ 12,680

24


NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JANUARY 31, 2017

BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards includes the federal award activity of Harlem Tenants Association, Inc., HUD Project No. 06-92002, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Harlem Tenants Association, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Harlem Tenants Association, Inc.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Harlem Tenants Association, Inc. has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

25


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JANUARY 31, 2017

Federal Grantor/Pass-through Grantor/Program Title

U.S. Department of Housing and Urban Development:

Section 221 (d)(3) Mortgage Insurance Rental Housing for Moderate Income and Elderly

Section 8 Housing Assistance Payments Program

26

Federal CFDA

Number

14.135

14.195

Federal Expenditures

$ 353,061

1,149,720

$ 1,502,781


SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JANUARY 31, 2017

There were no prior audit findings as of January 31, 2017.

27

599 C Steed Road

Ridgeland, MS 39157

601.898.8875

Fax: 601.898.2983

226 East Jefferson Street Yazoo City, MS 39194 662.746.4581 Fax: 662.746.5384

www.mclcpa.net




J. Raleigh Cutrer, CPA/PFS/ ABV















Proud member of

CPA~E~N~JI~~ - >..., Cravve Horwath International.

•

MATTHEWS ~ CUTRER and

• • LINDSAY, P.A CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER

MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors Harlem Tenants Association, Inc. Clewiston, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Harlem Tenants Association, Inc., HUD Project No. 066-92002, which comprise the statement of financial position as of at January 31, 2017, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated April 1, 2017.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Harlem Tenants Association, lnc.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Harlem Tenants Association, lnc.'s internal control. Accordingly, we do not express an opinion on the effectiveness of the Project's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Harlem Tenants Association, lnc.'s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Project's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Project's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

April 1, 2017

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599 C Steed Road

Ridgeland, MS 39157

601.898.887 5

Fax: 601.898.2983

226 East Jefferson Street Yazoo City, MS 39194 662. 746.4581 Fax: 662. 746.5384

www.mclcpa.net




J. Raleigh Cutrer, CPA/PFS/ABV








Michelle R . Stonestreet, CPA







Proud member of

CPA~E~N~JlfN~ - ,I\ Crowe Horwath International.

•

MATTHEWS ~ CUTRER and

• • LINDSAY, P.A. CERT IFIED PUBLIC ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL

OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

To the Board of Directors Harlem Tenants Association, Inc. Clewiston, Florida

Report on Compliance for Each Major Federal Program

We have audited Harlem Tenants Association, lnc.'s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Harlem Tenants Association, lnc.'s major federal programs for the year ended January 31, 2017. Harlem Tenants Association, lnc.'s major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditors' Responsibility

Our responsibility is to express an opinion on compliance for each of Harlem Tenants Association, lnc.'s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Harlem Tenants Association, lnc.'s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

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We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Harlem Tenants Association, lnc.'s compliance.

Opinion on Each Major Federal Program

In our opinion, Harlem Tenants Association, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended January 31, 2017.

Report on Internal Control Over Compliance

Management of Harlem Tenants Association, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Harlem Tenants Association, lnc.'s internal control over compliance with the types of requirements that could have a direct and material effect on each major f~deral program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Harlem Tenants Association, lnc.'s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

April 1, 2017

32


SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JANUARY 31, 2017

SUMMARY OF AUDIT RESULTS

1. The auditors' report expresses an unmodified opinion on whether the financial statements of Harlem Tenants Association, Inc., HUD Project No. 066-92002 were prepared in accordance with GAAP.

2. No material weaknesses were identified during the audit of the financial statements.

3. No instances of noncompliance material to the financial statements of Harlem Tenants Association, Inc., HUD Project No. 066-92002, were disclosed during the audit.

'

4. No material weaknesses were identified during the audit of the major federal award programs.

5. The auditor's report on compliance for the major federal award programs for Harlem Tenants Association, Inc., HUD Project No. 066-92002, expresses an unmodified opinion.

6. The audit did not disclose any audit findings which are required to be reported under the Uniform Guidance.

7. The programs tested as major programs were a U.S. Dept. of Housing and Urban Development Section 8 Housing Assistance Payments CFDA 14.195.

8. The threshold for distinguishing Types A and B programs was $750,000.

9. Harlem Tenants Association, Inc., HUD Project No. 066-92002, was determined to be a low-risk auditee.

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CERTIFICATION OF PROJECT OWNER

We hereby certify that we have examined the accompanying financial statements and

supplemental data of Harlem Tenants Association, Inc., HUD Project No. 066-92002 and, to

the best of our knowledge and belief; the same are accurate and complete.

