UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-24656
LIBERTY TAX CREDIT PLUS III L.P.
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3491408
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
625 Madison Avenue, New York, New York 10022
- - ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests and Beneficial Assignment Certificates
--------------------------------------------------------------------
(Title of Class)
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 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]
DOCUMENTS INCORPORATED BY REFERENCE
None
Index to exhibits may be found on page 202.
Page 1 of 215
<PAGE>
PART I
Item 1. Business.
General
Liberty Tax Credit Plus III L.P. (the "Partnership") is a limited
partnership which was formed under the laws of the State of Delaware on November
17, 1988. The General Partners of the Partnership are Related Credit Properties
III L.P., a Delaware limited partnership (the "Related General Partner"), and
Liberty GP III Inc., a Delaware corporation (the "Liberty General Partner"). The
general partner of the Related General Partner is Related Credit Properties III
Inc., a Delaware corporation.
On May 2, 1989, the Partnership commenced a public offering (the
"Offering") of Beneficial Assignment Certificates ("BACs") representing
assignments of limited partnership interests in the Partnership ("Limited
Partnership Interests").
As of March 30, 1990, (the date on which the Partnership held the final
closing of the sale of BACs and on which the Offering was terminated), the
Partnership had received $139,101,500 of gross proceeds of the Offering from
9,082 investors.
The Partnership was formed to invest, as a limited partner, in other
limited partnerships (referred to herein as "Local Partnerships" or "Subsidiary
Partnerships") each of which owns one or more leveraged low-income multifamily
residential complexes ("Apartment Complexes") that are eligible for the
low-income housing tax credit ("Housing Tax Credit") enacted in the Tax Reform
Act of 1986, some of which are eligible for the historic rehabilitation tax
credit ("Historic Rehabilitation Tax Credit") ("Rehabilitation Projects"; and
together with the Apartment Complexes, the"Properties"). Some of the Apartment
Complexes benefit from one or more other forms of federal or state housing
assistance. The Partnership's investment in each Local Partnership represents
from 27% to 98% of the partnership interests in the Local Partnership. As of
March 31, 1997, approximately $109,000,000 (not including acquisition fees) of
net proceeds have been invested in 62 Local Partnerships. The Partnership does
not anticipate making any additional investments. See Item 2, Properties, below.
Liberty Associates IV, L.P. ("Liberty Associates") is the Special Limited
Partner in all 62 Local Partnerships. Liberty Associates has certain rights and
obligations in its role as Special Limited Partner which permit this affiliate
of the registrant to execute control over the management and policies of the
subsidiaries.
The Partnership has been formed to invest primarily in low-income Apartment
Complexes that are eligible for the Housing Tax Credit enacted in the Tax Reform
Act of 1986. Some Apartment Complexes may also be eligible for Historic
Rehabilitation Tax Credits ("Historic Complexes"). The investment objectives of
the Partnership are to:
1. Entitle qualified BACs holders to substantial Housing Tax Credits over
the period of the Partnership's entitlement to claim such Tax Credits (for each
Property, generally ten years from the date of investment or, if later, the date
the Property is placed in service; referred to herein as the "Credit Period")
with respect to each Apartment Complex.
2. Preserve and protect the Partnership's capital.
3. Participate in any capital appreciation in the value of the Properties
and provide distributions of Sale or Refinancing Proceeds upon the disposition
of the Properties.
4. Provide cash distributions when available from the operations of the
Properties, current taxes on which are expected to be substantially deferred.
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<PAGE>
5. Allocate passive losses to individual BACs holders to offset passive
income that they may realize from rental real estate investments and other
passive activities, and allocate passive losses to corporate BACs holders to
offset business income.
One of the Partnership's objectives is to entitle qualified BACs holders to
Housing Tax Credits over the Credit Period. Each of the Local Partnerships in
which the Partnership has acquired an interest has been allocated by the
relevant state credit agency the authority to recognize Tax Credits during the
Credit Period provided that the Local Partnership satisfies the rent
restriction, minimum set-aside and other requirements for recognition of the Tax
Credits at all times during the 15-year period commencing at the beginning of
the Credit Period. Once a Local Partnership has become eligible to recognize Tax
Credits, it may lose such eligibility and suffer an event of "recapture" if (i)
the partnership ceases to meet qualification requirements , (ii) there is a
decrease in the qualified basis of the Projects, or (iii) there is a reduction
in the taxpayer's interest in the project at any time during the 15-year
Compliance Period that began with the first tax year of the Credit Period. None
of the Local Partnerships in which the Partnership has acquired an interest has
suffered an event of recapture.
The Partnership continues to meet its primary objective of generating
Housing Tax Credits; approximately $19,673,000, $19,673,000, and $19,765,000,
during the years ended March 31, 1997, 1996, and 1995, respectively.
The Partnership also continues to meet its objective of allocating passive
losses to individual BACs holders to offset passive income that they may realize
from rental real estate investments and other passive activities, and allocating
passive losses to corporate BACs holders to offset business income.
As of March 31, 1997, the Partnership has not met its investment objective
of providing cash distributions from the operations of the Properties. Cash
distributions received from the Local Partnerships have been relatively
immaterial. Management expects that the distributions received from the Local
Partnerships will increase, although not to a level sufficient to permit cash
distributions to BACs holders. The Partnership does not anticipate providing
cash distributions to BACs holders in circumstances other than refinancings or
sales.
There can be no assurance that the Partnership will achieve its investment
objectives.
Certain subsidiaries are subject to HUD restrictions which limit annual
cash distributions to partners and restrict the subsidiaries from selling or
otherwise liquidating their assets during the period that the agreement with HUD
is in existence, without HUD's approval.
In order for certain subsidiaries to qualify for the Section 421A Program,
and the Inclusionary Zoning Program they are subject to certain requirements by
local authorities as to the level of rent that may be charged to tenants, the
tenants' incomes, the obligation to operate the property in accordance with rent
stabilization guidelines, and restrictions on the rate at which housing units
may be released from such guidelines.
Also, certain subsidiary partnerships obtain grants from local authorities
to fund construction costs of the properties and in order to qualify must
maintain the low-income nature of the property, among other provisions.
HUD previously released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based Section 8 subsidy payments, and an attendant reduction in debt on
properties that were supported by the Section 8 payments. The ACPA calls for a
transition during which the project-based Section 8 payments would be converted
to a tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market" that is revalued in light of the reduced income stream.
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<PAGE>
Several industry sources have commented to HUD and Congress that in the
event the ACPA was fully enacted in its present form, the reduction in mortgage
indebtedness would be considered taxable income to owners such as the limited
partners in the Partnership. Legislative relief has been proposed to exempt
"marked-to-market" debt from cancellation of indebtedness income treatment. At
present, there are several bills pending in Congress to address this tax relief
issue. Additionally, in the interim, HUD has agreed to annual extensions of any
expiring project-based Section 8 contracts, but there is no guarantee that such
extensions will be available in the future.
The Partnership is subject to the risks incident to potential losses
arising from the management and ownership of improved real estate. The
Partnership can also be affected by poor economic conditions generally, however
no more than 20% of the properties are located in any single state. There are
also substantial risks associated with owning properties receiving government
assistance, for example the possibility that Congress may not appropriate funds
to enable the U.S. Department of Housing and Urban Development ("HUD") to make
rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owners equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore, there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.
Competition
The real estate business is highly competitive and substantially all of the
Properties acquired and to be acquired by the Partnership are subject to active
competition from similar properties in their respective vicinities. In addition,
various other limited partnerships may, in the future, be formed by the General
Partners and/or their affiliates to engage in businesses which may be
competitive with the Partnership.
Employees
The Partnership does not have any direct employees. All services are
performed for the Partnership by its General Partners and their affiliates. The
General Partners receive compensation in connection with such activities as set
forth in Items 11 and 13. In addition, the Partnership reimburses the General
Partners and certain of their affiliates for expenses incurred in connection
with the performance by their employees of services for the Partnership in
accordance with the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement").
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<PAGE>
Item 2. Properties.
The Partnership holds a 98% limited partnership interest in 61 Local
Partnerships and a 26.46% limited partnership interest in 1 Local Partnership
(the other 71.54% limited partnership interest is held by an affiliate of the
Partnership with the same management); together these 62 Local Partnerships own
66 apartment complexes. Set forth below is a schedule of these Local
Partnerships including certain information concerning their respective Apartment
Complexes (the "Local Partnership Schedule"). Further information concerning
these Local Partnerships and their Properties, including any encumbrances
affecting the properties, may be found in Item 14. Schedule III.
LocalPartnership Schedule
-------------------------
<TABLE>
<CAPTION>
% of Units Occupied at May 1
---------------------------------------
Name and Location (Number of Units) Date Acquired 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
C.V. Bronx Associates, L.P./Gerald Gardens
Bronx, NY (121) June 1989 97 97 95 98 100
Michigan Rural Housing Limited Partnership
Michigan (192)(a) September 1989 97 89 90 95 94
Jefferson Limited Partnership
Schreveport, LA (69) December 1989 94 99 96 100 100
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI (36) October 1989 94 100 100 97 100
RBM Associates/Spring Garden
Philadelphia, PA (8) December 1989 100 100 100 100 100
Glenbrook Associates
Atglen, PA (35) November 1989 100 100 100 98 100
Affordable Flatbush Associates
Brooklyn, NY (30) December 1989 97 100 97 100 100
Barclay Village II, LTD.
Chambersburg, PA (87) November 1989 100 100 100 100 100
1850 Second Avenue Associates, L.P.
New York, NY (48) October 1989 100 100 100 100 100
R.P.P. Limited Dividend Housing/River Place
Detroit, MI (301) November 1989 95 97 99 96 92
Williamsburg Residential II, L.P.
Wichita, KS (50) November 1989 74 92 96 99 95
West 104th Street Associates L.P.
New York, NY (56) December 1989 98 100 98 100 100
Meredith Apartments, LTD.
Salt Lake City, UT (22) August 1989 100 100 100 95 95
Ritz Apartments, LTD.
Salt Lake City, UT (30) August 1989 93 100 100 100 100
Ashby Apartments, LTD.
Salt Lake City, UT (27) August 1989 96 96 100 100 100
</TABLE>
-5-
<PAGE>
Local Partnership Schedule
--------------------------
<TABLE>
<CAPTION>
% of Units Occupied at May 1
---------------------------------------
Name and Location (Number of Units) Date Acquired 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
South Toledo Associates, LTD.
Toledo, OH (18) January 1990 94 100 100 94 100
Dunlap School Venture
Philadelphia, PA (35) January 1990 100 92 98 100 100
Philipsburg Elderly Housing Associates
Philipsburg, PA (103) February 1990 98 99 98 100 100
Franklin Elderly Housing Associates
Franklin, PA (89) February 1990 99 99 99 100 100
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA (103) February 1990 98 99 99 100 100
Lancashire Towers Associates
Limited Partnership
Cleveland, OH (240) February 1990 98 100 100 100 100
Northwood Associates Limited Partnership
Toledo, OH (176) February 1990 96 97 92 95 100
Brewery Renaissance Associates
Middletown, NY (53) February 1990 98 98 98 98 100
Brandywine Court Associates, L.P.
