ALLEN METROPOLITAN HOUSING AUTHORITY ALLEN COUNTY SINGLE AUDIT JULY 1, 2015 – JUNE 30, 2016 Board of Commissioners Allen Metropolitan Housing Authority 600 South Main Street Lima, Ohio 45804 We have reviewed the Independent Auditor’s Report of the Allen Metropolitan Housing Authority, Allen County, prepared by Wilson, Shannon & Snow, Inc., for the audit period July 1, 2015 through June 30, 2016. Based upon this review, we have accepted these reports in lieu of the audit required by Section 117.11, Revised Code. The Auditor of State did not audit the accompanying financial statements and, accordingly, we are unable to express, and do not express an opinion on them. Our review was made in reference to the applicable sections of legislative criteria, as reflected by the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of State, regulations and grant requirements. The Allen Metropolitan Housing Authority is responsible for compliance with these laws and regulations. Dave Yost Auditor of State January 3, 2017 88 East Broad Street, Fifth Floor, Columbus, Ohio 43215‐3506 Phone: 614‐466‐4514 or 800‐282‐0370 Fax: 614‐466‐4490 www.ohioauditor.gov This page intentionally left blank. ALLEN METROPOLITAN HOUSING AUTHORITY ALLEN COUNTY TABLE OF CONTENTS TITLE PAGE INDEPENDENT AUDITOR’S REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 4 BASIC FINANCIAL STATEMENTS: STATEMENT OF NET POSITION 11 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 12 STATEMENT OF CASH FLOWS 13 NOTES TO THE BASIC FINANCIAL STATEMENTS 14 REQUIRED SUPPLEMENTARY INFORMATION: SCHEDULE OF THE AUTHORITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILTY 29 SCHEDULE OF THE AUTHORITY’S CONTRIBUTIONS 30 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 31 SUPPLEMENTARY INFORMATION: ENTITY WIDE BALANCE SHEET SUMMARY – FDS SCHEDULE SUBMITTED TO HUD 32 ENTITY WIDE REVENUE AND EXPENSE SUMMARY – FDS SCHEDULE SUBMITTED TO HUD 34 COST CERTIFICATION 37 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 38 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS REQUIRED BY GOVERNMENT AUDITING STANDARDS 39 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE 41 SCHEDULE OF FINDINGS – 2 CFR § 200.515 43 INDEPENDENT AUDITOR’S REPORT Allen Metropolitan Housing Authority Allen County 600 South Main Street Lima, Ohio 45804 To the Board of Commissioners: Report on the Financial Statements We have audited the accompanying financial statements of the Allen Metropolitan Housing Authority, Allen County, Ohio (the Authority), as of and for the fiscal year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for preparing and fairly presenting these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes designing, implementing, and maintaining internal control relevant to preparing and fairly presenting financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to opine on these financial statements based on our audit. We audited in accordance with auditing standards generally accepted in the United States of America and the financial audit standards in the Comptroller General of the United States’ Government Auditing Standards. Those standards require us to plan and perform the audit to reasonably assure the financial statements are free from material misstatement. An audit requires obtaining evidence about financial statement amounts and disclosures. The procedures selected depend on our judgment, including assessing the risks of material financial statement misstatement, whether due to fraud or error. In assessing those risks, we consider internal control relevant to the Authority’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not to the extent needed to opine on the effectiveness of the Authority’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of management’s accounting policies and the reasonableness of their significant accounting estimates, as well as our evaluation of overall financial statement presentation. We believe the audit evidence we obtained is sufficient and appropriate to support our opinion. -1- Allen Metropolitan Housing Authority Allen County Independent Auditor’s Report Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Allen Metropolitan Housing Authority, Allen County as of June 30, 2016, and the changes in its financial position and its cash flows for the fiscal year then ended in accordance with the accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require this presentation to include Management’s discussion and analysis, and schedules of net pension liabilities and pension contributions listed in the table of contents, to supplement the basic financial statements. Although this information is not part of the basic financial statements, the Governmental Accounting Standards Board considers it essential for placing the basic financial statements in an appropriate operational, economic, or historical context. We applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, consisting of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries to the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not opine or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to opine or provide any other assurance. Supplementary Information Our audit was conducted to opine on the Authority’s basic financial statements taken as a whole. The Financial Data Schedules and Cost Certification as required by the Department of Housing and Urban Development present additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards presents additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and is not a required part of the financial statements. The schedules and certification are management’s responsibility, and derive from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. We subjected these schedules to the auditing procedures we applied to the basic financial statements. We also applied certain additional procedures, including comparing and reconciling schedules directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves in accordance with auditing standards generally accepted