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Home My WebLink AboutAUDIT 05-01-1960-- 11-30-1960Form No. 3. 5m sets-7-59-925889 The Commonwealth of Massachusetts DEPARTMENT OF THE-AUDITOR No~th Andover Housing Authority ~om May 1~ 1960 to November ~O, 1960 ~_ ~HO~S J. ~c~ ~ ~~;~ik~a~ [j~p~~ STATE AUDITOR APR 2,~ 1961 Mr. John J. Lyons Town Clerk Oreat Pond Road North Andover, Massachusetts Dear This Department has completed an examination of the accounts of the North Andover Housing Authority for the period from May 1, 1960 to November 30, 1960. A report covering this examination is enclosed herewith. Very truly yours, Auditor 61-H-42 TABLE OF CONTENTS 0rganization Statutory References Statistical Data Introduction Scope of Audit Notes and Comments Financial Statements: I II III V VI VII VIII IX X XI ~9ject 200fl Receipts and Disbursements, May l, 1960 to November 30, 19~0 Operating Statement, October l, 1960 to November 30, 1960 Analysis of Operating Reserve, May l, 1960 to November 30, 1960 Balance Sheet, November 30, 1960 Debt Service Schedule, November 30, 1960 Comparison of Approved Budget with Actual Operations, Fiscal Year Ended September 30, 1960 Comparative Operating Statement, Five Fiscal Years Ended September 30, 1960 p, rp~ect 667-1 Receipts and Disbursement, May t, 1960 to November 30, 1960 Balance Sheet, November 30, 1960 Analysis of Development Costs, November 30, 19SO Change Orders, November 30, 1960 Page 1 4 5 8 9 lO ll 12 13 14 15 16 17 18 19 61-H-42 -1- ORGANIZATION November 30, 1960 The North Andover Housing Authority is authorized by the General Laws, Chapter 121, Section 26K, as amended. Name Bernard W. Bingham Members Title Term E~pire S.' Vice-Chairman March 1961' Joseph J. Morkeski Raymond C. Fountain Thomas L. Foulds Assistant Treasurer and Representative of the State Housing Board Chairman measurer July 27, !96! March 1962' March 1964' Alfred H. McKee Member March 1965' * Annual Town Election Officer Name Title ~alary Stewart P. Wilson Executive Director and Acting Secretary $1,200.00 per year* * Plus $50.00 per month during construction of Project 667-1 Positions Bonded All positions are bonded in the amount of $10,000.00 each under the blanket bond of the State Housing Board. With Project 667-1 currently under development, additional coverage was secured in the amount of $10,000.00 for each of the follow- ing positions: Check Signer Check Countersigner Alternate Check Signer Alternate Check Countersigner 61-H-~2 -2- STATUTORY REFERENCES Housing Authority Law: Sections 26I to 26CCC inclusive of Chapter 121 of the General Laws, as amended Act to Provide Housing for Veterans: Chapter 200 of the Acts of 1948, as amended ® Act to Provide Housing for Elderly Persons of Low Income: Chapter 667 of the Acts of 1954, as amended STATISTICAL DATA .P..r~oject 2oo-1 Location Baldwin Street Francis Street Number of Units 24 Number of Units Occupied 24 Bonds Outstanding $190,000 O0 Interest Rate i 3/4% Due Dates Serially until October 1, 1990 Maximum Annual Subsidy $5,850 oo Final Subsidy Payment For Year Ending September 30, 1990 Average Rent (November 1960) $48 60 Contract for Financial Assistance, Dated March 3, 1949, as Amended August 31, 1950: Number of Units Dexelopment Co~t Total Per Unit Number of Buildings De~ scription 24 $234,000 oo $9,750 O0 6 2½ story, row, wood frame, asphalt shingles, some brick veneer 61-H-42 -3- STATISTICAL~ DATA (CONTINUED__ - 2)_ P.