Jacksonville, FL (52) November 1989 98 94 90 96 98
Art Apartments Associates
Philadelphia, PA (30) March 1990 97 83 94 97 100
The Village at Carriage Hills, LTD.
Clinton, TN (48) March 1990 100 100 100 100 100
Mountainview Apartments, LTD.
Newport, TN (34) March 1990 100 100 100 100 100
The Park Village, Limited
Jackson, MS (24) March 1990 100 100 100 100 99
River Oaks Apartments, LTD.
Oneonta, AL (35) March 1990 100 100 100 100 100
Forrest Ridge Apartments, LTD.
Forrest City, AR (25) March 1990 100 100 100 100 100
The Hearthside Limited Dividend Housing
Association Limited Partnership
Portage, MI (101) March 1990 99 98 100 98 98
Redemptorist Limited Partnership
New Orleans, LA (126) March 1990 95 98 95 100 97
Manhattan A Associates
New York, NY (99) April 1990 97 97 98 96 98
</TABLE>
-6-
<PAGE>
Local Partnership Schedule
--------------------------
<TABLE>
<CAPTION>
% of Units Occupied at May 1
---------------------------------------
Name and Location (Number of Units) Date Acquired 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Broadhurst Willows, L.P.
New York, NY (129) April 1990 92 96 97 98 100
Weidler Associates Limited Partnership
Portland, OR (52) May 1990 100 98 98 99 100
Gentle Pines-West Columbia Associates, L.P.
Columbia, SC (150) June 1990 100 99 97 100 99
Lake Forest Estates II, LTD.
Livingston, AL (32) June 1990 100 100 97 100 100
Las Camelias Limited Partnership
Rio Piedras, PR (166) June 1990 100 100 98 100 100
WPL Associates XXIII
Portland, OR (48) July 1990 92 97 98 100 95
Broadway Townhouses L.P.
Camden, NJ (175) July 1990 100 100 100 100 100
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR (67) August 1990 100 100 100 100 100
Citrus Meadows Apartments, LTD.
Brandenton, FL (200) July 1990 96 94 96 95 98
Sartain School Venture
Philadelphia, PA (35) August 1990 98 89 98 100 96
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL (176) September 1990 100 100 99 100 100
Holly Hill, LTD.
Greenville, TN (46) October 1990 100 100 96 100 100
Mayfair Apartments LTD.
Morristown, TN (48) October 1990 100 100 100 100 99
Foxcroft Apartments LTD.
Troy, AL (48) October 1990 98 98 100 100 99
Canterbury Apartments, LTD.
Indianola, MS (48) October 1990 90 100 100 100 100
Cutler Canal III Associates, LTD.
Miami, FL (262) October 1990 94 95 97 98 60
Jefferson Place L.P.
Olathe, KS (352) October 1990 96 93 99 98 94
Callaway Village, LTD.
Clinton, TN (46) November 1990 100 100 100 100 98
</TABLE>
-7-
<PAGE>
Local Partnership Schedule
--------------------------
<TABLE>
<CAPTION>
% of Units Occupied at May 1
---------------------------------------
Name and Location (Number of Units) Date Acquired 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Commerce Square Apartments Associates L.P.
Smyrna, DE (80) December 1990 100 95 98 100 99
West 132nd Development Partnership
New York, NY (40) December 1990 95 88 95 97 100
Site H Development Co.
Brooklyn, NY (11) December 1990 100 100 100 100 100
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA (78) December 1990 94 97 85 100 100
Diamond Phase II Venture
Philadelphia, PA (32) December 1990 97 91 97 94 100
Bookbindery Associates
Philadelphia, PA (41) December 1990 98 98 93 95 100
The Hamlet, LTD.
Boynton Beach, FL (240) December 1990 93 98 92 95 96
Stop 22 Limited Partnership
Santurce, PR (153) December 1990 100 100 99 100 100
Knob Hill Apartments, LTD.
Greenville, TN (48) December 1990 100 100 100 100 100
Conifer James Street Associates
Syracuse, NY (73) December 1990 92 92 79 100 100
Longfellow Heights Apartments, L.P.
Kansas City, MO (104) March 1991 98 98 86 98 100
</TABLE>
(a) Consists of five apartment complexes located throughout Michigan.
Generally, the General Partners require in connection with investments in
Local Partnerships that the general partners of the Local Partnerships ("Local
General Partners") undertake an obligation to fund operating deficits (up to a
stated maximum amount) of the Local Partnership during a limited period of time
following rent stabilization, the Partnership's investment ("Guarantee Period").
In each case the operating deficits will be funded by Operating Loans which will
not bear interest and will be repaid only out of 50% of available cash flow or
out of available net sale or refinancing proceeds. The gross amount of the
Operating Deficit Guarantees aggregate approximately $18,700,000, of which
approximately $16,100,000 have expired as of March 31, 1997. In cases where the
General Partners deem it appropriate, the obligations of a Local General Partner
under the Operating Deficit and/or Rent-Up Guarantees are secured by letters of
credit and/or cash escrow deposits.
The Tax Credits are available for a ten-year period which commences when
the property is placed in service. However, the annual Tax Credit available in
the year in which the Apartment Complex was placed in service by the Local
Partnership must be prorated based upon the months remaining in the year after
the Apartment Complex was placed in service. The amount of the annual Tax Credit
not available in the first year will be available in the eleventh year. In
certain cases, the Partnership acquired its interest in a Local Partnership
after the Local Partnership had placed its Apartment Complex in service. In
these cases, the Partnership may be allocated Tax
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<PAGE>
Credits only beginning in the month following the month in which the Partnership
acquired its interest. In addition, Tax Credits allocated in any prior period
may not be claimed by the Partnership. The Partnership has also acquired Local
Partnership Interests in which some of the Local Partnerships owning historic
complexes qualifies for the Historic Rehabilitation Tax Credit. The amount of
the Historic Rehabilitation Tax Credit is generally 20% of qualified
rehabilitation expenditures and is available in its entirety in the year the
rehabilitated building is placed in service or, under certain circumstances, in
the year in which the rehabilitation expenditure is made.
All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.
Rent from commercial tenants (to which average rental per square foot
applies) comprise less than 5% of the rental revenues of the Partnership. Rents
for the residential units are determined annually by HUD and reflect increases
in consumer price indexes in various geographic areas.
Management continuously reviews the physical state of the properties and
budgets improvements when required, which are generally funded from cash flow
from operations or release of replacement reserve escrows. No improvements are
expected to require additional financing.
Management continuously reviews the insurance coverage of the properties
and believes such coverage is adequate.
See Item 1, Business, above for the general competitive conditions to which
the properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations
determined by the township or city in which the property is located. Such taxes
have approximated 1% of the aggregate cost of the properties as shown in
Schedule III to the financial statements.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Security Holder
Matters.
The Partnership has issued 27,820.3 Limited Partnership Interests, each
representing a $5,000 capital contribution to the Partnership, for aggregate
Gross Proceeds of $139,101,500. All of the issued and outstanding Limited
Partnership Interests have been issued to Liberty Credit Assignor III Inc. (the
"Assignor Limited Partner"), which has in turn issued 139,101.5 BACs to the
purchasers thereof for an aggregate purchase price of $139,101,500. Each BAC
represents all of the economic and virtually all of the ownership rights
attributable to one-fifth of a Limited Partnership Interest held by the Assignor
Limited Partner. BACs may be converted into Limited Partnership Interests at no
cost to the holder (other than the payment of transfer costs not to exceed
$100), but Limited Partnership Interests so acquired are not thereafter
convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partners have imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. Implementation of the restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that such procedures will remain in effect until such time, if ever, as
further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.
As of May 1, 1997, the Partnership has approximately 9,800 registered
holders of an aggregate of 139,101.5 BACs.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $2,000, are held by the two General Partners.
Certain subsidiaries are subject to HUD restrictions which limit annual
cash distributions to partners and restrict the subsidiaries from selling or
otherwise liquidating their assets during the period that the agreement with HUD
is in existence, without HUD's approval.
Pursuant to the terms of the Partnership Agreement there are no material
restrictions that restrict the ability of the Partnership to make
distributions.
However, the Partnership has made no distributions to the BACs holders as
of March 31, 1997. The Partnership does not anticipate providing cash
distributions to its BACs holders other than from net refinancing or sales
proceeds.
There has recently been an increasing number of requests for the list of
BACs holders of limited partnerships such as the Partnership. Often these
requests are made by a person who, only a short time before making the request,
acquired merely a small number of BACs in the partnership and seeks the list for
an improper purpose, a purpose that is not in the best interest of the
partnership or is harmful to the partnership. In order to best serve and protect
the interests of the Partnership and all of its investors, the General Partners
have adopted a policy with respect to requests for the Partnership's list of
BACs holders. This policy is intended to protect investors from unsolicited and
coercive offers to acquire BACs holders' interests and does not limit any other
rights the General Partners may have under the Partnership Agreement or
applicable law.
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<PAGE>
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership from the last five fiscal years. Additional financial information is
set forth in the audited financial statements in Item 8 hereof.
<TABLE>
<CAPTION>
Year Ended March 31
-----------------------------------------------------------------------------------------
OPERATIONS 1997 1996 1995 1994 1993
- - ---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 33,542,935 $ 33,211,908 $ 32,437,587 $ 31,371,907 $ 30,001,314
Operating expenses 48,902,130 49,134,034 47,897,186 47,729,423 46,246,686
Provision for impairment
of assets 20,083,101 0 0 0 0
------------ ------------ ------------ ------------ ------------
Loss before
minority interest (35,442,296) (15,922,126) (15,459,599) (16,357,516) (16,245,372)
Minority interest in
income of subsidiary
partnerships 156,523 153,662 158,671 152,604 165,686
------------ ------------ ------------ ------------ ------------
Net loss $(35,285,773) $(15,768,464) $(15,300,928) $(16,204,912) $(16,079,686)
============ ============ ============ ============ ============
Net loss -
limited partners $(34,932,915) $(15,610,779) $(15,147,919) $(16,042,863) $(15,918,890)
============ ============ ============ ============ ============
Net loss per BAC $ (251.13) $ (112.23) $ (108.90) $ (115.33) $ (114.44)
============ ============ ============ ============ ============
<CAPTION>
March 31
-----------------------------------------------------------------------------------------
FINANCIAL POSITION 1997 1996 1995 1994 1993
- - ------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total assets $268,870,640 $302,121,868 $314,010,691 $324,600,042 $341,349,003
============ ============ ============ ============ ============
Total liabilities $258,746,588 $257,205,366 $252,803,110 $247,840,864 $248,042,255
============ ============ ============ ============ ============
Minority interest $ 2,257,054 $ 1,763,731 $ 2,286,346 $ 2,537,015 $ 2,879,673
============ ============ ============ ============ ============
Total partners' capital $ 7,866,998 $ 43,152,771 $ 58,921,235 $ 74,222,163 $ 90,427,075
============ ============ ============ ============ ============
</TABLE>
During the year ended March 31, 1997, total assets decreased primarily due
to depreciation and the provision for impairment of assets. During the years
ended March 31, 1993 through 1996, total assets decreased primarily due to
depreciation, partially offset by net additions to property and equipment.
