June 25, 1999
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Boston Financial Qualified Housing Limited Partnership
Form 10-K Annual Report for the Year Ended March 31, 1999
File Number 0-16796
Dear Sir/Madam:
Pursuant to the requirements of section 15(d) of the Securities Exchange Act of
1934, there is filed herewith one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
QH110K-K.98
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1999 0-16796
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 04-2947737
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
(Address of Principal executive office) (Zip Code)
Registrant's telephone number, including area code 617/439-3911
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
50,000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate sales price of partnership units held by nonaffiliates of
the registrant.
$50,000,000 as of March 31, 1999
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE:LIST THE FOLLOWING DOCUMENTS IF INCORPORATED
BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION STATEMENT AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Post-Effective Amendments Nos. 1 through 3
to the Form S-11 Registration Statement,
File # 33-11910 Part I, Item 1
Report on Form 8-K filed on July 7, 1988 Part I, Item 1
Report on Form 8-K filed on January 20, 1989 Part I, Item 1
Acquisition Reports Part I, Item 1
Prospectus - Sections Entitled:
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensation and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1999
TABLE OF CONTENTS
PART 1 Page No.
Item 1 Business K-3
Item 2 Properties K-6
Item 3 Legal Proceedings K-13
Item 4 Submission of Matters to a
Vote of Security Holders K-13
PART II
Item 5 Market for the Registrant's Units
and Related Security Holder Matters K-14
Item 6 Selected Financial Data K-15
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations K-16
Item 7A Quantitative and Qualitative Disclosures about
Market Risk K-20
Item 8 Financial Statements and Supplementary Data K-20
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-20
PART III
Item 10 Directors and Executive Officers
of the Registrant K-20
Item 11 Management Remuneration K-22
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-22
Item 13 Certain Relationships and Related
Transactions K-22
PART IV
Item 14 Exhibits, Financial Statement Schedule
and Reports on Form 8-K K-25
SIGNATURES K-26
<PAGE>
PART I
Item 1. Business
Boston Financial Qualified Housing Limited Partnership (the "Partnership") is a
limited partnership formed on January 22, 1987 under the Uniform Limited
Partnership Act of the State of Delaware. The Partnership's partnership
agreement ("Partnership Agreement") authorized the sale of up to 50,000 units of
Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain
discounts. The Partnership raised $49,963,740 ("Gross Proceeds"), net of
discounts of $36,260, through the sale of 50,000 Units. Such amounts exclude
five unregistered Units previously acquired for $5,000 by the Initial Limited
Partner, which is also one of the General Partners. The offering of Units
terminated on April 29, 1988.
The Partnership is engaged solely in the business of real estate investment.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole. On October 27, 1995, an affiliate of the
Partnership's Managing General Partners, BF Harbour View, Inc., became the Local
General Partner of Hughes Apartments, Ltd. ("Hughes"), a Local Limited
Partnership in which the Partnership has invested. As a result, the Partnership
is deemed to have control over Hughes, and commencing on November 1, 1995, the
accompanying financial statements are presented in combined form to conform with
the required accounting treatment under generally accepted accounting
principles. This change only affects the presentation of the Partnership's
financial condition and operating results, not the business of the Partnership.
The Partnership has invested as a limited partner in other limited partnerships
("Local Limited Partnerships") which own and operate residential apartment
complexes ("Properties"), all of which benefit from some form of federal, state
or local assistance programs and which qualify for the low-income housing tax
credits ("Tax Credits") that were added to the Internal Revenue Code (the "Code)
by the Tax Reform Act of 1986. The investment objectives of the Partnership
include the following: (i) to provide current tax benefits in the form of Tax
Credits which qualified limited partners may use to offset their federal income
tax liability; (ii) to preserve and protect the Partnership's capital; (iii) to
provide limited cash distributions from property operations which are not
expected to constitute taxable income during the expected duration of the
Partnership's operations; and (iv) to provide cash distributions from sale or
refinancing transactions. There cannot be any assurance that the Partnership
will attain any or all of these investment objectives.
Table A on the following page lists the properties owned by the Local Limited
Partnerships in which the Partnership has invested. Item 7 of this Report
contains other significant information with respect to such Local Limited
Partnerships. As required by applicable rules, the terms of the acquisition of
Local Limited Partnership interests have been described in supplements to the
Prospectus and collected in three post-effective amendments to the Registration
Statement and in two Form 8-K filings listed in Part IV of this Report on Form
10-K (collectively, the "Acquisition Reports"); such descriptions are
incorporated herein by this reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
<TABLE>
Properties owned by Date
Local Limited Interest
Partnerships Location Acquired
<S> <C> <C>
Barrington Manor Fargo, ND 12/31/87
Bingham Bingham, ME 12/30/87
Birmingham Village Randolph, ME 12/30/87
Bittersweet Randolph, MA 10/27/87
Boulevard Commons Chicago, IL 07/14/88
Brentwood Manor II Nashua, NH 01/20/89
Cass House/Roxbury Hills Boston, MA 06/08/88
Chestnut Lane Newnan, GA 08/01/88
Coronado Courts Douglas, AZ 12/18/87
Country Estates Glennville, GA 03/01/88
600 Dakota Wahpeton, ND 10/01/88
Delmar Gillette, WY 10/01/88
Duluth Sioux Falls, SD 10/01/88
Elmore Hotel Great Falls, MT 12/22/87
Graver Inn Fargo, ND 12/31/87
Hazel-Winthrop Chicago, IL 12/30/87
Hughes Mandan, ND 12/31/87
Lakeview Heights Clearfield, UT 12/30/87
Logan Plaza New York, NY 05/10/88
New Medford Hotel Medford, OR 12/22/87
Heritage View New Sweden, ME 12/30/87
Park Terrace Dundalk, MD 01/20/89
Pebble Creek Arlington, TX 06/20/88
Hillcrest III Perryville, MO 03/31/89
Pine Village Pine Mountain, GA 03/01/88
Rolling Green Edmond, OK 09/30/87
Sierra Pointe Las Vegas, NV 09/01/87
Sierra Vista Aurora, CO 09/30/87
Talbot Village Talbotton, GA 03/01/88
Terrace Oklahoma City, OK 11/20/87
Trenton Salt Lake City, UT 12/30/87
Verdean Gardens New Bedford, MA 05/31/88
Willowpeg Village Rincon, GA 03/01/88
Windsor Court Aurora, CO 12/30/87
</TABLE>
* The Partnership's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99%, except for Logan Plaza
where the Partnership's ownership interest is 98% and Barrington Manor,
Graver Inn, 600 Dakota and Duluth where the Partnership's ownership
interest is 49.5%. Profits and losses arising from sale or refinancing
transactions are allocated in accordance with the respective Local Limited
Partnership Agreements.
<PAGE>
Although the Partnership's investments in Local Limited Partnerships are not
subject to seasonal fluctuations, the Partnership's equity in losses of Local
Limited Partnerships, to the extent it reflects the operations of individual
properties, may vary from quarter to quarter based upon changes in occupancy and
operating expenses as a result of seasonal factors.
Since the Partnership invests as a limited partner, the Partnership has no
contracted obligation to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at March 31, 1999, the Partnership had no
contractual or other obligation to any Local Limited Partnership which had not
been paid or provided for.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Partnership's management might deem it in its
best interest to voluntarily provide such funds in order to protect its
investment. During the years ended March 31, 1999 and 1998, the Partnership
advanced approximately $2,601 and $3,000, respectively, to five Local Limited
Partnerships to fund operating deficits and other various property issues.
The Partnership's primary source of working capital is investment income earned
on the Reserves. Additionally, the Partnership expects to receive distributions
from cash flow from operations of its Local Limited Partnership interests. It is
expected that these sources of funds will provide adequate working capital to
the Partnership.
With the exception of Hughes, each Local Limited Partnership has, as its general
partners ("Local General Partners"), one or more individuals or entities not
affiliated with the Partnership or its General Partners. In accordance with the
partnership agreements under which such entities are organized ("Local Limited
Partnership Agreements"), the Partnership depends on the Local General Partners
for the management of each Local Limited Partnership. As of March 31, 1999, the
following Local Limited Partnerships have a common Local General Partner or
affiliated group of Local General Partners accounting for the specified
percentage of capital contributions to Local Limited Partnerships: (i) Rolling
Green, Sierra Vista, Terrace, Windsor and Sierra Point Limited Partnerships,
representing 29.78%, have Phillip Abrams Ventures, Inc. and PDW, Inc. as Local
General Partners; (ii) Graver Inn, Barrington Manor, 600 Dakota and Duluth
Limited Partnerships, representing 3.32%, have Jerry L. Meide and RRABB, Inc. as
Local General Partners (see discussion below); (iii) New Medford and Oregon
Landmark Limited Partnerships, representing 6.52%, have WHP Holdings, Inc. as
the Local General Partners; (iv) Trenton, Delmar and Lakeview Heights Limited
Partnerships, representing 2.59%, have PSC Real Estate, Inc. and J. Michael
Queenan & Associates, Inc. (which is a corporation controlled by J. Michael
Queenan) as Local General Partners; (v) Bingham, Birmingham and New Sweden
Limited Partnerships, representing 1.95%, have Charles B. Mattson and Todd
Mattson as Local General Partners; (vi) Cass House and Verdean Gardens Limited
Partnerships, representing 12.42%, have Cruz Development Corporation as the
Local General Partner; and (vii) Willowpeg Village, Pine Village, Glennville,
Talbot Village and Chestnut Lane Limited Partnerships, representing 2.74%, have
Norsouth Corporation as the General Partner. The Local General Partners of the
remaining Local Limited Partnerships are identified in the Acquisition Reports,
which are incorporated herein by reference.
On November 10, 1997, the Partnership transferred 50% of its interest in
Barrington Manor, Graver Inn, 600 Dakota and Duluth to the local general
partner. Included in these transfers is a put option granting the Managing
General Partner the right to put the Partnership's remaining interest to the
local general partner any time after one year has elapsed. These properties
represent 3.32% of capital contributions.
The properties owned by Local Limited Partnerships in which the Partnership has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The continued success of the
Partnership will depend on many outside factors, most of which are beyond the
control of the Partnership and which cannot be predicted at this time. Such
factors include general economic and real estate market conditions, both on a
national basis and in those areas where the properties are located, the
availability and cost of borrowed funds, real estate tax rates, operating
expenses, energy costs and government regulations. In addition, other risks
inherent in real estate investment may influence the ultimate success of the
Partnership, including: (i) possible reduction in rental income due to an
inability to maintain high occupancy levels or adequate rental levels; (ii)
possible adverse changes in general economic conditions and adverse local
conditions, such as competitive overbuilding, or a decrease in employment or
adverse changes in real estate laws, including building codes; and (iii)
possible future adoption of rent control legislation which would not permit
increased costs to be passed on to the tenants in the form of rent increases or
which would suppress the ability of the Local Limited Partnerships to generate
operating cash flow. Since all of the properties benefit from some form of
government assistance, the Partnership is subject to the risks inherent in that
area including decreased subsidies, difficulties in finding suitable tenants and
obtaining permission for rent increases. In addition, any Tax Credits allocated
to investors with respect to a property are subject to recapture to the extent
that the property or any portion thereof ceases to qualify for the Tax Credits.
Other future changes in federal and state income tax laws affecting real estate
ownership or limited partnerships could have a material and adverse affect on
the business of the Partnership.
The Partnership is managed by 29 Franklin Street, Inc., the Managing General
Partner of the Partnership. The other General Partner of the Partnership is
Franklin 29 Limited Partnership. The Partnership, which does not have any
employees, reimburses The Boston Financial Group Limited Partnership, an
affiliate of the General Partner, for certain expenses and overhead costs. A
complete discussion of the management of the Partnership is set forth in Item 10
of this Report.
Item 2. Properties
The Partnership owns limited partnership interests in thirty-four Local Limited
Partnerships which own and operate Properties, all of which benefit from some
form of federal, state or local assistance program and which qualify for the Tax
Credits added to the Code by the Tax Reform Act of 1986. The Partnership's
ownership interest in each Local Limited Partnership is 99%, except for Logan
Plaza where the Partnership's ownership interest is 98% and Barrington Manor,
Graver Inn, 600 Dakota, and Duluth where the Partnership's ownership interest is
49.5%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; or iii) loans that have repayment
terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Partnership.
<PAGE>
<TABLE>
Capital Contributions
Local Limited Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apts. Units March 31, 1999 March 31, 1999 December 31, 1998 Subsidy * 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Barrington Manor
Limited Partnership
Barrington Manor
Fargo, ND 18 $ 175,200 $ 175,200 $ 595,000 Section 8 89%
Bingham Family Housing
Associates (A Limited
Partnership)
Gingham
Gingham, ME 24 240,900 240,900 1,160,527 FmHA 96%
Birmingham Housing Associates
(A Limited Partnership)
Birmingham Village
Randolph, ME 24 236,520 236,520 1,155,244 FmHA 100%
MB Bittersweet Associates Limited
Partnership (a Massachusetts
Limited Partnership)
Bittersweet
Randolph, MA 35 620,500 620,500 2,383,518 None 100%
Boulevard Commons
Limited Partnership
Boulevard Commons
Chicago, IL 212 4,527,850 4,527,850 10,684,574 Section 8 85%
Michael J. Dobens
Limited Partnership I
Brentwood Manor II
Nashua, NH 22 300,000 300,000 760,183 Section 8 95%
<PAGE>
Capital Contributions
Local Limited Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apts. Units March 31, 1999 March 31, 1999 December 31, 1998 Subsidy * 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Cass House Associates Limited
Partnership (a Massachusetts
Limited Partnership)
Cass House/Roxbury Hills
Boston, MA 111 2,141,090 2,141,090 12,685,999 None 100%
Chestnut Lane Limited
Partnership (A Limited
Partnership)
Chestnut Lane
Newnan, GA 50 282,510 282,510 1,468,129 None 92%
Coronado Courts Limited
Partnership
Coronado Courts
Douglas, AZ 145 1,800,000 1,800,000 3,696,251 Section 8 98%
Glennville Properties
(A Limited Partnership)
Country Estates
Glennville, GA 24 121,910 121,910 593,661 FmHA 100%
600 Dakota Properties
Limited Partnership
600 Dakota
Wahpeton, ND 28 113,000 113,000 620,000 Section 8 83%
Delmar Housing Associates
Limited Partnership
Delmar
Gillette, WY 16 128,000 128,000 413,205 Section 8 99%
<PAGE>
Capital Contributions
Local Limited Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apts. Units March 31, 1999 March 31, 1999 December 31, 1998 Subsidy * 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Duluth Limited Partnership
Duluth
Sioux Falls, SD 11 107,000 107,000 255,179 Section 8 60%
Oregon Landmark-Three
Limited Partnership
Elmore Hotel
Great Falls, MT 60 1,022,000 1,022,000 3,186,932 Section 8 95%
Graver Inn
Limited Partnership
Graver Inn
Fargo, ND 70 819,500 819,500 1,911,129 Section 8 78%
Hazel-Winthrop Apartments (An
Illinois Limited Partnership)
Hazel-Winthrop
Chicago, IL 30 350,400 350,400 2,110,234 Section 8 97%
Heritage Court
Limited Partnership
Park Terrace
Dundalk, MD 101 2,048,750 2,048,750 3,536,511 None 98%
Hughes Apartments
Limited Partnership
Hughes
Mandan, ND 47 379,453 379,453 1,210,000 Section 8 98%
<PAGE>
Capital Contributions
Local Limited Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apts. Units March 31, 1999 March 31, 1999 December 31, 1998 Subsidy * 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Lakeview Heights Apartments,
Ltd. (A Limited Partnership)
Lakeview Heights
Clearfield, UT 83 584,000 584,000 2,765,967 Section 8 91%
Logan Plaza Associates
Logan Plaza
New York NY 130 2,240,000 2,240,000 10,784,320 None 98%
New Medford Hotel Associates
Limited Partnership
New Medford Hotel
Medford, OR 76 1,365,100 1,365,100 3,146,176 Section 8 99%
New Sweden Housing Associates
(A Limited Partnership)
Heritage View
New Sweden, ME 24 237,250 237,250 1,158,762 FmHA 88%
2225 New York Avenue, Ltd.
(A Limited Partnership)
Pebble Creek
Arlington, TX 352 2,512,941 2,512,941 7,955,434 Section 8 95%
Perryville Associates I, L.P.
(A Limited Partnership)
Hillcrest III
Perryville, MO 24 128,115 128,115 638,634 FmHA 88%
<PAGE>
Capital Contributions
Local Limited Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apts. Units March 31, 1999 March 31, 1999 December 31, 1998 Subsidy * 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Pine Village Limited Partnership
(A Limited Partnership)
Pine Village
Pine Mountain, GA 36 188,340 188,340 936,427 FmHA 98%
Rolling Green Housing Associates,
Ltd. (a Limited Partnership)
Rolling Green
Edmond, OK 166 1,855,650 1,855,650 4,756,724 Section 8 92%
Sierra Vista Housing Associates,
Ltd. (a Limited Partnership)
Sierra Pointe
Las Vegas, NV 209 3,016,008 3,016,008 7,401,300 Section 8 85%
Sundance Housing Associates,
Ltd. (A Limited Partnership)
Sierra Vista
Aurora, CO 160 2,271,751 2,271,751 6,246,475 Section 8 100%
Talbot Village Limited Partnership
(A Limited Partnership)
Talbot Village
Talbotton, GA 24 121,180 121,180 599,804 FmHA 96%
Terrace Housing Associates,
Ltd. (a Limited Partnership)
Terrace
Oklahoma City, OK 206 1,950,550 1,950,550 5,221,404 Section 8 91%
<PAGE>
Capital Contributions
Local Limited Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apts. Units March 31, 1999 March 31, 1999 December 31, 1998 Subsidy * 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Trenton Apartments, Ltd.
(A Limited Partnership)
Trenton
Salt Lake City, UT 37 237,250 237,250 821,747 Section 8 100%
Verdean Gardens Associates Limited
Partnership (a Massachusetts
limited partnership)
Verdean Gardens
New Bedford, MA 110 2,409,000 2,409,000 14,189,091 None 90%
Willowpeg Village Limited Partnership
(A Limited Partnership)
Willowpeg Village
Rincon, GA 57 288,400 288,400 1,472,966 FmHA 100%
Windsor Court Housing Associates,
Ltd. (a Limited Partnership)
Windsor Court
Aurora, CO 143 1,815,500 1,815,500 4,474,113 Section 8 96%
------- ------------ ------------ -------------
2,865 36,635,618 36,635,618 120,995,620
=======
Less: Hughes Apartments 379,453 379,453 1,210,000
------------ ------------ -------------
$ 36,256,165 $ 36,256,165 $ 119,785,620
============ ============ =============
</TABLE>
*FmHA This subsidy, which is authorized under Section 515 of the
Housing Act of 1949, can be one or a combination of different
types of financing. For instance, FmHA may provide: 1) direct
below-market-rate mortgage loans for rural rental housing;
2) mortgage interest subsidies which effectively lower the
interest rate of the loan to 1%; 3) a rental assistance
subsidy to tenants which allows them to pay no more than 30%
of their monthly income as rent with the balance paid by the
federal government; or 4) a combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title
II of the Housing and Community Development Act of 1974,
allows qualified low-income tenants to pay 30% of their
monthly income as rent with the balance paid by the federal
government.
<PAGE>
One Local Limited Partnership invested in by the Partnership, Boulevard Commons,
represents more than 10% of the total capital contributions made to Local
Limited Partnerships by the Partnership. Boulevard Commons is a 212-unit
rehabilitation apartment complex with six buildings located in Chicago,
Illinois.
Boulevard Commons was initially financed by a first mortgage at 10% interest,
insured by the U.S. Department of Housing and Urban Development ("HUD") and was
refinanced at 8.875% on April 6, 1995. Principal and interest payments of
$74,916 commenced June 1, 1995 and continue to May 1, 2035. In addition, there
is a junior mortgage payable to the City of Chicago which bears interest at 3%
per annum and matures at the later of July 1, 2030 or the retirement of the FHA
insured mortgage. Principal and interest are due in a lump sum upon maturity.
The duration of the leases for occupancy in the properties described above is
six to twelve months. The Managing General Partner believes the properties
described herein are adequately covered by insurance.
Additional information required under this Item, as it pertains to the
Partnership, is contained in Items 1, 7 and 8 of this Report.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal or administrative
proceeding, and to the best of its knowledge, no legal or administrative
proceeding is threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
<PAGE>
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Partnership. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Partnership.
The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.
As of June 15, 1999, there were 3,301 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. No cash distributions were
paid during the years ended March 31, 1999, 1998 and 1997.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Partnership's financial position and operating results. This information should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Notes
thereto, which are included in Items 7 and 8 of this Report.
<TABLE>
March 31, March 31, March 31, March 31, March 31,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Revenue (B) $ 465,783 $ 414,211 $ 435,791 $ 191,229 $ 77,348
Equity in losses of Local
Limited Partnerships (B) (311,996) (2,321,647) (2,041,502) (2,657,886) (2,732,227)
Net loss (542,258) (2,927,278) (2,048,112) (2,278,003) (3,142,627)
Per Limited Partnership Unit (10.74) (57.96) (40.55) (45.10) (62.22)
Cash and cash equivalents (B) 225,822 243,723 453,264 678,567 308,216
Marketable securities 1,935,991 2,025,236 1,923,032 1,998,381 2,066,336
Investment in Local Limited
Partnerships 1,436,677 1,809,097 4,558,388 6,411,602 8,922,540
Total assets 4,913,505 5,428,937 8,369,107 10,458,754 11,358,168
Long-term debt 1,210,000 1,210,000 1,210,000 1,210,000 -
Cash distribution - - - - -
Per Limited Partnership Unit - - - - -
Other Data:
Passive loss (A) (7,543,721) (7,045,034) (7,537,782) (6,502,105) (6,757,956)
Per Limited Partnership
Unit (A) (149.37) (139.49) (149.25) (128.74) (133.81)
Portfolio income (A) 327,862 308,954 389,939 442,059 321,042
Per Limited Partnership
Unit (A) 6.49 6.12 7.72 8.75 6.36
Low-Income Housing
Tax Credits (A) 4,335,200 6,904,667 7,559,531 7,652,372 7,512,822
Per Limited Partnership
Unit (A) 85.69 136.50 149.47 151.31 148.55
Local Limited Partnership
interests owned at end
of period 34 34 34 34 34
</TABLE>
(A) Income tax information is as of December 31, the year end of the
Partnership for income tax purposes. The Low-Income Housing Tax Credit
per Limited Partnership Unit for 1998, 1997, 1996, 1995 and 1994
represents the amount distributed to individual investors based upon
50,000 outstanding Units. Corporate investors received Low-Income
Housing Tax Credits of $92.64, $146.42, $159.39, $161.23 and $158.40
per Unit in 1998, 1997 1996, 1995 and 1994, respectively.
(B) March 31, 1999, 1998, 1997 and 1996 revenue includes $239,149,
$245,380, $237,895 and $28,827, respectively, of rental and other
revenue from Hughes Apartments that is included in the combined revenue
in the Statements of Operations.
March 31, 1999, 1998, 1997 and 1996 equity in losses of Local Limited
Partnerships does not include $26,568, $25,528, $36,820 and $13,329,
respectively, of losses from Hughes Apartments that have been combined
with the Partnership's loss in the Statements of Operations
March 31, 1999, 1998, 1997 and 1996 cash and cash equivalents includes
$4,064, $2,464, $2,544 and $26,084, respectively, of cash and cash
equivalents from Hughes Apartments that has been combined with the
Partnership in the Balance Sheets.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Partnership intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements and are including this
statement for purposes of complying with these safe harbor provisions. Although
the Partnership believes the forward-looking statements are based on reasonable
assumptions, the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, without limitation, general economic and real
estate conditions, interest rates and unanticipated delays or expenses on the
part of the Partnership and their suppliers in achieving year 2000 compliance.
Liquidity and Capital Resources
At March 31, 1999, the Partnership, including the combined entity (Hughes
Apartments, Ltd.), has cash and cash equivalents of $225,822 as compared with
$243,723 at March 31, 1998. The decrease is primarily attributable to cash used
for operations. These decreases to cash and cash equivalents are partially
offset by cash distributions received from Local Limited Partnerships and
proceeds from sales and maturities of marketable securities in excess of
purchases of marketable securities.
At March 31, 1999, approximately $1,543,000 of cash, cash equivalents and
marketable securities has been designated as Reserves. The Reserves were
established to be used for working capital of the Partnership and contingencies
related to the ownership of Local Limited Partnership interests. Reserves may be
used to fund Partnership operating deficits, if the Managing General Partner
deems funding appropriate.
Since the Partnership invests as a limited partner, the Partnership has no
contractual duty to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at March 31, 1999, the Partnership had no
contractual or other obligation to any Local Limited Partnership, which had not
been paid or provided for.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Partnership's management might deem it in its
best interests to provide such funds, voluntarily, in order to protect its
investment. During the year ended March 31, 1999, the Partnership advanced
$2,601 to one Local Limited Partnerships for various property issues.
Cash Distributions
No cash distributions to Limited Partners were made during the three years ended
March 31, 1999. In the event that distributions are received from Local Limited
Partnerships, the Managing General Partner has decided that such amounts will be
used to increase Reserves. No assurance can be given as to the amounts of future
distributions from the Local Limited Partnerships since many of the Properties
benefit from some type of federal or state subsidy and, as a consequence, are
subject to restrictions on cash distributions. Therefore, it is expected that
only a limited amount of cash will be distributed to investors from this source
in the future.
Results of Operations
1999 versus 1998
The Partnership's results of operations for the year ended March 31, 1999
resulted in a net loss of $542,258 as compared to a net loss of $2,927,278 for
the same period in 1998. The decrease in net loss is primarily attributable to a
decrease in equity in losses of Local Limited Partnerships due to an increase in
losses not recognized by the Partnership for Local Limited Partnerships whose
cumulative distributions exceeded its total investment in these Partnerships and
a decrease in provision for valuation of investments and bad debt expense.
1998 versus 1997
The Partnership's results of operations for the year ended March 31, 1998
resulted in a net loss of $2,927,278 as compared to a net loss of $2,048,112 for
the same period in 1997. The increase in net loss is primarily attributable to
an increase in equity in losses of Local Limited Partnerships and a provision
for valuation of investments in five Local Limited Partnerships. As discussed in
Note 4 to the combined financial statements in Item 8 of this Form 10-K, the
increase in equity in losses of Local Limited Partnerships is due to equity in
income recognized during the year ended March 31, 1997 due to a change in
accounting methods for two Local Limited Partnerships. The Partnership provided
for a provision for valuation in five Local Limited Partnerships because there
is evidence of a non-temporary decline in the recoverable amount of these
investments.
Low-Income Housing Tax Credits
The 1998, 1997 and 1996 Low-Income Housing Tax Credits per Unit for individuals
were $85.69, $136.50 and $149.47, respectively. The 1998, 1997 and 1996
Low-Income Housing Tax Credits per Unit for corporations were $92.64, $146.42
and $159.39, respectively. The Tax Credits per Limited Partnership Unit
stabilized in 1991 at approximately $148.00 per Unit for individuals and $158.00
per Unit for corporations. The credits have begun to decrease as certain
properties are reaching the end of the ten-year credit period. However, because
the Tax Credit compliance periods generally extend five years beyond the Tax
Credits, the Partnership intends to hold its Local Limited Partnership
investments for the foreseeable future.
Property Discussions
Limited Partnership interests have been acquired in thirty-four Local Limited
Partnerships which own and operate rental properties located in nineteen states.
Fourteen of the properties with 774 apartments were newly constructed, and
twenty of the properties with 2,091 apartments were rehabilitated.
Most of the thirty-four Local Limited Partnerships have stabilized operations.
The majority of these stabilized properties are operating at break-even or
generating positive operating cash flow. A number of properties are experiencing
operating difficulties and cash flow deficits due to a variety of reasons. The
Local General Partners of those properties have funded operating deficits
through project expense loans, subordinated loans or payments from operating
escrows. In certain instances where the Local General Partners have stopped
funding deficits because their obligation to do so has expired or otherwise, the
Managing General Partner is working with the Local General Partners to increase
operating income, reduce expenses or refinance the debt at lower interest rates
in order to improve cash flow.
