HomeMy WebLinkAboutAUDIT 02-01-1967 -- 01-31-1968I
I
I
I
I
I
, DEPARTMEN
, o STATE
I
,AUDITOR
REPORT ON THE EXAMINATION OF THE ACCOUI~/
OF THE
NORTH ANDOVER HOUSING AUTHORIT~
FROM FEBRUARY 1, 1967 TO JANUARY 31, 1968
DIVISION OF AUTHORITY AUDITS
"Guardian of
the
STATE AUDITOR
7M-I1-67-946298
68-A-89
TABLE OF CONTENTS
Organization
Statutory RefePences
Statistical Data
Introduction
Scope of Audit
Notes and Comments
Financial Statements:
Pmoject 200-1
I Balance Sheet,
Januamy 31, 1968
II Comparative Opemating Statement,
Two Fiscal Yea~s Ended Septembem 30, 1967
pmoject 667-C
III Balance Sheet,
Januamy 31, 1968
IV Operating Statement,
October 1, 1967 to January 31, 1968-
Page
1
2
5
6
9
10
11
12
13
68-A-89
Chapter 121 of the General Laws.
Name
-1-
ORGANIZATION
January 31, 1968
The North Andover Housing Authority is authorized by Section 26K of
M. George Norwood
lq Loraine Avenue
North Andover
Thomas Fould~
76 Buckingham Road
North Andover
James McCabe
6 Water Street
North Andover
Bernard Bingham
16 Faulkner Road
North Andover
Arthur Kirk
69 Pleasant Street
North Andover
Mem3Ders
Title
Treasurer
Term Expires
March 1968'
Chairman
March ~1969'
Assistant Treasurer
March 1970~
Vice-Chairman
March 1971'
Member, Division of
Housing Appointee
July 27, 1971
Term expires at the annual Town elections which are held on the
first Monday in March
Officer
Name Title Annual Salary
Stewart P, Wilson
Executive Director
and Accountant
$3,600 00
Positions Bonded
Ail positions are bonded in the amount of $10,000.00 each under the
.blanket bond of the Division of Housing in the Department of Commerce and Devel-
opment.
68-A-89
-2-
STATUTORY REFERENCES
Housing Authority Law:
Sections 26I to 26MMMinclusive, of Chapter 121 of the General Laws, as
amended
2. 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
Project 200-1
Location
Baldwin Street
Francis Street
Architect
Adden, Parker, Clinch and Crimp,
Boston
General contractor
Number of units
George Fichera, Lawrence
Number of units occupied
23
Bonds outstanding
$155,000 00
Interest rate
1
Due date of bonds
Maximum annual subsidy
Serially until October 1, 1990
$5,850 00
Final subsidy payment
Average. rent - January 1968
For year ending September 30, 1990
$60 35
Contract for Financial Assistance,
dated March 3, 1949, as amended
August 31, 1950:
Development Cost
Numbem
of Units Total Per Unit
Number of
Buildings
Description
$234,000 00 $9,750 00_
6
2 1/~ story, row, wood frame,
asphalt shingles, some
br~ck veneer
68-A-89
Rents:
-3-
STATISTICAL DATA (CONTINUED - 2)
Project 200-1 (Cont.) ~
Number of Minor Admission Continued
Dependents Income Occupancy
in Family Limit Limit
1 or less $4,500 O0 $5,000 O0
2 4,700 00 5,200 00
3 or more* 4,900 00 5,400 00
Percentage of
Income Used
in Computing
Rents
18%
16%
14%
Minimum
$30 O026 50
23 50
$200.00 deduction from total family income for each minor
dependent in excess of three
Location:
Section 667-1
Section 667-2
Architect:
Section 667-1
Section 667-2
Project 667-C
Fountain Drive
Bingham Way
Pearson Associates, Lawrence
Pearson Associates, Lawrence
Contractor:
Section 667-1'
Section 667-2
Fred J. Findlen ¢ Sons, Dedham
Fletcher Construction Co., Inc. Salem
Number of units
Number of units occupied
Notes outstanding:
Proje9t 667-1 - Ninth Series
Project 667-2 - Third Series
Interest rate
82
82
$458,000 O0
595,000 O0
3.63%
Date of notes
Due date of notes
Maximum annual subsidy
September 6, 1967
September 6, 1968
$26,625 O0
Final subsidy payment:
Section 667-1
Section 667-2
September 30, 2002
September 30, 2007
Average rent - January 1968:
Section 667-1
Section 667-2
(Includes gas for heat, hot water and cooking)
$49 00
54 O0
I
I
I
I
I
I
i
I
I
I
I
68-A-89
-4-
STATISTICAL DATA (CONTINUED -2)
Project 667-C (Cont.)