During the year ended March 31, 1994, total liabilities decreased primarily due
to payment of obligations. During the years ended March 31, 1996 and 1995, total
liabilities increased primarily due to the accrual of principal and interest
payments at one of the Local Partnerships, partially offset by payments of
obligations at the remaining Local Partnerships. During the year ended March 31,
1993, certain minority interest limited partners assumed building costs and debt
of approximately $2,000,000.
CASH DISTRIBUTION
The Partnership has made no distributions to the BACs holders as of
March 31, 1997.
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<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
The Partnership raised $139,101,500 in gross proceeds during the offering
period which commenced in May 1989 and was terminated on March 30, 1990. The net
proceeds available for investment, after volume discounts, establishment of a
working capital reserve, payment of sales commissions, acquisition fees, and
offering expenses were approximately $109,900,000. Through March 31, 1997, the
Partnership has invested approximately $109,000,000 (not including acquisition
fees) of net proceeds in 62 Local Partnerships of which approximately $1,361,000
remains to be paid (which includes approximately $1,072,000 held in escrow). The
Partnership did not make any investments during the year ended March 31, 1997
and does not anticipate making any further investments.
During the years ended March 31, 1997, 1996, and 1995, the Partnership's
primary source of funds include (i) working capital reserves in the original
amount of 3.5% of gross equity raised and (ii) cash distributions from the
operations of the local partnerships.
For the year ended March 31, 1997, cash and cash equivalents of the
Partnership and its 62 consolidated subsidiary partnerships decreased by
approximately $1,902,000. This decrease was primarily attributable to cash flow
used in operations ($1,683,000), acquisition of property and equipment
($820,000), a net decrease in due to local general partners and affiliates
($933,000), a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($233,000) and repayments on mortgage notes
($5,456,000), which exceeded borrowings on mortgage notes ($5,146,000), an
increase in due to debt guarantor ($1,926,000) and a net decrease in cash held
in escrow ($148,000). Included in the adjustments to reconcile the net loss to
cash flow used in operations is a provision for impairment of assets in the
amount of $20,083,000, depreciation and amortization in the amount of
$11,473,000 and an increase in due to debt guarantor in the amount of
$2,307,000.
The Partnership has a working capital reserve in the original amount of
3.5% of gross equity raised of which approximately $2,548,000 and $4,203,000
remained unused at March 31, 1997 and 1996, respectively.
The Partnership is not expected to have access to additional sources of
financing, and in particular will not have the ability to assess BAC holders for
additional capital contributions to provide capital if needed by the
Partnership. Accordingly, if circumstances arise that cause a Local Partnership
to require capital in addition to that contributed by the Partnership and any
equity of the Local General Partner, the only sources from which such capital
needs will be able to be satisfied (other than the limited reserves available at
the partnership level) will be additional third party debt financing (which may
not be available if, as expected, the property owned by the Local Partnership is
already substantially leveraged or, as in the case of the New York program
properties, the incurrence of third party debt is not permitted) or additional
equity contributions of the Local General Partner or other equity sources (which
could adversely affect the Partnership's interest in operating cash flow and/or
proceeds of sale or refinancing of the property and result in adverse tax
consequences to the BAC holders). There can be no assurance that any of such
sources would be readily available in sufficient proportions to fund the capital
requirements of the Local Partnerships in question, particularly if the residual
value of a property is uncertain. If sources are not available, the Local
Partnership would risk foreclosure on its property if it were unable to
renegotiate the terms of its first mortgage and any other debt with the lenders
thereof. The risks associated with the need of the Local Partnership to
refinance their underlying first mortgage debt are exacerbated by the
probability that the term of certain favorable assistance programs from which a
Local Partnership may benefit will expire prior to the end of the compliance
period with respect to such Local Partnership's property.
Cash distributions received from the Local Partnerships remain relatively
immaterial. These distributions, as well as the working capital reserves
referred to above, will be used to meet the future operating expenses of the
Partnership.
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During the years ended March 31, 1997, 1996 and 1995, the amounts received
from operations of the Local Partnerships approximated $112,000, $190,600, and
$113,000, respectively.
The Partnership has negotiated Operating Deficit Guarantee Agreements with
all Local Partnerships, in which the Local General Partners have agreed to fund
operating deficits for a specified period of time. The terms of the Operating
Deficit Guarantee Agreements vary for each Local Partnership, with the maximum
dollar amounts to be funded for a specified period of time, generally three
years, commencing at rent stabilization. The gross amount of the Operating
Deficit Guarantees aggregate approximately $18,700,000 of which approximately
$16,100,000, $15,600,000 and $12,000,000 had expired as of March 31, 1997, 1996
and 1995, respectively. As of March 31, 1997 and 1996, approximately $3,980,000
and $4,233,000, respectively, has been funded by the Local General Partners to
meet such obligations. All operating deficit guarantees expire within the next
two years. Management does not expect their expiration to have a material impact
on liquidity, based on prior years' fundings.
In addition, several Local Partnerships were initially subject to Rent-Up
Guarantee Agreements, in which the general partners of the Local General Partner
agree to pay liquidated damages if predetermined occupancy rates are not
achieved. As of March 31, 1997, all such guarantees have expired.
Both the Operating Deficit Guarantee Agreements and the Rent-Up Guarantee
Agreements were negotiated to protect the Partnership's interest in the Local
Partnerships and to provide incentive to the Local General Partners to generate
positive cash flow.
Partnership management fees owed to the General Partners amounting to
approximately $1,774,000 were accrued and unpaid at March 31, 1997 and 1996.
HUD previously released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based Section 8 subsidy payments, and an attendant reduction in debt on
properties that were supported by the Section 8 payments. The ACPA calls for a
transition during which the project-based Section 8 payments would be converted
to a tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market" that is revalued in light of the reduced income stream.
Several industry sources have commented to HUD and Congress that in the
event the ACPA was fully enacted in its present form, the reduction in mortgage
indebtedness would be considered taxable income to owners such as the limited
partners in the Partnership. Legislative relief has been proposed to exempt
"marked-to-market" debt from cancellation of indebtedness income treatment. At
present, there are several bills pending in Congress to address this tax relief
issue. Additionally, in the interim, HUD has agreed to annual extensions of any
expiring project-based Section 8 contracts, but there is no guarantee that such
extensions will be available in the future.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
Local Partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership will eliminate the ability to generate future tax credits
from such Local Partnership and may also result in recapture of tax credits if
the investment is lost before the expiration of the credit period.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be for laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversifications of the portfolio may not protect against a general
downturn in the national economy.
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The Partnership has fully invested the proceeds of its offering in 62 Local
Partnerships, all of which fully have their tax credits in place. The tax
credits are attached to the project for a period of ten years and are
transferable with the property during the remainder of the ten year period. If
trends in the real estate market warranted the sale of a property, the remaining
tax credits would transfer to the new owner; thereby adding significant value to
the property on the market, which are not included in the financial statement
carrying amount.
Results of Operations
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective April 1, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.
Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate disposition
of the property. Cost includes the purchase price, acquisition fees and
expenses, and any other costs incurred in acquiring the properties. A provision
for loss on impairment of assets is recorded when estimated amounts recoverable
through future operations and sale of the property on an undiscounted basis are
below depreciated cost. Property investments themselves are reduced to estimated
fair value (generally using discounted cash flows) when the property is
considered to be impaired and the depreciated cost exceeds estimated fair value.
For the year ended March 31, 1997, the Partnership has recorded approximately
$20,083,000 as a provision for loss on impairment of assets.
The following is a summary of the results of operations of the Partnership
for the years ended March 31, 1997, 1996 and 1995 (the "Fiscal 1996", "Fiscal
1995" and "Fiscal 1994", respectively).
The majority of the Local Partnerships' income continues to be in the form
of rental income, with the corresponding expenses (excluding provision for
impairment of assets) being divided among operations, depreciation, and mortgage
interest.
The net loss for the 1996, 1995 and 1994 Fiscal Years totaled $35,285,773,
$15,768,464, and $15,300,928, respectively.
1996 vs. 1995
Rental income increased approximately 2% for the year ended March 31, 1997
as compared to the corresponding period in 1996 primarily due to rental rate
increases.
Other income decreased approximately $414,000 for the year ended March 31,
1997 as compared to the corresponding period in 1996 primarily due to decreases
at four Local Partnerships. There was a decrease at one Local Partnership due to
forgiveness of indebtedness in 1995 on loans from the former general partners.
There was a decrease at a second Local Partnership due to a settlement with New
York City in 1995 resulting in the cancellation of water and sewer taxes which
had been accrued for 1985 and 1986. The decreases at the third and fourth Local
Partnerships were due to the Local Partnerships being awarded a
Federally-Assisted Low-Income Housing Drug Elimination Grant by the U.S.
Department of Housing and Urban Development in 1995.
Total expenses, excluding general and administrative-related parties,
repairs and maintenance and provision for impairment of assets remained fairly
consistent with a decrease of approximately 3% for the year ended March 31, 1997
as compared to the corresponding period in 1996.
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General and administrative-related parties increased approximately $718,000
for the year ended March 31, 1997 as compared to the corresponding period in
1996 primarily due to an increase in partnership management fees payable to the
General Partners.
Repairs and maintenance expense increased approximately $454,000 for the
year ended March 31, 1997 as compared to the corresponding period in 1996
primarily due to increases at eight Local Partnerships. There was an increase at
one Local Partnership due to the replacement of the safety surface in the play
area and the replacement of counter tops and cabinet doors. The increase at the
second Local Partnership was due to the conversion of fourteen wood entry doors
to steel doors, the addition of handicap access ramps, and the upgrade of the
hydroneumatic water pump system. The increase at the third Local Partnership was
due to the replacement of carpeting with vinyl tile in high traffic areas, the
repainting of hallways and doors and the repair and repainting of ceilings and
walls due to water damage caused by high winds and heavy rains. The increase at
the fourth Local Partnership was due to the installation of 68 new electrical
boxes. The increase at the fifth Local Partnership was due to the painting of
the exterior of 10 buildings, sidewalk repairs and landscaping improvements. The
increase at the sixth Local Partnership was due to roof repairs. The increase at
the seventh Local Partnership was due to the painting of the exterior of the
buildings.
A provision for impairment of assets was recorded in the 1996 Fiscal Year
(see Note 4 in Item 8. Financial Statements and Supplementary Data).
1995 vs. 1994
Rental income increased approximately 2% for the year ended March 31, 1996
as compared to the corresponding period in 1995 primarily due to rental rate
increases.
Total expenses remained fairly consistent, with a 3% increase, for the year
ended March 31, 1996 as compared to the corresponding period in 1995.
Results of Operations of Certain Local Partnerships
Williamsburg Residential II, L.P.
In November 1996, the general partner of Williamsburg Residential II, L.P.
("Williamsburg II") stopped making the mortgage note payments which constituted
an event of default. The general partner also communicated to the limited
partners its desire to withdraw as general partner and property manager in an
effort to eliminate the need for it to further secure loans from its affiliated
entities to keep the project going. The limited partners retained a national
property management firm to operate the property effective January 1, 1997 and
replaced the general partner effective January 16, 1997.