As previously reported, the Local General Partner of 600 Dakota, Graver Inn and
Barrington Manor, located in North Dakota, and Duluth, located in South Dakota,
expressed to the Managing General Partner some concerns over the long-term
financial health of the properties. In response to these concerns and to reduce
possible future risk, the Managing General Partner consummated the transfer of
50% of the Partnership's capital and profits in the properties to an affiliate
of the Local General Partner in November 1997. The Managing General Partner has
the right to transfer the Partnership's remaining interest to the Local General
Partner any time after one year has elapsed. In addition, the Local General
Partner has the right to call the remaining interest after the tax credit period
has expired. On April 9, 1999, due to concerns over the financial viability of
600 Dakota and Graver Inn and to avoid the potential risk of recapture of tax
credits associated with the properties, the Managing General Partner exercised
its right to transfer the Partnership's remaining interest in 600 Dakota and
Graver Inn to the Local General Partner. This transfer will not trigger a
recapture event for the Partnership nor have any impact on the Partnership's
financial statement. However, for tax purposes, this event will result in both
Section 1231 gain and cancellation of indebtedness income for the 1999-tax year.
The Managing General Partner continues to monitor closely the operations of
Barrington Manor and Duluth.
As previously reported, Boulevard Commons, located in Chicago, Illinois, is
experiencing operating deficits due to expenses increasing because of high
turnover at the property, security issues and increasing maintenance and capital
needs. As a result of these issues, Boulevard Common's mortgage went into
default. In October 1998, affiliates of the Managing General Partner replaced
the Local General Partners and a new unaffiliated non profit general partner.
The interest of the original Local General Partners was converted to a special
limited partner interest with no right to participate in the management of the
Local Limited Partnership. Further, the Managing General Partner consummated the
transfer of 48% of the Partnership's capital and profits in the properties to
the new Local General Partner. The Managing General Partner has the right to
transfer the Partnership's remaining interest to the New Local General
Partner any time after one year has elapsed. Occupancy as of March 31, 1999
was 85%.
Delmar, located in Gillette, Wyoming, has been experiencing operating deficits.
In addition, a significant amount of capital improvements on the property needs
to be completed in the very near future. In the past, deficits were funded by a
combination of the accrual of property management fees and the Local General
Partner. Due to the Managing General Partner's concerns regarding the long-term
viability of this property, the Managing General Partner negotiated with the
Local General Partner a plan that will ultimately transfer ownership of the
property to the Local General Partner. Effective January 1, 1998, the Managing
General Partner consummated the transfer of 49.5% of the Partnership's capital
and profits in the property to the Local General Partner. The Managing General
Partner has the right to transfer the Partnership's remaining interest in the
property to the Local General Partner any time after one year has elapsed. The
Partnership will retain its full share of tax credits until such time as the
remaining interest is put to the Local General Partner. In addition, the Local
General Partner has the right to call the remaining interest after the tax
credit period has expired.
As previously reported, the Managing General Partner at Pebble Creek, located in
Arlington, Texas, is still negotiating with HUD to extend and/or modify the
existing workout agreement which expired May 31, 1998. In addition, the Managing
General Partner is involved in negotiations for the appointment of a replacement
Local General Partner. Occupancy as of March 30, 1999 was 95%.
As previously reported Cass House and Verdean Gardens, both located in
Massachusetts and share a common Local General Partner, continue to operate
below break-even. Both properties, as well as Bittersweet Apartments, receive
subsidy through the State Housing Assistance Rental Program (SHARP), which is an
important part of their annual income. As originally conceived, the SHARP
subsidy was scheduled to decline over time to match expected increases in net
operating income. However, increases in net operating income failed to keep pace
with the decline in the SHARP subsidy. Many of the SHARP properties (including
Cass, Verdean and Bittersweet) structured workouts that included additional
subsidy in the form of Operating Deficit Loans (ODL's). Effective October 1,
1997, the Massachusetts Housing Finance Agency (MHFA), which provided the SHARP
subsidies, withdrew funding of the ODL's from its portfolio of 77 subsidized
properties. Properties unable to make full debt service payments were declared
in default by MHFA. The Managing General Partner has joined a group of SHARP
property owners called the Responsible SHARP Owners, Inc. (RSO) and is
negotiating with MHFA and the General Partners of Cass, Verdean and Bittersweet
to find a solution to the problems that will result from the withdrawn
subsidies. Due to the existing operating deficits and the dependence on these
subsidies, Cass and Verdean have defaulted on their mortgage obligations, and it
is likely that Bittersweet will default on its mortgage obligation in the near
future. On December 16, 1998, the Partnership joined with the RSO and about 20
SHARP property owners and filed suit against the MHFA (Mass. Sup. Court Civil
Action #98-4720). Among other things, the suit seeks to enforce the MHFA's
previous financial commitments to the SHARP properties. The lawsuit is complex
and in its early stages, so no predictions can be made at this time as to the
ultimate outcome. In the meantime, the Managing General Partner intends to
continue to participate in the RSO's efforts to negotiate a resolution of this
matter with MHFA.
The Local General Partner for Brentwood Manor II, in Nashua, New Hampshire,
filed for protection under the provisions of the Chapter 7 bankruptcy laws. The
Managing General Partner has replaced the former Local General Partner as
management agent of the property with an unaffiliated third-party management
agent. As noted previously, although full mortgage payments are being made at
this time, partial mortgage payments were made earlier in 1998 prior to the
Local General Partner declaring bankruptcy. The lender required that the small
deficit generated by the deficient payments be cured immediately. The Managing
General Partner is negotiating with both the lender and the Local General
Partner to develop a plan for the payment of this amount. It is possible that
Partnership Reserves will be used to pay this deficit.
Sierra Pointe, located in Las Vegas, Nevada, and Terrace, located in Oklahoma
City, Oklahoma, which share a common Local General Partner, are experiencing
operating deficits due to occupancy issues. The March 31, 1999 occupancy for
Sierra Pointe is 85% and for Terrace is 91%. The Managing General Partner and
the Local General Partner are working with the local Housing Authorities in both
Nevada and Oklahoma to fill vacant units. The Managing General Partner continues
to work with the Local General Partner and management agent in an effort to
stabilize operations and improve occupancy. In addition, the Managing General
Partner is negotiating with the Local General Partner a plan that will
ultimately transfer ownership of the property to the Local General Partner.
The plan includes provisions to minimize the risk of recapture.
In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
the Partnership has implemented policies and practices for assessing impairment
of its real estate assets and investments in Local Limited Partnerships. Each
asset is analyzed by real estate experts to determine if an impairment indicator
exists. If so, the carrying value is compared to the undiscounted future cash
flows expected to be derived from the asset and, if there is a significant
impairment in value, a provision to write down the asset to fair value will be
charged against income. No such impairment writedowns were taken in 1999.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Partnership for the years ended March 31, 1999, 1998 and 1997.
Impact of Year 2000
The Managing General Partner's plan to resolve year 2000 issues involves the
following four phases: assessment, remediation, testing and implementation. To
date, the Managing General Partner has fully completed an assessment of all
information systems that may not be operative subsequent to 1999 and has begun
the remediation, testing and implementation phase on both hardware and software
systems. Because the hardware and software systems of both the Partnership and
Local Limited Partnerships are generally the responsibility of obligated third
parties, the plan primarily involves ongoing discussions with and obtaining
written assurances from these third parties that pertinent systems will be 2000
compliant. In addition, neither the Partnership nor the Local Limited
Partnerships are incurring significant additional costs since such expenses are
principally covered under the service contracts with vendors. As of June 1999,
the General Partner is in the final stages of its Year 2000 remediation plan and
believes all major systems are compliant; any systems still being updated are
not considered significant to the Partnership's operations. However, despite the
likelihood that all significant year 2000 issues are expected to be resolved in
a timely manner, the Managing General Partner has no means of ensuring that all
systems of outside vendors or other entities that impact operations will be 2000
compliant. The Managing General Partner does not believe that the inability of
third parties to address their year 2000 issues in a timely manner will have a
material impact on the Partnership. However, the effect of non-compliance by
third parties is not readily determinable.
Management has also evaluated a worst case scenario projection with respect to
the year 2000 and expects any resulting disruption of either the Managing
General Partner's activities or any Local Limited Partnership's operations to be
short-term inconveniences. Such problems, however, are not likely to fully
impede the ability to carry out necessary duties of the Partnership. Moreover,
because expected problems under a worst case scenario are not extensively
detrimental, and because the likelihood that all systems affecting the
Partnership will be compliant before 2000, the Managing General Partner has
determined that a formal contingency plan that responds to material system
failures is not necessary.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The table below provides information about the Partnership's market risk
sensitive instruments:
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 Thereafter Face Value
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Debt Obligations
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Long Term Debt:
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Fixed Rate 1,210,000 1,210,000
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Average Interest
Rate 9.75%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Because of lack of market data for obligations with similar characteristics, it
is not practicable to determine a fair value other than face value.
In addition to the debt obligations included in this table, the Partnership has
invested in marketable securities with a aggregate fair values of $1,935,991 at
March 31, 1999; these securities, with rates ranging from 4.87% to 6.42%, do not
subject the Partnership to significant market risk because of their short term
maturities and high liquidity.
The Partnership has no other exposure to market risk associated with activities
in derivative financial instruments, derivative commodity instruments, or other
financial instruments.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Partnership is 29 Franklin Street, Inc., a
Massachusetts corporation (the "Managing General Partner" or "Franklin, Inc."),
an affiliate of The Boston Financial Group Limited Partnership ("Boston
Financial"), a Massachusetts limited partnership. George Fantini, Jr., a Vice
President of the Managing General Partner, resigned his position effective June
30, 1995. Donna Gibson, a Vice President of the Managing General Partner,
resigned from her position on September 13, 1996. Georgia Murray resigned as
Managing Director, Treasurer and Chief Financial Officer of the General Partner
on May 25, 1997. Fred N. Pratt, Jr. resigned as Managing Director of the General
Partner on May 28, 1997. William E. Haynsworth resigned as Managing Director and
Chief Operating Officer of the General Partner on March 23, 1998. Peter G.
Fallon resigned as a Vice President of the General Partner on June 1, 1999.
The Managing General Partner was incorporated in January 1987. Randolph G.
Hawthorne is the Chief Operating Officer of the Managing General Partner and had
the primary responsibility for evaluating, selecting and negotiating investments
for the Partnership. The Investment Committee of the Managing General Partner
approved all investments. The names and positions of the principal officers and
the directors of the Managing General Partner are set forth below.
Name Position
Jenny Netzer Managing Director and President
Michael H. Gladstone Managing Director, Vice President and Clerk
Randolph G. Hawthorne Managing Director, Vice President and
Chief Operating Officer
James D. Hart Chief Financial Officer and Treasurer
Paul F. Coughlan Vice President
William E. Haynsworth Vice President
The other General Partner of the Partnership is Franklin 29 Limited Partnership,
a Massachusetts limited partnership ("Franklin L.P.") that was organized in
January 1987. The General Partner of Franklin L.P. is 29 Franklin Street, Inc.
The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 43, graduated from Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. Ms. Netzer joined Boston Financial in 1987 and is a Senior Vice
President leading the Institutional Tax Credit Team. She is also a member of the
Senior Leadership Team, the firm's Executive Committee. Previously, Ms. Netzer
led Boston Financial's new business initiatives and managed the firm's Asset
Management division, which is responsible for the performance of 750 properties
and providing service to 35,000 investors. Before joining Boston Financial, she
was Deputy Budget Director for the Commonwealth of Massachusetts, where she was
responsible for the Commonwealth's health care and public pension programs'
budgets. Ms. Netzer was also Assistant Controller at Yale University and has
been a member of the Watertown Zoning Board of Appeals.
Michael H. Gladstone, age 42, graduated from Emory University (B.A., 1978) and
Cornell University (J.D., M.B.A., 1982). Mr. Gladstone joined Boston Financial
in 1985 and is Vice President and General Counsel. He is also a member of the
Senior Leadership Team. Prior to joining Boston Financial, Mr. Gladstone was
associated with the Boston law firm of Herrick & Smith. Mr. Gladstone is on the
Advisory Board of the Housing and Development Reporter. He is also a member of
the Investment Program Association, The National Realty Committee, Cornell Real
Estate Council, National Housing Conference and the Massachusetts Bar.
Randolph G. Hawthorne, age 49, is a graduate of Massachusetts Institute of
Technology (S.B., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
Mr. Hawthorne joined Boston Financial in 1973 and is currently a Vice President
responsible for structuring and acquiring real estate investments. Previously,
Mr. Hawthorne served as Treasurer of Boston Financial. Mr. Hawthorne is Past
Chairman of the Board of the National Multi Housing Council, having served on
the board since 1989. He is a past president of the National Housing and
Rehabilitation Association, a member of the Residential Development Council of
the Urban Land Institute, as well as a member of the Advisory Board of the
Berkeley Real Estate Center at the University of California. In addition to
speaking at industry conferences, he is on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News.
James D. Hart, age 41, graduated from Trinity College (B.A.) and Amos Tuck
School at Dartmouth College (M.B.A.). Mr. Hart joined Boston Financial in 1997
and serves as Chief Financial Officer and as a member of the Senior Leadership
Team. Prior to joining Boston Financial, Mr. Hart was engaged in venture capital
management on behalf of institutional investors, including the negotiation and
structuring of private equity and mezzanine transactions as a Vice President of
Interfid Ltd., and later in the operational management of a venture-backed
software company, as Managing Director and Chief Financial Officer of Bitstream
Inc. Mr. Hart has also served the Board of Directors of several companies,
including those that went on to complete initial public offerings.
Paul F. Coughlan, age 55, is a graduate of Brown University (A.B., 1965). Mr.
Coughlan joined Boston Financial in 1975 and is currently a Senior Vice
President and a member of the Investment Management division with responsibility
for marketing institutional investments. Previously, he was national sales
manager for Boston Financial's retail tax credit funds. Prior to joining Boston
Financial, Mr. Coughlan was an investment broker with Bache & Company and
Reynolds Securities, Inc.
William E. Haynsworth, age 59, is a graduate of Dartmouth College (A.B., 1961)
and Harvard Law School (L.L.B., 1964; L.L.M., 1969). Mr. Haynsworth joined
Boston Financial in 1977 and is a Senior Vice President responsible for the
structuring of real estate investments and the acquisition of property
interests. Prior to joining Boston Financial, Mr. Haynsworth was Acting
Executive Director and General Counsel of the Massachusetts Housing Finance
Agency. He was also the Director of Non-Residential Development of the Boston
Redevelopment Authority and an associate of the law firm of Goodwin, Procter &
Hoar. Mr. Haynsworth is a member of the Executive Committee and the Board of
Directors of the Affordable Housing Tax Credit Coalition. He is a member of the
Senior Leadership Team and the Board of Directors of Boston Financial. Mr.
Haynsworth has over 25 years of real estate experience.
Item 11. Management Remuneration
Neither the directors or officers of Franklin, Inc., nor the partners of
Franklin L.P. nor any other individual with significant involvement in the
business of the Partnership receives any current or proposed remuneration from
the Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Partnership to be the beneficial owner of more than 5%
of the outstanding Units.
The equity securities registered by the Partnership under Section 12(g) of the
Act consist of 50,000 Units, all of which have been sold to the public. Holders
of Units are permitted to vote on matters affecting the Partnership only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Partnership.
As of March 31, 1999, Franklin L.P. owns five (unregistered) Units not included
in the 50,000 Units sold to the public.
Except as described in the preceding paragraph, neither Franklin, Inc., Franklin
L.P., Boston Financial nor any of their executive officers, directors, partners
or affiliates is the beneficial owner of any Units. None of the foregoing
persons possesses a right to acquire beneficial ownership of Units.
The Partnership does not know of any existing arrangement that might at a later
date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
The Partnership was required to pay certain fees to and reimburse certain
expenses of the Managing General Partner or its affiliates (including Boston
Financial) in connection with the organization of the Partnership and the
offering of Units. The Partnership is also required to pay certain fees to and
reimburse certain expenses of the Managing General Partner or its affiliates
(including Boston Financial) in connection with the administration of the
Partnership and its acquisition and disposition of investments in Local Limited
Partnerships. In addition, the General Partners are entitled to certain
Partnership distributions under the terms of the Partnership Agreement. Also, an
affiliate of the General Partners will receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if the Partnership is
still a limited partner at the time of such transaction. All such fees, expenses
and distributions paid in the three years ended March 31, 1999 are described
below and in the sections of the Prospectus entitled "Estimated Use of
Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax
Purposes, Tax Credits and Cash Distributions". Such sections are incorporated
herein by reference. In addition, Boston Financial Property Management, an
affiliate of the Managing General Partner, serves as property management agent
for four of the properties in which the Partnership invested.
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement, as follows:
Organizational fees and expenses and selling expenses
In accordance with the Partnership Agreement, the Partnership was required to
pay certain fees to and reimburse expenses of the General Partners and others in
connection with the organization of the Partnership and the offering of its
Limited Partnership Units. Selling commissions, fees and accountable expenses
related to the sale of the Units totaling $6,164,983 have been charged directly
to Limited Partners' equity. In connection therewith, $3,963,740 of selling
expenses and $2,201,243 of offering expenses incurred on behalf of the
Partnership have been paid to an affiliate of the General Partner. The
Partnership has capitalized an additional $50,000 of organizational costs which
were reimbursed to an affiliate of the General Partner. These costs have been
fully amortized. Total organization and offering expenses, exclusive of selling
commissions and underwriting advisory fees, did not exceed 5.5% of the Gross
Proceeds, and organizational and offering expenses, inclusive of selling
commissions and underwriting advisory fees, did not exceed 15.0% of the Gross
Proceeds. No organizational fees and expenses and selling expenses were paid
during the three years ended March 31, 1999.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Partnership was required to
pay acquisition fees to and reimburse acquisition expenses of the Managing
General Partner or its affiliates for selecting, evaluating, structuring,
negotiating and closing the Partnership's investments in Local Limited
Partnerships. Acquisition fees totaled 8% of the Gross Proceeds. Acquisition
expenses include such expenses as legal fees and expenses, travel and
communications expenses, costs of appraisals and accounting fees and expenses.
Acquisition fees totaling $4,000,000 for the closing of the Partnership's Local
Limited Partnership Investments have been paid to an affiliate of the Managing
General Partner. Acquisition expenses totaling $770,577 were incurred and have
been reimbursed to an affiliate of the Managing General Partner. No acquisition
fees or expenses were paid during the three years ended March 31, 1999.
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries, benefits and administrative expenses. The reimbursements
are based upon the size and complexity of the Partnership's operations.
Reimbursements made in each of the three years ended March 31, 1999 are as
follows:
1999 1998 1997
------------- ------------ ---------
Salaries and benefits expense
reimbursements $ 133,092 $ 162,548 $ 138,995
Property management fees
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, currently manages three properties in which the Partnership has
invested. In the year ended March 31, 1997, BFPM managed four properties. Fees
earned by BFPM in each of the three years ended December 31, 1998 are as
follows:
1998 1997 1996
---------- ---------- --------
Property management fees $ 128,246 $ 136,095 $ 194,057
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the
Partnership, Franklin, Inc. and Franklin Limited Partnership, receive 1% of cash
distributions made to partners. No cash distributions were paid to the General
Partners in each of the three years ended March 31, 1999.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston Financial and its affiliates during each
of the three years ended March 31, 1999 is presented in Note 5 to the Financial
Statements.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedule and the auditors' reports relating thereto are submitted as a
separate section of this Report. See Index on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3)(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the year ended March 31,
1999.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
27. Financial data schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(b) Audited financial statements of Local Limited Partnerships
Coronado Courts
(a)(3)(d) None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
By: 29 Franklin Street, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date: June 25, 1999
------------------------------- -------------
Randolph G. Hawthorne
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Partnership and in the capacities and on the dates indicated:
By: /s/ Randolph G. Hawthorne Date: June 25, 1999
------------------------------- -------------
Randolph G. Hawthorne
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: June 25, 1999
------------------------------- -------------
Michael H. Gladstone
A Managing Director
<PAGE>
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
Annual Report on Form 10-K For the Year Ended March 31, 1999
Index
Page No.
Report of Independent Accountants
For the Years Ended March 31, 1999 and 1998 F-2
Combined Financial Statements
Combined Balance Sheets - March 31, 1999 and 1998 F-3
Combined Statements of Operations - Years Ended
March 31, 1999, 1998 and 1997 F-4
Statements of Changes in Partners' Equity (Deficiency) -
Years Ended March 31, 1999, 1998 and 1997 F-5
Combined Statements of Cash Flows - Years Ended
March 31, 1999, 1998 and 1997 F-6
Notes to Combined Financial Statements F-7
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation F-22
See also Index to Exhibits on Page K-25 for the financial statements of the
Local Limited Partnership included as a separate exhibit in this Annual Report
on Form 10-K.
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Boston Financial Qualified Housing Limited Partnership:
In our opinion, based on our audits and the reports of other auditors, the
combined financial statements listed in the accompanying index present fairly,
in all material respects, the financial position of Boston Financial Qualified
Housing Limited Partnership (the "Partnership") at March 31, 1999 and 1998, and
the results of its operations and its cash flows for each of the three years in
the period ended March 31, 1999, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedule listed in the accompanying index presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related combined financial statements. These financial statements and financial
statement schedule are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We did not audit the financial
statements of certain local limited partnerships for which total assets of $0
and $149,526, are included in these financial statements as of March 31, 1999
and 1998, respectively, and for which net losses of $338,832, $2,321,647 and
$2,041,502 are included in the accompanying financial statements as of March 31,
1999, 1998, 1997, respectively. Those statements were audited by other auditors
whose reports thereon have been furnished to us, and our opinion expressed
herein, insofar as it relates to the amounts included for the Local Limited
Partnerships, is based solely on the reports of the other auditors. We conducted
our audits of these statements in accordance with generally accepted auditing
standard, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable basis for the
opinions expressed above.
/S/PricewaterhouseCoopers LLP
June 18, 1999
Boston, Massachusetts
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
COMBINED BALANCE SHEETS - March 31, 1999 and 1998
<TABLE>
1999 1998
------------- --------
<S> <C> <C>
Assets
Cash and cash equivalents $ 225,822 $ 243,723
Tenant security deposits 4,040 4,731
Accounts receivable, net 2,601 3,000
Marketable securities, at fair value (Notes 1 and 3) 1,935,991 2,025,236
Mortgagee escrow deposits 9,543 6,020
Replacement reserve escrow 6,719 6,398
Bond trusts (Note 7) 122,093 107,572
Investments in Local Limited Partnerships,
net of reserve for valuation of
$685,201 in 1999 and 1998 (Note 4) 1,436,677 1,809,097
Deferred charges, net of accumulated
amortization of $38,693 and $35,469
in 1999 and 1998, respectively 41,921 45,145
Rental property, at cost, net of
accumulated depreciation (Note 6) 1,099,860 1,145,822
Other assets 28,238 32,193
------------- -------------
Total Assets $ 4,913,505 $ 5,428,937
============= =============
Liabilities and Partners' Equity
Accounts payable to affiliates (Note 5) $ 25,799 $ 22,773
Accounts payable and accrued expenses 43,860 27,577
Accrued interest (Note 7) 68,819 68,819
Tenant security deposits payable 5,132 4,731
Bonds payable (Note 7) 1,210,000 1,210,000
------------- -------------
Total Liabilities 1,353,610 1,333,900
------------- -------------
Minority interest in Local Limited Partnership 58,321 58,589
General, Initial and Investor Limited Partners' Equity 3,489,132 4,031,390
Net unrealized gains on marketable securities 12,442 5,058
------------- -------------
Total Partners' Equity 3,501,574 4,036,448
------------- -------------
Total Liabilities and Partners' Equity $ 4,913,505 $ 5,428,937
============= =============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
<TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
1999 1998 1997
-------------- ------------- --------
<S> <C> <C> <C>
Revenue:
Rental $ 224,199 $ 228,680 $ 227,492
Investment, net (Note 3) 129,760 146,437 151,516
Other 111,824 39,094 56,783
-------------- ------------- -------------
Total Revenue 465,783 414,211 435,791
-------------- ------------- -------------
Expenses:
General and administrative (includes
reimbursements to an affiliate of $133,092,
$162,548 and $138,995 in 1999, 1998 and
1997, respectively) (Note 5) 400,926 276,279 207,292
Bad debt expense - 52,665 -
Rental operations, exclusive of depreciation 99,894 104,426 111,221
Interest (Note 7) 118,185 118,057 118,095
Depreciation (Note 6) 44,682 45,459 42,547
Amortization (Note 2) 32,626 66,816 100,691
Provision for valuation of
investments in Local
Limited Partnerships (Note 4) - 356,398 (137,073)
-------------- ------------- -------------
Total Expenses 696,313 1,020,100 442,773
-------------- ------------- -------------
Loss before equity in losses
of Local Limited Partnerships and
minority interest (230,530) (605,889) (6,982)
Equity in losses of Local Limited
Partnerships, including income of
$822,529 in 1997 for prior year
adjustments (Note 4) (311,996) (2,321,647) (2,041,502)
Minority interest in losses of
Local Limited Partnership 268 258 372
-------------- ------------- -------------
Net Loss $ (542,258) $ (2,927,278) $ (2,048,112)
============== ============= =============
Net Loss allocated
General Partners $ (5,423) $ (29,273) $ (20,481)
Limited Partners (536,835) (2,898,005) (2,027,631)
-------------- ------------- -------------
$ (542,258) $ (2,927,278) $ (2,048,112)
============== ============= =============
Net Loss per Limited Partnership Unit
(50,000 Units) $ (10.74) $ (57.96) $ (40.55)
============== ============= =============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1996 $ (344,429) $ 4,648 $ 9,346,561 $ (37) $ 9,006,743
------------ -------- ------------ ------------ ------------
Comprehensive Loss:
Net change in net unrealized
losses on marketable
securities available
for sale (Note 3) - - - (12,943) (12,943)
Net Loss (20,481) - (2,027,631) - (2,048,112)
------------ -------- ------------ ------------ ------------
Comprehensive Loss (20,481) - (2,027,631) (12,943) (2,061,055)
------------ -------- ------------ ------------ ------------
Balance at March 31, 1997 (364,910) 4,648 7,318,930 (12,980) 6,945,688
------------ -------- ------------ ------------ ------------
Comprehensive Income (Loss):
Net change in net unrealized
losses on marketable
securities available
for sale (Note 3) - - - 18,038 18,038
Net Loss (29,273) - (2,898,005) - (2,927,278)
------------ -------- ------------ ------------ ------------
Comprehensive Income (Loss) (29,273) - (2,898,005) 18,038 (2,909,240)
------------ -------- ------------ ------------ ------------
Balance at March 31, 1998 (394,183) 4,648 4,420,925 5,058 4,036,448
------------ -------- ------------ ------------ ------------
Comprehensive Income (Loss):
Net change in net unrealized
gains on marketable
securities available
for sale (Note 3) - - - 7,384 7,384
Net Loss (5,423) (536,835) - (542,258)
------------ -------- ------------ -------- ------------
Comprehensive Income (Loss) (5,423) - (536,835) 7,384 (534,874)
------------ -------- ------------ ------------ ------------
Balance at March 31, 1999 $ (399,606) $ 4,648 $ 3,884,090 $ 12,442 $ 3,501,574
============ ======== ============ ============ ============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
1999 1998 1997
------------- ------------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (542,258) $ (2,927,278) $ (2,048,112)
Adjustments to reconcile net loss to net
cash used for operating activities:
Equity in losses of Local Limited Partnerships 311,996 2,321,647 2,041,502
Provision for valuation of investments in
Local Limited Partnerships - 356,398 (137,073)
Bad debt expense - 52,665 -
(Gain) loss on sales and maturities of
marketable securities (4,990) (1,711) 3,072
Cash distribution income included in cash
distributions from Local Limited Partnerships (97,075) (21,181) (41,631)
Depreciation and amortization 77,308 112,275 143,238
Minority interest in losses of Local Limited
Partnership (268) (258) (372)
Increase (decrease) in cash arising from
changes in operating assets and
liabilities:
Tenant security deposits 691 (23) (642)
Mortgagee escrow deposits (3,523) 4,210 (10,230)
Replacement reserve escrow (321) (306) (276)
Other assets 3,955 1,395 33,895
Accounts payable to affiliates 3,026 (12,017) 18,027
Accounts payable and accrued expenses 16,682 (18,769) (47,928)
Tenant Security deposits payable 401 114 1,681
------------- ------------- -------------
Net cash used for operating activities (234,376) (132,839) (44,849)
------------- ------------- -------------
Cash flows from investing activities:
Purchases of marketable securities (1,594,531) (2,292,303) (1,234,961)
Proceeds from sales and maturities
of marketable securities 1,696,150 2,209,848 1,294,295
Advances to Local Limited
Partnerships - (3,000) (321,650)
Cash distributions received from Local
Limited Partnerships 129,377 30,116 163,216
Purchase of rental property and equipment - - (65,285)
Bond trust deposits (14,521) (21,363) (16,069)
------------- ------------- -------------
Net cash provided by (used for) investing activities 216,475 (76,702) (180,454)
------------- ------------- -------------
Net decrease in cash and cash
equivalents (17,901) (209,541) (225,303)
Cash and cash equivalents, beginning 243,723 453,264 678,567
------------- ------------- -------------
Cash and cash equivalents, ending $ 225,822 $ 243,723 $ 453,264
============= ============= =============
Supplemental disclosure:
Cash paid for interest $ 118,185 $ 118,057 $ 118,095
============= ============= =============
The accompanying notes are an integral part of these combined financial statements,
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS
1. Organization
Boston Financial Qualified Housing Tax Credits Limited Partnership (the
"Partnership") was formed on January 22, 1987 under the laws of the State of
Delaware for the primary purpose of investing, as a limited partner, in other
limited partnerships ("Local Limited Partnerships"), each of which owns and
operates apartment complexes benefiting from some form of federal, state or
local assistance program and each of which qualifies for low-income housing tax
credits. The Partnership's objectives are to: (i) provide current tax benefits
in the form of tax credits which qualified investors may use to offset their
federal income tax liability; (ii) preserve and protect the Partnership's
capital; (iii) provide limited cash distributions from property operations which
are not expected to constitute taxable income during Partnership operations; and
iv) provide cash distributions from sale or refinancing transactions. The
General Partners of the Partnership are 29 Franklin Street Inc., which serves as
the Managing General Partner, and Franklin 29 Limited Partnership, which serves
as the Initial Limited Partner. Both of the General Partners are affiliates of
The Boston Financial Group Limited Partnership ("Boston Financial"). The fiscal
year of the Partnership ends on March 31.