~r~9~.ject 200~-1 (C. on.tinue, d). Rents: Number of Minor Dependents in Family Percentage of Admission Continued Income Used Income Occupancy in Computing Limit Limit Rents I or less $3,950 O0 $4,400 O0 1~8% 2 4,15o oo 4,8oo oo lo% 3 or more* 4,350 O0 4,800 O0 14% * $200.00 deduction from total family income for each minor dependent in excess of three. ProJe, c, ,,t 667-1 Developmeq~Sta~us..-..Con~trug~ion Stage Location Number of Units P~oposed Notes Outstanding Interest Rate Premium Received Date of Notes Due Dates Maximum Annual Subsidy Contract for Financial Assistance, Dated July 18, 1959, as Amended July 12, 1960 Minimum Rent oo 5o 23 5o Street Unnamed ~o $503,000 oo 1.66% $5 03 September 12, 1960 September 14, 1961 Not Yet Determined $503,000 OO 61-H-~2 In conformance with Chapter 682 of the Acts of 1949, an exami- nation has been made of the accounts of the North Andover Housing Authority covering the period from May 1, 1960 to November 90, 1960. The Authority maintains a separate set of books for each proj- ect under its direction. The financial records of the Authority which are subject to audit follow: Chapter 200 - Project 2OO-1 Chapter 667 - Project 667-1 SCOPE OF AUDIT General: Trial balances were taken of the general ledgers as of November BO, 1960 and necessary adjustments were made for audit purposes. The financial reports sent to the State Housing Board during the period under audit were checked to the Authority's books. The min- utes of the meetings were read. The insurance policies were examined and listed. Cash: The cash was balanced and the bank accounts were rec- onciled as of November SO, 1960 and December 5, 1960. Cash book foot- ings were tested. Bank deposit slips were test checked to the cash books. Income: A trial balance was taken of the tenants' accounts as of November BO, 1960 and December 5, 1960 and the accounts outstand- ing as of December 5, 1960 were verified by correspondence. The recorded income was checked by applying the proper rental percentages outlined in the Management Resolution to the tenants' reported income. The potential income thus determined was checked to the rent schedules. Used rent receipts were checked to the cash book and the tenants' accounts. An inventory was taken of the unused rent receipts. The miscellaneous income was verified. with the agent. of the aw checks an~ Fund rela' bondswas wealth of Authority finance t and found on ProJec was also stage. the Certi State Hou of the au dwellings ~nyestmen~s: repositories. -5- The investments were verified by correspondence There were no funds in the custody of the fiscal Contracts: ~rds. Expenditures: invoices. Contract awards were checked for the propriety The expenditures were test checked to canceled F~sca! .A~nt's A~count: The activity in the Debt Service ~ive to the retirement of bonds and interest on outstanding checked. S~aSel Financial.Assista~e: The contract between the Common- Massachusetts, acting through the State Housing Board, and the relevant to the guaranty of notes of the Authority issued to ~e cost of the Housing for the Elderly project was examined to be in proper form. The guaranty of the bonds and interest t 200-1, together with the annual Commonwealth Contributions, checked. project 667-1: The project is currently in the construction The development costs to November 30, 1960 were analyzed and £icate of Purposes and Cash Requirements as prepared by the sing Board was checked. Pro~ect~ ylsit: Project 200-1 was visited during the progress dit and a visual inspection was made of the exteriors of the and the grounds. 