The new general partner, which is an affiliate of the Related General
Partner, has been in contact with the lender, Federal National Mortgage
Association ("FNMA"), shortly after the default. Williamsburg II entered into a
Forbearance Agreement with FNMA on January 27, 1997. The agreement called for
back payments to be made and provided Williamsburg II 60 days to work out a loan
agreement. A subsequent extension of the forbearance agreement runs through July
25, 1997. The general framework of the proposed loan modification agreement
calls for: 1. Williamsburg II to deposit an amount approximately equal to six
months payments into a debt service escrow fund to be utilized as needed; 2.
Payments of interest only on the loan for 36 months; 3. The waiving of
replacement reserve escrow payments during 1997; 4. Excess net operating income
to be turned over to the loan servicer monthly. FNMA's standard modification
documentation will be used after which FNMA will not excercise further remedies
relating to the default. The factors mentioned above raise substantial doubt
about Williamsburg II's ability to continue as a going concern. The auditors for
Williamsburg II modified their report for the 1996 fiscal year due to the
uncertainty of the subsidiary partnership to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. The Partnership's investment in Williamsburg II had
been written down to zero by prior years' losses and the minority interest
balance was zero at March 31, 1997
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and 1996. Williamsburg II's net loss after minority interest amounted to
approximately $1,368,000 (after provision for impairment of assets of
approximately $1,279,974), $77,000 and $48,000 for the years ended March 31,
1997, 1996 and 1995, respectively.
R.P.P. Limited Dividend Housing Association Limited Partnership
During the 1996, 1995 and 1994 Fiscal Years, R.P.P. Limited Dividend
Housing Association Limited Partnership ("River Place"), a subsidiary
partnership, experienced significant losses from operations.
River Place's long-term debt consists of borrowings under two loan
agreements with the Michigan State Housing Development Authority (the
"Authority") whereby the Authority issued Limited Obligation Revenue Bonds and
loaned the proceeds to River Place in the original amounts of $21,000,000 (the
"First Loan") and $14,000,000 (the "Second Loan") (collectively hereinafter
referred to as the "Loans").
The First Loan, with an outstanding balance of $18,690,000 at December 31,
1996, requires semi-annual payments of principal and interest on April 1 and
October 1 and matures on October 1, 2011. Interest is payable at a variable rate
no lower than 5% and no greater than 8%. At December 31, 1996, the interest rate
was approximately 5.13%.
The Second Loan, with an outstanding balance of $12,700,000 at December 31,
1996, requires semi-annual payments of principal and interest on June 1 and
December 1 and matures on June 1, 2018. Interest is payable at a fixed rate of
5.5%.
The Loans are nonrecourse and are secured by mortgages which are
collateralized by the real estate held for lease.
To enhance the credit of River Place, the General Retirement System of the
City of Detroit ("GRS") entered into an agreement with the Authority to purchase
the Loans upon the occurrence of certain events, as defined. The commitment to
purchase the First Loan is supported by securities pledged as collateral by GRS
and the commitment to purchase the Second Loan is supported by a direct pay
letter of credit issued by a bank in the initial stated amount equal to the
initial aggregate principal amount of the bonds plus 210 days' interest (at
7.25%) on such amounts. The letter of credit expires on August 1, 2000 and is
secured by a reimbursement agreement and a note issued by River Place. Until
expiration, a support fee for the letter of credit is payable at .35% per annum
of the average daily stated amount payable.
GRS' Commitment is nonrecourse and is secured by a second mortgage which is
collateralized by the real estate held for lease. Commitment fees equal to 1.5%
of the outstanding principal balance of the First Loan plus six months interest,
adjusted for the Annual Credit, as defined, are payable annually to GRS. These
fees totaled approximately $263,000 in 1996 and are included in interest and
related fees in the statement of operations. River Place has been unable to pay
these fees owed to GRS, totaling $2,052,912 at December 31, 1996, which are
included in due to debt guarantor in the consolidated balance sheets.
River Place has been unable to generate sufficient cash flows to meet a
majority of its required principal and interest payments under the Loans. GRS
has been making these payments, which totaled $1,134,352 in 1996, on behalf of
River Place. As a result, GRS has declared River Place in default under its
obligation to make these payments. As of December 31, 1996, GRS has made
advances to River Place to meet its debt service requirements totaling
$13,997,565 which remain unpaid by River Place and are included in due to debt
guarantor in the consolidated balance sheets. Interest on these advances is
accrued by River Place at 15%. Interest accrued during 1996 totaled $2,024,728
and is included in interest and related fees in the statement of operations. As
of December 31, 1996, unpaid interest on these advances totals $7,763,971 and is
included in due to debt guarantor in the consolidated balance sheets.
GRS agreed to waive its right of foreclosure under the mortgage held by
GRS, unless certain events occur, through February 1, 2006, upon the execution
and delivery of the amended local partnership
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agreement, dated July 1, 1996. Significant provisions of the amended local
partnership agreement include (a) admittance of GRS RP General Corp., an
affiliate of GRS, as the general partner (b) restrictions on the general
partner's authority to sell the project prior to February 1, 2006 unless the
sale is an arm's length sale to an unrelated third party, (c) the authority of
the general partner to require each of the partners to make additional capital
contributions to River Place in an aggregate amount up to the then-existing
amount of all indebtedness of River Place, including all amounts then owed to
GRS under mortgages executed and delivered by River Place and those certain
repayment agreements executed and delivered by River Place to GRS in connection
with such mortgages, and (d) the admissions of two additional limited partners
with an interest of .001% each and the reduction of the special limited
partner's interest from 1% to .998%. However, through the rights of the
Partnership and/or an affiliate of the General Partners, which affiliate has a
contractual obligation to act on behalf of the Partnership, to approve certain
major operating and financial decisions, the Partnership continues to have a
controlling financial interest in River Place.
Management anticipates that River Place will be unable to make all of the
required debt service payments during 1997. However, there is no guarantee that
GRS, or any other persons, will continue to make these payments on behalf of
River Place. These items raise substantial doubt about River Place's ability to
continue as a going concern.
The financial statements of River Place have been prepared assuming that
River Place will continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
The Partnership's investment in River Place has been written down to zero by
prior years' losses and the minority interest balance was $882,750 and $0 at
March 31, 1997 and 1996, respectively. The net loss after minority interest for
River Place amounted to approximately $22,373,000 (after provision for
impairment of assets of approximately $18,803,000), $5,166,000 and $4,799,000
for the years ended March 31, 1997, 1996 and 1995, respectively.
Jefferson Place L.P.
Jefferson Place, L.P. ("Jefferson Place") has consistently been unable to
generate sufficient cash flow from operations to pay the interest obligation on
its mortgage note payable and has a working capital deficiency and a net capital
deficiency at March 31, 1997. Jefferson Place has, however, generated cash flows
sufficient to cover the cost of operations before payment of interest on the
mortgage note payable. The terms of the mortgage note payable provide that the
difference between the stated interest rate and the actual interest paid per
month is accrued and that such amount bears interest at the same rate as the
mortgage note (8.5%) and is payable from excess cash flow in future months. The
mortgagee has agreed not to declare a default under the terms of the mortgage
note payable through December 2002. These items raise substantial doubt about
Jefferson Place's ability to continue as a going concern. The financial
statements for Jefferson Place do not include any adjustments that might result
from the outcome of this uncertainty. Jefferson Place has addressed this concern
by implementing an operating plan designed to reposition the project and
substantially increase long-term cash flow from operations. This plan includes:
(1) investment of a significant portion of property cash flow in upgrading and
improving the condition and appearance of the project; and (2) implementation of
stringent resident qualification standards designed to improve the resident
profile and, ultimately, property operations. In addition, Jefferson Place is
also considering requesting the reissuance of the bonds at lower interest rates
so that the project can support monthly interest payments. The Partnership's
investment in Jefferson Place has been written down to zero by prior years'
losses and the minority interest balance was $0 at March 31, 1997 and 1996. The
net loss after minority interest for Jefferson Place amounted to approximately
$1,032,000, $1,069,000, and $1,016,000 for the years ended March 31, 1997, 1996
and 1995, respectively.
L.I.H. Chestnut Associates, L.P.
L.I.H. Chestnut Associates, L.P. ("Chestnut") has sustained recurring
losses from operations. At December 31, 1996, Chestnut had not made certain
payments required under the terms of the mortgage loan and, as a result, is in
default. Chestnut's continued existence is dependent on its resolution of the
default under the mortgage loan. These items raise substantial doubt about
Chestnut's ability to continue as a going concern. The financial
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statements for Chestnut do not include any adjustments that might result from
the outcome of this uncertainty. Management of Chestnut is in discussion with
the first mortgagee and Chestnut's general and limited partners in an attempt to
resolve the default. The Partnership's investment in Chestnut has been written
down to zero by prior years' losses and the minority interest balance was
$1,147,000 at March 31, 1997 and 1996. The net loss after minority interest for
Chestnut amounted to approximately $348,000, $306,000 and $328,000 for the years
ended March 31, 1997, 1996 and 1995, respectively.
Jefferson Limited Partnership
At December 31, 1996 and 1995 Jefferson Limited Partnership's ("Jefferson")
current liabilities exceeded its current assets by over $220,000 and $201,000,
respectively. Although this condition could raise substantial doubt about
Jefferson's ability to continue as a going concern, such doubt is alleviated as
follows:
1. Under the HUD regulatory agreement, Jefferson is precluded from
paying, except from surplus cash, certain related party payables that
are included in current liabilities which at December 31, 1996 and
1995 totaled $166,523 and $141,381, respectively.
2. In addition to the related party payables mentioned above, $47,216 and
$53,077 of current liabilities at December 31, 1996 and 1995,
respectively, are to related parties which do not intend to pursue
payment beyond Jefferson's ability to pay.
Accordingly, management believes that Jefferson has the ability to continue
as a going concern for at least one year from December 31, 1996. The
Partnership's investment in Jefferson was approximately $940,000 and $1,073,000
at March 31, 1997 and 1996, respectively, and the minority interest balance was
$0 at each date. The net loss after minority interest for Jefferson amounted to
approximately $133,000, $146,000 and $141,000 for the years ended March 31,
1997, 1996 and 1995, respectively.
West 132nd Development Partnership
West 132nd Development Partnership ("West 132nd") has received notification
of default on its mortgages due to its arrears on the mortgage debt and related
escrow accounts. As of December 31, 1996, West 132nd owed approximately $44,000
toward its prior monthly installments, inclusive of principal, interest and
escrows. West 132nd is currently negotiating with the lender to arrange a
payment schedule for those arrears. The Partnership investment in West 132nd was
approximately $552,000 and $628,000 at March 31, 1997 and 1996, respectively,
and the minority interest balance was $0 and $1,352, respectively. The net loss
after minority interest for West 132nd amounted to approximately $76,000,
$62,000 and $129,000 for the years ended March 31, 1997, 1996 and 1995,
respectively.
Wade D. Mertz Elderly Housing Associates
On July 29, 1996, Wade D. Mertz Elderly Housing Associates ("Wade D.
Mertz") received a notice from the Internal Revenue Service ("IRS") that they
would be examining Wade D. Mertz's federal income tax return for the year ended
December 31, 1994. The IRS commenced the examination on August 13, 1996,
completed its field work in early September and on May 20, 1997 notified Wade D.