The Partnership's partnership agreement ("Partnership Agreement") authorized the
sale of up to 50,000 units of Limited Partnership Interest ("Units") at $1,000
per Unit, adjusted for certain discounts. The Partnership raised $49,963,740
("Gross Proceeds"), net of discounts of $36,260, through the sale of 50,000
Units. Such amounts exclude five unregistered Units previously acquired for
$5,000 by the Initial Limited Partner, which is also one of the General
Partners. The offering of Units terminated on April 29, 1988.
Generally, profits, losses, tax credits and cash flows from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners after certain priority payments.
Under the terms of the Partnership Agreement, the Partnership originally
designated 5% of Gross Proceeds from the sale of Units as a reserve for working
capital of the Partnership and contingencies related to ownership of Local
Limited Partnership interests. The Managing General Partner may increase or
decrease such amounts from time to time, as it deems appropriate. As of March
31, 1999, the Managing General Partner has designated approximately $1,543,000
of cash, cash equivalents and marketable securities as such Reserve.
2. Significant Accounting Policies
Basis of Presentation and Combination
The Partnership accounts for its investments in Local Limited Partnerships, with
the exception of Hughes Apartments, using the equity method of accounting
because the Partnership does not have a majority control over the major
operating and financial policies of the Local Limited Partnerships in which it
invests. Under the equity method, the investment is carried at cost, adjusted
for the Partnership's share of income or loss of the Local Limited Partnership,
additional investments in and cash distributions from the Local Limited
Partnerships. Equity in income or loss of the Local Limited Partnerships is
included currently in the Partnership's operations. The Partnership has no
obligation to fund liabilities of the Local Limited Partnership beyond its
investment and therefore a Limited Partnership's investment will not be carried
below zero. To the extent that equity losses are incurred or distributions
received when the Partnership's respective carrying value of the Local Limited
Partnership has been reduced to a zero balance, the losses will be suspended to
be used against future income, and distributions received will be recorded as
income. In addition, valuation reserves are adjusted for equity losses in
subsequent years.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the
Partnership. These fees and expenses are included in the Partnership's
Investments in Local Limited Partnerships and are being amortized on a
straight-line basis over 35 years.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation and Combination (continued)
The Managing General Partner has elected to report results of the Local Limited
Partnerships on a 90 day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying combined
financial statements is as of December 31, 1998, 1997 and 1996.
On October 27, 1995, an affiliate of the Partnership's Managing General
Partners, BF Harbour View, Inc., became the Local General Partner of Hughes
Apartments, Ltd. ("Hughes"), a Local Limited Partnership in which the
Partnership has invested. Since the Local General Partner of Hughes is an
affiliate of the Partnership and has a controlling financial interest in the
Local Limited Partnership, these combined financial statements include financial
activity of Hughes for the years ended December 31, 1998, 1997 and 1996. All
significant intercompany balances and transactions have been eliminated.
The Partnership has elected to report the results of Hughes on a 90 day lag
basis, consistent with the presentation of the financial information of all
Local Limited Partnerships.
The Partnership recognizes a decline in the carrying value of its investments in
Local Limited Partnerships when there is evidence of a non-temporary decline in
the recoverable amount of the investment. There is a possibility that the
estimates relating to reserves for non-temporary declines in the carrying value
of investments in Local Limited Partnerships may be subject to material near
term adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is
subject to risks inherent in the ownership of property which are beyond its
control, such as fluctuations in occupancy rates and operating expenses,
variations in rental schedules, proper maintenance and continued eligibility for
tax credits. If the cost of operating a property exceeds the rental income
earned thereon, the Partnership may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
Cash and Cash Equivalents
Cash and cash equivalents consist of short-term money market instruments with
original maturities of ninety days or less at acquisition and approximate fair
value.
Marketable Securities
Marketable securities consist primarily of U.S. treasury instruments and various
asset-backed investment vehicles. The Partnership's marketable securities are
classified as "Available for Sale" securities and reported at fair value as
reported by the brokerage firm at which the securities are held. All marketable
securities have fixed maturities. Realized gains and losses from the sales of
securities are based on the specific identification method. Unrealized gains and
losses are excluded from earnings and reported as a separate component of
partners' equity.
Effect of Recently Issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Partnership adopted the new standard effective April 1, 1998 and its adoption
did not have a significant effect on the Partnership's financial position or
results of operations. The only component of the Partnership's other accumulated
comprehensive income is net unrealized gains and losses on marketable
securities.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Deferred Charges
Bond financing costs incurred in connection with financing the construction of
Hughes have been capitalized and are being amortized over the 25-year term of
the bonds using the straight line method of amortization.
Rental Property
Real estate and personal property of Hughes are recorded at cost. Valuation
allowances are established when the carrying value of such assets exceeds their
estimated receivable amounts. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets.
In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
the Partnership has implemented policies and practices for assessing impairment
of its real estate assets and investments in Local Limited Partnerships. Each
asset is analyzed by real estate experts to determine if an impairment indicator
exists. If so, the carrying value is compared to the undiscounted future cash
flows expected to be derived from the asset and, if there is a significant
impairment in value, a provision to write down the asset to fair value will be
charged against income.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Rental Income
Rental income, principally from short term leases on apartment units, is
recognized as income as rentals become due.
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value, investments accounted for under the
equity method and all nonfinancial assets such as real property. The fair values
of the Partnership's assets and liabilities which qualify as financial
instruments under SFAS No. 107, except the bond trusts (see Note 7), approximate
their carrying amounts in the accompanying balance sheets.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
the obligation of the partners of the Partnership.
Reclassifications
Certain amounts in the prior year financial statements have been reclassified
herein to conform with the current year presentation.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
<TABLE>
3. Marketable Securities
A summary of marketable securities is as follows:
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by the
US Treasury and
other US government
corporations and agencies $ 1,793,226 $ 11,447 $ (1,861) $ 1,802,812
Mortgage backed securities 130,323 2,856 - 133,179
------------- ------------- ------------- -------------
Marketable securities
at March 31, 1999 $ 1,923,549 $ 14,303 $ (1,861) $ 1,935,991
============= ============= ============= =============
Debt securities issued by the
US Treasury and
other US government
corporations and agencies $ 1,836,517 $ 6,426 $ (3,884) $ 1,839,059
Mortgage backed securities 183,661 2,516 - 186,177
------------- ------------- ------------- -------------
Marketable securities
at March 31, 1998 $ 2,020,178 $ 8,942 $ (3,884) $ 2,025,236
============= ============= ============= =============
</TABLE>
The contractual maturities at March 31, 1999 are as follows:
Fair
Cost Value
Due in less than one year $ 1,393,880 $ 1,403,296
Due in one year to five years 399,346 399,516
Mortgage backed securities 130,323 133,179
------------ -----------
$1,923,549 $ 1,935,991
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of securities were approximately $302,000, $1,652,000 and $804,000 during the
fiscal years ended March 31, 1999, 1998 and 1997, respectively. Proceeds from
the maturities of marketable securities were approximately $1,394,000, $558,000
and $490,000 during the fiscal years ended March 31, 1999, 1998 and 1997,
respectively. Included in investment income are gross gains of $7,440, $7,098
and $4,492 and gross losses of $2,450, $5,387 and $7,564 that were realized on
these sales during the years ended March 31, 1999, 1998 and 1997, respectively.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships
The Partnership has acquired limited partnership interests in thirty-three Local
Limited Partnerships, excluding Hughes, which own and operate multi-family
housing complexes, all of which are government-assisted. The Partnership, as
Investor Limited Partner pursuant to the various Local Limited Partnership
Agreements which contain certain operating and distribution restrictions, has
acquired a 99% interest in the profits, losses, tax credits and cash flows from
operations of each of the Local Limited Partnerships, with the exception of
Barrington Manor, Graver Inn, 600 Dakota and Duluth which are 49.5%. Upon
dissolution, proceeds will be distributed according to each respective
partnership agreement.
The following is a summary of Investments in Local Limited Partnerships,
excluding Hughes, at March 31:
<TABLE>
1999 1998 1997
------------- ------------- --------
<S> <C> <C> <C>
Capital contributions to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
Partnerships $ 36,256,165 $ 36,256,165 $ 36,256,165
Cumulative equity in losses of Local
Limited Partnerships (excluding cumulative
unrecognized losses of $27,730,385, $22,515,719
and $12,515,308 in 1999, 1998 and
1997, respectively) (35,977,227) (35,762,306) (33,461,841)
Cumulative cash distributions received
from Local Limited Partnerships (1,731,926) (1,602,549) (1,572,433)
------------- ------------- -------------
Investments in Local Limited Partnerships
before adjustment (1,452,988) (1,108,690) 1,221,891
Excess investment costs over the
underlying net assets acquired:
Acquisition fees and expenses 4,725,764 4,725,764 4,725,764
Accumulated amortization of acquisition
fees and expenses (1,150,898) (1,122,776) (1,060,464)
------------- -------------- -------------
Investments in Local Limited Partnerships 2,121,878 2,494,298 4,887,191
Reserve for valuation of investments in
Local Limited Partnerships (685,201) (685,201) (328,803)
------------- ------------- -------------
$ 1,436,677 $ 1,809,097 $ 4,558,388
============= ============= =============
</TABLE>
The 1998, 1997 and 1995 financial statements of 2225 New York Avenue, LTD ("2225
New York Avenue"), a Local Limited Partnership in which the Partnership
invested, were prepared assuming that 2225 New York Avenue will continue as a
going concern. 2225 New York Avenue, which owns Pebble Creek in Arlington,
Texas, incurred significant net losses in 1998, 1997 and 1996 and has severe
liquidity problems and recurring cash deficits. These factors, among others,
raise substantial doubt as to 2225 New York Avenue's ability to continue as a
going concern. As such, the Partnership provided a reserve for valuation of
$1,885,841 against its investment in 2225 New York Avenue at March 31, 1992.
This reserve has been adjusted in the financial statements to reflect the
Partnership's share of the net losses of 2225 New York Avenue for the years
ended December 31, 1993 through 1998. Equity in losses of Local Limited
Partnerships for the years ended March 31, 1998, 1997 and 1996 includes
$725,997, $55,803 and $449,345, respectively, related to 2225 New York Ave. The
reserve for valuation of investments in Local Limited Partnerships has been
reduced by these amounts. As a result, these losses have no effect on the
Partnership's Net Loss.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
The Partnership has also provided a reserve for valuation for its investment in
five Local Limited Partnerships, Graver Inn, Sierra Pointe, Barrington Manor,
600 Dakota and Duluth, because there is evidence of a non-temporary decline in
the recoverable amount of these investments.
Included in cumulative equity in losses of Local Limited Partnerships is
$822,529 of income recognized during the year ended March 31, 1997 as a result
of a change in accounting method of two Local Limited Partnerships.
Summarized financial information as of December 31, 1998, 1997 and 1996 (due to
the Partnership's policy of reporting financial information of its Local Limited
Partnership interests on a 90 day lag basis) of all the Local Limited
Partnerships, excluding Hughes, in which the Partnership has invested as of that
date is as follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
1998 1997 1996
---------------- ---------------- ----------
<S> <C> <C> <C>
Assets:
Investment property, net $ 92,363,668 $ 94,727,330 $ 104,825,788
Current assets 2,212,892 2,033,143 2,686,076
Other assets 7,300,351 9,048,810 9,247,079
---------------- --------------- ----------
Total Assets $ 101,876,911 $ 105,809,283 $ 116,758,943
================ ================ ===============
Liabilities and Partners' Deficit:
Current liabilities (includes current portion
of long-term debt) $ 18,064,685 $ 17,747,512 $ 14,381,389
Other debt 6,392,766 4,551,240 15,883,277
Long-term debt 109,959,470 110,449,979 100,798,039
---------------- ---------------- ---------------
Total Liabilities 134,416,921 132,748,731 131,062,705
---------------- ---------------- ---------------
Partners' Deficit:
Partnership's Deficit (32,151,518) (26,663,482) (14,087,983)
Other Partners' Deficit (388,492) (275,966) (215,779)
---------------- ---------------- ---------------
Total Partners' Deficit (32,540,010) (26,939,448) (14,303,762)
---------------- ---------------- ---------------
Total Liabilities and Partners' Deficit $ 101,876,911 $ 105,809,283 $ 116,758,943
================ ================ ===============
Summarized Income Statements - for
the years ended December 31,
1998 1997 1996
----------------- ---------------------- -------
Rental and other revenue $ 20,444,984 $ 19,707,452 $ 19,530,795
----------------- --------------- ---------------
Expenses:
Interest 9,686,187 9,720,959 9,754,129
Operating 11,869,008 17,741,869 10,860,840
Depreciation and amortization 4,374,717 4,671,464 4,717,555
----------------- --------------- ---------------
Total Expenses 25,929,912 32,134,292 25,332,524
----------------- --------------- ---------------
Net Loss $ (5,484,928) $ (12,426,840) $ (5,801,729)
================= =============== ===============
Partnership's share of Net Loss (1996 includes
an adjustment relating to prior
year as discussed above) $ (5,429,527) $ (12,300,877) $ (4,925,359)
================= =============== ===============
Other partners' share of Net Loss $ (55,401) $ (125,963) $ (110,302)
================= =============== ===============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
For the years ended March 31, 1999, 1998 and 1997, the Partnership has not
recognized $5,214,666, $10,000,411 and $2,925,488, respectively, in equity in
losses relating to twenty Local Limited Partnerships where cumulative equity in
losses and cumulative distributions exceeded its total investments.
The Partnership's deficit as reflected by the Local Limited Partnerships of
$32,151,518 differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $1,452,988 principally because: a) the
Partnership has not recognized $27,730,385 of equity in losses relating to Local
Limited Partnerships whose cumulative equity in losses and cumulative cash
distributions exceeded their total investments and b) the purchase price paid to
the original Limited Partners by the Partnership has not been reflected in the
balance sheets of certain Local Limited Partnerships.
5. Transactions with Affiliates
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Partnership's operating expenses. Included in general and administrative
expenses for the years ended March 31, 1999, 1998 and 1997 is $133,092, $162,548
and $138,995, respectively, that has been paid or is payable by the Partnership
as reimbursement for salaries and benefits. At March 31, 1999 and 1998, $25,799
and $22,773, respectively, is payable to an affiliate of the Managing General
Partner.
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, currently manages Windsor Court, Rolling Green and Terrace,
three properties in which the Partnership has invested. (In the year ended
December 31, 1996, BFPM also managed Sierra Vista.) Included in operating
expenses in the summarized income statements in Note 4 to the Financial
Statements is $128,246, $136,095 and $194,057 of fees earned by BFPM for the
years ended December 31, 1998, 1997 and 1996, respectively.
6. Rental Property
Real estate and personal property belonging to Hughes are recorded at cost, the
components of which, excluding certain acquisition costs of $31,895 and $33,175
as of December 31, 1998 and 1997, respectively, are as follows at December 31:
<TABLE>
1998 1997
------------ ---------
<S> <C> <C>
Land $ 29,008 $ 29,008
Building and improvements 1,490,659 1,490,659
Equipment and furnishings 26,817 26,817
------------ ------------
1,546,484 1,546,484
Less: accumulated depreciation (478,519) (433,837)
------------ ------------
Total $ 1,067,965 $ 1,112,647
============ ============
</TABLE>
7. Bonds Payable
Hughes financed the construction of the project through the sale of 25 year
Industrial Development Revenue Bonds (the "Bonds") by the city of Mandan, North
Dakota and leased the property from the city for rental equal to the sum of the
annual principal payment and semiannual interest payments on the Bonds. The
Bonds bear interest at 9.75%. The leased property is included as an asset of
Hughes and the bonds have been recorded as a direct obligation of Hughes.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
7. Bonds Payable (continued)
The bond financing documents require that a portion of the bond proceeds be
deposited into a bond reserve trust account and that only interest income on the
account can be used for operations. The funds can be withdrawn only by the bond
trustee in the event that there is insufficient cash in the bond account to pay
the annual bond payments. If the bond trustee does draw on the bond reserve
trust account, the amount withdrawn must be replaced or Hughes will be
considered in default on the remaining outstanding bonds. The bond trustee
withdrew funds from this account in 1996. The amounts withdrawn have not been
replaced, and consequently, Hughes is in default of its lease agreement.
The bond trust account is used to receive deposits from Hughes for principal and
interest payments on the bonds. The trustee makes all principal and interest
payments on the bonds from this trust account. Principal payments are currently
not being made.
Effective October 27, 1995, an affiliate of the Partnership's Managing General
Partner replaced the Local General Partner of Hughes and successfully negotiated
a Forbearance Agreement with the trustee whereby the mortgage arrears and
capital repairs would be funded from Partnership and bond reserves. The
agreement calls for interest payments on June 1 and December 1, annually,
through 2005 of $58,987.50 at each payment date. On December 1, 2005, all
arrears are due and payable.
Based on the unique terms of the financing and lack of available market data for
agreements with similar characteristics, management believes it is not
practicable to estimate the fair value of this arrangement.
The balances in the bond trust accounts required to be maintained pursuant to
the bond financing documents at December 31, 1998 and 1997 are as follows:
1998 1997
----------- --------
Bond reserve trust $ 84,075 $ 79,358
Bond trust 38,018 28,214
----------- ----------
$ 122,093 $ 107,572
=========== ===========
The Bond reserve trust account consists of investments in US Treasury notes,
which are considered held to maturity and are due in January 1999. Investment
cost as of December 31, 1998 and 1997 is $84,075 and $79,358, respectively. Fair
value as of December 31, 1998 and 1997 is $84,835 and $80,413, respectively.
Unrealized gains of $760 and $1,055 in 1998 and 1997, respectively, have not
been recognized, as the notes will be held to maturity.
8. Transfer of Interests in Local Limited Partnerships
On November 10, 1997, the Managing General Partner transferred 50% of its
interest in capital and profits of Barrington Manor, Graver Inn, 600 Dakota and
Duluth to the local general partner. Included in this transfer is a put option.
The put option grants the Managing General Partner the right to put the
Partnership's remaining interest to the local general partner anytime after one
year has elapsed. For financial reporting purposes, the Partnership has written
down the carrying value of these investments in Local Limited Partnerships to
zero, because it is unknown as to whether the Partnership will be able to
recover its remaining invested balances. The Partnership will retain its full
share of tax credits until such time as the remaining interest is put to the
local general partner.
As previously reported, Boulevard Commons, located in Chicago, Illinois, is
experiencing operating deficits due to expenses increasing because of high
turnover at the property, security issues and increasing maintenance and capital
needs. As a result of these issues, Boulevard Common's mortgage went into
default. In October 1998, affiliates of the Managing General Partner replaced
the Local General Partners and a new unaffiliated non profit general partner.
The interest of the original Local General Partners was converted to a special
limited partner interest with no right to participate in the management of the
Local Limited Partnership. Further, the Managing General Partner
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
8. Transfer of Interests in Local Limited Partnerships (continued)
consummated the transfer of 48% of the Partnership's capital and profits in the
properties to the new Local General Partner. The Managing General Partner has
the right to transfer the Partnership's remaining interest to the New Local
General Partner any time after one year has elapsed. Occupancy as of December
31, 1999 was 82%.
9. Subsequent Events
On April 9, 1999, due to concerns over the financial viability of 600 Dakota and
Graver Inn and to avoid the potential risk of recapture of tax credits
associated with the properties, the Managing General Partner exercised its right
to transfer the Partnership's remaining interest in 600 Dakota and Graver Inn to
the Local General Partner. This transfer will not trigger a recapture event for
the Partnership nor have any impact on the Partnership's financial statements.
However, for tax purposes, this event will result in both Section 1231 gain and
cancellation of indebtedness income for the 1999-tax year.
10. Federal Income Taxes
A reconciliation of the loss reported in the Combined Statements of Operations
for the fiscal years ended March 31, 1999, 1998 and 1997 to the loss reported
for federal income tax purposes for the years ended December 31, 1998, 1997 and
1996 is as follows:
<TABLE>
1999 1998 1997
-------------- ------------ ---------
<S> <C> <C> <C>
Net Loss per Statements of Operations $ (542,258) $ (2,927,278) $ (2,048,112)
Adjustment to reflect March 31, fiscal
year-end to December 31,
taxable year-end (38,297) (291,494) 230,663
Provision for valuation of investments in
Local Limited Partnerships not deductible
for tax purposes - 356,398 (458,723)
Amortization of acquisition fees and
expenses for tax purposes over
amortization for financial
reporting purposes (144,074) (109,884) (94,149)
Adjustment for equity in losses of Local
Limited Partnerships for financial
reporting purposes over (under)
equity in losses for tax purposes (1,252,301) 5,611,504 (1,829,071)
Equity in losses of Local Limited
Partnerships not recognized
for financial reporting purposes (5,214,666) (10,000,411) (2,925,488)
Other (24,263) 353,134 (22,963)
-------------- ------------ ------------
Net Loss for federal income tax purposes $ (7,215,859) $ (7,008,031) $(7,147,843)
============== ============ ===========
</TABLE>
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax purposes as of March 31, 1999 are as follows:
<TABLE>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 1,436,677 $ (33,064,295) $ (34,500,972)
============= ============= =============
Other assets $ 3,476,828 $ 8,805,232 $ (5,328,404)
============= ============= =============
Liabilities $ 1,353,610 $ 35,076 $ 1,318,534
============= ============= =============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
10. Federal Income Taxes (continued)
The differences in assets and liabilities of the Partnership for financial
reporting purposes are primarily attributable to the following: (i) for
financial reporting purposes, the Partnership combines the financial statements
of one Local Limited Partnership with its financial statements; for tax
reporting purposes, this entity is carried on the equity method; (ii) the
cumulative equity in losses from Local Limited Partnerships, including the
Combined Entity, for tax reporting purposes is approximately $6,683,000 greater
than for financial reporting purposes, including approximately $27,730,000 of
losses the Partnership has not recognized relating to twenty Local Limited
Partnerships whose cumulative equity in losses exceeded its total investment;
(iii) the amortization of acquisition fees for tax reporting purposes exceeds
financial reporting purposes by approximately $664,000; (iv) approximately
$7,000 of cash distributions received from Local Limited Partnerships during the
quarter ended March 31, 1999 are not included in the Partnership's Investments
in Local Limited Partnerships for tax reporting purposes at December 31, 1998;
and (v) organizational and offering costs of approximately $6,165,000 that have
been capitalized for tax reporting purposes are charged to Limited Partners'
equity for financial reporting purposes.
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax purposes as of March 31, 1998 are as follows:
<TABLE>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 1,809,097 $ (25,958,295) $ (27,767,392)
============= ============= =============
Other assets $ 3,619,840 $ 8,908,049 $ (5,288,209)
============= ============= =============
Liabilities $ 1,333,900 $ 28,034 $ 1,305,866
============= ============= =============
</TABLE>
The differences in assets and liabilities of the Partnership for financial
reporting purposes are primarily attributable to the following: (i) for
financial reporting purposes, the Partnership combines the financial statements
of one Local Limited Partnership with its financial statements; for tax
reporting purposes, this entity is carried on the equity method; (ii) the
cumulative equity in losses from Local Limited Partnerships, including the
Combined Entity, for tax reporting purposes is approximately $5,334,000 greater
than for financial reporting purposes, including approximately $22,516,000 of
losses the Partnership has not recognized relating to twenty Local Limited
Partnerships whose cumulative equity in losses exceeded its total investment;
(iii) the amortization of acquisition fees for tax reporting purposes exceeds
financial reporting purposes by approximately $520,000; (iv) approximately
$7,000 of cash distributions received from Local Limited Partnerships during the
quarter ended March 31, 1998 are not included in the Partnership's Investments
in Local Limited Partnerships for tax reporting purposes at December 31, 1997;
and (v) organizational and offering costs of approximately $6,165,000 that have
been capitalized for tax reporting purposes are charged to Limited Partners'
equity for financial reporting purposes.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
11. Supplemental Combining Schedules
Balance Sheets
<TABLE>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined (A)
Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 221,758 $ 4,064 $ - $ 225,822
Tenant security deposits - 4,040 - 4,040
Accounts receivable, net 56,490 - (53,889) 2,601
Marketable securities, at fair value 1,935,991 - - 1,935,991
Mortgagee escrow deposits - 9,543 - 9,543
Replacement reserve escrow - 6,719 - 6,719
Bond trusts - 122,093 - 122,093
Investments in Local Limited
Partnerships, net 1,321,369 - 115,308 1,436,677
Deferred charges, net - 41,921 - 41,921
Rental property, at cost, net of
accumulated depreciation - 1,067,965 31,895 1,099,860
Other assets 21,920 6,318 - 28,238
---------------- -------------- ------------- ------------
Total Assets $ 3,557,528 $ 1,262,663 $ 93,314 $ 4,913,505
================ ============== ============= ============
Liabilities and Partners' Equity
Accounts payable to affiliates $ 25,799 $ 53,889 $ (53,889) $ 25,799
Accounts payable and accrued
expenses 30,155 13,705 - 43,860
Accrued interest - 68,819 - 68,819
Tenant security deposits payable - 5,132 - 5,132
Bonds payable - 1,210,000 - 1,210,000
---------------- -------------- ------------- ------------
Total Liabilities 55,954 1,351,545 (53,889 1,353,610
------ ----------- --------------- -------------
Minority interest in Local Limited
Partnership - - 58,321 58,321
---------------- -------------- ------------- ------------
General, Initial and Investor
Limited Partners' Equity 3,489,132 (88,882) 88,882 3,489,132
Net unrealized gains on marketable
securities 12,442 - - 12,442
---------------- -------------- ------------- ------------
Total Partners' Equity 3,501,574 (88,882) 88,882 3,501,574
---------------- -------------- ------------- ------------
Total Liabilities and
Partners' Equity $ 3,557,528 $ 1,262,663 $ 93,314 $ 4,913,505
================ ============== ============= ============
</TABLE>
(A) As of March 31, 1999.