Officers:

Harlem Tenants Association, Inc. Employer Identification Number 59-1291983

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MANAGEMENT AGENT'S CERTIFICATION

We hereby certify that we have examined the accompanying financial statements and

supplemental data of Harlem Tenants Association, Inc., HUD Project No. 066-92002 and, to

the best of our knowledge and belief; the same are accurate and complete.

Services Taylor Made, Inc.

Robert Mosley, President Services Taylor Made, Inc. 3248 West Mary Blvd. Ste 1220 Lake Mary, FL 32746 Employer Identification Number 65-0247151

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599 C Steed Road

Ridgeland, MS 39157

601.898.8875

Fax: 601.898.2983

226 East Jefferson Street Yazoo City, MS 39194 662. 746.4581 Fax: 662. 746.5384

www.mclcpa.net




J. Raleigh Cutrer, CPNPFS/ABV


Matthew E. Freeland , CPA




Kimberly L. Hardy, CPN CFF

William (B ill) McCoy, CPA








Proud member of

CPA~E~N~J1£~ - A Cn:M1e Ho.-wath International.

•

MATTHEWS ~ CUTRER ano

• • LINDSAY, P.A. CERT I FIED PUBLIC A CCOUNTANTS

INDEPENDENT ACCOUNTANTS' REPORT ON APPL YING AGREED-UPON PROCEDURES

The Board of Directors Harlem Tenants Association, Inc. Clewiston, Florida

We have performed the procedure described in the second paragraph of this report, which was agreed to by Harlem Tenants Association, Inc. and the U.S. Department of Housing and Urban Development, Public Indian Housing-Real Estate Assessment Center (PIH-REAC), solely to assist them in determining whether the electronic submission of certain information agrees with the related hard copy documents included within the OMB Uniform Guidance reporting package. Harlem Tenants Association, Inc. is responsible for the accuracy and completeness of the electronic submission. This agreed-upon procedure engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States. The sufficiency of the procedure is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedure described below either for the purpose for which this report has been requested or for any other purpose.

We compared the electronic submission of the items listed in the "UFRS Rule Information" column with the corresponding printed documents listed in the "Hard Copy Documentsn column. The results of the performance of our agreed-upon procedure indicate agreement or non-agreement of the electronically submitted information and hard copy documents as shown in the attached chart.

We were engaged to perform an audit in accordance with the audit requirements of Title 2 U.S. Code of the Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), by Harlem Tenants Association, Inc. as of and for the year ended January 31, 2017, and have issued our reports thereon dated April 1, 2017. The information in the "Hard Copy Documents" column was included within the scope, or was a by-product of that audit. Further, our opinion on the fair presentation of the supplementary information dated April 1, 2017, was expressed in relation to the basic financial statements of Harlem Tenants Association, Inc. taken asa whole.

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A copy of the reporting package required by the Uniform Guidance, which includes the auditor's reports, is available in its entirety from Harlem Tenants Association, Inc .. We have not performed any additional auditing procedures since the date of the aforementioned audit reports. Further, we take no responsibility for the security of the information transmitted electronically to the U.S. Department of Housing and Urban Development, PIH-REAC.

This report is intended solely for the information and use of Harlem Tenants Association, Inc. and the U.S. Department of Housing and Urban Development, PIH-REAC, and is not intended to be and should not be used by anyone other than these specified parties.

April 1, 2017

37


ATTACHMENTTOINDEPENDENTACCOUNTANTS'REPORT ON APPL YING AGREED-UPON PROCEDURES

UFRS Rule Information Hard Coov Documents Findinas Balance Sheet, Revenue and Expense Financial Data Templates (i.e., Agrees and Cash Flow Data (account numbers Supplemental Schedules) 1120 to 7100T and the S1200 series) Surplus Cash (S1300 series of Financial Data Templates (i.e., Agrees accounts) Computation of Surplus Cash,

Distributions and Residual Receipts (Annual))

Footnotes (S3100 series of accounts) Footnotes to Audited Basic Financial Agrees Statements

Type of Opinion on the Financial Auditor's Reports on the Financial Agrees Statements and Auditor Reports Statements, Compliance, and Internal (S3400, S3500, and S3600 series of Control accounts) Type of Opinion on Financial Data Auditor's Supplemental Report on Agrees Templates (i.e., Supplemental Data) Financial Data Templates (account S3400-100) Audit Findings Narrative (S3800 series Schedule of Findings and Questioned Agrees of accounts) Costs General Information (S3300, S3700, Schedule of Findings and Questioned Agrees and S3800 series of accounts) Costs and Federal Awards Data

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