in the United States of America. In our opinion, these schedules and certification are fairly stated in all material respects in relation to the basic financial statements taken as a whole. -2- Allen Metropolitan Housing Authority Allen County Independent Auditor’s Report Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report November 17, 2016, on our consideration of the Authority’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report describes the scope of our internal control testing over financial reporting and compliance, and the results of that testing, and does not opine 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 the Authority’s internal control over financial reporting and compliance. Newark, Ohio November 17, 2016 -3- ALLEN METROPOLITAN HOUSING AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2016 (Unaudited) The following discussion and analysis of the Allen Metropolitan Housing Authority (the Authority) is to provide an introduction to the basic financial statements for the fiscal year ended June 30, 2016. This discussion has been prepared by management and should be read in conjunction with the financial statements, notes to the financial statements, and supplementary information found in the report. This information taken collectively is designed to provide readers with an understanding of the Authority’s finances. FINANCIAL HIGHLIGHTS  The assets and deferred outflows of resources of the Authority exceeded its liabilities and deferred inflows of resources at the close of fiscal year 2016 by $7,152,427 (net position). Of this amount, $1,310,713 (unrestricted Net Position) may be used to meet the Authority’s ongoing obligations to citizens and creditors.  Capital assets decreased by $279,321.  Net Position decreased by $1,010,921 in the fiscal year ended June 30, 2016.  Revenues increased $347,769 primarily due to an increase in Capital fund program revenue.  Operating expenses increased by $93,056 due to an increase in the maintenance contracts and repair expenses.  The capital contributions increased $419,376 due to increase in capital fund monies spent on capital fund projects in 2016. USING THIS ANNUAL REPORT The following graphic outlines the format of this report:   MD&A ~ Management Discussion and Analysis ~ Basic Financial Statements ~ Statement of Net Position ~ ~ Statement of Revenues, Expenses and Changes in Net Position ~ ~ Statement of Cash Flows ~ ~ Notes to the Basic Financial Statements ~ Other Required Supplementary Information ~ Required Supplementary Information (Pension Schedules) ~ Supplementary Information ~ Financial Data Schedules ~ ~ Cost Certification ~ ~ Schedule of Expenditures of Federal Awards ~   The focus is on both the Authority as a whole (authority-wide). Both perspectives (authority-wide and major fund) allow the user to address relevant questions, broaden a basis for comparison (fiscal year to fiscal year or Authority to Authority) and enhance the Authority’s accountability. -4- ALLEN METROPOLITAN HOUSING AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2016 (Unaudited) Authority-Wide Financial Statements The Authority-wide financial statements are designed to be corporate-like in that all business-type activities are consolidated into columns which add to a total for the entire Authority. These statements include a Statement of Net Position, which is similar to a Balance Sheet. The Statement of Net Position reports all financial and capital resources for the Authority. The statement is presented in the format where assets and deferred outflows of resources, minus liabilities and deferred inflows of resources, equal “Net Position”, formerly known as equity. Assets and liabilities are presented in order of liquidity, and are classified as “Current” (convertible into cash within one year), and “Non-current”. The focus of the Statement of Net Position (the “Unrestricted Net Position”) is designed to represent the net available liquid (non-capital) assets and deferred outflows of resources, net of liabilities and deferred inflows of resources, for the entire Authority. Net Position (formerly equity) is reported in three broad categories (ass applicable): Investment in Capital Assets: This component of Net Position consists of all Capital Assets, reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. The Authority does not have any outstanding debt. Restricted Net Position: This component of Net Position consists of restricted assets, when constraints are placed on the asset by creditors (such as debt covenants), grantors, contributors, laws, regulations, etc. Unrestricted Net Position: Consists of Net Position that do not meet the definition of “Investment in Capital Assets”, or “Restricted Net Position”. This account resembles the old operating reserves account. The Authority financial statements include a Statement of Revenues, Expenses and Changes in Fund Net Position (similar to an Income Statement). This Statement includes Operating Revenues, such as rental income, operating grants, and other revenues; Operating Expenses, such as administrative, utilities, maintenance, general, insurance, housing assistance payments, and depreciation; and Non-Operating Revenues, such as capital grant revenue and investment income. The focus of the Statement of Revenues, Expenses and Changes in Fund Net Position is the “Change in Net Position”, which is similar to Net Income or Loss. Finally, a Statement of Cash flows is included, which discloses net cash provided by, or used by operating activities, non- capital financing activities, and from capital and related financing activities. Fund financial Statements The Authority consists exclusively of Enterprise Funds. Enterprise funds utilize the full accrual basis of accounting. The Enterprise method of accounting is similar to accounting utilized by the private sector accounting. Accounting balances for many of the programs maintained by the Authority are segregated as required by HUD. Others are segregated to enhance accountability and control. -5-