(B) As of December 31, 1998 - See Note 2.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
11. Supplemental Combining Schedules (continued)
Statements of Operations
<TABLE>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined (A)
Revenue:
<S> <C> <C> <C> <C>
Rental $ - $ 224,199 $ - $ 224,199
Investment 121,754 8,006 - 129,760
Other 104,880 6,944 - 111,824
---------------- ------------- ------------ ---------------
Total Revenue 226,634 239,149 - 465,783
---------------- ------------- ------------ ---------------
Expenses:
General and administrative 400,926 - - 400,926
Rental operations, exclusive
of depreciation - 99,894 - 99,894
Interest - 118,185 - 118,185
Depreciation - 44,682 - 44,682
Amortization 29,402 3,224 - 32,626
---------------- ------------- ------------ ---------------
Total Expenses 430,328 265,985 - 696,313
---------------- ------------- ------------ ---------------
Loss before equity in losses
of Local Limited Partnerships
and minority interest (203,694) (26,836) - (230,530)
Equity in losses of Local
Limited Partnerships (338,564) - 26,568 (311,996)
Minority interest in losses of
Local Limited Partnership - - 268 268
---------------- ------------- ------------ ---------------
Net Loss $ (542,258) $ (26,836) $ 26,836 $ (542,258)
================ ============= ============ ===============
</TABLE>
(A) For the year ended March 31, 1999. (B) For the year ended December 31, 1998
- - See Note 2.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
11. Supplemental Combining Schedules (continued)
Statements of Cash Flows
<TABLE>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined (A)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (542,258) $ (26,836) $ 26,836 $ (542,258)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Equity in losses of Local Limited
Partnerships 338,564 - (26,568) 311,996
Gain on sale of marketable securities (4,990) - - (4,990)
Cash distribution income included in
cash distributions from
Local Limited Partnerships (97,075) - - (97,075)
Depreciation and amortization 29,402 47,906 - 77,308
Minority interest in losses of Local
Limited Partnership - - (268) (268)
Increase (decrease) in cash arising
from changes in operating assets
and liabilities:
Tenant security deposits - 691 - 691
Mortgagee escrow deposits - (3,523) - (3,523)
Replacement reserve escrow - (321) - (321)
Other assets 3,859 96 - 3,955
Accounts payable to affiliates 3,026 - - 3,026
Accounts payable and accrued
expenses 18,975 (2,293) - 16,682
Tenant security deposits payable - 401 - 401
------------ ------------ ------------------ -------
Net cash provided by (used for)
operating activities (250,497) 16,121 - (234,376)
------------ ------------ ------------------ ----------
Cash flows from investing activities:
Purchases of marketable securities (1,594,531) - - (1,594,531)
Proceeds from sales and maturities
of marketable securities 1,696,150 - - 1,696,150
Cash distributions received from
Local Limited Partnerships 129,377 - - 129,377
Bond trust deposits - (14,521) - (14,521)
------------ ------------ ------------------ -----------
Net cash provided by (used for)
investing activities 230,996 (14,521) - 216,475
------------ ------------ ------------------ -----------
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
11. Supplemental Combining Schedules (continued)
Statements of Cash Flows (continued)
<TABLE>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined (A)
<S> <C> <C> <C> <C>
Net increase (decrease) in cash and
cash equivalents (19,501) 1,600 - (17,901)
Cash and cash equivalents, beginning 241,259 2,464 - 243,723
------------ ------------ ----------- -----------
Cash and cash equivalents, ending $ 221,758 $ 4,064 $ - $ 225,822
============ ============ ========== ==============
(A) For the year ended March 31, 1999. (B) For the year ended December 31, 1998
- - See Note 2.
</TABLE>
<PAGE>
Boston Financial Qualified Housing Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation of Property owned by
Local Limited Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
GROSS AMOUNT AT
WHICH CARRIED
AT DECEMBER 31,
COST OF INTEREST AT 1998
AQUISITION DATE
---------------------------- -----------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION IMPROVEMENTS
- ----------- ----- --------- ---- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Barrington Manor 18 $595,000 $30,000 $555,638 $242,106 $32,011
Fargo, ND
Bingham Housing 24 1,160,527 48,934 362,172 1,048,144 65,754
Associates
Bingham, ME
Birmingham Village 24 1,155,244 61,900 190,424 1,166,788 61,900
Randolph, ME
Bittersweet Lane 35 2,383,518 69,300 2,884,207 379,824 74,542
Randolph , MA
Coronodo Courts 145 3,696,251 452,331 4,995,460 (386) 452,331
Douglas, AZ
Elmore Hotel 60 3,186,932 12,500 2,976,388 515,543 12,500
Great Falls, MT
Graver Inn 70 1,911,129 30,000 2,208,960 843,461 40,914
Fargo, ND
Hazel Winthrop Apartments 30 2,110,234 45,000 2,548,540 (113,453) 45,000
Chicago, IL
Hughes Apartments 47 1,210,000 28,000 1,260,066 258,418 29,008
Mandan, ND
Lakeview Heights 83 2,765,967 217,588 2,896,224 333,289 217,588
Clearfield, UT
Medford Hotel 76 3,146,176 12,500 2,747,997 1,853,845 12,500
Medford, OR
Heritage View 24 1,158,762 64,800 690,736 682,131 64,800
New Sweden, ME
Rolling Green Apartments 166 4,756,724 286,350 6,254,575 156,122 286,350
Edmond, OK
Sierra Pointe Apartments 209 7,401,300 382,000 8,001,390 1,069,030 336,087
Aurora, CO
Terrace Apartments 206 5,221,404 350,000 6,470,754 (263,733) 350,000
Oklahoma City, OK
Trenton Apartments 37 821,747 154,000 899,293 105,261 154,000
Salt Lake City, UT
Windsor Court Apartments 143 4,474,113 280,000 5,579,636 (178,309) 280,000
Aurora, CO
Sierra Vista 160 6,246,475 434,866 8,056,238 173,973 434,866
Las Vegas, NV
Willow Peg Village 57 1,472,966 125,000 1,741,799 4,166 125,000
Ricon, GA
Pebble Creek 352 7,955,434 794,000 9,563,687 270,453 734,800
Arlington, TX
Pine Village 36 936,427 40,000 960,000 189,698 40,000
Pine Mountain, GA
</TABLE>
<PAGE>
Boston Financial Qualified Housing Limited Partnership Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
GROSS AMOUNT
AT WHICH
CARRIED AT
COST OF INTEREST AT DECEMBER 31,
AQUISITION DATE 1998
------------------------------ ----------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION IMPROVEMENTS
- ----------- ----- --------- ---- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Talbot Village 24 599,804 21,775 545,547 192,054 20,000
Talbolton, GA
Logan Plaza 130 10,784,320 969,289 13,287,069 366,468 969,289
New York, NY
Cass House 111 12,685,999 222,000 11,423,209 84,178 222,000
Boston, MA
Verdean Gardens (A) 110 14,189,091 214,992 8,891,168 (3,764,800) 214,992
New Bedford, MA
Country Estates 24 593,661 22,500 734,409 0 22,500
Glenville, GA
Boulevard Commons 212 10,684,574 318,000 3,580,316 11,265,504 412,010
Chicago, IL
Chestnut Lane 50 1,468,129 93,484 848,922 888,481 93,322
Newman, GA
600 Dakota Properties 28 620,000 64,353 769,608 36,538 63,670
Wahpeton, ND
Duluth 11 255,179 24,000 363,810 13,214 24,000
Souix Falls, SD
Delmar 16 413,205 75,000 495,203 25,015 75,000
Gillette, WY
Park Terrace 101 3,536,511 393,713 4,781,404 214,005 393,713
Dundalk, MD
Brentwood Manor II 22 760,183 44,980 1,118,947 20,991 44,980
Nashua, NH
Hillcrest Apts 3 24 638,634 17,000 727,587 13,579 17,000
Perryville, MO
---------------------------------------------------------------------------------------
Subtotal 2,865 120,995,620 6,400,155 119,411,383 18,091,598 6,422,427
Less Combined Entity 47 1,210,000 28,000 1,260,066 258,418 29,008
=======================================================================================
Total 2,818 $119,785,620 $6,372,155 $118,151,317 $17,833,180 $6,393,419
=======================================================================================
</TABLE>
(1) The aggregate cost for Federal Income Tax purposes is approximately
$149,753,000.
* Mortgage notes payable generally represent
non-recourse financing of low-income housing
projects payable with terms of up to 40 years
with interest payable at rates ranging from 9.75%
to 12%. The Partnership has not guaranteed any of
these mortgage notes payable.
<PAGE>
Boston Financial Qualified Housing Limited Partnership Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1998
-------------------------------------------------
<TABLE>
LIFE ON
WHICH
BUILDINGS DEPRECIATION
AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
- ----------- ------------ ----- ------------ ----- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Barrington Manor $795,733 $827,744 $246,606 1927 various 12/31/87
Fargo, ND
Bingham Housing 1,393,496 1,459,250 363,744 1988 various 12/30/87
Associates
Bingham, ME
Birmingham Village 1,357,212 1,419,112 352,665 1988 various 12/30/87
Randolph, ME
Bittersweet Lane 3,258,789 3,333,331 1,262,475 1988 various 10/27/87
Randolph , MA
Coronodo Courts 4,995,074 5,447,405 1,854,373 1945 various 12/18/87
Douglas, AZ
Elmore Hotel 3,491,931 3,504,431 1,397,247 1917 various 12/22/87
Great Falls, MT
Graver Inn 3,041,507 3,082,421 958,960 1917 various 12/31/87
Fargo, ND
Hazel Winthrop Apartments 2,435,087 2,480,087 735,714 1910 various 12/30/87
Chicago, IL
Hughes Apartments 1,517,476 1,546,484 478,519 1926 various 12/31/87
Mandan, ND
Lakeview Heights 3,229,513 3,447,101 1,108,642 1972 various 12/30/87
Clearfield, UT
Medford Hotel 4,601,842 4,614,342 1,526,882 1915 various 12/22/87
Medford, OR
Heritage View 1,372,867 1,437,667 359,986 1988 various 12/30/87
New Sweden, ME
Rolling Green Apartments 6,410,697 6,697,047 2,748,487 1974 various 09/30/87
Edmond, OK
Sierra Pointe Apartments 9,116,333 9,452,420 4,039,146 1973 various 09/30/87
Aurora, CO
Terrace Apartments 6,207,021 6,557,021 2,754,089 1970 various 11/20/87
Oklahoma City, OK
Trenton Apartments 1,004,554 1,158,554 348,629 1925 various 12/30/87
Salt Lake City, UT
Windsor Court Apartments 5,401,327 5,681,327 2,362,117 1974 various 12/30/87
Aurora, CO
Sierra Vista 8,230,211 8,665,077 3,629,848 1963 various 09/01/87
Las Vegas, NV
Willow Peg Village 1,745,965 1,870,965 707,004 1989 various 03/01/88
Ricon, GA
Pebble Creek 9,893,340 10,628,140 2,750,594 1977/81 various 06/20/88
Arlington, TX
Pine Village 1,149,698 1,189,698 453,167 1988 various 03/01/88
Pine Mountain, GA
</TABLE>
<PAGE>
Boston Financial Qualified Housing Limited Partnership Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1998
-------------------------------------------------
<TABLE>
LIFE ON
WHICH
BUILDINGS DEPRECIATION
AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
- ----------- ------------ ----- ------------ ----- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Talbot Village 739,376 759,376 284,427 1988 various 03/01/88
Talbolton, GA
Logan Plaza 13,653,537 14,622,826 3,808,493 1988 various 05/10/88
New York, NY
Cass House 11,507,387 11,729,387 4,106,089 1988 various 06/08/88
Boston, MA
Verdean Gardens (A) 5,126,368 5,341,360 3,468,167 1989 various 05/31/88
New Bedford, MA
Country Estates 734,409 756,909 313,056 1988 various 03/01/88
Glenville, GA
Boulevard Commons 14,751,810 15,163,820 5,281,643 1920 various 07/14/88
Chicago, IL
Chestnut Lane 1,737,565 1,830,887 663,584 1989 various 08/01/88
Newman, GA
600 Dakota Properties 806,829 870,499 225,740 1988 various 10/01/88
Wahpeton, ND
Duluth 377,024 401,024 113,406 1989 various 10/01/88
Souix Falls, SD
Delmar 520,218 595,218 205,868 1988 various 10/01/88
Gillette, WY
Park Terrace 4,995,409 5,389,122 1,765,691 1989 various 01/20/89
Dundalk, MD
Brentwood Manor II 1,139,938 1,184,918 518,246 1971 various 01/20/89
Nashua, NH
Hillcrest Apts 3 741,166 758,166 259,562 1989 various 03/31/89
Perryville, MO
--------------------------------------------------
Subtotal 137,480,709 143,903,136 51,452,866
Less Combined Entity 1,517,476 1,546,484 478,519
==================================================
Total $135,963,233 $142,356,652 $50,974,347
==================================================
</TABLE>
<PAGE>
<TABLE>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1998 Accumulated Depreciation December 31, 1998
- -------------------------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C>
Balance at beginning of period $143,058,700 Balance at beginning of period $46,784,886
Additions during period: Additions during period:
Less current year Hughes (1,546,484) Less current year Hughes (478,519)
Apartments Apt.
Other acquisitions 405,477 4,667,980
Depreciation
---------------
Improvements etc. 463,184 Balance at close of period $50,974,347
-------------- ===============
(677,823)
Deductions during period:
Cost of real estate and fixed (24,225)
assets sold
Write down of fixed assets
- ------------------------------------------------------
(24,225)
--------------
Balance at close of period $142,356,652
==============
Property Owned December 31, 1997 Accumulated Depreciation December 31, 1997
- -------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $148,607,718 Balance at beginning of period $42,623,824
Additions during period: Additions during period:
Less current year Hughes (1,546,484) Less current year Hughes (433,837)
Apartments Apt.
Other acquisitions 75,769 4,594,899
Depreciation
---------------
Improvements etc. 525,109 Balance at close of period $46,784,886
-------------- ===============
(945,606)
Deductions during period:
Cost of real estate and fixed (149,896)
assets sold
Write down of fixed assets (6,000,000)
--------------
(6,149,896)
--------------
Balance at close of period $141,512,216
==============
Property Owned December 31, 1996 Accumulated Depreciation December 31, 1996
- -------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $148,106,716 Balance at beginning of period $38,028,894
Additions during period: Additions during period:
Other acquisitions 18,812 4,594,930
Depreciation
---------------
Improvements etc. 512,563 Balance at close of period $42,623,824
-------------- ===============
531,375
Deductions during period:
Cost of real estate and fixed (30,373)
assets sold
Reclassification to intangible 0
assets
--------------
(30,373)
--------------
Balance at close of period $148,607,718
==============
</TABLE>
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates LTD
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
BOULEVARD COMMONS LIMITED PARTNERSHIP Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheet of BOULEVARD COMMONS LIMITED
PARTNERSHIP, Project No. 071-35592, as of December 31, 1998 and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards for financial and
compliance audits issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.
In our opinion the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of BOULEVARD
COMMONS LIMITED PARTNERSHIP as of December 31, 1998, and its profit or loss,
changes in partners' equity, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in the notes to the
financial statements, the Partnership is several months delinquent on its first
mortgage which raises substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a report
dated January 25, 1999 on our consideration of BOULEVARD COMMONS LIMITED
PARTNERSHIP's internal control structure and reports dated January 25, 1999 on
its compliance with specific requirements applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.
The accompanying supplementary information included in this report (shown on
pages 15 through 19) is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are presented fairly in all material
respects in relation to the basic financial statements taken as a whole.
/s/ HARAN & ASSOCIATES LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
January 25, 1999
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates LTD
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
BOULEVARD COMMONS LIMITED PARTNERSHIP Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheet of BOULEVARD COMMONS LIMITED
PARTNERSHIP, Project No. 071-35592, as of December 31, 1997 and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards for financial and
compliance audits issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.
In our opinion the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of BOULEVARD
COMMONS LIMITED PARTNERSHIP as of December 31, 1997, and its profit or loss,
changes in partners' equity, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998 on our consideration of BOULEVARD COMMONS LIMITED
PARTNERSHIP's internal control structure and reports dated January 23, 1998 on
its compliance with specific requirements applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.
The accompanying supplementary information included in this report (shown on
pages 14 through 17) is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are presented fairly in all material
respects in relation to the basic financial statements taken as a whole.
/s/ HARAN & ASSOCIATES LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
January 23, 1998
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1996
Reports of Independent Auditors
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
BOULEVARD COMMONS LIMITED PARTNERSHIP Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheet of BOULEVARD COMMONS LIMITED
PARTNERSHIP, Project No. 071-35592, as of December 31, 1996 and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards for financial and
compliance audits issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.
In our opinion the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of BOULEVARD
COMMONS LIMITED PARTNERSHIP as of December 31, 1996, and its profit or loss,
changes in partners' equity, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 1997 on our consideration of BOULEVARD COMMONS LIMITED
PARTNERSHIP's internal control structure and reports dated January 19, 1996 on
its compliance with specific requirements applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.
The accompanying supplementary information included in this report (shown on
pages 16 through 20) is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are presented fairly in all material
respects in relation to the basic financial statements taken as a whole.
/s/ HARAN & ASSOCIATES LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (708) 853-2580
January 17, 1997
<PAGE>
SUNDANCE HOUSING ASSOCIATES
[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO 80112
Telephone (303) 770-3356
Fax (303) 770-3357
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office
Sundance Housing Associates, Ltd. Denver, CO
Denver, Colorado
We have audited the accompanying Balance Sheet of Sundance Housing Associates,
Ltd., FHA Project Number 101-44154-SR-PR,as of December 31, 1998,and the related
statements of profit and loss, changes in project equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sundance Housing Associates,
Ltd., as of December 31, 1998, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits and HUD Programs and, we have also issued a report dated
February 23, 1999, on our consideration of Sundance Housing Associates, Ltd.'s
internal control structure and reports dated February 23, 1999 on its compliance
with laws and regulations and compliance with laws and requlations and specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-discrimination.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
12 through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Americana Redevelopment.
Such information has been subjected to the same auditing procedures applied in
the examination of basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
/s/Michael Sczkan
Michael Sczekan Co., P.C.
Certified Public Accountants
Englewood, CO
February 23, 1999
[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO 80112
Telephone (303) 770-3356
Fax (303) 770-3357
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office
Sundance Housing Associates, Ltd. Denver, CO
Denver, Colorado
We have audited the accompanying Balance Sheet of Sundance Housing Associates,
Ltd., FHA Project Number 101-44154-SR-PR, as of December 31, 1997, and the
related statements of profit and loss, changes in project equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit in accordance
with generally accepted auditing standards and Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sundance Housing Associates,
Ltd., as of December 31, 1997, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits and HUD Programs and, we have also issued a report dated
February 5, 1998, on our consideration of Sundance Housing Associates, Ltd.'s
internal control structure and reports dated February 5, 1998 on its compliance
with laws and regulations and compliance with laws and requlations and specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-discrimination.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
12 through 18 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Americana Redevelopment.
Such information has been subjected to the same auditing procedures applied in
the examination of basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
/s/Michael Sczkan
Michael Sczekan Co., P.C.
Certified Public Accountants
Englewood, CO
February 5, 1998
<PAGE>
Reznick Fedder & Silverman
Certified Public Accountants
Business Consultants
745 Atlantic Avenue, Suite 800
Boston, MA 02111-2735, Phone (617) 423-5855
FAX (617) 423-6651
INDEPENDENT AUDITORS' REPORT
To the Partners
Sundance Housing Associates, Ltd.
We have audited the accompanying balance sheet of Sundance Housing
Associates, Ltd. as of December 31, 1996, and the related statements of
profit and loss (on HUD Form No. 92410), partners' deficit and cash flows for
the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sundance Housing Associates,
Ltd. as of December 31, 1996, and the results of its operations,
the changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 26
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, except for that portion marked "unaudited" on which we express
no opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 27,
1997, on our consideration of Sundance Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 27, 1997 Identification Number: 52-1088612
Audit Principal: Phillip A. Weitzel
PEBBLE CREEK APARTMENTS
<PAGE>
[Letterhead]
[Pyramid logo]
ARONSON, FETRIDGE & WEIGLE
A Professional Corporation
Certified Public Accountants
and Management Consultants
Independent Auditor's Report
The Partners HUD Field Office Director
2225 NEW YORK AVENUE, LTD. 1600 Thockmorton
T/A PEBBLE CREEK APARTMENTS P.O. Box 2905
11781 Lee Jackson Highway, #320 Fort Worth, Texas 76113-2905
Fairfax, Virginia
We have audited the Balance Sheet of 2225 NEW YORK AVENUE, LTD. (A Limited
Partnership) T/A PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 as of
December 31, 1998, and the related Statements of Profit and Loss, Partners'
Capital and Cash Flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above presently fairly, in
all material respects, the financial position of 2225 NEW YORK AVENUE, LTD. T/A
PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 as of December 31, 1998, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that 2225 NEW
YORK AVENUE, LTD. T/A PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 will
continue as a going concern. As discussed in Note 5 to the financial statements,
the Partnership has incurred substantial losses from operations, had negative
working capital at December 31, 1998 and is under a workout agreement with
Department of HUD on it's mortgage. These factors raise substantial doubt about
the Partnership's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data required by HUD
presented on pages 13 - 17 are presented for purposes of additional analysis and
is not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1999 on our consideration of 225 NEW YORK AVENUE, LTD T/A
PEBBLE CREEK APARTMENTS; internal control and reports dated January 22, 1998 on
its compliance with laws and regulations.
/s/ Aronson, Fetridge & Weigle
Rockville, Maryland
January 22, 1999
<PAGE>
[Letterhead]
[Pyramid logo]
ARONSON, FETRIDGE & WEIGLE
A Professional Corporation
Certified Public Accountants
and Management Consultants
Independent Auditor's Report
The Partners HUD Field Office Director
2225 NEW YORK AVENUE, LTD. 1600 Thockmorton
T/A PEBBLE CREEK APARTMENTS P.O. Box 2905
11781 Lee Jackson Highway, #320 Fort Worth, Texas 76113-2905
Fairfax, Virginia
We have audited the Balance Sheet of 2225 NEW YORK AVENUE, LTD. (A Limited
Partnership) T/A PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 as of
December 31, 1997, and the related Statements of Profit and Loss, Partners'
Capital and Cash Flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above presently fairly, in
all material respects, the financial position of 2225 NEW YORK AVENUE, LTD. T/A
PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 as of December 31, 1997, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that 2225 NEW
YORK AVENUE, LTD. T/A PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 will
continue as a going concern. As discussed in Note 5 to the financial statements,
the Partnership has incurred substantial losses from operations, had negative
working capital at December 31, 1997 and is under a workout agreement with
Department of HUD on it's mortgage. These factors raise substantial doubt about
the Partnership's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data required by HUD
presented on pages 13 - 21 are presented for purposes of additional analysis and
is not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1998 on our consideration of 225 NEW YORK AVENUE, LTD T/A
PEBBLE CREEK APARTMENTS; internal control and reports dated January 22, 1998 on
its compliance with laws and regulations.
/s/ Aronson, Fetridge & Weigle
Rockville, Maryland
January 22, 1998
<PAGE>
[Letterhead]
[Pyramid logo]
ARONSON, FETRIDGE & WEIGLE
A Professional Corporation
Certified Public Accountants
and Management Consultants
Independent Auditor's Report
The Partners HUD Field Office Director
2225 NEW YORK AVENUE, LTD. 1600 Thockmorton
T/A PEBBLE CREEK APARTMENTS P.O. Box 2905
11781 Lee Jackson Highway, #320 Fort Worth, Texas 76113-2905
Fairfax, Virginia
We have audited the Balance Sheet of 2225 NEW YORK AVENUE, LTD. (A Limited
Partnership) T/A PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 as of
December 31, 1996, and the related Statements of Profit and Loss, Partners'
Capital and Cash Flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
We were unable to reconcile the confirmation received from HUD of the balance of
the mortgage, escrows, and mortgage interest paid as reflected on the balance
sheet and income statement as of and for the year ended December 31, 1996. We
were unable to obtain satisfactory corroborating information from other sources
or through alternative procedures.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we been able to corroborate the
recorded balance of the mortgage payable, mortgage escrows and mortgage interest
paid as referred to in the preceding paragraph, the financial statements
referred to above presently fairly, in all material respects, the financial
position of 2225 NEW YORK AVENUE, LTD. T/A PEBBLE CREEK APARTMENTS, FHA Project
No. 113-36607 as of December 31, 1996, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that 2225 NEW
YORK AVENUE, LTD. T/A PEBBLE CREEK APARTMENTS, FHA Project No. 113-36607 will
continue as a going concern. As discussed in Note 7 to the financial statements,
the Partnership has incurred substantial losses from operations, had negative
working capital at December 31, 1996, and was several months delinquent on its
mortgage payments. These factors raise substantial doubt about the Partnership's
ability to continue as a going concern. Management's plan in regard to these
matters are also described in Note 7. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data required by HUD
presented on pages 13 - 21 are presented for purposes of additional analysis and
is not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Aronson, Fetridge & Weigle
Rockville, Maryland
January 12, 1997
<PAGE>
CASS HOUSE
[Letterhead]
[LOGO]
ZINER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cass House Associates Limited
Partnership
We have audited the accompanying balance sheet (MHFA Forms F.C.-3A & -3B) of
Cass House Associates Limited Partnership (a Massachusetts limited partnership)
(Project No. 84-057-S) as of December 31, 1998, and the related statements of
changes in partners' equity (deficiency) (MHFA Form F.C. -2A) operations (MHFA
Form F.C.-2A) and cash flows (MHFA Forms F.C. -4A, -4B & -4C) for the year then
ended. These financial statements are the responsibility of the general
partners. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
general partners, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cass House Associates Limited
Partnership as of December 31, 1998, and the results of its operations, its cash
flows and changes in partners' equity (deficiency) for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note H to the
financial statements, the Partnership has suffered recurring losses from
operations and has a net working capital deficiency, which raises substantial
doubt about its ability to continue in existence. The general partners' plans
regarding these matters are also discussed in Note H. The financial statements
do not include any adjustments that might result form the outcome of this
uncertainty.
/s/ Ziner & Company, P.C.
Boston, MA
January 21, 1999
<PAGE>
[Letterhead]
[LOGO]
ZINER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cass House Associates Limited
Partnership
We have audited the accompanying balance sheet (MHFA Forms F.C.-3A & -3B) of
Cass House Associates Limited Partnership (a Massachusetts limited partnership)
(Project No. 84-057-S) as of December 31, 1997, and the related statements of
changes in partners' equity (deficiency) (MHFA Form F.C. -2A) operations (MHFA
Form F.C.-2A) and cash flows (MHFA Forms F.C. -4A, -4B & -4C) for the year then
ended. These financial statements are the responsibility of the general
partners. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
general partners, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cass House Associates Limited
Partnership as of December 31, 1997, and the results of its operations, its cash
flows and changes in partners' equity (deficiency) for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note H to the
financial statements, the Partnership has suffered recurring losses from
operations and has a net working capital deficiency, which raises substantial
doubt about its ability to continue in existence. The general partners' plans
regarding these matters are also discussed in Note H. The financial statements
do not include any adjustments that might result form the outcome of this
uncertainty.
/s/ Ziner & Company, P.C.
Boston, MA
January 27, 1998
<PAGE>
[Letterhead]
[LOGO]
ZINER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cass House Associates Limited
Partnership
We have audited the accompanying balance sheet (MHFA Forms F.C.-3A & -3B) of
Cass House Associates Limited Partnership (a Massachusetts limited partnership)
(Project No. 84-057-S) as of December 31, 1996, and the related statements of
changes in partners' equity (deficiency) (MHFA Forms F.C. -2A) operations (MHFA
Form F.C.-2A) and cash flows (MHFA Forms F.C. -4A, -4B & -4C) for the year then
ended. These financial statements are the responsibility of the general
partners. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
general partners, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cass House Associates Limited
Partnership as of December 31, 1996, and the results of its operations, its cash
flows and changes in partners' equity (deficiency) for the year then ended in
conformity with generally accepted accounting principles.