Mertz that they had concluded their audit and that they were proposing no
adjustments for the return.
Las Camelias Limited Partnership
During June 1996, Las Camelias Limited Partnership completed a modification
of its mortgage debt, effective July 1, 1996, which reduced the stated rate from
10% to 8.25%, the pay rate from 9% to 7.25%, and extended the maturity date from
October 1, 2021 to February 1, 2026. The monthly payment which had been interest
only in the amount of $45,000 was reduced to a payment of principal and interest
in the amount of $40,931. The interest rate on the accrued but unpaid interest
(1%), which had been at 10%, was reduced to 8.25%.
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The Hamlet, Ltd.
On September 30, 1996, The Hamlet, Ltd. ("Hamlet") refinanced its Nations
Bank loan which had a balance of $4,491,693 with a loan from Home Savings of
America in the amount of $4,700,000. The note bears interest at 9.15%. Principal
and interest of $38,326 is payable monthly from November 1, 1996 through October
1, 2011, when unpaid principal and interest become due. The loan is nonrecourse
and is collateralized by Hamlet's rental property.
Stop 22 Limited Partnership
As of May 1996, Stop 22 Limited Partnership ("Stop 22") had interest in
arrears totaling $540,000. This constituted an event under which the lender may
have declared the mortgage obligation in default. In May 1996, Stop 22 completed
a modification of its mortgage debt, effective November 1, 1995, which reduced
the stated rate from 10% to 8% and the pay rate from 9% to 7% resulting in a
reduction of the monthly interest only payments from $60,000 to $46,666. The
interest rate on the accrued but unpaid interest (1%), which had been at 10%,
was reduced to 8%. In connection with the modification the interest in arrears
was paid.
Other Subsidiary Partnerships
Four of the subsidiary partnerships are leasing the land on which the
Projects are located for terms ranging from 28 to 99 years. At December 31,
1996, the subsidiary partnerships were committed to minimum annual rentals on
the noncancelable leases aggregating $155,130 for each of the next five years,
and $4,448,684 in total, thereafter.
Other
The Partnership's investment in the Local Partnerships is subject to the
risks incident to management and ownership of improved real estate. The
Partnership's investments also could be adversely affected by poor economic
conditions, which, could increase vacancy levels, rental payment defaults, and
operating expenses, any or all of which could threaten the financial viability
of one or more of the Local Partnerships.
There also are substantial risks associated with the operation of Apartment
Complexes receiving government assistance. These risks stem from governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low- and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
contracted to make; and that when the rental assistance contracts expire there
may not be market demand for apartments at full market rents in a Local
Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs as, for example, for such items as fuel,
utilities and labor. However, continued inflation should allow for appreciated
values of the Local Partnerships' Apartment Complexes over a period of time as
rental revenues and replacement costs continue to increase.
There has recently been an increasing number of requests for the list of
BACs holders of limited partnerships such as the Partnership. Often these
requests are made by a person who, only a short time before making the request,
acquired merely a small number of BACs in the partnership and seeks the list for
an improper purpose, a purpose that is not in the best interest of the
partnership or is harmful to the partnership. In order to best serve and protect
the interests of the Partnership and all of its investors, the General Partners
have adopted a policy with respect to requests for the Partnership's list of
BACs holders . This policy is intended to protect investors from unsolicited and
coercive offers to acquire BACs holders' interests and does not limit any other
rights the general partners may have under the Partnership Agreement or
applicable law.
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Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 21
Consolidated Balance Sheets at March 31, 1997 and 1996 175
Consolidated Statements of Operations for the years ended
March 31, 1997, 1996 and 1995 176
Consolidated Statements of Changes in Partners' Capital
for theyears ended March 31, 1997, 1996 and 1995 177
Consolidated Statements of Cash Flows for the years
ended March 31, 1997, 1996 and 1995 178
Notes to Consolidated Financial Statements 180
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[TRIEN, ROSENBERG, ROSENBERG, WEINBERG, CIULLO & FAZZARI, LLP - LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Liberty Tax Credit Plus III L.P. and Subsidiaries
(A Delaware Limited Partnership)
We have audited the consolidated balance sheets of Liberty Tax Credit Plus
III L.P. and Subsidiaries (a Delaware Limited Partnership) (the "Partnership")
as of March 31, 1997 and 1996, and the related consolidated statements of
operations, changes in partners' capital, and cash flows for the years ended
March 31, 1997, 1996 and 1995 (the 1996, 1995 and 1994 Fiscal Years,
respectively). 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 did not audit the financial
statements of 61 (Fiscal 1996, 1995 and 1994) subsidiary partnerships whose
losses aggregated $33,407,170 (including a provision for impairment of assets of
$20,083,101), $14,773,600 and $14,070,341 of the Partnership's net loss for the
1996, 1995 and 1994 Fiscal Years, respectively, and whose assets constituted 94%
and 96% of the Partnership's assets at March 31, 1997 and 1996, respectively,
presented in the accompanying consolidated financial statements. The financial
statements of these 61 subsidiary partnerships 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 these subsidiary
partnerships, is based solely upon the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. 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, based upon our audits, and the reports of the other
auditors referred to above, the consolidated financial statements referred to in
the first paragraph present fairly, in all material respects, the financial
position of Liberty Tax Credit Plus III L.P. and Subsidiaries at March 31, 1997
and 1996 and the results of their operations and cash flows for the years ended
March 31, 1997, 1996 and 1995, in conformity with generally accepted accounting
principles.
As discussed in Note 10(a), the consolidated financial statements include
the financial statements of five subsidiary partnerships with significant
contingencies and uncertainties. The financial statements of four of these
subsidiary partnerships were prepared assuming that each will continue as a
going concern. These subsidiary partnerships have been unable to generate
sufficient cash flow to pay their mortgage obligations. The four subsidiary
partnerships' net losses after minority interests aggregated $25,919,773 (Fiscal
1996), $6,618,418 (Fiscal 1995) and $6,190,080 (Fiscal 1994) and their assets
aggregated $37,266,711 and $59,224,657 at March 31, 1997 and 1996, respectively.
Management's plans in regard to these matters are also described in Note 10(a).
The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
/s/ TRIEN, ROSENBERG, ROSENBERG, WEINBERG,
CIULLO & FAZZARI, LLP
TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP
New York, New York
June 30, 1997
-21-
<PAGE>
[GROSSMAN, TUCHMAN & SHAH, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
C.V. Bronx Associates, L.P.
New York, New York
We have audited the accompanying balance sheets of C.V. Bronx Associates, L.P.
(a Delaware limited partnership) as of December 31, 1996 and 1995, and the
related statements of income (loss), changes in 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. 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 C.V. Bronx Associates, L.P. as
of December 31, 1996 and 1995 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP
---------------------------------
New York, N.Y.
January 31, 1997
<PAGE>
[GROSSMAN, TUCHMAN & SHAH, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
C.V. Bronx Associates, L.P.
New York, New York
We have audited the accompanying balance sheets of C.V. Bronx Associates, L.P.
(a Delaware limited partnership) as of December 31, 1995 and 1994, and the
related statements of income (loss), changes in 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. 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 C.V. Bronx Associates, L.P. as
of December 31, 1995 and 1994 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Respectfully submitted,
/s/ GROSSMAN, TUCHMAN & SHAH, LLP
New York, N.Y.
January 31, 1996
<PAGE>
[THEO CARSON & ASSOCIATES LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Michigan Rural Housing Limited Partnership
I have audited the accompanying balance sheets of Michigan Rural Housing Limited
Partnership (a Michigan partnership) as of December 31, 1996 and 1995, and the
related statements of operations, changes in partners' capital, and cash flows
for the years 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 audits.
I have conducted the audits 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 the 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 Michigan Rural Housing Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Theo C. Carson & Associates
- - -------------------------------
Theo C. Carson & Associates
Kalamazoo, Michigan
February 17, 1997
<PAGE>
[THEO CARSON & ASSOCIATES LETTERHEAD - KALAMAZOO, MICHIGAN]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Michigan Rural Housing Limited Partnership
I have audited the accompanying balance sheets of Michigan Rural Housing Limited
Partnership (a Michigan partnership) as of December 31, 1995 and 1994, and the
related statements of operations, changes in partners' capital, and cash flows
for the years 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 audits.
I have conducted the audits 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 the 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 Michigan Rural Housing Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ THEO C. CARSON & ASSOCIATES
Theo C. Carson & Associates
February 12, 1996
<PAGE>
[COLE, EVANS & PETERSON LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Jefferson Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheets of Jefferson Limited
Partnership at December 31, 1996 and December 31, 1995, and the related
statements of income, 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. These 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 in the first paragraph
above present fairly, in all material respects, the financial position of
Jefferson Limited Partnership at December 31, 1996 and December 31, 1995, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Cole, Evans & Peterson
--------------------------
Cole, Evans & Peterson
February 4. 1997
Shreveport, Louisiana
-1-
<PAGE>
[COLE, EVANS & PETERSON LETTERHEAD - SHREVEPORT, LOUISIANA]
January 29, 1996
INDEPENDENT AUDITORS' REPORT
To the Partners
Jefferson Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheets of Jefferson Limited
Partnership at December 31, 1995 and December 31, 1994, and the related
statements of income, 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. These 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 in the first paragraph
above present fairly, in all material respects, the financial position of
Jefferson Limited Partnership at December 31, 1995 and December 31, 1994, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Cole, Evans & Peterson
Cole, Evans & Peterson
<PAGE>
[PAUL DAMIANO LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Inter-Tribal Indian Village Housing Development Associates, L.P.
(A Limited Partnership)
Providence, RI
We have audited the accompanying balance sheet of Project No. HIP010 of
Inter-Tribal Indian Village Housing Development Associates, L.P. (a limited
partnership) as of December 31, 1996, and the related statements of loss and
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 Project No. HIP010 as of December
31, 1996 and the results of its operations and the changes in partners' equity
and cash flows for the year then ended in conformity with generally accepted
accounting principles.
Our audit wee 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 13-17 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project No. HIP010. 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.
<PAGE>
In accordance with Government Auditing standards, we have also issued a report
dated January 16, 1997 on our consideration of Inter-Tribal Indian Village
Housing Development Associates, L.P.'s internal control structure and a report
dated January 16, 1997 on its compliance with specific requirements applicable
to RIHMFC programs.
/s/ Paul Damiano CPA pc
-----------------------
Lincoln, RI
January 16, 1997
<PAGE>
[PAUL DAMIANO LETTERHEAD - LINCOLN, RI]
INDEPENDENT AUDITORS' REPORT
To the Partners
Inter-Tribal Indian Village Housing Development Associates, L.P.
(A Limited Partnership)
Providence, RI
We have audited the accompanying balance sheet of Project No. HIPO10 of
Inter-Tribal Indian Village Housing Development Associates, L.P. (a limited
partnership) as of December 31, 1995, and the related statements of loss and
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 Project No. HIPO10 as of
December 31, 1995 and the results of its operations and the changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
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 13-17 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project No. HIPO10. 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.
<PAGE>
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 1996 on our consideration of Inter-Tribal Indian Village
Housing Development Associates, L.P.'s internal control structure and a report
dated January 17, 1996 on its compliance with specific requirements applicable
to RIHMFC programs.