Contract for Financial Assistance,
dated January 25, 1968:
Development Cost
Number of
Section Units Total
667-1 ~0 $ ~95,000 00
Per Unit
$12,375 00
Number of
Buildings
Des cription
7 - 1 story, wood frame,
bPiek veneer
1 - Community building
667-2 ~2 570,000 O0
8~ $~17065,.00~_ 00
13,523 81
12,987 80
5 - 2 story, wood frame,
brick veneer
1 - Community building
Rents:
Section 667-1:
Single individuals
Admission Continued
Income Occupancy
Limit Limit
$2,500 00 $3,125 00
Percentage of
Income Used
in Computing Minimum
Rents Rent
$49 O0
Couples 3,000 00 3,750 O0
26% ~9 O0
Section 667-2:
Single individuals
2,500 O0 3,125 O0
26% 54 O0
Couples 3,000 00 3,750 00
28% 54 O0
Rental.charge includes gas for heat, hot water and cooking.
Federally-aided Housing Proje~.s
There are no Federally-aided housing projects under the supervision of
the North Andover Housing Authority.
68-A-89
-5-
In conformance with Chapter 682 of the Acts of 1949, an examination has
been made of the accounts of the North Andover Housing Authority covering the
period from February 1, 1967 to January 31, 1968. This audit was initiated on
February 2, 1968.
The Authority maintains a separate set of books for each project under
its direction. The financial records of the Authority which are subject to audit
follow:
Chapter 200 - Project 200-1
Chapter 667 - Project 667-C
SCOPE OF AUDIT
General: Trial balances were taken of the general ledgers as of
January 31, 1968 and necessary adjustments were made for audit purposes. The
financial reports sent to the Division of Housing during the period under audit
were checked to the Authority's books. The minutes of the meetings were read.
The insurance policies were examined and listed.
Cash:' The cash was balanced and the bank accounts were reconciled
as of January 31, 1968 and February 2, 1968. Cash book footings were tested.
Bank deposit slips were test checked to ~the cash books.
Income: A trial balance was taken of the tenants' accounts as of
January 31, 1968 and the outstanding accounts were verified by correspondence.
The recorded income was checked by applying the proper rental percentages out-
lined in the Management Resolution to the income reported by tenants. The poten-
tial income thus determined was checked to the rent schedules. Used~rent re-
ceipts were checked to the cash book and the tenants' accounts. An inventory
was taken of the unused rent receipts. The miscellaneous income was verified.
Investments: Investments were verified by correspondence with the
depositomies. There were no funds in the custody of the fiscal agent. Potential
investment income was reconciled with amounts received from investments. The
68-A-89
-6-
investment account was analyzed.
Notes and Contracts: The temporary note issues and contract awards
were checked for the propriety of the awards.
Expenditures: The expenditures were test checked to the canceled
checks and paid invoices. Authorizations for the employment of personnel and
Pates of pay were checked to the minutes of the meetings.
State Financial Assistance: The contracts between the Commonwealth of
Massachusetts, acting through the Division of Housing, and 'the Authority relevant
to the guaranty of the bonds and notes of the Authority issued to finance the
cost of the projects and the provision fop annual contributions by the Common-
wealth wePe reviewed.
Final Development Costs - Project 667-2: The final Development Costs
were checked and analyzed. Payments under contracts were examined and compared
with the terms of the contract.