/s/ Ziner & Company, P.C.
Boston, MA
January 27, 1997
<PAGE>
VERDEAN GARDENS APARTMENTS
[Letterhead]
[LOGO]
ZINER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Verdean Gardens Associates
Limited Partnership
We have audited the accompanying balance sheet (MHFA Forms F.C.-3A & -3B) of
Verdean Gardens Associates Limited Partnership (a Massachusetts limited
partnership) (Project No. 84-082-S) as of December 31, 1998, and the related
statements of changes in partners' equity (deficiency) (MHFA Form F.C.-3C)
operations (MHFA Form F.C.-2A) and cash flows (MHFA Forms F.C.-4A, -4B & -4C)
for the year then ended. These financial statements are the responsibility of
the general partners. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Verdean Gardens Associates
Limited Partnership as of December 31, 1998, and the results of its operations,
its cash flows and its changes in partners' equity (deficiency) for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note G to the
financial statements, the Partnership has suffered recurring losses from
operations and has a net working capital deficiency, which raises substantial
doubt about its ability to continue in existence. The general partners' plans
regarding these matters are also discussed in Note G. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Ziner & Company, P.C.
Boston, MA
January 28, 1999
[Letterhead]
[LOGO]
<PAGE>
ZINER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Verdean Gardens Associates
Limited Partnership
We have audited the accompanying balance sheet (MHFA Forms F.C.-3A & -3B) of
Verdean Gardens Associates Limited Partnership (a Massachusetts limited
partnership) (Project No. 84-082-S) as of December 31, 1997, and the related
statements of changes in partners' equity (deficiency) (MHFA Form F.C.-3C)
operations (MHFA Form F.C.-2A) and cash flows (MHFA Forms F.C.-4A, -4B & -4C)
for the year then ended. These financial statements are the responsibility of
the general partners. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Verdean Gardens Associates
Limited Partnership as of December 31, 1997, and the results of its operations,
its cash flows and its changes in partners' equity (deficiency) for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note G to the
financial statements, the Partnership has suffered recurring losses from
operations and has a net working capital deficiency, which raises substantial
doubt about its ability to continue in existence. The general partners' plans
regarding these matters are also discussed in Note G. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Ziner & Company, P.C.
Boston, MA
January 28, 1998
<PAGE>
[[LOGO]
ZINER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Verdean Gardens Associates
Limited Partnership
We have audited the accompanying balance sheet (MHFA Forms F.C.-3A & -3B) of
Verdean Gardens Associates Limited Partnership (a Massachusetts limited
partnership) (Project No. 84-082-S) as of December 31, 1996, and the related
statements of changes in partners' equity (deficiency) (MHFA Form F.C.-3C)
operations (MHFA Form F.C.-2A) and cash flows (MHFA Forms F.C.-4A, -4B & -4C)
for the year then ended. These financial statements are the responsibility of
the general partners. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Verdean Gardens Associates
Limited Partnership as of December 31, 1996, and the results of its operations,
its cash flows and its changes in partners' equity (deficiency) for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note H to the
financial statements, the Partnership has suffered recurring losses from
operations and has a net working capital deficiency, which raises substantial
doubt about its ability to continue in existence. The general partners' plans
regarding these matters are also discussed in Note H. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Ziner & Company, P.C.
Boston, MA
January 27, 1997
<PAGE>
medford hotel
[Letterhead]
ROBERT STEPHENSON
An Accountancy Corporation
515 N. Sepulveda Blvd., Suite A
Manhattan Beach, California 90266
(310) 318-1592
Partners
Medford Hotel Associates Limited Partnership
I have audited the balance sheet of Medford Hotel Associates Limited Partnership
(an Oregon limited partnership) as of December 31, 1998 and the related
statements of operations, partnership capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Medford Hotel Associates Limited
Partnership at December 31, 1998 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, I have also issued a report
dated January 19, 1999 on my consideration of Medford Hotel Associates Limited
Partnership's internal control structure and a report dated January 19, 1999 on
its compliance with laws and regulations.
The accompanying supplementary information (shown on pages 14 and 15) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Robert Stephenson
Manhattan Beach, California
January 19, 1999
[Letterhead]
ROBERT STEPHENSON
An Accountancy Corporation
515 N. Sepulveda Blvd., Suite A
Manhattan Beach, California 90266
(310) 318-1592
Partners
Medford Hotel Associates Limited Partnership
I have audited the balance sheet of Medford Hotel Associates Limited Partnership
(an Oregon limited partnership) as of December 31, 1997 and the related
statements of operations, partnership capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Medford Hotel Associates Limited
Partnership at December 31, 1997 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, I have also issued a report
dated January 19, 1998 on my consideration of Medford Hotel Associates Limited
Partnership's internal control structure and a report dated January 19, 1998 on
its compliance with laws and regulations.
The accompanying supplementary information (shown on pages 14 and 15) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Robert Stephenson
Manhattan Beach, California
January 19, 1998
<PAGE>
[Letterhead]
ROBERT STEPHENSON
An Accountancy Corporation
515 N. Sepulveda Blvd., Suite A
Manhattan Beach, California 90266
(310) 318-1592
Partners
Medford Hotel Associates Limited Partnership
I have audited the balance sheet of Medford Hotel Associates Limited Partnership
(an Oregon limited partnership) as of December 31, 1996 and the related
statements of operations, partnership capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Medford Hotel Associates Limited
Partnership at December 31, 1996 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, I have also issued a report
dated January 22, 1997 on my consideration of Medford Hotel Associates Limited
Partnership's internal control structure and a report dated January 22, 1997 on
its compliance with laws and regulations.
The accompanying supplementary information (shown on pages 14 and 15) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Robert Stephenson
Manhattan Beach, California
January 22, 1997
<PAGE>
OREGON LANDMARK
[Letterhead]
ROBERT STEPHENSON
An Accountancy Corporation
515 N. Sepulveda Blvd., Suite A
Manhattan Beach, California 90266
(310) 318-1592
Partners
Oregon Landmark-Three Limited Partnership
I have audited the balance sheet of Oregon Landmark-Three Limited Partnership
(an Oregon limited partnership) as of December 31, 1998 and the related
statements of operations, deficit in partnership capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Oregon Landmark-Three Limited
Partnership at December 31, 1998 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, I have also issued a report
dated January 19, 1999 on my consideration of Oregon Landmark-Three Limited
Partnership's internal control structure and a report dated January 19, 1999 on
its compliance with laws and regulations.
The accompanying supplementary information (shown on pages 14 and 15) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Robert Stephenson
Manhattan Beach, California
January 19, 1999
<PAGE>
[Letterhead]
ROBERT STEPHENSON
An Accountancy Corporation
515 N. Sepulveda Blvd., Suite A
Manhattan Beach, California 90266
(310) 318-1592
Partners
Oregon Landmark-Three Limited Partnership
I have audited the balance sheet of Oregon Landmark-Three Limited Partnership
(an Oregon limited partnership) as of December 31, 1997 and the related
statements of operations, deficit in partnership capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Oregon Landmark-Three Limited
Partnership at December 31, 1997 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, I have also issued a report
dated January 20, 1998 on my consideration of Oregon Landmark-Three Limited
Partnership's internal control structure and a report dated January 20, 1998 on
its compliance with laws and regulations.
The accompanying supplementary information (shown on pages 14 and 15) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Robert Stephenson
Manhattan Beach, California
January 20, 1998
<PAGE>
[Letterhead]
ROBERT STEPHENSON
An Accountancy Corporation
515 N. Sepulveda Blvd., Suite A
Manhattan Beach, California 90266
(310) 318-1592
Partners
Oregon Landmark-Three Limited Partnership
I have audited the balance sheet of Oregon Landmark-Three Limited Partnership
(an Oregon limited partnership) as of December 31, 1996 and the related
statements of operations, deficit in partnership capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oregon Landmark-Three Limited
Partnership at December 31, 1996 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, I have also issued a report
dated January 22, 1997 on my consideration of Oregon Landmark-Three Limited
Partnership's internal control structure and a report dated January 22, 1997 on
its compliance with laws and regulations.
The accompanying supplementary information (shown on pages 14 and 15) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Robert Stephenson
Manhattan Beach, California
January 22, 1997
<PAGE>
TRENTON APARTMENTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Trenton Apartments, Ltd.
We have audited the accompanying balance sheet of Trenton Apartments, Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1998 and the
related statements of profit and loss, changes in partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Trenton Apartments, Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1998, and
the results of its operations and changes in partners' equity and cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 19, 1998, on our
consideration of Trenton Apartments, Ltd. (a limited partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 19, 1999, on
its compliance with specific requirements applicable to major HUD programs, and
specific requirements applicable to Affirmative Fair Housing.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 19, 1999
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Trenton Apartments, Ltd.
We have audited the accompanying balance sheet of Trenton Apartments, Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1997 and the
related statements of profit and loss, changes in partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Trenton Apartments, Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1997, and
the results of its operations and changes in partners' equity and cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 22, 1998, on our
consideration of Trenton Apartments, Ltd. (a limited partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 22, 1998, on
its compliance with specific requirements applicable to major HUD programs, and
specific requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 14 to 23) are presented for the purposes of
additional analysis and are not a required part of the basic statement of
Trenton Apartments, Ltd. (a limited partnership) (HUD Project No. 105-94006).
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 22, 1998
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Trenton Apartments, Ltd.
We have audited the accompanying balance sheet of Trenton Apartments, Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1996 and the
related statements of profit and loss, changes in partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Trenton Apartments, Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1996, and
the results of its operations and changes in partners' equity and cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 16, 1997, on our
consideration of Trenton Apartments, Ltd. (a limited partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 16, 1997, on
its compliance with specific requirements applicable to major HUD programs, and
specific requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 15 to 22) are presented for the purposes of
additional analysis and are not a required part of the basic statement of
Trenton Apartments, Ltd. (a limited partnership) (HUD Project No. 105-94006).
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 16, 1997
<PAGE>
Lakeview Heights
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Lakeview Heights Apartments, Ltd.
We have audited the accompanying balance sheet of Lakeview Heights Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31, 1998
and the related statements of profit and loss, changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lakeview Heights Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31,
1998, and the results of its operations and changes in partners' equity and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 21, 1999, on our
consideration of Lakeview Heights Apartments, Ltd's. (a limited partnership)
(HUD Project No. 105-94007) internal control structure and reports dated January
21, 1999, on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 22, 1999
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Lakeview Heights Apartments, Ltd.
We have audited the accompanying balance sheet of Lakeview Heights Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31, 1997
and the related statements of profit and loss, changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lakeview Heights Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31,
1997, and the results of its operations and changes in partners' equity and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 21, 1998, on our
consideration of Lakeview Heights Apartments, Ltd's. (a limited partnership)
(HUD Project No. 105-94007) internal control structure and reports dated January
21, 1998, on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 14 to 23) are presented for the purposes of
additional analysis and are not a required part of the basic statements of
Lakeview Heights Apartments, Ltd. (a limited partnership) (HUD Project No.
105-94007). Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 21, 1998
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Lakeview Heights Apartments, Ltd.
We have audited the accompanying balance sheet of Lakeview Heights Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31, 1996
and the related statements of profit and loss, changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lakeview Heights Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31,
1996, and the results of its operations and changes in partners' equity and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 23, 1997, on our
consideration of Lakeview Heights Apartments, Ltd's. (a limited partnership)
(HUD Project No. 105-94007) internal control structure and reports dated January
23, 1997, on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 15 to 22) are presented for the purposes of
additional analysis and are not a required part of the basic statements of
Lakeview Heights Apartments, Ltd. (a limited partnership) (HUD Project No.
105-94007). Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 23, 1997
<PAGE>
WINDSOR COURT
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Windsor Court Housing Associates, Ltd.
We have audited the accompanying balance sheet of Windsor Court Housing
Associates, Ltd. as of December 31, 1998, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Windsor Court Housing
Associates, Ltd. as of December 31, 1998, and the results of its operations, the
changes in partners' (deficit) and it's cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
February 9, 1999 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Windsor Court Housing Associates, Ltd.
We have audited the accompanying balance sheet of Windsor Court Housing
Associates, Ltd. as of December 31, 1997, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Windsor Court Housing
Associates, Ltd. as of December 31, 1997, and the results of its operations, the
changes in partners' deficit and it's cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 25
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs, we have also issued reports dated January 26,
1998 on our consideration of Windsor Court Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 26, 1998 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners
Windsor Court Housing Associates, Ltd.
We have audited the accompanying balance sheet of Windsor Court Housing
Associates, Ltd. as of December 31, 1996, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Windsor Court Housing
Associates, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 26
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued reports
dated January 30, 1997, on our consideration of Windsor Court Housing
Associates, Ltd.'s internal control structure and on its compliance with
specific requirements applicable to major HUD programs, affirmative fair
housing, and laws and regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 30, 1997 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
TERRACE HOUSING
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Terrace Housing Associates, Ltd.
We have audited the accompanying balance sheet of Terrace Housing Associates,
Ltd. as of December 31, 1998, and the related statements of profit and loss (on
HUD Form No. 92410), partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Terrace Housing Associates,
Ltd. as of December 31, 1998, and the results of its operations, changes in
partners' deficit and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
February 4, 1999 Identification Number: 52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Terrace Housing Associates, Ltd.
We have audited the accompanying balance sheet of Terrace Housing Associates,
Ltd. as of December 31, 1997, and the related statements of profit and loss (on
HUD Form No. 92410), partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Terrace Housing Associates,
Ltd. as of December 31, 1997, and the results of its operations, changes in
partners' deficit and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 21 through 25
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 21,
1998, on our consideration of Terrace Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, affirmative fair housing and non-discrimination, and laws
and regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 21, 1998 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners
Terrace Housing Associates, Ltd.
We have audited the accompanying balance sheet of Terrace Housing Associates,
Ltd. as of December 31, 1996, and the related statements of profit and loss (on
HUD Form No. 92410), partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Terrace Housing Associates,
Ltd. as of December 31, 1996, and the results of its operations, the changes in
partners' deficit and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 26
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 27,
1997, on our consideration of Terrace Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 27, 1997 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
Rolling Green
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners
Rolling Green Housing Associates, Ltd.
We have audited the accompanying balance sheet of Rolling Green Housing
Associates, Ltd. as of December 31, 1998, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rolling Green Housing
Associates, Ltd. as of December 31, 1998, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
February 4, 1999 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners
Rolling Green Housing Associates, Ltd.
We have audited the accompanying balance sheet of Rolling Green Housing
Associates, Ltd. as of December 31, 1997, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rolling Green Housing
Associates, Ltd. as of December 31, 1997, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 26
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information, except for that portion
marked "unaudited", has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 19,
1998, on our consideration of Rolling Green Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 19, 1998 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners
Rolling Green Housing Associates, Ltd.
We have audited the accompanying balance sheet of Rolling Green Housing
Associates, Ltd. as of December 31, 1996, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rolling Green Housing
Associates, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 27
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information, except for that portion
marked "unaudited" on which we express no opinion, has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 27,
1997, on our consideration of Rolling Green Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 27, 1997 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
SIERRA VISTA
[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO 80112
Telephone (303) 770-3356
Fax (303) 770-3357
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office
Sierra Vista Housing Associates, Ltd. Denver, CO
Aurora, Colorado
We have audited the accompanying BalanceSheet of Siera Vista Housing Associates,
Ltd., FHA Project Number 125-94004, as of December 31, 1998, and the related
statements of profit and loss, changes in project equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sierra Vista Housing, Ltd., as
of December 31, 1998, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
21 through 24 is presented for purposes of additional analysis and are not a
required part of the basic financial statements of Sierra Vista Housing
Associates, Ltd.. Such information has been subjected to the same auditing
procedures applied in the examination of basic financial statements and, in our
opinion, are presented fairly in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated February 5,
1999, on our consideration of Sierra Vista Housing Associates, Ltd's internal
control structure and a report dated February 5, 1999, on its compliance with
laws and regulations and compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-discrimination.
Respectfully submitted,
/s/Michael Sczkan
Michael Sczekan Co., P.C.
Certified Public Accountants
Englewood, CO
February 5, 1999
<PAGE>
[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO 80112
Telephone (303) 770-3356
Fax (303) 770-3357
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office
Sierra Vista Housing Associates, Ltd. Denver, CO
Aurora, Colorado
We have audited the accompanying BalanceSheet of Siera Vista Housing Associates,
Ltd., FHA Project Number 125-94004, as of December 31, 1997, and the related
statements of profit and loss, changes in project equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sierra Vista Housing, Ltd., as
of December 31, 1997, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated February 5,
1998, on our consideration of Sierra Vista Housing Associates, Ltd's internal
control structure and a report dated February 5, 1998, on its compliance with
laws and regulations and compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-discrimination.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As noted in Note 2 to the
financial statements, the Partnership is in monetary default of mortgage
agreement. Continued operation is contingent on reducing vacancies or obtaining
a additional financing.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
14 through 19 is presented for purposes of additional analysis and are not a
required part of the basic financial statements of Sierra Vista Housing
Associates, Ltd.. Such information has been subjected to the same auditing
procedures applied in the examination of basic financial statements and, in our
opinion, are presented fairly in all material respects in relation to the basic
financial statements taken as a whole.
Respectfully submitted,
/s/Michael Sczkan
Michael Sczekan Co., P.C.
Certified Public Accountants
Englewood, CO
February 5, 1998
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners
Sierra Vista Housing Associates, Ltd.
We have audited the accompanying balance sheet of Sierra Vista Housing
Associates, Ltd. as of December 31, 1996, and the related statements of profit
and loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sierra Vista Housing
Associates, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 21 through 28
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, except for that portion marked "unaudited" on which we express
no opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 27,
1997, on our consideration of Sierra Vista Housing Associates, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 27, 1997 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
CORONADO
[Letterhead]
[Logo] Lutz & Company, PC
Accountants and Consultants
11837 Miracle Hills Drive, Suite 100
Omaha, Nebraska 68154-4404
INDEPENDENT AUDITOR'S REPORT
Partners
Coronado Courts Limited Partnership
Omaha, Nebraska
We have audited the accompanying balance sheets of Coronado Courts Limited
Partnership, HUD Project No. 123-36605, an Arizona partnership, as of December
31, 1998 and the related statements of operations, changes in partners' capital
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of Coronado Courts Limited Partnership as of December 31, 1997, were
audited by other auditors, whose report dated February 3, 1998, expressed an
unqualified opinion on those statements.
Except as discussed in the following paragraph, we conducted our audit in
accordance with generally accepted auditing standards and Government Auditing
Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Government Accounting Standards Board Technical Bulletin 98-1, Disclosures about
Year 2000 Issues, Requires disclosures of certain matters regarding the year
2000 issue. Coronado Courts Limited Partnership has included such disclosures in
Note 7. Because of the unprecedented nature of the year 2000 issue, its effects
and the success of the related remediation efforts will not be fully
determinable until the year 2000 and thereafter. Accordingly, insufficient audit
evidence exists to support Coronado Courts Limited Partnership disclosure with
respect to the year 2000 issues made in Note 7. Further, we do not provide
assurance that Coronado Courts Limited Partnership is or will be 2000 ready,
that Coronado Courts Limited Partnership's year 2000 remediation efforts will be
successful in whole or in part, or that parties with which Coronado Courts
Limited Partnership does business will be year 2000 ready.
In our opinion, except for effects of such adjustments, if any, as might have
been determined To be necessary had we been able to examine evidence regarding
year 2000 disclosures, the financial statements referred to above present
fairly, in all material respects, the financial position of Coronado Courts
Limited Partnership as of December 31, 1998, and the results of its operations,
changes in partners' capital and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have
also issued a report dated January 25, 1999, on our consideration of the
Coronado Courts Limited Partnership's internal control and reports dated January
25, 1999, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to Fair Housing and
Non-discrimination, and specific requirements applicable to nonmajor HUD program
transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the report (shown on pages 14-17) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
the Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Lutz & Company, P.C.
January 25, 1999
<PAGE>
[Letterhead]
[Logo] VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
INDEPENDENT AUDITOR'S REPORT
To the Partners
Coronado Courts Limited Partnership
We have audited the accompanying balance sheets of Coronado Courts Limited
Partnership, as of December 31, 1997 and 1996, and the related statements of
profit and loss, partners' capital (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Coronado Courts Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations,
changes in partners' capital (deficit) and cash flows for the years then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have issued a report dated February 3, 1998, on our
consideration of the Partnership's internal control structure and reports, also
dated February 3, 1998, on its compliance with specific requirements applicable
to
major HUD programs, compliance with laws, regulations, contracts and grants, and
specific requirements applicable to Affirmative Fair Housing and
Non-Discrimination.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
(shown in Section II) is presented for the purpose of additional analysis and is
not a required part of the basic financial statements of Coronado Courts Limited
Partnership. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
Other Auditor information:
Lead Auditor - Donald R. Smith
Federal I.D. Number
<PAGE>
BITTERSWEET
[Letterhead]
[LOGO] Freedberg, Derba & Tardiff, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of
MB Bittersweet Associates Limited Partnership
(a Massachusetts Limited Partnership)
Boston, Massachusetts
We have audited the accompanying balance sheet of MB Bittersweet Associates
Limited Partnership, MHFA Project No. 84-051-S, as of December 31, 1998, and the
related statements of operations, partners' equity (deficiency) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MB Bittersweet Associates
Limited Partnership as of December 31, 1998, and the results of its operations,
changes in partners' equity (deficiency) and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the Partnership has suffered recurring losses from
operations, working capital requirements exceed the estimated cash flows, which
raise substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan regarding those matters also are described in Note 8.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainly.
/s/ Freedberg , Derba & Tardiff, P.C.
Wellesley, MA
February 18, 1998
<PAGE>
[Letterhead]
[LOGO] Freedberg, Derba & Tardiff, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of
MB Bittersweet Associates Limited Partnership
(a Massachusetts Limited Partnership)
Boston, Massachusetts
We have audited the accompanying balance sheet of MB Bittersweet Associates
Limited Partnership, MHFA Project No. 84-051-S, as of December 31, 1997, and the
related statements of operations, partners' equity (deficiency) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MB Bittersweet Associates
Limited Partnership as of December 31, 1997, and the results of its operations,
changes in partners' equity (deficiency) and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the Partnership has suffered recurring losses from
operations, working capital requirements exceed the estimated cash flows, which
raise substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan regarding those matters also are described in Note 8.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainly.
In accordance with Government Auditing Standards. we have also issued reports
dated February 12, 1998 on our consideration of MB Bittersweet Associates
Limited Partnership's internal control structure and on its compliance with laws
and regulations.
/s/ Freedberg , Derba & Tardiff, P.C.
Wellesley, MA
February 12, 1998
<PAGE>
[Letterhead]
[LOGO] Freedberg, Derba & Tardiff, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of
MB Bittersweet Associates Limited Partnership
(a Massachusetts Limited Partnership)
Boston, Massachusetts
We have audited the accompanying balance sheet of MB Bittersweet Associates
Limited Partnership, MHFA Project No. 84-051-S, as of December 31, 1996, and the
related statements of operations, partners' equity (deficiency) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MB Bittersweet Associates
Limited Partnership as of December 31, 1996, and the results of its operations,
changes in partners' equity (deficiency) and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards. we have also issued reports
dated February 12, 1997 on our consideration of MB Bittersweet Associates
Limited Partnership's internal control structure and on its compliance with laws
and regulations.
/s/ Freedberg , Derba & Tardiff, P.C.
Wellesley, MA
February 12, 1997
<PAGE>
HUGES
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Hughes Apartments Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheets of Hughes Apartments Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hughes Apartments Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial statements, the Partnership has entered into a forbearance agreement
with its bond holders as a result of cash flow problems which raises substantial
doubt about the Partnership's ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
February 23, 1999
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Hughes Apartments Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheets of Hughes Apartments Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hughes Apartments Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial statements, the Partnership has entered into a forbearance agreement
with its bond holders as a result of cash flow problems which raises substantial
doubt about the Partnership's ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
February 2, 1998
<PAGE>
600 DAKOTA
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
600 Dakota Properties Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of 600 Dakota Properties Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 600 Dakota Properties Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 19, 1999
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
600 Dakota Properties Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of 600 Dakota Properties Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 600 Dakota Properties Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
DULUTH
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Duluth Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheet of Duluth Limited Partnership,
FHA Project Number 091-10505 REF, as of December 31, 1998, and the related
statements of profit and loss, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership, FHA
Project Number 091-10505 REF, as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1998 on our consideration of Duluth Limited Partnership's
internal controls and a report dated January 27, 1999, on its compliance laws
and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 27, 1999
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Duluth Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheet of Duluth Limited Partnership,
FHA Project Number 091-10505 REF, as of December 31, 1997, and the related
statements of profit and loss, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership, FHA
Project Number 091-10505 REF, as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1998 on our consideration of Duluth Limited Partnership's
internal controls and a report dated January 21, 1998, on its compliance laws
and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Duluth Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheet of Duluth Limited Partnership,
FHA Project Number 091-10505 REF, as of December 31, 1996, and the related
statements of profit and loss, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership as
of December 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1997; on our
consideration of Duluth Limited Partnership's internal control structure and
reports dated January 18, 1997, on its compliance with specific requirements
applicable to nonmajor HUD program transactions and specific requirements
applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 18, 1997
<PAGE>
BARRINGTON
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Barrington Manor Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Barrington Manor Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barrington Manor Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 9 to the
financial statements, the Partnership has suffered recurring vacancies and cash
deficiencies the raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plan regarding those matters are also
described in Note 9. The financial statements do not include any adjustments
that might result from the outcome of this uncertainly.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 13, 1999, except for Note 10,
as to which the date is January 25, 1999
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Barrington Manor Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Barrington Manor Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barrington Manor Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 9 to the
financial statements, the Partnership has suffered recurring vacancies and cash
deficiencies the raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plan regarding those matters are also
described in Note 9. The financial statements do not include any adjustments
that might result from the outcome of this uncertainly.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
Graver
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Graver Inn Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Graver Inn Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Graver Inn Limited Partnership
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 11 to the
financial statements, the Partnership has suffered recurring vacancies and cash
deficiencies the raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plan regarding those matters are also
described in Note 11. The financial statements do not include any adjustments
that might result from the outcome of this uncertainly.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 19, 1999
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Graver Inn Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Graver Inn Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Graver Inn Limited Partnership
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 11 to the
financial statements, the Partnership has suffered recurring vacancies and cash
deficiencies the raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plan regarding those matters are also
described in Note 11. The financial statements do not include any adjustments
that might result from the outcome of this uncertainly.