61-H-42 -6- NOTES AND COMMENTS ~roje~t 200-1: 1. ~DebtSer¥ice .p~men. t: This project pays into its Debt Service ~und each fiscal year from rental income an amount, which, together with amounts received from other sources, equals the fiscal year's debt requirements. For the fiscal year ending September 30, 1961, the debt service requirements for this project were computed as follows: Funds Required: Interest Payable: April 1, 1961 October 1, 1961 Bonds Payable: October 1, 1961 $1,662 50 1,662 50 5, 0oo oo $8,325 oo Funds Provided: Commonwealth Contribution Project Requirement $2,850 O0 $8,325 O0 2. Commonwealth Contribution: Chapter 200 of the Acts of 1948 was enacted by the General Court to provide housing principally for veterans of low income. Since the rental rates charged tenants are set at a comparatively low figure, an annual deficit from operations would result if it were not for the annual subsidy paid by the Commonwealth. Annual contributions by the Commonwealth toward the operations of this Chapter 200 Project since it acquired Management Status on October 1, 1950 have been as follows: Maximum Annual Contribution $5,850 O0 61-H-42 -7- Actual Commonwealth Contributions: Fiscal Year Ended ,, September ~0 Amount 1951 $ 5,850 O0 1952 5,850 O0 1955 5,85o oo 195~ 4,831 68 1955 5,850 oo 1956 4,850 oo 1957 2,466 34 1958 5,850 O0 1959 5,850 O0 1960 ~859 O0 $51,o98 02 3. Income Limits: A directive received from the State Hous- lng Board in March 1959 suggested an upward revision of Admission and Continued Occupancy Limits. It is recommended that the Authority adopt the revised limits which are more in keeping with present day earnings than those now in effect. 4. Tenants' Aq~ounts: The prior audit report recommended that the Authority install and maintain a tenants' account ledger. This is a necessary accounting record and is maintained in all housing authorities. It is again recommended that a tenants' ledger be installed so that a complete chronological record of transactions with each tenant may be readily available. 5. ~oJect V~S%t: The project was visited during the prog- ress of the audit and a visual inspection of the exteriors of the build- ings and the project area indicated proper maintenance. The buildings have been recently repainted. .Pr~oJect 667-1: 1. con.tra9~ ~or Financial Assist~aD¢~_: The original Contract for Financial Assistance, dated July 17, 1959 in the amount of 61-H-42 -8- $440,000.00 was amended to $503,000.00 on July 12, 1960. Refinancing was accomplished by the sale of the second series notes on September 12, 1960 in the principal amount of $503,000..00. 2. ~De~elgpment Costs: The total Development Costs as of November 30, 1960 amounted to $192,556.14. 