Project Visit: The projects were visited during the progress of the
audit, and a visual inspection was made of the exterior of the dwellings and the
g~ounds.
68-A-89
-?-
NOTES AND COMMENTS
Audit Review: At the conclusion of the audit a draft of this report
was reviewed with Mr. Stewart P. Wilson, the Executive Director of the Authority.
Project 200-1:
1. Commonwealth Contributions: Chapter 200 of the Acts of 1948 was
enacted by the General Court to provide housing principally for veterans of iow
income. Since the rental rates charged tenants are set at a comparatively low
level, an annual' deficit from operations would generally 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
Actual Commonwealth contributions:
$5,850 00
Fiscal Year Ended
September 30
AmoUnt
1951 ~ 5,850 00
1952 5,850 00
1953 5,850 00
1954 4,831 68
1955 5,850 O0
1956 4,850 O0
1957 2,466 34
1958 5,850 00
1959 5,850 00
1960 3,850 00
1961 2,850 O0
1962 3,355 57
1963 1,415 89
1964 1,493 68
1965 -
1966 -
1967 -
$60,213 16
The operation of this 'project has not re-
2. Financial Condition:
quired the maximum annual contribution of $5,850.00 since the fiscal year ended
68-A-89
September 30, 1959.
-8-
During the fiscal years ending September 30, 1965, 1966 and
1967 the project operated without any financial subsidy from the Commonwealth.
The Operating Surplus for the year ending September 30, 1967 amounted to $9,112.42,
which is more than sufficient to enable the project to operate in fiscal year 1968
without the need of a Commonwealth subsidy.
3. Operating Reserve: The balance in this account as of January 31,
1968 was $15,974.41, which was $6,374.41 in excess of the prescribed maximum of
$9,600.00. No accruals have been made to this account since December 1963.
Project 667-C:
1. Consolidation of Projects 667-1 and 667-2: The final Development
Cost for Project 667-2 was set at $570,000.00 as of September 30, 1967. This
project had acquired Initial Operating Period Status on August 1, 1967, and it
remained in this status until it was consolidated on October 1, 1967 with Project
667-1 into Project 667-C.
2. Commonwealth Contributions: Chapter 667 of the Acts of 1954 was
enacted by the General Court to provide housing for elderly persons of low income.
Since the rental rates charged tenants are set at a comparatively low level, 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 the
Chapter 667-1 project since it acquired Management Status and until consolida-
tion was effected on October 1, 1967 were as follows:
~oject 667-1
Maximum annual contribution $12,375 O0
68-A-89
Actual Commonwealth contmibutions:
Fiscal Yeam Ended
Septembem 30
Amount
1963 $12~375 00
1964 10,375 00
1965 10~375 00
1966 9,375 00
1967 14,375 00~
-$56,875 00
Includes additional contmibution of $2,000.00 to corem the incmeased
intemest mate on the note issue, as authomized by Section VV of Chaptem 121 of
the General Laws.
The maximum annual contmibution for P~oject 667-C has been set at
$26,625.00. The actual contribution for the fiscal yeam ending September 30,
1968 will be $35,625.00. This amount includes an additional contribution of
$9,000.00.
General:
1. Project Visit:
During the progress of the audit the projects
weme visited, and an inspection of the exterior of the buildings indicated that
they weme being properly maintained.