/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
Chestnut Lane LP
[Letterhead]
FLOYD & COMPANY
Certified Public Accountant
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Chestnut Lane Limited Partnership
We have audited the accompanying balance sheets of Chestnut Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chestnut Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1999
<PAGE>
[Letterhead]
FLOYD & COMPANY
Certified Public Accountant
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Chestnut Lane Limited Partnership
We have audited the accompanying balance sheets of Chestnut Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chestnut Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1998
<PAGE>
[Letterhead]
FLOYD & COMPANY
Certified Public Accountant
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Chestnut Lane Limited Partnership
We have audited the accompanying balance sheets of Chestnut Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
The financial statement information for the year ending December 31, 1995 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chestnut Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1997
<PAGE>
GLENNVILLE
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Glennville Properties
We have audited the accompanying balance sheets of Glennville Properties (a
Georgia Limited Partnership) as of December 31, 1998 and the related statements
of operations, partners' equity (deficit) and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Glennville Properties (a
Georgia Limited Partnership) as of December 31, 1998 and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Floyd & Company, CPA
Savannah, GA
/s/R. Doug Floyd
February 28, 1999
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Glennville Properties
We have audited the accompanying balance sheets of Glennville Properties (a
Georgia Limited Partnership) as of December 31, 1997 and the related statements
of operations, partners' equity (deficit) and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Glennville Properties (a
Georgia Limited Partnership) as of December 31, 1997 and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Floyd & Company, CPA
Savannah, GA
/s/R. Doug Floyd
February 28, 1998
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Glennville Properties
We have audited the accompanying balance sheets of Glennville Properties (a
Georgia Limited Partnership) as of December 31, 1996 and the related statements
of operations, partners' equity (deficit) and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
The financial statement information for the year ending December 31, 1995 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Glennville Properties (a
Georgia Limited Partnership) as of December 31, 1996 and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1997
<PAGE>
Pine Village
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Pine Village Limited Partnership
We have audited the accompanying balance sheets of Pine Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1999
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Pine Village Limited Partnership
We have audited the accompanying balance sheets of Pine Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1998
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Pine Village Limited Partnership
We have audited the accompanying balance sheets of Pine Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
The financial statement information for the year ending December 31, 1996 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1997
<PAGE>
Talbot
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Talbot Village Limited Partnership
We have audited the accompanying balance sheets of Talbot Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Talbot Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1999
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Talbot Village Limited Partnership
We have audited the accompanying balance sheets of Talbot Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Talbot Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1998
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Talbot Village Limited Partnership
We have audited the accompanying balance sheets of Talbot Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
The financial statement information for the year ending December 31, 1996 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Talbot Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1997
<PAGE>
Willowpeg
Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Willowpeg Village Limited Partnership
We have audited the accompanying balance sheets of Willowpeg Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willowpeg Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1999
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Willowpeg Village Limited Partnership
We have audited the accompanying balance sheets of Willowpeg Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willowpeg Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1997 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1998
<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone: (912) 355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Willowpeg Village Limited Partnership
We have audited the accompanying balance sheets of Willowpeg Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
The financial statement information for the year ending December 31, 1995 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willowpeg Village Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1997
<PAGE>
BINGHAM
[Letterhead]
[Logo] macdonaldpage
Independent Auditors' Report
February 5, 1999
Bingham Family Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Bingham Family Housing
Associates (a limited partnership) as of December 31, 1998 and 1997, and the
related statements of profit and loss, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bingham Family Housing
Associates as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants
<PAGE>
[Letterhead]
[Logo] macdonaldpage
Independent Auditors' Report
February 5, 1998
Bingham Family Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Bingham Family Housing
Associates (a limited partnership) as of December 31, 1997 and 1996, and the
related statements of profit and loss, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bingham Family Housing
Associates as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants
<PAGE>
BIRMINGHAM
[Letterhead]
[Logo] macdonaldpage
Independent Auditors' Report
February 5, 1999
Birmingham Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Birmingham Housing Associates
(a limited partnership) as of December 31, 1998 and 1997, and the related
statements of profit and loss, changes in partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Birmingham Housing Associates
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants
<PAGE>
[Letterhead]
[Logo] macdonaldpage
Independent Auditors' Report
February 5, 1998
Birmingham Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Birmingham Housing Associates
(a limited partnership) as of December 31, 1997 and 1996, and the related
statements of profit and loss, changes in partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Birmingham Housing Associates
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants
<PAGE>
NEW SWEDEN
[Letterhead]
[Logo] macdonaldpage
Independent Auditors' Report
February 5, 1999
New Sweden Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of New Sweden Housing Associates
(a limited partnership) as of December 31, 1998 and 1997, and the related
statements of profit and loss, changes in partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Sweden Housing Associates
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants
<PAGE>
[Letterhead]
[Logo] macdonaldpage
Independent Auditors' Report
February 5, 1998
New Sweden Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of New Sweden Housing Associates
(a limited partnership) as of December 31, 1997 and 1996, and the related
statements of profit and loss, changes in partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Sweden Housing Associates
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants
<PAGE>
HAZEL-WINTHROP
[Letterhead]
[LOGO]
Haran & Associates Ltd
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
HAZEL-WINTHROP APARTMENTS Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheets of HAZEL-WINTHROP APARTMENTS,
Project No. 071-35522-PM, as of December 31, 1998 and 1997, and the related
statements of profit and loss, changes in partners' equity, and statement of
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provided a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HAZEL-WINTHROP APARTMENTS, as
of December 31, 1998 and 1997, and its profit or loss, changes in partners'
equity, and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 29, 1999, on our consideration of HAZEL-WINTHROP APARTMENTS
internal control structure and reports dated January 29, 1999, on its compliance
with specific requirements applicable to Affirmative Fair Housing, and specific
requirements applicable to Nonmajor HUD programs.
The accompanying supplementary information (shown on pages 15 to 21) is
presented for purposes of additional analysis and is not part of the basic
financial statements. Such information has been subjected to the same auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Haran & Associates Ltd
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
January 29, 1999
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
HAZEL-WINTHROP APARTMENTS Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheets of HAZEL-WINTHROP APARTMENTS,
Project No. 071-35522-PM, as of December 31, 1997 and 1996, and the related
statements of profit and loss, changes in partners' equity, and statement of
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provided a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HAZEL-WINTHROP APARTMENTS, as
of December 31, 1997 and 1996, and its profit or loss, changes in partners'
equity, and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 30, 1998, on our consideration of HAZEL-WINTHROP APARTMENTS
internal control structure and reports dated January 30, 1998, on its compliance
with specific requirements applicable to Affirmative Fair Housing, and specific
requirements applicable to Nonmajor HUD programs.
The accompanying supplementary information (shown on pages 15 to 20) is
presented for purposes of additional analysis and is not part of the basic
financial statements. Such information has been subjected to the same auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Haran & Associates Ltd
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
February 5, 1998
<PAGE>
MICHAEL DOBENS
[Letterhead]
[Logo]
Otis, Atwell & Timberlake
Certified Public Accountants
The Partners
Michael J. Dobens Limited Partnership I
We have audited the accompanying balance sheets of Michael J. Dobens Limited
Partnership I as of December 31, 1998, and the related statements of income,
partners' equity and cash flows for the years then ended. The financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
we believe that my audits, provide a reasonable basis for my opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Michael J. Dobens Limited
Partnership I as of December 31, 1998, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership's first mortgage note has matured and has
not yet been refinanced, which raises substantial doubt about the Partnership's
ability to continue as a going concern. Management's plans regarding this matter
are described in Note 7. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Otis, Atwell & Timberlake, P.A.
January 21, 1999
Portland, Maine
<PAGE>
BILLIE J. BURNETT, CPA
5 Benton Drive
Nashua, NH 03060
(603) 883-4230
To The Partners
Michael J. Dobens Limited Partnership I
I have audited the accompanying balance sheets of Michael J. Dobens Limited
Partnership I as of December 31, 1997 and 1996, and the related statements of
income, partners' equity and cash flows for the years then ended. The financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits, provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Michael J. Dobens Limited
Partnership I as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Billie J. Burnett
Nashua, NH
Billie J. Burnett
January 2, 1998
<PAGE>
LOGAN
[Letterhead]
Marks Shron & Company, LLP
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
To the Partners of
Logan Plaza Associates
We have audited the accompanying balance sheets of Logan Plaza Associates,
as of December 31, 1998 and 1997, and the related statements of income, changes
in partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the U.
S. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Logan Plaza Associates at December
31, 1998 and 1997, and the results of its operations, changes in partners'
capital and cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development , Office of Inspector General, we have also issued
reports dated January 15, 1999 on our consideration of the Partnership's
internal control structure, on its compliance with specific requirements
applicable to major HUD programs and on its compliance with specific
requirements applicable to Fair Housing and Non-Discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 13 to 17 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of
the Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, except for the effects of the item discussed above, the additional
information is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
/s/ Marks Shron & Company
New York, NY
January 27, 1998
<PAGE>
[Letterhead]
Marks Shron & Company, LLP
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
To the Partners of
Logan Plaza Associates
We have audited the accompanying balance sheets of Logan Plaza Associates,
as of December 31, 1997 and 1996, and the related statements of income, changes
in partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the U.
S. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Logan Plaza Associates at December
31, 1997 and 1996, and the results of its operations, changes in partners'
capital and cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development , Office of Inspector General in July 1993, we have also
issued
reports dated January 15, 1998 on our consideration of the Partnership's
internal control structure, on its compliance with specific requirements
applicable to major HUD programs and on its compliance with specific
requirements applicable to Fair Housing and Non-Discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.The accompanying supplementary information
shown on pages 14 to 21 is presented for purposes of additional analysis and
is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, except for the
effects of the item discussed above, the additional information is fairly
stated, in all material respects, in relation to the basic financial statements
taken as a whole.
/s/ Marks Shron & Company
New York, NY
January 15, 1998
<PAGE>
[Letterhead]
Marks Shron & Company, LLP
INDEPENDENT AUDITOR'S REPORT
To the Owners of HUD Field Office
Delmar Housing Associates Limited Partnership Denver, Colorado
Yuma, Arizona
We have audited the accompanying Balance Sheet of Delmar Housing Associates
Limited Partnership, FHA Project Number 109-94004 REF, as of December 31, 1998,
and the related statements of profit and loss, changes in project equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Delmar Housing Associates
Limited Partnership, as of December 31, 1998 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1998, on our consideration of Delmar Housing Associates
Limited Partnership's internal control structure and a report dated January 26,
1998, on its compliance with laws and regulations.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
14 through 16 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Delmar Housing Associates Limited
Partnership. Such information has been subjected to the same auditing procedures
applied in the examination of the basic financial statements and, in our
opinion, are presented fairly in all material respects in relation to the
financial statements taken as a whole.
Respectfully submitted,
/s/ Michael Sczekan & Co.
Michael Sczekan & Co., P.C.
Certified Public Accountants
Englewood, Colorado
January 26, 1999
<PAGE>
[Letteread]
Michael Sczekan & Co., P.C.
INDEPENDENT AUDITOR'S REPORT
To the Owners of HUD Field Office
Delmar Housing Associates Limited Partnership Denver, Colorado
Yuma, Arizona
We have audited the accompanying Balance Sheet of Delmar Housing Associates
Limited Partnership, FHA Project Number 109-94004 REF, as of December 31, 1997,
and the related statements of profit and loss, changes in project equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Delmar Housing Associates
Limited Partnership, as of December 31, 1997 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 10, 1998, on our consideration of Delmar Housing Associates
Limited Partnership's internal control structure and a report dated February 10,
1998, on its compliance with laws and regulations.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
15 through 21 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Delmar Housing Associates Limited
Partnership. Such information has been subjected to the same auditing procedures
applied in the examination of the basic financial statements and, in our
opinion, are presented fairly in all material respects in relation to the
financial statements taken as a whole.
Respectfully submitted,
/s/ Michael Sczekan & Co.
Michael Sczekan & Co., P.C.
Certified Public Accountants
Englewood, Colorado
February 10, 1998
<PAGE>
[Letterhead]
Michael Sczekan & Co., P.C.
INDEPENDENT AUDITOR'S REPORT
To the Owners of HUD Field Office
Delmar Housing Associates Limited Partnership Denver, Colorado
Yuma, Arizona
We have audited the accompanying Balance Sheet of Delmar Housing Associates
Limited Partnership, FHA Project Number 109-94004 REF, as of December 31, 1996,
and the related statements of profit and loss, changes in project equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Delmar Housing Associates
Limited Partnership, as of December 31, 1996 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 14, 1997, on our consideration of Delmar Housing Associates
Limited Partnership's internal control structure and a report dated February 14,
1997, on its compliance with laws and regulations.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
16 through 23 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Delmar Housing Associates Limited
Partnership. Such information has been subjected to the same auditing procedures
applied in the examination of the basic financial statements and, in our
opinion, are presented fairly in all material respects in relation to the
financial statements taken as a whole.
Respectfully submitted,
/s/ Michael Sczekan & Co.
Michael Sczekan & Co., P.C.
Certified Public Accountants
Englewood, Colorado
February 14, 1997
<PAGE>
HERITAGE
[Letterhead]
[Logo] Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Heritage Court Limited Partnership
We have audited the accompanying balance sheet of Heritage Court Limited
Partnership as of December 31, 1998, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity (deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Heritage Court Limited
Partnership as of December 31, 1998, and the results of its operations, changes
in partners' (deficit) and cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 21 through 26
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information, except for that portion
marked "unaudited," on which we express no opinion, has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated January 5,
1999, on our consideration of Heritage Court Limited Partnership's internal
control structure and on its compliance with specific requirements applicable to
CDA programs, fair housing and non-discrimination, and laws and regulations
applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 5, 1999 Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
<PAGE>
[Letterhead]
[Logo] Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Heritage Court Limited Partnership
We have audited the accompanying balance sheet of Heritage Court Limited
Partnership as of December 31, 1997, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity (deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Heritage Court Limited
Partnership as of December 31, 1997, and the results of its operations, changes
in partners' (deficit) and cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 21 through 33
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information, except for that portion
marked "unaudited," on which we express no opinion, has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated January
6, 1998, on our consideration of Heritage Court Limited Partnership's
internal control structure and on its compliance with specific requirements
applicable to CDA programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 6, 1998 Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
<PAGE>
[Letterhead]
[Logo] Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Heritage Court Limited Partnership
We have audited the accompanying balance sheet of Heritage Court Limited
Partnership as of December 31, 1996, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity (deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Heritage Court Limited
Partnership as of December 31, 1996, and the results of its operations, changes
in partners' equity (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 19 through 33
is presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information, except for that portion
marked "unaudited," on which we express no opinion, has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated January
6, 1997, on our consideration of Heritage Court Limited Partnership's
internal control structure and on its compliance with specific requirements
applicable to CDA programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 6, 1997 Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
<PAGE>
MUELLER, WALLA & ALBERTSON, P.C.
INDEPENDENTS AUDITORS' REPORT
The Partners
Perryville Associates I, L.P.
St. Louis, Missouri
We have compiled the accompanying balance sheet of Perryville Associates I, L.P.
(a limited partnership) as of December 31, 1998, and the related statements of
operations, partners' capital, and cash flows for the year then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
and opinion or any other form of assurance on them.
The financial statements for the year ended December 31, 1997, were audited by
us, and we expressed an unqualified opinion on them in our report dated February
9, 1998, but we have not performed any auditing procedures since that date.
/s/Mueller, Walla & Albertson, P.C.
Kirkwood, Missouri
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
February 10, 1999
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
MUELLER, WALLA & ALBERTSON, P.C.
INDEPENDENTS AUDITORS' REPORT
The Partners
Perryville Associates I, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Perryville Associates I, L.P.
(a limited partnership) as of December 31, 1997 and 1996, and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Perryville Associates, I, L.P.
as of December 31, 1997 and 1996, and the results of its operations, changes in
partners' capital and cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Mueller, Walla & Albertson, P.C.
Kirkwood, Missouri
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
February 9, 1998
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORTS
DECEMBER 31, 1997 AND 1996
Project No. 123-36605
Project Name - Coronado Courts
<PAGE>
C O N T E N T S
Page
SECTION I - BASIC FINANCIAL STATEMENTS
Independent Auditor's Report 1
Financial Statements:
Balance Sheets 2
Statement of Profit and Loss (HUD Form No. 92410) - 1997 3
Statement of Profit and Loss (HUD Form No. 92410) - 1996 5
Statements of Partners' Capital (Deficit) 7
Statements of Cash Flows 8
Notes to Financial Statements 9
SECTION II - SUPPLEMENTAL INFORMATION REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SECTION III - OTHER REQUIRED INDEPENDENT AUDITOR REPORTS
SECTION IV - PARTNERS' AND MANAGEMENT AGENT'S CERTIFICATIONS
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Partners
Coronado Courts Limited Partnership
We have audited the accompanying balance sheets of Coronado Courts Limited
Partnership, as of December 31, 1997 and 1996, and the related statements of
profit and loss, partners' capital (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Coronado Courts Limited
Partnership as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have issued a report dated February 3, 1998 on our
consideration of the Partnership's internal control and reports, also dated
February 3, 1998, on its compliance with specific requirements applicable to
major HUD programs, compliance with laws, regulations, contracts and grants,
and specific requirements applicable to Fair Housing and Non-Discrimination.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
information (shown in Section II) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Coronado Courts Limited Partnership. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
ASSETS
1997 1996
------------------ ------------------
CURRENT ASSETS
1110 Petty cash $ 59,222 $ 75,937
1120 Cash 500 500
1130 Accounts receivable - tenants 371 342
1140 Accounts receivable - government 1,054 398
1140 Accounts receivable - other 50 117
1240 Prepaid property insurance 12,690 12,499
1250 Prepaid mortgage insurance 3,219 3,235
------------------ ------------------
Total current assets 107,745 120,762
FUNDED DEPOSITS HELD IN TRUST
1191 Tenant security deposits 15,236 14,879
1320 Reserve for replacements 90,957 116,758
------------------ ------------------
Total funded deposits held in trust 106,193 131,637
PROPERTY AND EQUIPMENT
1410 Land 200,000 200,000
1411 Land improvements 252,331 252,331
1420 Buildings 4,792,782 4,792,782
1430 Building equipment - fixed 81,154 124,157
1450 Furniture - for project
and tenant use 20,477 14,541
1465 Automobiles 15,000 15,000
1470 Maintenance equipment 572 572
1490 Furnishings 52,027 98,500
------------------ ------------------
5,414,343 5,497,883
Less accumulated depreciation 1,675,292 1,643,651
------------------ ------------------
Net property and equipment 3,739,051 3,854,232
OTHER ASSETS
1900 Deferred loan fees, net of
$55,492 and $50,078 accumulated
amortization 161,058 166,472
------------------ ------------------
TOTAL ASSETS $ 4,114,047 $ 4,273,103
================== ==================
The accompanying notes are an integral part of these financial statements.
<PAGE>
LIABILITIES AND PARTNERS' CAPITAL
1997 1996
------------------ ------------------
CURRENT LIABILITIES
2110 Accounts payable $ 5,913 $ 7,611
2111 Accrued incentive management fee 45,490 27,054
2130 Accrued interest payable 30,316 30,575
2150 Accrued property taxes 14,215 15,356
2210 Prepaid rental income - 27
2320 Mortgage note payable -
current portion 35,002 31,763
Total current liabilities 130,936 112,386
DEPOSIT LIABILITIES
2191 Tenant security deposits
15,236 14,879
LONG-TERM LIABILITIES
2320 Mortgage note payable 3,731,253 3,763,016
Less current portion
35,002 31,763
------------------ ------------------
Net long-term debt 3,696,251 3,731,253
------------------ ------------------
TOTAL LIABILITIES 3,842,423 3,858,518
PARTNERS' CAPITAL
3120 Partners' contributions 1,800,000 1,800,000
3121 Less distributions (502,435) (472,435)
3240 Accumulated loss (1,025,941) (912,980)
------------------ ------------------
TOTAL PARTNERS' CAPITAL 271,624 414,585
------------------ ------------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 4,114,047 $ 4,273,103
================== ==================
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of Profit U.S. Department of Housing
And Loss and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval 2502-0052 (Exp. 1/31/95)
Public Reporting Burden for this collection of information is estimated to
average 1.0 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed,
and completing and reviewing the collection of information. Send comments
regarding this burden estimate or any other aspect of this collection of
information, including suggestions for reducing this burden, to the Reports
Management Officer, Office of Information Policies and Systems, U.S. Department
of Housing and Urban Development, Washington, D.C. 20410-3600 and to the Office
of Management and Budget, Paperwork Reduction Project (2502-0052), Washington,
D.C. 20503. Do not send this completed form to either of these addressees.
For Month/Period Project Number: project Name:
Beginning: Ending:
January 1, 1997 December 31, 1997 123-36605 Coronado Courts
<TABLE>
<S> <C> <C> <C>
Part I Description of Account Acct. No. Amount*
Apartment or Member Carrying Charges (Coops) 5120 $119,820
Tenant Assistance Payments 5121 $725,280
Rental Furniture and Equipment 5130 $
Income Stores and Commercial 5140 $
5100 Garage and Parking Spaces 5170 $
Flexible Subsidy Income 5180 $
Miscellaneous (specify) 5190 $
Total Rent Revenue Potential at 100% Occupancy $845,100
Apartments 5220 $(2,943)
Furniture and Equipment 5230 $
Vacancies Stores and Commercial 5240 $
5200 Garage and Parking Spaces 5270 $
Miscellaneous (specify) 5290 $
Total Vacancies (2,943)
Net Rental Revenue Rent Revenue Less Vacancies $842,157
Elderly & Congregate Services Income - 5300
Total Services Income ( Schedule Attached ) 5300 $
Interest Income - Project Operations 5410 $119
Financial Income from investments - Residual Receipts 5430
Revenue Income from investments - Reserve for Replacement 5440 $2,460
5400 Income from investments - Miscellaneous 5490 $
Total Financial Revenue $2,579
Laundry and Vending 5910 $14,205
NSF and Late Charges 5920 $829
Other Damages and Cleaning Fees 5930 $3,770
Revenue Forfeited Tenant Security Deposits 5940 $
5900 Other Revenue (specify) - Appliance sales 5990 $3,053
Total Other Revenue $21,857
Total Revenue $866,593
Advertising 6210 $
Other Administrative Expense 6250 $
Office Salaries 6310 $1,263
Office Supplies 6311 $1,649
Office or Model Apartment Rent 6312
Administrative Management 6320 $60,229
Expenses Manager or Superintendent Salaries 6330 $30,688
6200/6300 Manager or Superintendent Rent Free Unit 6331 $
Legal Expenses (Project) 6340 $163
Auditing Expenses (Project) 6350 $4,600
Bookkeeping Fees/Accounting Services 6351 $11,152
Telephone and Answering Service 6360 $2,399
Bad Debts 6370 $161
Miscellaneous Administrative Expenses (specify) 6390 $3,079
Total Administrative Expenses $115,383
Fuel Oil/Coal 6420 $
Utilities Electricity (Light and Misc. Power) 6450 $6,757
Expense Water 6451 $22,465
6400 Gas 6452 $3,280
Sewer 6453 $
Total Utilities Expense $32,502
</TABLE>
*All amounts must be rounded to the nearest dollar; $.50 and over,
round up--$.49 and below, round down.
Page 1 of 2 form HUD-92410 (7/91)
ref Handbook 4370.2
The accompanying notes are an integral part of these financial statements
<TABLE>
<PAGE>
<S> <C> <C>
Coronado Courts 123-36605
Janitor and Cleaning Payroll 6510 $ 12,458
Janitor and Cleaning Supplies 6515 $ 336
Janitor and Cleaning Contract 6517 $
Exterminating Payroll/Contract 6519 $ 648
Exterminating Supplies 6520 $ 5,720
Garbage and Trash Removal 6525 $ 12,457
Security Payroll/Contract 6530 $
Grounds Payroll 6535 $ 12,243
Grounds Supplies 6536 $ 991
Operating and Grounds Contract 6537 $ 19,122
Maintenance Repairs Payroll 6540 $ 49,849
Expenses Repairs Material 6541 $ 18,424
6500 Repairs Contract 6542 $ 6,264
Elevator Maintenance/Contract 6545 $
Heating/Cooling Repairs and Maintenance 6546 $ 90
Swimming Pool Maintenance/Contract 6547 $
Snow Removal 6548 $
Decorating Payroll/Contract 6560 $
Decorating Supplies 6561 $ 16,044
Other 6570 $ 12,204
Miscellaneous Operating and Maintenance Expenses 6590 $
Total Operating & Maintenance Expenses $ 166,850
Real Estate Taxes 6710 $ 28,420
Payroll Taxes (FICA) 6711 $ 10,012
Miscellaneous Taxes, Licenses and Permits 6719 $ 20,546
Taxes Property and Liability Insurance (Hazard) 6720 $ 15,037
and Fidelity Bond Insurance 6721 $
Insurance Workmen's Compensation 6722 $
6700 Health Insurance and Other Employee Benefits 6723 $
Other Insurance (specify) 6729 $
Total Taxes and Insurance $ 74,015
Interest on Bonds Payable 6810 $
Financial Interest on Mortgage Payable 6820 $ 365,241
Expenses Interest on Notes Payable (Long-Term) 6830 $
6800 Interest on Notes Payable (Short-Term) 6840 $
Mortgage Insurance Premium/Service Charge 6850 $ 19,330
Miscellaneous Financial Expenses 6890 $ 5,414
Total Financial Expenses $ 389,985
Elderly & Total Service Expenses-Schedule Attached 6900 $
Congregate Total Cost of Operations Before Depreciation $ 778,735
Service Profit (Loss) before Depreciation
$ 87,858
Expenses Depreciation (Total) - 6600 Specify 6600 $ 173,761
6900 Operating Profit or (Loss) $ (85,903)
Corporate or Drug Elimination grant income (Note E) $ (161,388)
Mortgagor Drug Elimination grant expenditures (Note E) $ 161,388
Entity Taxes (Federal-State-Entity) 7130-32 $
Expenses Other Expenses (Entity) - Incentive Management Fee 7190 $ 27,058
7100 Total Corporate Expenses $ 27,058
Net Profit or (Loss) $ (112,961)
</TABLE>
Warning: HUD will prosecute false claims and statements. Conviction may
result in criminal and or civil penalties. (18 U.S.C 1001, 1010, 1012;
31 U.S.C. 3729, 3802) Miscellaneous or other Income and Expense Sub-
account Groups. If miscellaneous or other income and/or expense
subaccounts (5190,5290,5490,5990,6390,6590,6729, 6890 and 7190) exceed
the Account Groupings by 10% or more, attach a separate schedule
describing or explaining the miscellaneous income or expenses.
Part II
1. Total principal payments required under the mortgage, even
if payments under a Workout Agreement are less or more than
those required under the mortgage. $ 31,763
2. Replacement Reserve deposits required by the Regulatory
Agreement or Amendments thereto, even if payments may be
temporarily suspended or waived. $ 15,963
3. Replacement or Painting Reserve releases which are included
as expense items on this Profit and Loss statement. $ 821
4. Project Improvement Reserve Releases under the Flexible
Subsidy Program that are included as expense items on this
Profit and Loss Statement. $ 0
Page 2 of 2
form HUD-92410
The accompanying notes are an integral part of these financial statements
<PAGE>
Statement of Profit U.S. Department of Housing
and Loss and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval 2502-0052 (Exp. 1/31/95)
Public Reporting Burden for this collection of information is estimated to
average 1.0 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information. Send comments regarding
this burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to the Reports Management
Officer, Officeof Information Policies and Systems, U.S. Department of Housing
and Urban Development, Washington, D.C. 20410-3600 and to the Office of
Management and Budget, Paperwork Reduction Project (2502-0052), Washington,
D.C. 20503. Do not send this completed form to either of these addressees.
For Month/Period
Project Number: 123-36605 Project Name: Coronado Courts
Beginning: Ending:
January 1, 1996 December 31, 1996
<TABLE>
<S> <C> <C> <C>
Part I Description of Account Acct. No. Amount*
Apartment or Member Carrying Charges (Coops) 5120 $ 102,913
Tenant Assistance Payments 5121 $ 734,207
Rental Furniture and Equipment 5130 $
Income Stores and Commercial 5140 $
5100 Garage and Parking Spaces 5170 $
Flexible Subsidy Income 5180 $
Miscellaneous (specify) 5190 $
Total Rent Revenue Potential at 100% Occupancy $ 837,120
Apartments 5220 $ (1,089)
Furniture and Equipment 5230 $
Vacancies Stores and Commercial 5240 $
5200 Garage and Parking Spaces 5270 $
Miscellaneous (specify) 5290 $
Total Vacancies (1,089)
Net Rental Revenue Rent Revenue Less Vacancies $ 836,031
Elderly & Congregate Services Income - 5300
Total Services Income ( Schedule Attached ) 5300 $
Interest Income - Project Operations 5410 $ 316
Financial Income from investments - Residual Receipts 5430 $
Revenue Income from investments - Reserve for Replacement 5440 $ 3,624
5400 Income from investments - Miscellaneous 5490 $
Total Financial Revenue $ 3,940
Laundry and Vending 5910 $ 14,923
NSF and Late Charges 5920 $ 705
Other Damages and Cleaning Fees 5930 $ 2,883
Revenue Forfeited Tenant Security Deposits 5940 $
5900 Other Revenue (specify) - Appliance sales 5990 $ 2,457
Total Other Revenue $ 20,968
Total Revenue $ 860,939
Advertising 6210 $
Other Administrative Expense 6250 $
Office Salaries 6310 $ 1,354
Office Supplies 6311 $ 2,710
Office or Model Apartment Rent 6312 $
Administrative Management 6320 $ 59,805
Expenses Manager or Superintendent Salaries 6330 $ 28,486
6200/6300 Manager or Superintendent Rent Free Unit 6331 $
Legal Expenses (Project) 6340 $ 76
Auditing Expenses (Project) 6350 $ 4,500
Bookkeeping Fees/Accounting Services 6351 $ 9,698
Telephone and Answering Service 6360 $ 2,528
Bad Debts 6370 $ 147
Miscellaneous Administrative Expenses (specify) 6390 $ 3,182
Total Administrative Expenses $ 112,486
Fuel Oil/Coal 6420 $
Utilities Electricity (Light and Misc. Power) 6450 $ 6,127
Expense Water 6451 $ 24,834
6400 Gas 6452 $ 2,533
Sewer 6453 $
Total Utilities Expense $ 33,494
</TABLE>
*All amounts must be rounded to the nearest dollar; $.50 and over,
round up--$.49 and below, round down.