3. ~Const~ucti. on...C..gntra0t: The original construction con- tract in the amount of $42~,873.00 was increased to $425,070.00 by two change orders totaling $197.00. FINANCIAL STATEr~NTS The financial statements listed in the "Table of Contents" follow: -9- Schedule No. I Project, ii200 Recei. p..ts, and. Di.s~ur .sements May l, 1960 to November 30, 1960 Balance May l, 1960: Administration Fund Debt Service Fund ~eceipt~ Administration Fund: Tenants' Accounts Receivable Insurance Rebate Debt Service Fund: From Administration Fund Disbursements Administration Fund: Management Utilities Repairs, Maintenance and Replacements Insurance Payment in Lieu of Taxes Operating Reserve Charges To Debt Service Fund To Savings Account Debt Service Fund: Retirement of Bonds Interest on Bonds Balance November 30, 1960: Administration Fund * Cash in BallkSl: Arlington Trust Co., Lawrence, North Andover Branch Cash on Hand $12,898 30 .... $8,201 50 $ 964 07 200 39 1,564 39 128 45 864 O0 3,367 O0 4,562 50 $5,000 O0 , $3,129 29 17o5o $3,299 79 $15,042 05 8,202 82 ....... 4~56250 $27,807 37 $17,8Ol 33 6,706 25 $24,507 58 3,299 79* $27,807 37 61-H-42 -10- Schedule No. II proJe.ct 2.00,r,1 Operating Statement October 1, 1960 to November 30, 1960 Project Income: Dwelling Rent Miscellaneous Operating Expenses: Management Utilities Repairs, Maintenance and Replacements Insurance Payment in Lieu of Taxes Operating Income Other Charges: Provision for Operating Reserve Provision for Debt Service Reserve Debt Service Expense Loss Before Co~nonwealth Contribution Commonwealth Contribution Net Project Loss after Commonwealth Contribution Contribution Reduction from Prior Surplus Net Surplus Credit from Operations $2,3~6 O0 ._15o 9o $2,496 90 $288 23 101 52 856 27 lll 38 144 o0 1,499 4o $ 997 5o $ 192 O0 121 34 qo, 1,?o $703 84 475 OO $228 84 p,o oo $271 ~6 Analysis of Surplus Balance October l, 1960 Add: Net Surplus Credit from Operations October l, 1960 to November 30, 1960 Less: Transfer to Operating Reserve Transfer to Contribution Reduction Reserve Balance November 30, 1960 $ 496 66 3,000..00 $3,496 66 271 16 $3,767 82 3, .496 .6.6. $271 16 -ll- Schedule No. III Project 200-1 Analysi~.pf.0peratin~ Reserve May l, 1960 to November 30, 1980 Balance May' 1, 1960 Add: Accruals Charged to Operations Transfer from Surplus Less: Exterior Painting Balance November 30, 1960 Note: The maximum Operating Reserve for this project has been set at $9,600.00 which represents an amount of $400.00 per unit. The current accrual to provide for this reserve is computed on the basis of $4.00 per unit per month. $672 O0 $11,519 31 1,168 66 $12,687 97 $,367. oo $9,320 97 61-H-42 -12- Schedule No. IV .Project 200-_. _l_ Balance Sheet November 30, 1960 Assets Administration Fund Cash Accounts Receivable: Accrued Commonwealth Contribution Investments: Arlington Trust Co., Lawrence, Savings Account ~65069 Other Assets: Prepaid Insurance Prepaid Payment in Lieu of Taxes Development Cost Less: Development Cost Liquidation $490 07 ~ 72 oo $234,000 oo · .