/s/ PAUL DAMIANO
January 17, 1996
<PAGE>
[PAUL DAMIANO LETTERHEAD - LINCOLN, RI]
To the Partners
Inter-Tribal Indian Village Housing Development Associates, L.P.
(A Limited Partnership)
Providence, RI
We have audited the accompanying balance sheet of Project No. HIPO10 of
Inter-Tribal Indian Village Housing Development Associates, L.P. (a limited
partnership) as of December 31, 1994, and the related statements of loss and
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 Project, No. HIPO10 as of
December 31, 1994 and the results of its operations and the changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
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 13-17 are presented for the purposes of additional
analysis and is not a required part of the basic financial statements of
Project No. HIPO10. 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/ PAUL DAMIANO, CPA, P.C.
February 2, 1995
<PAGE>
[J.H. WILLIAMS & CO., LLP LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
RBM Associates (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of RBM Associates (a Limited
Partnership) as of December 31, 1996 and 1995 and the related statements of
(loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 RBM Associates (a Limited
Partnership) at December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ J.H. Williams & Co., LLP
- - ----------------------------
Kingston, Pennsylvania
February 12, 1997
<PAGE>
[J.H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
RBM Associates (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of RBM Associates (a Limited
Partnership) as of December 31, 1995 and 1994 and the related statements of
income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 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 the
Partnership's general partners and contracted management agent, 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 RBM Associates (a Limited
Partnership) at December 31, 1995 and 1994, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ J.H. WILLIAMS & CO., LLP
Kingston, Pennsylvania
February 10, 1996
<PAGE>
[MCKONLY & ASBURY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Glenbrook Associates Rural Development
Lancaster, Pennsylvania Allentown, Pennsylvania
We have audited the accompanying balance sheets of Glenbrook Associates (a
limited partnership) as of December 31, 1996 and 1995, and the related
statements of income, 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
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 Glenbrook Associates at
December 31, 1996 and 1995, 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 10, 1997 on our consideration of Glenbrook Associates' internal
control structure and a report dated January 10, 1997 on its compliance with
laws and regulations.
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 16
and 17 is presented for the purpose 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 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/ McKonly & Asbury
-------------------
Harrisburg, Pennsylvania
January 10, 1997
<PAGE>
[McKONLY & ASBURY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Glenbrook Associates Farmers Home Administration
Lancaster, Pennsylvania Allentown, Pennsylvania
We have audited the accompanying balance sheets of Glenbrook Associates (a
limited partnership) as of December 31, 1995 and 1994, and the related
statements of income, 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 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 Glenbrook Associates at
December 31, 1995 and 1994, 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 22, 1996 on our consideration of Glenbrook Associates'
internal control structure and a report dated January 22, 1996 on its compliance
with laws and regulations.
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 16
through 23 is presented for the purpose 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 audits 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/ McKONLY & ASBURY
Harrisburg, Pennsylvania
January 22, 1996
<PAGE>
[M.L. BERGER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)
We have audited the accompanying balance sheet of Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1996, 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.
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 Affordable Flatbush Associates
(A New York 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.
/s/ M.L. Berger & Company
- - -------------------------
New York, New York
February 10, 1997
-1-
<PAGE>
[M.L. BERGER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)
We have audited the accompanying balance sheet of Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1995, 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.
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 Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1995, 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.
/s/ M.L. BERGER & COMPANY
New York, New York
February 15, 1996
<PAGE>
[M.L. BERGER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)
We have audited the accompanying balance sheet of Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1994, 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.
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 Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1994, 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.
/s/ M.L. BERGER & COMPANY
New York, New York
February 15, 1995
<PAGE>
[WESSEL & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
January 23,1997
To the Partners of
Barclay Village II, Ltd.
We have audited the accompanying balance sheets of Barclay Village II, Ltd.
(a limited partnership) PHFA No. R-0039-8F as of December 31, 1996 and 1995, and
the related statements of operations, changes in partners' capital, and cash
flows for the years 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 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 and Pennsylvania Housing Finance Agency regulations. Those
standards and regulations 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 Barclay Village II, Ltd.,
PHFA No. R-0039-8F, as of December 31, 1996 and 1995, 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 Pennsylvania
Housing Finance Agency regulations, we have also issued a report dated January
23, 1997, on our consideration of Barclay Village II, Ltd.'s internal control
structure, and a report dated January 23,1997, on its compliance with
Pennsylvania Housing Finance Agency regulations and laws.
As described in Note 7 to the financial statements, the Partnership's
December 31, 1994, partners' capital has been restated to reflect a prior period
adjustment to properly reflect partner distributions.
/s/ Wessel & Company
----------------------------
WESSEL & COMPANY
Johnstown, Pennsylvania Certified Public Accountants
<PAGE>
[ZUBAIR S. MANSORI LETTERHEAD]
February 27, 1995
To the Partners
Barclay Village II, Ltd. (a Limited Partnership)
Mechanicsburg, Pennsylvania
Gentlemen:
We have audited the accompanying balance sheet of Barclay Village II, Ltd. (a
Limited Partnership) as of December 31, 1994 and 1993, and the related
statements of income, and cash flows and analysis of net worth for the year then
ended. These financial statements are the responsibility of the Project's
/Lender'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 Barclay Village II, Ltd. as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
and its analysis of net worth for the year then ended in conformity with
generally accepted accounting principles.
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 through 25 are presented for the purposes of
additional analysis and are
<PAGE>
To the Partners
Barclay Village II, Ltd.
Page 2
not required part of the basic financial statements of Barclay Village II, Ltd.
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.
Respectfully submitted,
/s/ ZUBAIR S. MANSORI
Zubair S. Mansori
Johnstown, Pennsylvania
February 27, 1995
<PAGE>
[GROSSMAN, TUCHMAN & SHAH, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
1850 Second Avenue
Associates, L.P.
New York, New York
We have audited the accompanying balance sheets of 1850 Second Avenue
Associates, L.P. (a Delaware limited partnership) as of December 31, 1996 and
1995, and the related statements of income (loss), changes in 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. 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 1850 Second Avenue Associates,
L.P. as of December 31, 1996 and 1995 and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP
---------------------------------
New York, N.Y.
January 31, 1997
<PAGE>
[GROSSMAN, TUCHMAN & SHAH LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
1850 Second Avenue
Associates, L.P.
New York, New York
We have audited the accompanying balance sheets of 1850 Second Avenue
Associates, L.P. (a Delaware limited partnership) as of December 31, 1995 and
1994, and the related statements of income (loss), changes in 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. 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 1850 Second Avenue Associates,
L.P. as of December 31, 1995 and 1994 and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
Respectfully submitted,
/s/ GROSSMAN, TUCHMAN & SHAH, LLP
New York, N.Y.
February 2, 1996
<PAGE>
[ERNST & YOUNG LLP - LETTERHEAD]
Report of Independent Certified Public Accountants
Partners
R.P.P. Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of R.P.P. Limited Dividend
Housing Association Limited Partnership (the Partnership) as of December 31,
1996, and the related statements of operations, 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. 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 R.P.P. Limited Dividend
Housing Association 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.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 7, the
Partnership has been unable to generate sufficient cash flow to meet its debt
service requirements and is in default under those obligations. These
conditions raise substantial doubt about the Partnership's ability to continue
as a going concern. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification
of assets or the amounts and classification of liabilities that may result
from the outcome of this uncertainty.
As discussed in Note 1 to the financial statements, in 1996, the Partnership
adopted Statement of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of.
/s/ Ernst & Young LLP
-----------------
West Palm Beach, Florida
March 27, 1997
<PAGE>
[DELOITTE & TOUCHE LETTERHEAD - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
R.P.P. Limited Dividend Housing
Association Limited Partnership
Detroit, Michigan
We have audited the accompanying balance sheets of R.P.P. Limited Dividend
Housing Association Limited Partnership (the "Partnership") as of December 31,
1995 and 1994, and the related statements of net loss, partners' 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, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1995 and
1994, 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 7 to the
financial statements, the Partnership's difficulties in generating sufficient
cash flow to repay debt and interest raise substantial doubt about its ability
to continue as a going concern. Management's plans 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.
/s/ DELOITTE & TOUCHE LLP
April 25, 1996
<PAGE>
[CHESSER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
----------------------------
Partners
Williamsburg Residential II, L.P.
Wichita, Kansas
We have audited the accompanying balance sheet of Williamsburg Residential II,
L.P. as of December 31, 1996 and 1995, and the related statements of operations,
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.
Those standards require that we plan and perform our 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 Williamsburg Residential II,
L.P. as of December 31, 1996 and 1995, 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
Company will continue as a going concern. As discussed in note 11 to the
financial statements, the Company has suffered recurring losses from operations
and defaulted on their mortgage note payable which raises substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in note 11. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Chesser & Company
- - ---------------------
Wichita, Kansas
March 12, 1997
<PAGE>
[CHESSER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Partners
Williamsburg Residential II, L.P.
Wichita, Kansas
We have audited the accompanying balance sheet of Williamsburg Residential II,
L.P. as of December 31, 1995 and 1994, and the related statements of operations,
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.
Those standards require that we plan and perform our 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 Williamsburg Residential II,
L.P. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the years then ended, in conformity with generally accepted
accounting principles.
/s/ Chesser & Company
Wichita, Kansas
February 14, 1996
<PAGE>
[M.L. BERGER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)
We have audited the accompanying balance sheet of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 1996, 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.
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 West 104th Street Associates,
L.P. 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.
/s/ M.L. Berger & Company
- - -------------------------
New York, New York
February 10, 1997
<PAGE>
[M.L. BERGER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)
We have audited the accompanying balance sheet of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 1995, 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.
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 West 104th Street Associates,
L.P. as of December 31, 1995, 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.
/s/ M.L. Berger & Company
New York, New York
February 16, 1996
<PAGE>
[M.L. BERGER & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)
We have audited the accompanying balance sheet of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 1994, 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.
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 West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 1994, 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.
/s/ M.L. Berger & Company
New York, New York
February 15, 1995
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
To the Partners of
Meredith Apartments, Ltd.
We have audited the accompanying balance sheet of Meredith Apartments, Ltd. (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of operations, 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 Meredith Apartments, Ltd. at
December 31, 1996 and 1995, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lake, Hill & Company
- - ------------------------
Lake, Hill & Company
Salt Lake City, Utah
January 17, 1997
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Meredith Apartments, Ltd.
We have audited the accompanying balance sheet of Meredith Apartments, Ltd. (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of operations, 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 Meredith Apartments, Ltd. at
December 31, 1995 and 1994, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 11, 1996
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
To the Partners of
Ritz Apartments, Ltd.
We have audited the accompanying balance sheet of Ritz Apartments, Ltd. (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of operations, 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 Ritz Apartments, Ltd. at
December 31, 1996 and 1995, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lake, Hill & Company
- - ------------------------
Lake, Hill & Company
Salt Lake City, Utah
January 17, 1997
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Ritz Apartments, Ltd.
We have audited the accompanying balance sheet of Ritz Apartments, Ltd. (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of operations, 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 Ritz Apartments, Ltd. at
December 31, 1995 and 1994, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 11, 1996
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
To the Partners of
Ashby Apartments, Ltd.