Page 1 of 2 form HUD-92410 (7/91)
ref Handbook 4370.2
The accompanying notes are an integral part of these financial statements
<PAGE>
Coronado Courts 123-36605
<TABLE>
<S> <C> <C> <C>
Janitor and Cleaning Payroll 6510 $ 10,717
Janitor and Cleaning Supplies 6515 $ 343
Janitor and Cleaning Contract 6517 $
Exterminating Payroll/Contract 6519 $ 600
Exterminating Supplies 6520 $ 5,783
Garbage and Trash Removal 6525 $ 13,214
Security Payroll/Contract 6530 $
Grounds Payroll 6535 $ 13,961
Grounds Supplies 6536 $ 625
Operating and Grounds Contract 6537 $ 18,139
Maintenance Repairs Payroll 6540 $ 45,713
Expenses Repairs Material 6541 $ 11,404
6500 Repairs Contract 6542 $ 5,919
Elevator Maintenance/Contract 6545 $
Heating/Cooling Repairs and Maintenance 6546 $ 1,659
Swimming Pool Maintenance/Contract 6547 $
Snow Removal 6548 $
Decorating Payroll/Contract 6560 $
Decorating Supplies 6561 $ 14,977
Other 6570 $ 11,364
Miscellaneous Operating and Maintenance
Expenses 6590 $ 50
Total Operating & Maintenance Expenses $ 154,468
Real Estate Taxes 6710 $ 30,713
Payroll Taxes (FICA) 6711 $ 8,191
Miscellaneous Taxes, Licenses and Permits 6719 $ 20,366
Taxes Property and Liability Insurance (Hazard)6720 $ 14,209
and Fidelity Bond Insurance 6721 $
Insurance Workmen's Compensation 6722 $
6700 Health Insurance and Other Employee Benefits 6723 $
Other Insurance (specify) 6729 $ 3,959
Total Taxes and Insurance $ 77,438
Interest on Bonds Payable 6810 $
Financial Interest on Mortgage Payable 6820 $ 368,205
Expenses Interest on Notes Payable (Long-Term) 6830 $
6800 Interest on Notes Payable (Short-Term) 6840 $
Mortgage Insurance Premium/Service Charge 6850 $ 19,427
Miscellaneous Financial Expenses 6890 $ 5,414
Total Financial Expenses $ 393,046
Elderly & Total Service Expenses-Schedule Attached 6900 $
Congregate Total Cost of Operations Before Depreciation $ 770,932
Service Profit (Loss) before Depreciation $ 90,007
Expenses Depreciation (Total) - 6600 Specify 6600 $ 164,845
6900 Operating Profit or (Loss) $ (74,838)
Corporate or Drug Elimination grant proceeds (Note E) $ (88,612)
Mortgagor Drug Elimination grant expenditures (Note E) $ 88,612
Entity Taxes (Federal-State-Entity) 7130-32 $
Expenses Other Expenses (Entity) - Incentive
Management Fee 7190 $ 26,487
7100 Total Corporate Expenses $ 26,487
Net Profit or (Loss) $ (101,325)
</TABLE>
Warning: HUD will prosecute false claims and statements. Conviction
may result in criminal and or civil penalties. (18 U.S.C. 1001, 1010,
1012; 31 U.S.C. 3729, 3802) Miscellaneous or other Income and Expense
Sub-account Groups. If miscellaneous or other income and/or expense
subaccounts (5190,5290,5490,5990,6390,6590,6729, 6890 and 7190) exceed
the Account Groupings by 10% or more, attach a separate schedule
describing or explaining the miscellaneous income or expenses.
Part II
1. Total principal payments required under the mortgage, even if
payments under a Workout Agreement are less or more than those
required under the mortgage. $ 28,823
2. Replacement Reserve deposits required by the Regulatory
Agreement or Amendments thereto, even if payments may be
temporarily suspended or waived. $ 15,963
3. Replacement or Painting Reserve releases which are
included as expense items on this Profit and Loss
statement. $ 1,400
3. Project Improvement Reserve Releases under the Flexible
Subsidy Program that are included as expense items on
this Profit and Loss Statement. $ 0
Page 2 of 2
form HUD-92410
The accompanying notes are an integral part of these financial statements
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1997 AND 1996
LIMITED GENERAL
YEAR ENDED DECEMBER 31, 1996 PARTNERS PARTNERS TOTAL
- -------------------------------------------------------------------------------
Balance, January 1, 1996 $ 765,845 $ (219,935) $ 545,910
Distribution to partners (29,700) (300) (30,000)
Loss for the year (100,312) (1,013) (101,325)
-------------------------------------------------
Balance, December 31, 1996 $ 635,833 $ (221,248) $ 414,585
=================================================
YEAR ENDED DECEMBER 31, 1997
- ------------------------------------------------
Balance, January 1, 1997 $ 635,833 $ (221,248) $ 414,585
Distribution to partners (29,700) (300) (30,000)
Loss for the year (111,831) (1,130) (112,961)
-------------------------------------------------
Balance, December 31, 1997 $ 494,302 $ (222,678) $ 271,624
===============================================
The accompanying notes are an integral part of these financial statements.
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
------------------ -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from operations
Rental of apartments $ 841,445 $ 836,308
Interest 2,579 3,940
Drug Elimination grant proceeds 161,388 88,612
Laundry receipts and other revenue 21,857 20,968
------------------ -----------------
Total 1,027,269 949,828
Cash disbursed for operations 24,780 26,717
Administrative expense
Management fees 59,804 59,581
Utilities 32,106 33,468
Payroll 115,250 108,422
Operating and maintenance expense 93,271 83,396
Property taxes 29,561 32,189
Taxes - other 20,539 20,231
Property insurance 15,228 15,714
Mortgage insurance premiums 19,314 19,412
Mortgage interest 365,500 368,439
Drug Elimination grant expenditures 161,388 88,612
Incentive management fee 8,622 24,969
------------------ -----------------
Total 945,363 881,150
------------------ -----------------
Net cash provided by operating activities 81,906 68,678
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (59,754) (51,820)
Tenant security deposits funded (357) 178
Net change in escrow deposit accounts (2,905) (9,479)
Deposits to reserve for replacements (18,423) (19,587)
Withdrawals from reserve for replacements 44,224 47,929
------------------ -----------------
Net cash used by investing activities (37,215) (32,779)
CASH FLOWS FROM FINANCING ACTIVITIES
Tenant security deposits received 357 (178)
Payment of long-term debt (31,763) (28,823)
Withdrawals by partners (30,000) (30,000)
------------------ -----------------
Net cash used by financing activities (61,406) (59,001)
------------------ -----------------
Net decrease in cash (16,715) (23,102)
CASH BALANCE, BEGINNING OF YEAR 76,437 99,539
------------------ -----------------
CASH BALANCE, END OF YEAR $ 59,722 $ 76,437
================== =================
CASH FLOWS FROM OPERATING ACTIVITIES
Net $ (112,961) $ (101,325)
loss
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 179,175 170,259
Changes in:
Accounts receivable (618) 133
Prepaid expenses (175) (1,490)
Accounts payable and accrued
expenses (1,951) (417)
Accrued incentive management fee 18,436 1,518
------------------ -----------------
Net cash provided by operating
activities $ 81,906 $ 68,678
================== =================
The accompanying notes are an integral part of these financial statements.
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
NOTE A - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
BUSINESS - Coronado Courts Limited Partnership, rehabilitated and
operates a 145 unit rental housing project in conjunction with the U.S.
Department of Housing and Urban Development Section 8 Housing Assistance
Payments Program administered through the City of Douglas Housing Authority.
The Partnership's housing assistance contract expires in four stages during
2002. The project's name is Coronado Courts and is located in Douglas, Arizona.
Apartments are initially leased for a period of one year. After the
initial term, the leases continue on a month-to-month basis. The U.S.
Department of Housing and Urban Development (HUD) regulates the rental rates
and pays a portion of the rental. In addition, HUD continues to pay a portion
of the rental for a period of sixty days, if a vacancy occurs. The apartment
rents range from $380 to $620 per month.
The apartment project is the principal asset of the Partnership and therefore,
the Partnership's operations are concentrated in the multifamily real estate
market. The Partnership operates in a heavily regulated environment. The
operations of the Partnership 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 administrative
changes 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.
NATURE OF PARTNERSHIPS - In accordance with the generally accepted
method of presenting partnership financial statements, the financial statements
do not include the personal assets and liabilities of the partners. The
Partnership's income or loss is reportable by the partners on their individual
income tax returns.
CASH AND CASH EQUIVALENTS - Cash and cash equivalents, for statement
of cash flow purposes, consist of unrestricted cash deposits in federally
insured financial institutions. Funded deposits held in trust are not
considered to be cash and cash equivalents for statement of cash flow purposes.
RESTRICTED DEPOSITS AND FUNDED RESERVES - Mortgage escrow deposits
and the reserve for asset replacement are held on deposit by the mortgage
servicing corporation.
PROPERTY AND EQUIPMENT - Property and equipment are generally
presented at cost, less accumulated depreciation. Depreciation is provided
using accelerated methods over the estimate useful lives of the assets. The
Partnership has, however, adopted Statement of Financial Accounting Standard
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. This Statement requires that long-lived assets be
presented at fair value where information indicates that the Partnership might
be unable to recover, through operations or sale, the carrying amount of long-
lived assets.
DEFERRED LOAN FEES - Deferred loan fees are amortized by straight-line method
over the forty-year term of the related mortgage note.
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
NOTE A - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Continued
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
REGULATORY AGREEMENT - A Regulatory Agreement with the Federal Housing
Administration sets forth the following requirements, among others:
The Partnership is required to make monthly deposits for the funding of
property insurance, mortgage and real estate taxes.
The Partnership is required to establish and maintain a
reserve fund for asset replacements through monthly deposits to the reserve.
These funds may not be withdrawn without the prior consent of HUD.
The Partnership is prohibited from making any distribution of
assets or income, except from surplus cash and only after the end of a semi-
annual or annual fiscal period.
ADVERTISING - Advertising costs are expensed as incurred.
NOTE B - MORTGAGE NOTE PAYABLE
The mortgage note payable is collateralized by an insured mortgage on
the project's land and buildings. Terms of the note require monthly payments
of $33,105, including principal and interest at 9.75%, with final maturity June
2023.
In connection with this mortgage note, the Partnership has entered
into a regulatory agreement with the Secretary of Housing and Urban Development
which contains, among other things, restrictions on the conveyance, transfer,
or encumbrance of any of the project property, the assumption of additional
indebtedness, and the assignment of rights to manage or receive the rents and
profits of the property.
Maturities of long-term debt for the next five years are as follows:
1998 $35,002
1999 $38,571
2000 $42,505
2001 $46,839
2002 $51,616
<PAGE>
NOTE C - ALLOCATION OF NET INCOME OR LOSS AND DISTRIBUTION PREFERENCES
Net income or loss is allocated one-percent (1%) to the general
partners and ninety-nine percent (99%) to the limited partners. Annual cash
distributions to partners can only be paid from surplus cash of the Partnership
as defined by the Department of Housing and Urban Development. Such
distributions are allocable between the limited partners and the general
partner as follows:
First - $29,700 to the limited partners and $300 to the general
partner on a cumulative basis.
Second - Repay any project expense loans.
Third - Payment of the incentive management fee.
Balance - 99% to the limited partners and 1% to the general partner.
Cash distributions resulting from a sale or refinancing of the project
will be allocated using methods described in the
partnership's agreement.
NOTE D - IDENTITY OF INTEREST
Essex Corporation, a general partner in Coronado Courts Limited
Partnership, also manages Coronado Courts. The management agreement with Essex
Corporation currently provides for a management fee equal to 7% of rental and
service income. Management fees paid or accrued to Essex Corporation for the
years ended December 31, 1997 and 1996 were $60,229 and $59,805, respectively.
Data processing fees paid to Essex for the years ended December 31, 1997 and
1996 were $11,152 and $9,698, respectively. Essex Corporation also is
entitled to an incentive management fee which is to be paid from surplus cash.
Incentive management fees totaled $27,058 for 1997 and $26,487 for 1996.
NOTE E - GRANT INCOME AND EXPENSE
The project has been awarded Drug Elimination grants through the U.S.
Department of Housing and Urban Renewal. Grant income and expense for the years
ended December 31, 1997 and 1996 is summarized below:
1997 1996
--------------------- ---------------------
Grant income $ 161,388 $ 88,612
===================== =====================
Grant expenses:
Educational services $25,972 $28,048
Transportation 5,147 27,522
Facility improvements 2,212 8,955
Payroll 83,480 1,795
Counseling 12,560 10,848
Other expenses 32,017 11,444
--------------------- ---------------------
Total grant expenses $161,388 $88,612
===================== =====================
<PAGE>
Section II
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
SUPPLEMENTAL INFORMATION REQUIRED BY
YEAR ENDED DECEMBER 31, 1997 AND 1998
Non-Income Producing Apartments
None
Accounts Receivable - Tenants
Days Number of Tenants Amount
- ---------------- -------------------------- -----------------
0-30 - -
31-60 2 $ 209
61-90 - -
over 90 1 $ 162
========================== =================
Total 3 $ 371
========================== =================
Accounts and Notes Receivable - Other Than From Regular Tenants
Accounts receivable - government - tenant assistance payments $ 1,054
=================
=================
Accounts receivable - miscellaneous $ 50
=================
Mortgage Escrow Deposits
Estimated amount required for future payment of:
City, state and county taxes $ 7,102
Property insurance 2,294
Mortgage insurance 16,095
-----------------
Total 25,491
Total confirmed by mortgagee 30,639
-----------------
Amount on deposit in excess of estimated requirements $ 5,148
=================
Tenant Security Deposits
Reserve for Replacements
Balance, beginning of year $ 116,758
Deposits 15,963
Interest earnings, net of any investment fees 2,460
Authorized withdrawals (carpet, ranges, refrigerators,
and blinds) (44,224)
-----------------
Balance, end of year - confirmed by mortgagee $ 90,957
=================
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
SUPPLEMENTAL INFORMATION REQUIRED BY
YEAR ENDED DECEMBER 31, 1997 AND 1998
Accounts Payable - Other Than Trade Creditors
Essex Corporation incentive management fee -
payable from surplus cash $ 45,490
=================
Accrued Property Taxes
Basis of Accrual Period Covered Due Date Accrued
-----------------
Property tax statement 7/1/97 to 12/31/97 May 1998 $ 14,215
=================
Monthly installments are paid into a mortgage escrow for the payment of
property taxes.
Notes Payable (Other than Insured Mortgage)
None
Compensation Paid to Partners
None
Distributions Paid to Partners $ 38,622
Surplus cash available at December 31, 1996
Less amount distributed for incentive management fee (8,622)
(February 1997)
-----------------
Amount distributed to partners (during February 1997) $ 30,000
=================
Unauthorized Distributions
None
Changes in Partnership Interests
Ownership
% Addition or
Name (Deletion)
- ----------------------------------------------- -----------------
None 0%
0%
-----------------
=================
Net change 0%
=================
Identity of Interest
Management fees paid to Essex Corporation $ 60,229
=================
Bookkeeping fees paid to Essex Corporation $ 11,152
=================
Incentive management fee accrued to Essex Corporation $ 27,058
=================
Comments on Balance Sheet Items
None
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
SCHEDULE OF CHANGES IN PROPERTY AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1997
COST
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------------
Balance, Balance,
Beginning End of
of Year Additions Reductions Year
---------------------------------------------------------------
Land $ 200,000 $ $ 200,000
- -
Land improvements 252,331 252,331
- -
Buildings 4,792,782 4,792,782
- -
Building equipment - fixed 124,157 20,777 63,780 81,154
Furniture - for project and tenant use
14,541 5,936 - 20,477
Automobiles
15,000 - - 15,000
Maintenance equipment
572 - - 572
Furnishings 31,867
98,500 78,340 52,027
---------------------------------------------------------------
$ 5,497,883 $ 58,580 $ 142,120 $ 5,414,343
===============================================================
</TABLE>
<TABLE>
ACCUMULATED DEPRECIATION
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, Balance, Net Book
Beginning End of Value, End
of Year Additions Reductions Year Of Year
--------------------------------------------------------------- -----------------
Land $ $ $ $ $ 200,000
- - - -
Land improvements 170,394 14,898 185,292
- 67,039
Buildings 1,300,776 137,077 1,437,853 3,354,929
-
Building equipment - fixed
81,425 9,634 63,780 27,279 53,875
Furniture - for project and tenant use
7,622 2,075 - 9,697 10,780
Automobiles
3,000 4,800 - 7,800 7,200
Maintenance equipment
114 115 - 229 343
Furnishings
80,320 5,162 78,340 7,142 44,885
--------------------------------------------------------------- -----------------
$ 1,643,651 $ 173,761 $ 142,120 $ 1,675,292 $ 3,739,051
=============================================================== =================
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
HOUSING - FEDERAL HOUSING COMMISSIONER
OFFICE OF MULTIFAMILY HOUSING MANAGEMENT AND OCCUPANCY
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
RESIDUAL RECEIPTS
- -------------------------------------------------------------------------------
PROJECT PROJECT NUMBER 123-36605
NAME
FISCAL PERIOD ENDED:
Coronado Courts 12/31/97
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
PART A - COMPUTE SURPLUS CASH
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
------------------------------
1. Cash (Accounts 1110, 1120,1191,1192)
74,958
------------------------------
---------------------------------------------------------------------------------------------------
2. Tenant subsidiary vouchers due for period
covered by financial statements 1,054
---------------------------------------------------------------------------------------------------
------------------------------
3. Other (Describe)
-
------------------------------
----------------------------------------------------------------------------------------------------------------------------
(a) Total Cash (Add Lines 1, 2, and 3)
76,012
- -----------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
4. Accrued mortgage interest payable
30,316
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
5. Delinquent mortgage principal payments
-
---------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
6. Delinquent deposits to reserve for replacements
-
---------------------------------------------------------------------------------------------------
7. Accounts payable (due within 30 days)
5,913
---------------------------------------------------------------------------------------------------
8. Loans and notes payable - - (due within 30 days)
-
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
9. Deficient Tax, Insurance or MIP Deposits
-
---------------------------------------------------------------------
------------------------------
10. Accrued Expenses (not escrowed)
-
------------------------------
---------------------------------------------------------------------
11. Prepaid Rents(Account 2210)
-
---------------------------------------------------------------------
------------------------------
12. Tenant security deposits liability (Account 2191)
15,236
---------------------------------------------------------------------------------------------------
13. Other (Describe)
-
---------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
(b) Less Total Current Obligations (Add Lines
4 through 13) 51,465
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
(c) Surplus Cash (Deficiency) (Line (a) minus Line (b))
24,547
- -----------------------------------------------------------------------------------------------------------------------------------
PART B - COMPUTE DISTRIBUTIONS TO OWNERS AND REQUIRED DEPOSIT TO RESIDUAL RECEIPTS
- -----------------------------------------------------------------------------------------------------------------------------------
1. Surplus Cash
24,547
- -----------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
2a. Annual Distribution Earned During Fiscal
Period Covered by the Statement -
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
2b. Distribution Accrued and Unpaid as of
the
end of the Prior Fiscal Period -
---------------------------------------------------------------------------------------------------
2c. Distributions Paid During Fiscal Period Covered By Statement
-
---------------------------------------------------------------------------------------------------
3. Amount to be carried on Balance Sheet as
Distribution
Earned but Unpaid (Line 2a plus 2b minus 2c) -
---------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
4. Amount Available for Distribution During Next Fiscal Period
24,547
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
5. Deposit Due Residual Receipts (Must be deposited with Mortgagee within 60 days After Fiscal Period
Ends)
-
- -----------------------------------------------------------------------------------------------------------------------------------
PREPARED BY REVIEWED BY
- -----------------------------------------------------------------------------------------------------------------------------------
LOAN TECHNICIAN LOAN SERVICER
- -----------------------------------------------------------------------------------------------------------------------------------
DATE DATE
- -----------------------------------------------------------------------------------------------------------------------------------
(See Reverse for HUD-93486 (12-80)
Instructions)
</TABLE>
<PAGE>
SECTION II
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL
To the Partners
Coronado Courts Limited Partnership
We have audited the financial statements of Coronado Courts Limited Partnership
as of and for the year ended December 31, 1997, and have issued our report
thereon dated February 3, 1998. We have also audited the Partnership's
compliance with requirements applicable to major HUD-assisted programs and have
issued our report thereon dated February 3, 1998.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide"), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General. Those standards and the Guide require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and about whether the
Partnership complied with laws and regulations, noncompliance with which would
be material to a major HUD-assisted program.
The management of the Partnership is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of controls. The objectives of internal control are to provide
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles, and that HUD-assisted
programs are managed in compliance with applicable laws and regulations.
Because of inherent limitations in any internal control, errors, irregularities
or instances of noncompliance may nevertheless occur and not be detected.
Also, projection of any evaluation of internal control to future periods is
subject to the risk that procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation of controls
may deteriorate.
In planning and performing our audits, we obtained an understanding of the
design of relevant controls and determined whether they had been placed in
operation, and we assessed control risk in order to determine our auditing
procedures for the purpose of expressing our opinions on the financial
statements of Coronado Courts Limited Partnership and on its compliance with
specific requirements applicable to its major HUD-assisted programs and to
report on internal control in accordance with the provisions of the Guide and
not to provide any assurance on internal control.
We performed tests of controls, as required by the Guide, to evaluate the
effectiveness of the design and operation of controls that we considered
relevant to preventing or detecting material noncompliance with specific
requirements applicable to the Partnership's major HUD-assisted programs. Our
procedures were less in scope than would be necessary to render an opinion on
internal control. Accordingly, we do not express such an opinion.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be material
in relation to the financial statements or that noncompliance with laws and
regulations that would be material to a HUD-assisted program may occur and not
be detected within atimely period by employees in the normal course of
performing their assigned functions. We noted no matters involving internal
control and its operations that we consider to be material weaknesses as
defined above.
This report is intended for the information of the Partners, the Partnership's
management, and the U.S. Department of Housing and Urban Development. However,
this report is a matter of public record and its distribution is not limited.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON
COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE
TO MAJOR HUD PROGRAMS
To the Partners
Coronado Courts Limited Partnership
We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997, and have issued
our report thereon dated February 3, 1998. We have also audited the
Partnership's compliance with the specific program requirements governing its
major HUD-assisted programs (HUD insured mortgage loan and housing assistance
payments) for the year ended December 31, 1997. We tested the Partnership's
compliance with specific program requirements in the following areas:
- - Mortgage status - Cash receipts
- - Replacement reserve - Cash disbursements
- - Distributions to owners - Management functions
- - Tenant application - Security deposits
- - Federal financial reports
The management of the Partnership is responsible for compliance with those
requirements. Our responsibility is to express an opinion on compliance with
those requirements based on our audit.
We conducted our audit of compliance with those requirements in accordance with
generally accepted auditing standards, Government Auditing Standards, issued
by the Comptroller General of the United States, and the Consolidated Audit
Guide for Audits of HUD Programs (the "Guide"), issued by the U.S. Department
of Housing and Urban Development, Office of Inspector General. Those standards
and the Guide require that we plan and perform the audit to obtain reasonable
assurance about whether material noncompliance with the requirements referred
to above occurred. An audit includes examining, on a test basis, evidence
about the Partnership's compliance with those requirements. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the Partnership complied, in all material respects, with the
requirements described above that are applicable to its major HUD-assisted
programs for the year ended December 31, 1997.
This report is intended for the information of the Partners, the Partnership's
management, and the U.S. Department of Housing andUrban Development. However,
this report is a matter of public record and its distribution is not limited.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH LAWS,
REGULATIONS, CONTRACTS AND GRANTS
To the Partners
Coronado Courts Limited Partnership
We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997 and have issued our
report thereon dated February 3, 1998.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.
Compliance with laws, regulations, contracts and grants applicable to the
Partnership is the responsibility of the Partnership's management. As part of
obtaining reasonable assurance about whether the financial statements are free
of material misstatement, we performed tests of the Partnership's compliance
with certain provisions of laws, regulations, contracts and grants. However,
the objective of our audit of the financial statements was not to provide an
opinion on the overall compliance with such provisions. Accordingly, we do not
express such an opinion.
The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under Government Auditing Standards.
This report is intended for the information of the Partners, the Partnership's
management, and the U.S. Department of Housing and Urban Development. However,
this report is a matter of public record and its distribution is not limited.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION
To the Partners
Coronado Courts Limited Partnership
We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997 and have issued our
report thereon dated February 3, 1998.
We have applied procedures to test the Partnership's compliance with the Fair
Housing and Non-Discrimination requirements applicable to its HUD-assisted
programs for the year ended December 31, 1997.
Our procedures were limited to the applicable compliance requirements described
in the Consolidated Audit Guide for Audits of HUD Programs (the "Guide"),
issued by the U.S. Department of Housing and Urban Development, Office of
Inspector General. Our procedures were substantially less in scope than an
audit, the objective of which would be the expression of an opinion on the
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under the Guide.
This report is intended for the information of the Partners, the Partnership's
management and the U.S. Department of Housing and Urban Development. However,
this report is a matter of public record and its distribution is not limited.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>
INDEPENDENT AUDITOR'S COMMENTS ON AUDIT RESOLUTION
MATTERS RELATED TO HUD PROGRAMS
To the Partners
Coronado Courts Limited Partnership
We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997, and issued our
report thereon dated February 3, 1998.
During our audit, we noted no instances where the project had not undertaken
corrective action on findings from our prior auditor reports (there were no
findings as the result of our December 31, 1996 audit), physical inspection
reports, management review reports and similar reports.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>
SECTION IV
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
CERTIFICATE OF PARTNERS
DECEMBER 31, 1997
"We hereby certify that we have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership and, to the
best of our knowledge and belief, the same is complete and accurate."
For the Partners:
/S/Kent B. Braasch 2/14/98
Essex Corporation, General Partner Date
Kent B. Braasch, Executive Vice President
The Partnership's employer identification number is 06-1171352.
<PAGE>
MANAGEMENT AGENT'S CERTIFICATION
DECEMBER 31, 1997
"We hereby certify that we have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership and, to the
best of our knowledge and belief, the same is complete and accurate."
Project manager - Kent Braasch, Executive Vice-President
For the Management Agent:
/S/Kent B. Braasch 2/14/98
Essex Corporation Date
Kent B. Braasch, Executive Vice President
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
FINANCIAL STATEMENTS AND
INDEPENDENT ACCOUNTANTS' AUDIT REPORT
DECEMBER 31, 1998 AND 1997
<PAGE>
INDEPENDENT ACCOUNTANTS' AUDIT REPORT
Partners
Coronado Courts Limited Partnership
Omaha, Nebraska
We have audited the accompanying balance sheet of Coronado Courts Limited
Partnership, HUD Project No. 123-36605, an Arizona partnership, as of December
31, 1998 and the related statements of operations, changes in partners'
capital and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Coronado Courts Limited Partnership as of December
31, 1997, were audited by other auditors, whose report dated February 3, 1998,
expressed an unqualified opinion on those statements.