~,ooo.... oo Liabilities and~Surplus Accrued Liabilities: Matured Interest and Principal Bonds Authorized and Issued Less: Bonds Retired Reserves: Debt Service Operating Contribution Reduction Surplus $234,000 O0 · 44,000 oo $7,371 34 9,320 97 ~75oo oo $ 3,299 79 475 O0 18,514 61 562 07 !90,000 00. $21o,851 47 $ 1,388 oo 190,000 O0 19,192 31 271 16 61-H-42 -13- Schedule No. V Pro.j e..c t 200-1 Debt Service Schedule November 30, 1960 Fiscal Year Ending Principal Interest ~eP~ember 3~. Amgrtiza~gn* .Expense 1961 $ 5,000 O0 $ 3,325 O0 1962 5,000 O0 3,237 50 1963 5,ooo oo 3,15o O0 1964 5,000 O0 3,052 50 1965 5,0O0 O0 2,975 O0 19~6 5,000 O0 2,887 50 1967 5,000 O0 2,800 oo 1958 5,000 O0 2,712 50 1969 6,000 O0 2,625 O0 1970 6,000 O0 2,520 O0 4 ' 1971 6,000 O0 2, 12 O0 1972 6,000 O0 2,310 O0 1973 6,000 O0 2,205 O0 1974 6,000 O0 2,100 O0 1975 6,000 O0 1,995 O0 1976 6,000 O0 1,890 O0 1977 6,000 O0 1,7'85 O0 1978 7,000 O0 1,580 O0 1979 7,000 O0 1,557 50 1980 7,000 O0 1,435 00 1981 7,000 O0 1,312 50 1982 7,000 O0 1,190 O0 1983 7,ooo oo l,O67 50 1984 7,000 O0 945 O0 1985 7,000 O0 822 50 1986 8,000 O0 700 O0 1987 8,000 O0 560 O0 1988 8,000 O0 420 O0 1989 8,000 O0 280 O0 199o 8,909,,,00 oo $19o,ooo oo 56',1o5 oo * The principal maturities fall due on the first day of the following fiscal year. Total Debt SerM,i,c~. Expense $ 8,325 O0 8,237 50 8,150 O0 8,062 50 7,975 O0 7,887 50 7,800 O0 7,712 5O 8,625 O0 8,520 O0 8,415 O0 8,310 00 8,205 O0 8,100 O0 7,995 O0 7,890 O0 7,785 O0 8,680 O0 8,557 50 8,435 O0 8,312 50 8,190 O0 8,067 50 7,9~5 O0 7,822 50 8,700 O0 8,560 O0 8,420 O0 8,280 00 oo $2~,lO5 oo 61-H-42 -14- Schedule No. VI Projegt 200-1 Comparison~ .. . of Approved.. Budget. with,.$ctual.. .. . Operations Fiscal Year Ended September 30, 1960 Budget Actual Project Income: Dwelling Rent Miscellaneous Total Project Income $12,672 O0 294 O0 $13,537 50 302 77 Operating Expenses: Management Utilities Repairs, Maintenance and Replacements Insurance Payment in Lieu of Taxes Total Operating Expenses Operating Income $1,750 oo 520 oo 3,185 oo 799 O0 864 O0 $1,584 81 447 44 2,179 52 828 34 864 O0 $5,904 11 $5,848 O0 $7,936 16 Other Charges: Provision for Operating Reserve Provision for Debt Service Reserve Debt Service Expense Total Other Charges Loss before Commonwealth Contribution Commonwealth Contribution Net Project Income after Co~nonwealth Contribution Contribution Reduction from Prior Surplus Surplus, September 30~ 1960 $ 1,152 O0 725 O0 8,413 O0 $4,442 O0 5,~850 o0 $1,4o8 oo SL 4os oo $ 1,152 O0 725 O0 8,412 50 $2,$53 3~ ~ 3_~50 O0 $1,496 66 2,000:O0 66 61 -15- SC ,OULE NO. PROJECT200-1 COMPARATIVE OPERATING STATEi~IENT FIVE FISCAL YEARS ENDED SEPTEMBER 30, 1960 PROJECT INCOME= DWELLING RENT MISCELLANEOUS TOTAL PROJECT INCOME $11~933 80 $12,603 51 $13,649 13 $13,051 35 $13,537 50 17~ 2g ~_ 58 ~ 1._._.,....,_._~ 294 51 302 '77 OPERATING EXPENSES= HANAGENENT UTILITIES REPAIRS, HAINTENANCE AND REPLACEHENTS INSURANCE PAYMENT IN LIEU OF TAXES TOTAL OPERATING EXPENSES OPERATING INCOHE $1,14'/ ~9 $1,133 29 $1,245 50 $1,187 66 $1,584 81 285 42 340 41 478 1'/ 465 66 447 44 2,166 68 2,001 10 2,337 47 2~337 27 2~179 52 $5,189 ~ ~.5,117 27 ~ ~ ~57994_ 11 OTHER CHARGES: PROVISION FOR OPERATING RESERVE PROVISION FOR DEBT SERVICE RESERVE DEBT SERVICE EXPENSE TOTAL OTHER CHARGES $ 916 48 $ 1,15200 $ 1,15200 725 O0 725 O0 72500 7;74~ O0 8;6'75 00 8,58750 $9,386 48 $1,0,552 O0 $19,46450 LOSS BEFORE COMMONWEALTH CONTRIBUTION CONMO~ALTN CONTRIBUTION NET PROJECT INCOME (LOSS) AFTER COI~ALTH CONTRIBUTION CONTRIBUTION REDUCTION FROM PRIOR SURPLUS SURPLUS SEPTEHBER 30® $2,466 34 $2,832 18 $2~351 60 4,850 O0 2,466 34 5,850 O0 $2,383 66 $ (365 84) $3,49840 1,000 0__ 0 3,383 66 $3,38366 $3,01782 $~,49840 DISTRIBUTION OF SURPLUS~ TO OPERATING RESERVE TO CONTRIBUTION REDUCTION - $3,017 82 $3,498 40 ~ - . $3,383 66 $3~017 82 $3~498 40 $ 1~152 O0 $ 1,152 O0 72~00 '/2500 . 