We have audited the accompanying balance sheet of Ashby Apartments, Ltd. (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of operations, 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ashby Apartments, Ltd. at
December 31, 1996 and 1995, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lake, Hill & Company
- - ------------------------
Lake, Hill & Company
Salt Lake City, Utah
January 17, 1997
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Partners of
Ashby Apartments, Ltd.
We have audited the accompanying balance sheet of Ashby Apartments, Ltd. (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of operations, 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 Ashby Apartments, Ltd. at
December 31, 1995 and 1994, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 15, 1996
<PAGE>
[ZINNER & CO. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
South Toledo Associates, Ltd.
Toledo, Ohio
We have audited the accompanying balance sheet of South Toledo Associates, Ltd.,
Project No. 042 35432 PM L8, (a 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.
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 South Toledo Associates, Ltd.,
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 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 13, 1997, on our
consideration of South Toledo Associates, Ltd.'s internal control structure, and
reports dated January 13, 1997, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental data, as referred to in the Table
of Contents, 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, the supplemental data is fairly
stated. in all material respects, in relation to the basic financial statements
taken as a whole.
January 13, 1997
Cleveland, Ohio
/s/ Zinner & Co.
----------------
<PAGE>
[ZINNER & CO. LETTERHEAD - CLEVELAND, OHIO]
INDEPENDENT AUDITORS' REPORT
To the Partners
South Toledo Associates, Ltd.
Toledo, Ohio
We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(a limited partnership) as of December 31, 1995, and the related statements of
operations, 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 South Toledo Associates, Ltd.,
at December 31, 1995, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ Zinner & Co.
January 16, 1996
<PAGE>
[ZINNER & CO. LETTERHEAD - CLEVELAND, OHIO]
INDEPENDENT AUDITORS' REPORT
To the Partners
South Toledo Associates, Ltt.
Toledo, Ohio
We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(a limited partnership) as of December 31, 1994, and the related statements of
operations, 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.
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 South Toledo Associates, Ltd.,
at December 31, 1994, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ Zinner & Co.
January 12, 1995
<PAGE>
[J.H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Dunlap School Venture (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Dunlap School Venture (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of (loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Dunlap School Venture (a
Limited Partnership) at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J.H. Williams & Co., LLP
- - ----------------------------
Kingston, Pennsylvania
February 7, 1997
<PAGE>
[J. H. WILLIAMS & CO. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Dunlap School Venture (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Dunlap School Venture (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Dunlap School Venture (a
Limited Partnership) at December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
February 8, 1996
<PAGE>
[KOSTIN, RUFFKESS & COMPANY, LLC LETTERHEAD]
To The Partners
Philipsburg Elderly Housing Associates
PHFA Project #R-0210-8E
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying balance sheets of Philipsburg Elderly Housing
Associates as of December 31, 1996 and 1995, and the related statements of
income and expense, 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
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 Philipsburg Elderly Housing
Associates at December 31, 1996 and 1995, and the results of its operations 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 30, 1997 on our
consideration of Philipsburg Elderly Housing Associates' internal control
structure and a report dated January 30, 1997 on its compliance with laws and
regulations.
1
<PAGE>
Philipsburg Elderly Housing Associates
Page Two
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary information contained in
Schedules 1 through 17 is presented for the purpose of additional analysis and
is not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the financial
statements and, in our opinion, the supplementary information is fairly
presented in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Kostin, Ruffkess & Co , LLC
- - -------------------------------
West Hartford, Connecticut
January 30, 1997
2
<PAGE>
[BAKER NEWMAN & NOYES LETTERHEAD - PORTLAND, MAINE]
INDEPENDENT AUDITORS' REPORT
To the Partners of Philipsburg Elderly Housing Associates
(A Maine Limited Partnership):
We have audited the accompanying balance sheet of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership) as of December 31, 1994, and the
related statements of operations, partners' capital (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's 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.
As described in note 7, there were significant related party transactions
between the Partnership and its partners.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership) as of December 31, 1994, 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 basic financial
statements of Philipsburg Elderly Housing Associates (A Maine Limited
Partnership) for the year ended December 31, 1994 taken as a whole. The
supplementary information included in Exhibit A is presented for purposes of
additional analysis and is not a required part of the basic financial statements
of the Partnership, but is supplementary information requested by a limited
partner. The supplementary 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 for the year ended December 31, 1994 taken as a whole.
/s/ Baker Newman & Noyes
January 27, 1995 Limited Liability Company
<PAGE>
[KOSTIN, RUFFKESS & COMPANY, LLC LETTERHEAD]
To The Partners
Franklin Elderly Housing Associates
(A Limited Partnership)
PHFA #R-0383-8E
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying balance sheets of Franklin Elderly Housing
Associates as of December 31, 1996 and 1995, and the related statements of
income and expense, 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, 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 Franklin Elderly Housing
Associates at December 31, 1996 and 1995, and the results of its operations 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 24, 1997 on our
consideration of Franklin Elderly Housing Associates' internal control structure
and a report dated January 24, 1997 on its compliance with laws and regulations.
1
<PAGE>
Franklin Elderly Housing Associates
(A Limited Partnership)
Page Two
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary information contained in
Schedules 1 through 16 is presented for the purpose of additional analysis and
is not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the financial
statements and, in our opinion, the supplementary information is fairly
presented in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Kostin, Ruffkess & Co, LLC
- - ------------------------------
West Hartford, Connecticut
January 24, 1997
<PAGE>
[BAKER NEWMAN & NOYES LETTERHEAD - PORTLAND, MAINE]
Independent Auditors' Report
To the Partners of Franklin Elderly Housing Associates
(A Maine Limited Partnership):
We have audited the accompanying balance sheet of Franklin Elderly Housing
Associates (A Maine Limited Partnership) as of December 31, 1994, and the
related statements of operations, partners' capital (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's 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.
As described in note 7, there were significant related party transactions
between the Partnership and its partners.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Franklin Elderly Housing
Associates (A Maine Limited Partnership) as of December 31, 1994, 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 basic financial
statements of Franklin Elderly Housing Associates (A Maine Limited Partnership)
for the year ended December 31, 1994 taken as a whole. The supplementary
information included in Exhibit A is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership, but is supplementary information requested by a limited partner.
The supplementary 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 for the year ended December 31, 1994 taken as a whole.
/s/ BAKER NEWMAN & NOYES
January 24, 1995 Limited Liability Company
<PAGE>
[KOSTIN, RUFFKESS & COMPANY, LLC LETTERHEAD]
To The Partners
Wade D. Mertz Elderly Housing Associates
PHFA #R-0488-8E
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying balance sheets of Wade D. Mertz Elderly Housing
Associates, as of December 31, 1996 and 1995, and the related statements of
income and expense, 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
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 Wade D. Mertz Elderly Housing
Associates at December 31, 1996 and 1995, and the results of its operations 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 28, 1997 on our
consideration of Wade D. Mertz Elderly Housing Associates' internal control
structure and a report dated January 28, 1997 on its compliance with laws and
regulations.
1
<PAGE>
Wade D. Mertz Elderly Housing Associates
Page Two
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary information contained in
Schedules 1 through 17 is presented for the purpose of additional analysis and
is not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the financial
statements and, in our opinion, the supplementary information is fairly
presented in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Kostin, Ruffkess & Co, LLC
- - ------------------------------
West Hartford, Connecticut
January 28, 1997
2
<PAGE>
[BAKER NEWMAN & NOYES LETTERHEAD - PORTLAND, MAINE]
Independent Auditors' Report
To the Partners of Wade D. Mertz Elderly Housing Associates
(A Maine Limited Partnership):
We have audited the accompanying balance sheet of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership) as of December 31, 1994, and the
related statements of operations, partners' capital (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's 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.
As described in note 7, there were significant related party transactions
between the Partnership and its partners or their affiliates.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership) as of December 31, 1994, 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 basic financial
statements of Wade D. Mertz Elderly Housing Associates (A Maine Limited
Partnership) for the year ended December 31, 1994 taken as a whole. The
supplementary information included in Exhibit A is presented for purposes of
additional analysis and is not a required part of the basic financial statements
of the Partnership, but is supplementary information requested by a limited
partner. The supplementary 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 for the year ended December 31, 1994 taken as a whole.
/s/ BAKER NEWMAN & NOYES
January 24, 1995 Limited Liability Company
<PAGE>
[BICK o FREDMAN & CO LETTERHEAD]
Independent Auditor's Report
----------------------------
The General and Limited Partners
Lancashire Towers Associates Limited Partnership
Cleveland, Ohio
We have audited the accompanying balance sheets of Lancashire Towers
Associates Limited Partnership (an Ohio Limited Partnership), as of December 31,
1996 and 1995, and the related statements of operations, partners' capital and
cash flows for the years 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 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 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 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 Lancashire Towers Associates
Limited Partnership as of December 31, 1996 and 1995, 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 24, 1997 on our consideration of Lancashire Manor
Associates Limited Partnership's internal control structure and a report dated
January 24, 1997 on its compliance with laws and regulations.
/s/ Bick o Fredman & Co
-----------------------
Cleveland, Ohio
January 24, 1997
<PAGE>
[CIUNI & PANICHI LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
General and Limited Partners
Lancashire Towers Associates Limited Partnership
Cleveland, Ohio
We have audited the accompanying balance sheet of Lancashire Towers
Associates Limited Partnership (An Ohio Limited Partnership), as of December 31,
1994, and the related statements of operations, partners' capital 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. The financial statements of Lancashire
Towers Associates Limited Partnership as of December 31, 1993 were audited by
other auditors whose report, dated January 19, 1994, expressed an unqualified
opinion on those statements.
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 Lancashire Towers Associates
Limited Partnership as of December 31, 1994, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ CIUNI & PANICHI
Cleveland, Ohio
January 20, 1995
<PAGE>
[BICK o FREDMAN & CO LETTERHEAD]
Independent Auditor's Report
----------------------------
The General and Limited Partners
Northwood Associates Limited Partnership
Cleveland, Ohio
We have audited the accompanying balance sheets of Northwood Associates
Limited Partnership (an Ohio Limited Partnership), as of December 31, 1996 and
1995, and the related statements of operations, partners' capital and cash flows
for the years 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 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 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 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 Northwood Associates Limited
Partnership as of December 31, 1996 and 1995, 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 24, 1997 on our consideration of Northwood Associates
Limited Partnership's internal control structure and a report dated January 24,
1997 on its compliance with laws and regulations.
/s/ Bick o Fredman & Co
-----------------------
Cleveland, Ohio
January 24, 1997
1
<PAGE>
[CIUNI & PANICHI LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
General and Limited Partners
Northwood Associates Limited Partnership
Cleveland, Ohio
We have audited the accompanying balance sheet of Northwood Associates
Limited Partnership (An Ohio Limited partnership) as of December 31, 1994 and
the related statements of operations, 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 Northwood
Associates Limited Partnership as of December 31, 1993 were audited by other
auditors whose report, dated January 19, 1994, expressed an unqualified opinion
on those statements.
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 Northwood Associates Limited
Partnership as of December 31, 1994, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ CIUNI & PANICHI
Cleveland, Ohio
January 20, 1995
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Brewery Renaissance Associates, L.P.