Except as discussed in the following paragraph, we conducted our audit in
accordance with generally accepted auditing standards and Government Auditing
Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures
About Year 2000 Issues, requires disclosures of certain matters regarding the
year 2000 issue. Coronado Courts Limited Partnership has included such
disclosures in Note 7. Because of the unprecedented nature of the year 2000
issue, its effects and the success of the related remediation efforts will not
be fully determinable until the year 2000 and thereafter. Accordingly,
insufficient audit evidence exists to support Coronado Courts Limited Partner-
ship disclosure with respect to the year 2000 issues made in Note 7. Further,
we do not provide assurance that Coronado Courts Limited Partnership is or will
be year 2000 ready, that Coronado Courts Limited Partnership's year 2000
remediation efforts will be successful in whole or in part, or that parties
with which Coronado Courts Limited Partnership does business will be year 2000
ready.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we been able to examine evidence
regarding year 2000 disclosures, the financial statements referred to above
present fairly, in all material respects, the financial position of Coronado
Courts Limited Partnership as of December 31, 1998 and the results of its
operations, changes in partners' capital and cash flows for the year then ended
in conformity with generally accepted accounting principles.
<PAGE>
Coronado Courts Limited Partnership
Page 2
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 25, 1999, on our
consideration of Coronado Courts Limited Partnership's internal control and
reports dated January 25, 1999, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-discrimination, and specific requirements applicable to
nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the report (shown on pages 14-17) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/Lutz & Company, PC
January 25, 1999
<PAGE>
- -------------------------------------------------------------------------------
BALANCE SHEETS
- -------------------------------------------------------------------------------
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
ASSETS
Acct. # CURRENT ASSETS 1998 1997
1120 Cash Operations $ 79,352 $ 59,722
1130 Accounts Receivable, Tenants 283 371
1135 Accounts Receivable, HUD 2,427 1,054
1140 Accounts and Notes Receivable, Operations 1,530 50
1200 Miscellaneous Prepaid Expenses 18,693 15,909
- -------------------------------------------------------------------------------
1100T Total Current Assets 102,285 77,106
- -------------------------------------------------------------------------------
RESTRICTED DEPOSITS AND FUNDED RESERVES (Note 2)
1191 Tenant Deposits Held in Trust 14,529 15,236
1310 Escrow Deposits 30,958 30,639
1320 Replacement Reserve 74,931 90,957
- -------------------------------------------------------------------------------
1300T Total Restricted Deposits and
Funded Reserves 120,418 136,832
- -------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT (Note 3)
1410 Land 200,000 200,000
1411 Land Improvements 252,331 252,331
1420 Buildings 4,873,936 4,873,936
1450 Furniture and Fixtures 38,973 20,477
1460 Furnishings 61,593 52,027
1470 Maintenance Equipment 572 572
1480 Vehicles 20,000 15,000
- -------------------------------------------------------------------------------
1400T Total Cost 5,447,405 5,414,343
1495 Less Accumulated Depreciation 1,854,373 1,675,292
- -------------------------------------------------------------------------------
1400N Net Book Value 3,593,032 3,739,051
- -------------------------------------------------------------------------------
OTHER ASSETS
1520 Deferred Loan Fees, Net of Accumulated
Amortization of $60,906 and $55,492,
Respectively 155,644 161,058
- -------------------------------------------------------------------------------
===============================================================================
1000T TOTAL ASSETS $3,971,379 $4,114,047
===============================================================================
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
<PAGE>
LIABILITIES
Acct. # CURRENT LIABILITIES 1998 1997
2110 Accounts Payable, Operations $ 9,742 $ 5,913
2123 Accrued Incentive Management Fees 73,615 45,490
2131 Accrued Interest Payable, First Mortgage 30,032 30,316
2150 Accrued Property Taxes 14,807 14,215
2170 Current Portion of Mortgage Payable (Note 3)38,571 35,002
- -------------------------------------------------------------------------------
2122T Total Current Liabilities 166,767 130,936
- -------------------------------------------------------------------------------
DEPOSIT LIABILITIES
2191 Tenant Security Deposits 14,545 15,236
- -------------------------------------------------------------------------------
LONG-TERM LIABILITIES
2320 Mortgage Payable, Less Current Portion
(Note 3) 3,657,680 3,696,251
- -------------------------------------------------------------------------------
2000T Total Liabilities 3,838,992 3,842,423
- -------------------------------------------------------------------------------
CONTINGENCIES (Note 7)
PARTNERS' CAPITAL
3033T PARTNERS' CAPITAL 132,387 271,624
- -------------------------------------------------------------------------------
===============================================================================
2033T TOTAL LIABILITIES AND PARTNERS' CAPITAL $3,971,379 $4,114,047
===============================================================================
<PAGE>
- -------------------------------------------------------------------------------
3
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
Acct. # REVENUES 1998 1997
Rental Revenue
5120 Apartments $ 124,555 $119,820
5121 Tenant Assistance Payments 722,575 725,280
- -------------------------------------------------------------------------------
5100T Total Potential Rental Revenue 847,130 845,100
5220 Vacancies (1,870) (2,943)
- -------------------------------------------------------------------------------
5152N Total Net Rental Revenue 845,260 842,157
- -------------------------------------------------------------------------------
Financial Revenue
5410 Interest 119 119
5440 Interest from Reserve for Replacements 1,736 2,460
- -------------------------------------------------------------------------------
5400T Total Financial Revenue 1,855 2,579
- -------------------------------------------------------------------------------
Other Revenue
5910 Laundry and Vending 12,184 14,205
5920 Tenant Charges 6,226 4,599
5990 Miscellaneous 3,053
- -------------------------------------------------------------------------------
5900T Total Other Revenues 18,410 21,857
- -------------------------------------------------------------------------------
5000T Total Revenues 865,525 866,593
- -------------------------------------------------------------------------------
EXPENSES
Administrative Expenses
6210 Advertising 10
6310 Office Salaries 1,020 1,263
6311 Office Expenses 5,499 4,048
6320 Management Fees 85,725 87,287
6330 Manager's Salary 30,750 30,688
6340 Legal Expenses 1,561 163
6350 Audit Expense 2,304 4,600
6351 Bookkeeping Fees 16,139 11,152
6370 Bad Debts 112 161
6390 Miscellaneous Administrative Expenses 3,555 3,079
- -------------------------------------------------------------------------------
6263T Total Administrative Expenses 146,675 142,441
- -------------------------------------------------------------------------------
Utilities Expense
6450 Electricity 6,292 6,757
6451 Water and Sewer 21,220 22,465
6452 Gas 2,571 3,280
- -------------------------------------------------------------------------------
6400T Total Utilities Expenses 30,083 32,502
- -------------------------------------------------------------------------------
(Continued on next page)
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
4
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
STATEMENTS OF OPERATIONS - Continued
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
EXPENSES - Continued 1998 1997
Operating and Maintenance Expenses
6510 Payroll $ 66,558 $ 74,550
6515 Supplies 30,712 35,795
6520 Contracts 38,043 31,754
6525 Trash Removal 13,427 12,457
6570 Vehicle and Maintenance Repairs 11,456 12,205
6590 Other Repairs 107 89
- -------------------------------------------------------------------------------
6500T Total Operating and Maintenance
Expenses 160,303 166,850
- -------------------------------------------------------------------------------
Taxes and Insurance Expenses
6710 Property Taxes 29,602 28,420
6711 Payroll Taxes 9,161 10,012
6720 Property and Liability Insurance 17,991 15,037
6790 Miscellaneous Taxes 20,705 20,546
- -------------------------------------------------------------------------------
6700T Total Taxes and Insurance Expenses 77,459 74,015
- -------------------------------------------------------------------------------
Financial Expenses
6820 Mortgage Interest 361,976 365,241
6850 Mortgage Insurance 19,224 19,330
- -------------------------------------------------------------------------------
6800T Total Financial Expenses 381,200 384,571
- -------------------------------------------------------------------------------
6000T Total Expenses Before Depreciation
and Amortization 795,720 800,379
- -------------------------------------------------------------------------------
5060T Net Income Before Depreciation
and Amortization 69,805 66,214
6600 Depreciation 179,081 173,761
6610 Amortization 5,414 5,414
===============================================================================
3250 NET LOSS $(114,690) $(112,961)
===============================================================================
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE> 5
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
Limited General
Partners Partners Total
- -------------------------------------------------------------------------------
BALANCES, December 31, 1996 $635,833 $(221,248) $414,585
- -------------------------------------------------------------------------------
Net Loss (111,831) (1,130) (112,961)
Distributions to Partners (29,700) (300) (30,000)
- -------------------------------------------------------------------------------
BALANCES, December 31, 1997 494,302 (222,678) 271,624
- -------------------------------------------------------------------------------
Net Loss (113,543) (1,147) (114,690)
Distributions to Partners (24,302) (245) (24,547)
===============================================================================
BALANCES, December 31, 1998 $356,457 $(224,070) $132,387
===============================================================================
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
6
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts
Rental Receipts $843,975 $841,445
Interest Receipts 1,855 2,579
Drug Elimination Grant Proceeds 125,000 161,388
Laundry Receipts and Other Revenue 18,410 21,857
- -------------------------------------------------------------------------------
Total Receipts 989,240 1,027,269
- -------------------------------------------------------------------------------
Expenditures
Administrative Expenses 30,200 24,466
Management Fees 57,600 59,804
Salaries and Wages 97,308 105,238
Utilities Expenses 30,083 32,502
Operating and Maintenance Expenses 91,396 94,356
Property Taxes 29,010 29,561
Payroll Taxes 9,161 10,012
Taxes-Other 20,705 20,546
Property Insurance 20,793 15,228
Mortgage Interest 362,260 365,500
Mortgage Insurance 19,206 19,314
Drug Elimination Grant Expenditures 125,000 161,388
Incentive Management Fee 8,622
- -------------------------------------------------------------------------------
Total Expenditures 892,722 946,537
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 96,518 80,732
- -------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment (33,062) (58,580)
Changes In:
Tenant Security Deposits 16
Mortgage Escrow Deposits (319) (2,905)
Reserve for Replacements 16,026 25,801
- -------------------------------------------------------------------------------
Net Cash Used in Investing Activities (17,339) (35,684)
- -------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Mortgage Payable (35,002) (31,763)
Distributions to Partners (24,547) (30,000)
- -------------------------------------------------------------------------------
Net Cash Used in Financing Activities (59,549) (61,763)
- -------------------------------------------------------------------------------
Net Increase (Decrease) in Cash 19,630 (16,715)
Cash, Beginning of Year 59,722 76,437
===============================================================================
Cash, End of Year $ 79,352 $ 59,722
===============================================================================
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE> 7
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
STATEMENTS OF CASH FLOWS - Continued
FOR THE YEARS ENDED DECEMBER 31,1998 AND 1997
- -------------------------------------------------------------------------------
RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY ACTIVITIES
1998 1997
Net Loss $(114,690) $(112,961)
Adjustments to Reconcile Net Loss to
Net Cash Provided by Operating Activities
Depreciation 179,081 173,761
Amortization 5,414 5,414
Changes in Current Assets and Liabilities
Decrease (Increase) in Accounts Receivable, Tenants 88 (29)
Increase in Accounts Receivable, HUD (1,373) (656)
Decrease (Increase) in Accounts and
Notes Receivable, Operations (1,480) 67
Increase in Prepaid Miscellaneous
Prepaid Expenses (2,784) (175)
Increase (Decrease) in Accounts Payable,
Operations 3,829 (1,698)
Increase in Accrued Incentive Management Fees 28,125 18,436
Decrease in Accrued Interest Payable,
First Mortgage (284) (259)
Increase (Decrease) in Accrued Property Taxes 592 (1,141)
Decrease in Prepaid Rent (27)
===============================================================================
Net Cash Provided by Operating Activities $ 96,518 $ 80,732
===============================================================================
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE> 8
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
- -------------------------------------------------------------------------------
A summary of the significant accounting policies consistently applied
in the preparation of the accompanying financial
statements is set forth below.
Nature of Organization
and Operations Coronado Courts Limited Partnership is a partnership
organized for the purpose of rehabilitating and operating
a 145-unit apartment building project in Douglas, Arizona.
The project is operated under Section 202 of the National
Housing Act and regulated by the U.S.Department of Housing
and Urban Development (HUD) with respect to rental charges
and operating methods. The Project's major programs are
its Section 221 (d)(4) direct loan and Section 8 Housing
Assistance Payments Program administered through the City
of Douglas, Public Housing Authority.
The apartment project is the principal asset of the
Partnership and therefore, the Partnership's operations
are concentrated in the multifamily real estate market.
The Partnership operates in a heavily regulated
environment. The operations of the Partnership 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 administrative changes 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.
Use of Estimates The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Property and
Equipment Property and equipment is stated at cost. Expenditures for
additions and betterments are capitalized; expenditures
for maintenance and repairs are expensed as incurred. The
costs of assets disposed and the related accumulated
depreciation are eliminated from the accounts in the year
of disposal. Gains or losses from property disposals are
recognized in the year of disposals.
- -------------------------------------------------------------------------------
9
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies - Continued
- -------------------------------------------------------------------------------
Property and
Equipment -
Continued Depreciation is computed using both the straight-line and the
accelerated methods over the following useful lives:
Years
Land Improvements 15
Buildings 35
Furniture and Fixtures 5-7
Furnishings 5-7
Maintenance Equipment 5
Vehicles 5
The Partnership has adopted SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of. This statement requires that long-lived assets be
presented at fair value where information indicates that the
Partnership might be unable to recover, through operations or
sale, the carrying value of long-lived assets.
Income Taxes The entity has elected to be taxed as a partnership under the
provisions of the Internal Revenue code.
Accordingly, taxable income, deductions and credits flow through
to the partners and are reported on their tax returns. Therefore,
no provision or liability for income taxes has been included in
the financial statements of the Partnership.
The Partnership reports certain expenses differently for
financial reporting purposes than for income tax purposes. At
December 31, 1998, there were accumulated temporary differences
principally relating to depreciation of approximately $589,000
which will increase income for income tax return purposes in the
future as they reverse.
Deferred Loan
Fees Deferred loan fees are amortized by the straight-line method over
the forty-year term of the related mortgage note.
Distributions The Partnership's regulatory agreement with HUD limits partner
distributions to "surplus cash" available at year-end.
Allocations of operations and distributions are performed in
accordance with the partnership agreement.
Reclassifications
of Prior Year
Balances Certain reclassifications have been made to the 1997 financial
statements to conform to the classifications used in the 1998
financial statements.
- -------------------------------------------------------------------------------
10
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
2. Restricted Deposits and Funded Reserves
- -------------------------------------------------------------------------------
Under the terms of the Regulatory Agreement, the Partnership is required
to set aside specified amounts for the replacement of property and other
project expenditures as approved by HUD. Restricted deposits are held in
separate accounts and generally are not available for operating purposes.
In addition, all tenant security deposits are deposited into a separate
bank account at Bank One in Phoenix, Arizona and are held in trust for the
tenants until they vacate the property. Any amounts not returned to the
tenant due to lease violations are transferred to the Partnership's
general operating account.
3. Mortgage Payable
- -------------------------------------------------------------------------------
1998 1997
The mortgage is insured by HUD and is payable
in monthly installments of $33,105
which includes principal and interest at 9.75%
per annum. The final payment is due June 1, 2023.
Property and equipment are pledged as collateral
for the mortgage. $3,696,251 $3,731,253
Less Current Portion 38,571 35,002
Mortgage Payable, Less Current Portion $3,657,680 $3,696,251
The aggregate maturities of the mortgage for the years ending after
December 31, 1998 are as follows:
Year Ending December 31,
1999 $ 38,571
2000 42,505
2001 46,839
2002 51,616
2003 56,879
Thereafter 3,459,841
Total $3,696,251
- -------------------------------------------------------------------------------
11
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4. Allocation of Net Income or Loss and Distribution Preferences
Net income or loss is allocated one percent (1%) to the general partners
and ninety-nine percent (99%) to the limited partners. Annual cash
distributions to partners can only be paid from surplus cash of the
Partnership as defined by the HUD agreement. Such distributions are
allocable between the limited partners and the general partner as follows:
First - $29,700 to the limited partners and $300 to the general
partners on a cumulative basis.
Second - Repay any project expense loans.
Third - Payment of the incentive management fee.
Balance - 99% to the limited partners and 1% to the general partners.
Cash distributions resulting from a sale or refinancing of the project will
be allocated using methods described in the partnership's agreement.
- -------------------------------------------------------------------------------
5. Identity of Interest
Essex Corporation, a general partner in Coronado Courts Limited
Partnership, also manages Coronado Courts. The management agreement with
Essex Corporation currently provides for a management fee equal to 7% of
rental and service income. Management fees paid or accrued to Essex
Corporation for the years ended December 31, 1998 and 1997 were $57,600 and
$60,229, respectively. Data processing fees paid to Essex Corporation for
the years ended December 31, 1998 and 1997 were $16,139 and $11,152,
respectively. Essex Corporation also is entitled to an incentive management
fee which is to be paid from surplus cash. Incentive management fees
totaled $28,125 and $27,058 for the years ended December 31, 1998 and 1997,
respectively.
- -------------------------------------------------------------------------------
12
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
6. Grant Income and Expenses
- -------------------------------------------------------------------------------
The project has been awarded Drug Elimination grants through the U.S.
Department of Housing and Urban Renewal. Grant income and expenses for the
years ended December 31, 1998 and 1997 are summarized below:
1998 1997
Grant Income $125,000 $161,388
Grant expenses:
Education Services $ 26,780 $ 25,972
Transportation 1,437 5,147
Facility Improvemets 2,212
Payroll 66,023 83,480
Counseling 12,240 12,560
Other Expenses 18,520 32,017
Total Grant Expenses $125,000 $161,388
7. Year 2000 Issues
- -------------------------------------------------------------------------------
The General Partner has assessed the Partnership's exposure to date
sensitive computer software programs that may not be operative subsequent
to 1999 and has implemented a requisite course of action to minimize Year
2000 risk and ensure that neither significant costs or disruption of normal
business operations are encountered. However, because there is no
guarantee that all systems of outside vendors or other entities affecting
the Partnership's operations will be 2000 compliant, the Partnership
remains susceptible to consequences of the Year 2000 issue.
- -------------------------------------------------------------------------------
13
<PAGE>
- -------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
- -------------------------------------------------------------------------------
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
SUPPLEMENTAL DATA REQUIRED BY HUD
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
CHANGES IN PROPERTY AND EQUIPMENT
- --------------------------------------Property---------------------------------
Balance Balance
January 1, December 31,
1998 Additions Disposals 1998
Land $ 200,000 $ $ $ 200,000
Land Improvements 252,331 252,331
Buildings 4,873,936 4,873,936
Furniture and Fixtures 20,477 18,496 38,973
Furnishings 52,027 9,566 61,593
Maintenance Equipment 572 572
Vehicles 15,000 5,000 20,000
===============================================================================
Totals $5,414,343 $33,062 $ $5,447,405
===============================================================================
During the year ended December 31, 1998, the Partnership purchased the
following:
Refrigerators and Stoves $17,412
Carpet 10,650
Truck 5,000
Total $33,062
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------Accumulated Depreciation----------------------------------
Balance Balance
January 1, Depreciation December 31, December 31,
1998 Expense Disposals 1998 1998
<S> <C> <C> <C> <C> <C>
Land $ $ $ $ $ 200,000
Land Improvements 185,292 14,898 200,190 52,141
Buildings 1,465,132 147,509 1,612,641 3,261,295
Furniture and Fixtures 9,697 4,964 14,661 24,312
Furnishings 7,142 8,049 15,191 46,402
Maintenance Equipment 229 114 343 229
Vehicles 7,800 3,547 11,347 8,653
===================================================================================================
Totals $1,675,292 $179,081 $ $1,854,373 $ 3,593,032
===================================================================================================
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
SUPPLEMENTAL DATA REQUIRED BY HUD
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
RESERVE FOR REPLACEMENTS
In accordance with the provisions of the Regulatory Agreement, restricted
cash is held by the mortgagee to be used for replacement of property with the
approval of HUD as follows:
Balance, January 1, 1998 $90,957
Monthly Deposits 15,963
Interest Earnings, Net of Any Investment Fees 1,736
Authorized Withdrawals (33,725)
Balance, December 31, 1998 Confirmed by Mortgagee $74,931
The reserve for replacement account is held in an interest-bearing account by
GMAC Commercial Mortgage Corporation.
RESIDUAL RECEIPTS ACCOUNT
None
15
<PAGE>
INDEPENDENT ACCOUNTANTS' AUDIT REPORT ON INTERNAL CONTROL
Partners
Coronado Courts Limited Partnership
Omaha, Nebraska
We have audited the financial statements of Coronado Courts Limited Partnership,
HUD Project No. 123-36605, as of and for the year ended December 31, 1998, and
have issued our report thereon dated January 25, 1999. We have also audited
Coronado Courts Limited Partnership compliance with requirements applicable to
its major HUD-assisted programs and have issued our report thereon dated
January 25, 1999.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide"), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement and about whether
Coronado Courts Limited Partnership complied with laws and regulations,
noncompliance with which would be material to a major HUD-assisted program.
The management of Coronado Courts Limited Partnership is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and relate costs of controls. The objectives of internal
control are to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or disposition,
that transactions are executed in accordance with management's authorization
and recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles, and that HUD-assisted
programs are managed in compliance with applicable laws and regulations.
Because of inherent limitations in any internal control, errors, irregularities,
or instances of noncompliance may nevertheless occur and not be detected. Also,
projection of any evaluation of internal control to future periods is subject to
the risk that procedures may become inadequate because of changes in conditions
or that the effectiveness of the design and operation of controls may
deteriorate.
In planning and performing our audit, we obtained an understanding of the
design of relevant controls and determined whether they had been placed in
operation, and we assessed control risk in order to determine our auditing
procedures for the purpose of expressing our opinion on Coronado Courts Limited
Partnership financial statements and on its compliance with specific
requirements applicable to its major HUD-assisted programs and to report on
internal control in accordance with the provisions of the Guide and not to
provide any assurance on internal control.
18
<PAGE>
We performed tests of controls, as required by the Guide, to evaluate the
effectiveness of the design and operation of controls that we considered
relevant to preventing or detecting material noncompliance with specific
requirements applicable to Coronado Courts Limited Partnership's major HUD-
assisted programs. Our procedures were less in scope than would be necessary to
render an opinion on internal control. Accordingly, we do not express such an
opinion.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be material
in relation to the financial statements or that noncompliance with laws and
regulations that would be material to a HUD-assisted program may occur and not
be detected within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving internal
control and its operation that we consider to be material weaknesses as defined
above.
This report is intended for the information of the mortgagor, management, and
the U. S. Department of Housing and Urban Development. However, this report is
a matter of public record and its distribution is not limited.
/S/Lutz & Company, P.C.
January 25, 1999
19
<PAGE>
INDEPENDENT ACCOUNTANTS' AUDIT REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS
Partners
Coronado Courts Limited Partnership
Omaha, Nebraska
We have audited the financial statements of Coronado Courts Limited Partnership,
HUD Project No. 123-36605 as of and for the year ended December 31, 1998, and
have issued our report thereon dated January 25, 1999.
We have also audited Coronado Courts Limited Partnerships' compliance with the
specific program requirements governing mortgage status, replacement reserve,
distributions to owners, tenant application, federal financial reports, cash
receipts, cash disbursements, management functions and security deposits that
are applicable to each of its major HUD-assisted programs for the year ended
December 31, 1998. The management of Coronado Courts Limited Partnership is
responsible for compliance with those requirements. Our responsibility is to
express an opinion on compliance with those requirements based on our audit.
We conducted our audit of compliance with those requirements in accordance with
generally accepted auditing standards, Government Auditing Standards, issued
by Comptroller General of the United States, and the Consolidated Audit Guide
for Audits of HUD Programs (the "Guide") issued by the U.S. Department of
Housing and Urban Development, Office of Inspector General. Those standards and
the Guide require that we plan and perform the audit to obtain reasonable
assurance about whether material noncompliance with the requirements referred
to above occurred. An audit includes examining, on a test basis, evidence about
Coronado Courts Limited Partnership's compliance with those requirements. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, Coronado Courts Limited Partnership complied, in all material
respects, with the requirements described above that are applicable to its
major HUD-assisted programs for the year ended December 31, 1998.
This report is intended for the information of the mortgagor, management, and
the U.S. Department of Housing and Urban Development. However, this report is
a matter of public record and its distribution is not limited.
/S/Lutz & Company, P.C
January 25, 1999
20
<PAGE>
INDEPENDENT ACCOUNTANTS' AUDIT REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION
Partners
Coronado Courts Limited Partnership
Omaha, Nebraska
We have audited the financial statements of Coronado Courts Limited Partnership,
HUD Project No. 123-36605 as of and for the year ended December 31, 1998, and
have issued our report thereon dated January 25, 1999.
We have applied procedures to test Coronado Courts Limited Partnership's
compliance with the Fair Housing and Non-Discrimination requirements applicable
to its HUD-assisted programs for the year ended December 31, 1998.
Our procedures were limited to the applicable compliance requirement described
by the Consolidated Audit Guide for Audits of HUD Programs (the "Guide") issued
by the U.S. Department of Housing and Urban Development, Office of Inspector
General. Our procedures were substantially less in scope than an audit, the
objective of which is the expression of an opinion on Coronado Courts Limited
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under the Guide.
This report is intended for the information of the mortgagor, management and
the U.S. Department of Housing and Urban Development. However, this report is
a matter of public record and its distribution is not limited.
/S/Lutz & Company, P.C
January 25, 1999
21
<PAGE>
INDEPENDENT AUDITOR'S COMMENTS ON AUDIT RESOLUTION
MATTERS RELATED TO HUD PROGRAMS
Partners
Coronado Courts Limited Partnership
Omaha, Nebraska
We have audited the financial statements of Coronado Courts Limited Partnership,
as of and for the year ended December 31, 1998, and issued our report thereon
dated January 25, 1999.
During our audit, we noted no instances where the project had not undertaken
corrective action on findings from the prior auditor's reports. There were no
findings as the result of our December 31, 1998 audit, physical inspection
reports, management review reports and similar reports.
/S/Lutz & Company, P.C
January 25, 1999
22
<PAGE>
ORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
CERTIFICATION OF PARTNER
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
I hereby certify that I have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership, HUD
Project No. 123-36605 and, to the best of my knowledge and belief, the same are
complete and accurate. (Federal E.I.N. 06-1171352).
1/25/99 /S/Lutz & Company, P.C.
Date Essex Corporation, General Partner
Kent B. Braasch, Executive Vice President
23
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
HUD PROJECT NO. 123-36605
CERTIFICATION OF MANAGEMENT AGENT
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
We hereby certify that we have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership and, to the
best of our knowledge and belief, the same are complete and accurate.
1/25/99 /S/Lutz & Company, P.C
Date Essex Corporation, Management Agent
Kent B. Braasch, Executive Vice President
24
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 225,822
<SECURITIES> 1,935,991
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 1,099,860
<DEPRECIATION> 000
<TOTAL-ASSETS> 4,913,505<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 1,210,000
<COMMON> 000
000
000
<OTHER-SE> 3,501,574
<TOTAL-LIABILITY-AND-EQUITY> 4,913,505<F2>
<SALES> 000
<TOTAL-REVENUES> 465,783<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 578,128<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 118,185
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (542,258)<F5>
<EPS-BASIC> (10.74)
<EPS-DILUTED> 000
<FN>
<F1>Included in Total assets is $4,040 of Tenant security deposits, $1,436,677
of Investments in Local Limited Partnerships, $6,719 of Replacement reserve
escrow, $9,543 of Mortgagee escrow deposits, $122,093 in Bond trusts, $41,921 of
Deferred charges, net, Accounts receivable, net of $2,601 and $28,238 of Other
assets.<F2>Included in Total liability and equity is $58,321 of Minority
interest in Local Limited Partnership, Accounts payable and accrued expenses of
$43,860, Accounts payable to affiliates of $25,799, Accrued interest of $68,819
and Tenant security deposits payable of $5,132. <F3>Total revenue includes
$129,760 of Investment revenue, net, $224,199 of Rental revenue and $111,824 of
Other revenue. <F4>Included in Other expenses is $32,626 of Amortization,
$400,926 of General and administrative expenses, $44,682 of Depreciation and
$99,894 of Rental operations. <F5>Net loss reflects Equity in losses of Local
Limited Partnerships of $311,996 and Minority interest of $268.
</FN>
</TABLE>