FINANCIAL STATEMENTS
The financial statements listed in the "Table of Contents" follow:
68-A-89
-10-
Schedule No. I
Project 200-1
Balance Sheet
January 31, 1968
Assets
Administration Fund Cash
Accounts Receivable:
Tenants
Investments:
A~lington Trust Company, Lawrence:
Certificate of Deposit #6491,
Due July 27, 1968
SavinEs Account #65069
Other Assets:
Prepaid Insurance
Development Cost
Less:
Development Cost Liquidation
5,153 03
1,360 00~
$25,000 00
1,570 96
$23~,000 00
79,000 00
26,570 96
5'23 qq
155,000 00
$188,607
Liabilities and Surplus
Accrued Liabilities:
Matured Interest and Principal
Payment in Lieu of Taxes
Bonds Authorized and Issued
Less:
Bonds Retired
Reserves:
Operating
Debt Service
Contribut ion Reduction
Surplus'
$2,570 67
72 00
$23~,000 00
79,000 00
.$15,97~ ~1
8,701 O0
3,900 O0
$ 2,6~2 67
155,000 00
28,575 ~1
2,389 35
~188,607 ~3
Analysis
One Month
Two Months
Three Months and Over
$ 6~3 O0
27~ O0
~3 O0
$1,360 O0
68-A-89
-11-
Schedule No. II
Project 200-1
C_~omparat ire. O. peratin g Statement
Two Fiscal Years Ended September 30, 1967
Project Income:
Dwelling Rent
Miscellaneous
Total Project Income
Operating Expenses:
Management
Utilities
Repairs, Maintenance and Replacements
Insurance
Payment in Lieu of Taxes
Total Operating Expenses
Operating Income
Other Charges:
Debt Service Expense
Total Other Charges
Income before Commonwealth Contribution
Commonwealth Contribution
Net Project Income
Contribution Reduction from Prior Surplus
Surplus September 30*
1966
$15,722 50
1,663 57
'~7,386 07
$1,694 13
497 96
2,900 54
192 77
864 O0
~6,149 q0
$11,236 67
$7,887 50
$7,887 50
5,850 00
$3,349 17
5,850 00
79,199 17
Distribution of Surplus: To Operating Reserve
To Contribution Reduction
1967
$16,221 O0
1,435 66
~i7,656 66
$1,579 95
645 18
3,155 43
349 68
864 00
~6-~59q 24
$11,062 42
$7,800 00
~7,800 00
$3,262 42
$3,262 42
5,850 00
$7,112 42
$3,262 42
5,850 00
~9,112 42
68-A-89
-12-
Schedule No. III
Project 667-C
Balance Sheet
January 31, 1968
Assets
Administration Fund Cash
Accounts Receivable:
Tenants
State Aid
Investments:
Arlin§ton Trust Company,
Account #127787
Andover Savings Bank,
Account #87887
Andover Savings Bank~ 90 Day Notice
Account #89722
Other Assets:
Prepaid Insurance
Development Cost
Less:
Development Cost Liquidation
Liabilities and Surplus
Accounts Payable:
Development
Accrued Liabilities:
Matured Interest and Principal
Notes Authorized and Issued
Less:
Notes Retired
Reserves:
Opera%lng
Debt Service
Contribution Reduction
Surplus
One Month
· ~:A_~e An a ly s___i__s
$ 152 00~
11,875 00
$19,538 54
7,070 92
22,119 27
01,065,000 O0
37~000 00
$1,090,000 00
37,000 00
321,810 33
8,800 67
2,000 00
$152 O0
152 oo
22,197 ~8
12,027 00
~8,728 73
~95 04
1,028,000 O0
~1,111,448 25
$ 3~ 52
20,20q 79
1,053,000 00
32 ~611 O0
5 ~287 9q
$1,111,qq8 25
I
I
I
I
I
I
I
I
I
I
I
I
I
68-A-89
-13-
Schedule No. IV
Project 667-C
Operating Statement
October 1, 1967 to January 31, 1968
Project Income:
Dwelling Rent
Miscellaneous
Operating Expenses:
Management
Utilities
Repairs, Maintenance and Replacements
Insurance
Operating Income
Other Charges:
Provision for Debt Service Reserve
Debt Service Expense
Loss before Commonwealth Contribution
Commonwealth Contribution:
Annual
Additional Annual
Net Project Income after Commonwealth Contribution
Contribution Reduction from Prior Surplus
Net Surplus Credit from Operations, January 31, 1968
$16,912 00
858 28
$17,770 28
$ 914 81
3,268 53
2,381 74
125 59
6,690 67
~11,079 61
$ 626 67
18,040 00
18,666 67
$ 7,587 06
~8,875 00
3,000 00
$11,875 00
$4,287--~4
1,000 00
~'~, 287 94