8,__~ O0 8,412 50 $10,377 O0 ~17,28g 50 $2~846 07 $2,353 34 5,85000 3,85000 $3,003 93 $1,496 66 - 2,000_00 $3,003 93 $3~49666 $1~003 9'3 $ 496 66 2,000 O0 3,000 O0 $3,003 93 $3,49666 -16- Schedule No. VIII .P. ro~.e ct' 667-1 Receipts.and Dis~r..~ements May 1, 1960 to November 30, 1960 Balance May l, 1960: Development Fund ,680 37 ReceiPt~ Development Fund: Sale of Investments FromDebt Service Fund Employees' Wage Deductions Debt Service Fund: Sale of Second Series Notes Premium on Second Series Notes $851,187 50 51,957 73 903,486 08 $503,000 O0 5....0.3 .... ~03,005~_ 03 $1,433,171 -48 Disbursements Development Fund: Purchase of Investments Development Costs Less: Contract Retentions Materials Stored Director of internal Revenue, Withheld Taxes Mass. Income Tax Bureau, 'Withheld Taxes Debt Service Fund: Retirement of First Series Notes Interest on First Series Notes To Development Fund Balance November 30, 1960: Development Fund $194,538 52 .._ 5 ,735 90 $848,010 90 178,802 62 34,038 50 201 30 $440, ooo oo l1,047 30 51~57..73 861,072 57 ~o3~oo5 03 $1,364,o77 60 ........ 69,093 8~* $i~-433'171 48 * Cash in Bank: Arlington National Bank, Lawrence $69,093 88 -17- scnedu,le NO. ,I.X P, r,o~_ect 667-~ Balance Sheet November 30, 1960 Assets Development Fund Cash Investments - U. S. Treasury Bills: Due December 8, 1950 Due January 12, 1961 Due February 9, 1961 Development Costs Materials Stored Incompleted Contracts (Contra) Accrued Interest Contract Retentions Employees' Taxes Withheld Notes Authorized and Issued Contract Awards (Contra) Liabilities $75,000 O0 75,000 O0 7'5,~,i000,,, 90 $ 69,093 88 225,000 O0 192,556 14 34,038 50 $788,399 52 $ 1,832 32 15,735 90 120 30 503,000 O0 __~67,711 O0 $y88 99 52 61-H-42 -18- Schedule No. X project 66T-% Analysisp?f_ Developme,nt costs November BO, 1960 Administrative: Payroll - Executive Office Expenses Photographs Fidelity Bond and Insurance Advertising Fiscal and Other Fees Carrying Charges: Interest in Development Architectural and Engineering: Fees under Contract Borings and Test Pits Blueprinting Inspection Salary and Expenses Acquisition of Site: Land Purchase Price Surveys and Maps Appraisal Fees Legal Services - Land Structures $250 oo 14o 65 23 oo 70 08 147 70 ,~566 0,6. $16,267 50 585 66 519 42 ~,125 oo $18,000 O0 950 oo 200 O0 plO 72 Total Development Costs $ 1,197 49 (5,558 65) 19,497 58 20,060 72 157 ~ 3~ o? $!?.~.,~~ !~ 61-H-42 Change Order Number 2 -19- Schedule No. XI Prg~j..e_9 t 667-1 ~han g? _ O_rd_er s November 30, 1980 DegcriP~ign Lay rough flooring at right angles to floor joists in lieu of diagonally' as specified ~tend fire walls by' 4" gypsum blocks over exterior doors of A buildings Net Contract Price Increase Analysis ofConstru~io~ Coutract Original Contract Award, July' 7, 1959 Add: Net Contract Price Increase Adjusted Contract Price, November 30, 1980 Contract Price Increase Decrease - $288 oo $48500 $485 oo $485 oo 197 O0 $485 oo $424,873 O0 197 O0 $425,070 O0