We have audited the accompanying balance sheet of Brewery Renaissance
Associates, L.P. as of December 31, 1996, and the related statements of
operations, 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. 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 Brewery Renaissance
Associates, L.P. as of December 31, 1996, and the results of its operations, the
changes in partners' capital and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 18, 1997
-3-
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Brewery Renaissance Associates, L.P.
We have audited the accompanying balance sheet of Brewery Renaissance
Associates, L.P. as of December 31, 1995, and the related statements of
operations, 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. 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 Brewery Renaissance
Associates, L.P. as of December 31, 1995, and the results of its operations, the
changes in partners' capital and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ REZNICK FEDDER & SILVERMAN
Bethesda, Maryland
January 21, 1996
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Brewery Renaissance Associates, L.P.
We have audited the accompanying balance sheet of Brewery Renaissance
Associates, L.P. as of December 31, 1994, and the related statements of
operations, 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. 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 principle" 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 Brewery Renaissance
Associates, L.P. as of December 31, 1994, and the results of its operations, the
changes in partners' capital and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ REZNICK FEDDER & SILVERMAN
Bethesda, Maryland
January 23, 1995
<PAGE>
[ASHER & COMPANY, LTD. LETTERHEAD]
Independent Auditors Report
---------------------------
The Partners
Brandywine Court Associates, L.P.
Marlton, New Jersey
We have audited the balance sheet of Brandywine Court Associates, L.P. (A
Limited Partnership), HUD Project No. 063-94015, 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. The financial statements as of December
31, 1995 were audited by other auditors, whose report dated January 15, 1996
expressed an unqualified opinion on those statements.
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 Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31,
1996, and the results of its operations, changes in its Partners' capital, 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 21, 1997 on our
consideration of Brandywine Court Associates, L.P.'s (A Limited Partnership),
HUD Project No. 063-94015, internal control structure, and reports dated January
21, 1997 on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to affirmative fair housing.
<PAGE>
Asher & Company, Ltd.
Page Two
The Partners
Brandywine Court Associates, L.P.
Our audit was made for the purpose of forming an opinion on the basic 1996
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic 1996 financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic 1996 financial statements taken as a whole.
/s/ Asher & Company, Ltd.
-------------------------
ASHER & COMPANY, Ltd
Philadelphia, Pennsylvania
January 21, 1997
<PAGE>
[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD - PENNSYLVANIA, PA]
Independent Auditor's Report on Basic
Financial Statements and Supplemental Data
To the Partners
Brandywine Court Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Brandywine Court
Associates, L.P. (A Florida Limited Partnership), HUD Project #063-94015, as of
December 31, 1995 and 1994, and the related statements of profit and loss,
partners' (deficit) and cash flows for the year ended December 31, 1995. 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 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 Brandywine Court Associates,
L.P. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 14 through 19) are presented for the purposes of
additional analysis and are not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly presented 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 the
following reports dated January 15, 1996 concerning Brandywine Court Associates,
L.P. (1) on the internal control structure, (2) on compliance with specific
requirements applicable to major HUD programs, (3) on compliance with specific
requirements applicable to affirmative fair housing, and (4) on compliance with
applicable laws and regulations.
/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants
January 15, 1996
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Partners of
Art Apartments Associates (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of Art Apartments Associates (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of (loss), changes in partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. 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
Partnership's general partner and contracted management agent, 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 Art Apartments Associates (a
Limited Partnership) at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/ J. H. Williams & Co., LLP
- - -----------------------------
Kingston, Pennsylvania
January 23, 1997
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Art Apartments Associates (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of Art Apartments Associates (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of income, changes in partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. 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
Partnership's general partner and contracted management agent, 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 Art Apartments Associates (a
Limited Partnership) at December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/ J. H. WILLIAMS & CO., LLP
Kingston, Pennsylvania
January 25, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
The Village At Carriage Hills, Ltd.
Clinton, Tennessee
I have audited the accompanying balance sheets of The Village At Carriage Hills,
Ltd., a limited partnership, RHS Project No.: 4X-001-6309X0039 as of December
31, 1996 and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 The Village At Carriage Hills,
Ltd., RHS Project No.: 48-001-6309X0039 as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 21, 1997 on my consideration of The Village At Carriage Hills,
Ltd., internal control structure and a report dated February 21, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
- - -------------------------------
Gadsden, Alabama
February 21, 1997
-1-
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
The Village At Carriage Hills, Ltd.
Clinton, Tennessee
I have audited the accompanying balance sheets of The Village At Carriage Hills,
Ltd., a limited partnership, RECD Project No.: 48-001-630980039 as of December
31, 1995 and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 The Village At Carriage Hills,
Ltd., RECD Project No.: 48-001-630980039 as of December 31, 1995 and 1994, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards. I have also issued a report
dated February 22, 1996 on my consideration of The Village At Carriage Hills,
Ltd., internal control structure and a report dated February 22, 1996 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 22, 1996
<PAGE>
[DONALD W. CAUDEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Mountainview Apartments, Ltd.
Newport, Tennessee
I have audited the accompanying balance sheets of Mountainview Apartments, Ltd.,
a limited partnership, RHS Project No.: 48-015-63097225 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Mountainview Apartments, Ltd., RHS
Project No.: 48-015-63097225 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 16, 1997 on my consideration of Mountainview Apartments, Ltd.,
internal control structure and a report dated February 16, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
- - -------------------------------
Gadsden, Alabama
February 16, 1997
-1-
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Mountainview Apartments, Ltd.
Newport, Tennessee
I have audited the accompanying balance sheets of Mountainview Apartments, Ltd.,
a limited partnership, RECD Project No.: 48-015-63097225 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Mountainview Apartments, Ltd., RECD
Project No.: 48-015-63097225 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 6, 1996 on my consideration of Mountainview Apartments, Ltd.,
internal control structure and a report dated February 6, 1996 on its compliance
with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
Gadsden, Alabama
February 6, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
The Park Village, Limited
Jackson, Mississippi
I have audited the accompanying balance sheets of The Park Village, Limited, a
limited partnership, as of December 31, 1996 and 1995, 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. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that the 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 The Park Village, Limited, as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 11 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 audit 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/ Donald W. Causey, CPA, P.C.
- - -------------------------------
Gadsden, Alabama
February 21, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
The Park Village, Ltd.
Jackson, Mississippi
I have audited the accompanying balance sheets of The Park Village, Ltd., a
limited partnership, as of December 31, 1995 and 1994, 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. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that the 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 The Park Village, Ltd., as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 9 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 audit
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/ DONALD W. CAUSEY, CPA, P.C.
February 24, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
River Oaks Apartments, Ltd.
Oneonta, Alabama
I have audited the accompanying balance sheets of River Oaks Apartments, Ltd., a
limited partnership, RHS Project No.: 01-005-630988076 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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 I believe that the 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 River Oaks Apartments, Ltd., RHS
Project No.: 01-005-630988076 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 23, 1997 on my consideration of River Oaks Apartments, Ltd.,
internal control structure and a report dated February 23, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
- - -------------------------------
Gadsden, Alabama
February 23, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
River Oaks Apartments, Ltd.
Oneonta, Alabama
I have audited the accompanying balance sheets of River Oaks Apartments, Ltd., a
limited partnership, RECD Project No.: 01-005-630988076 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 River Oaks Apartments, Ltd., RECD
Project No.: 01-005-630988076 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8,) Parts I
through III for the year ended December 31, 1995 and 1994, is presented for
purposes of complying with the requirements of the Rural Economic Community
Development and is also not a required part of the basic financial statements.
Such information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 22, 1996 on my consideration of River Oaks Apartments, Ltd.,
internal control structure and a report dated February 22, 1996 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 22, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Forrest Ridge Apartments, Ltd.
Forrest City, Arkansas
I have audited the accompanying balance sheets of Forrest Ridge Apartments,
Ltd., a limited partnership, RHS Project No.: 03-062-630899211 as of December
31, 1996 and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Forrest Ridge Apartments, Ltd., RHS
Project No.: 03-062-630899211 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 21, 1997 on my consideration of Forrest Ridge Apartments, Ltd.,
internal control structure and a report dated February 21, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
- - -------------------------------
Gadsden, Alabama
February 21, 1997
-1-
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Forrest Ridge Apartments, Ltd.
Forrest City, Arkansas
I have audited the accompanying balance sheets of Forrest Ridge Apartments,
Ltd., a limited partnership, RECD Project No.: 03-062-630899211 as of December
31, 1995 and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Forrest Ridge Apartments, Ltd.,
RECD Project No.: 03-062-630899211 as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 18, 1996 on my consideration of Forrest Ridge Apartments, Ltd.,
internal control structure and a report dated February 18, 1996 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 18, 1996
<PAGE>
[SCHOONOVER BOYER GETTMAN & ASSOCIATES LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
The Partners
The Hearthside Limited Dividend
Housing Association Limited Partnership
(a Michigan limited partnership)
We have audited the accompanying balance sheets of The Hearthside Limited
Dividend Housing Association Limited Partnership, (a Michigan limited
partnership) as of December 31, 1996 and 1995, and the related statements of
income (loss), 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 the 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 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 mentioned above present fairly, in all
material respects, the financial position of The Hearthside Limited Dividend
Housing Association Limited Partnership as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/s/ SCHOONOVER BOYER GETTMAN & ASSOCIATES
- - -----------------------------------------
Columbus, Ohio
January 25, 1997
<PAGE>
[SCHOONOVER, BOYER, GETTMAN & ASSOCIATES LETTERHEAD - WORTHINGTON, OHIO]
INDEPENDENT AUDITORS' REPORT
To the Partners
The Hearthside Limited Dividend
Housing Association Limited Partnership
(a Michigan limited partnership)
Kalamazoo, Michigan
We have audited the accompanying balance sheets of The Hearthside Limited
Dividend Housing Association Limited Partnership, (a Michigan limited
partnership) as of December 31, 1995 and 1994, and the related statements of
income (loss), 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
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 The Hearthside Limited Dividend
Housing Association Limited Partnership as of December 31, 1995 and 1994, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/s/ SCHOONOVER, BOYER, GETTMAN & ASSOCIATES
January 27, 1996
<PAGE>
[PAILET, MEUNIER AND LEBLANC, L.L.P. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
of Redemptorist Limited Partnership
New Orleans, Louisiana:
We have audited the accompanying balance sheets of HUD Project No. 064-35271 of
the Redemptorist Limited Partnership, as of December 31, 1996 and 1995, and the
related statements of income, changes in 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
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 Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' equity, 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 21, 1997, on our
consideration of Redemptorist Limited Partnership's internal control structure
and reports dated January 21, 1997, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
/s/ Pailet, Meunier and Leblanc, L.L.P.
Metairie, Louisiana
January 21, 1997
<PAGE>
[PAILET, MEUNIER AND LeBLANC, L.L.P. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
of Redemptorist Limited Partnership
New Orleans, Louisiana:
We have audited the accompanying balance sheet of HUD Project No. 064-35271 of
the Redemptorist Limited Partnership, as of December 31, 1994, 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 Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 1994, 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 conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. Supplemental data is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. The supplemental data has been subjected to the auditing
procedures applied in the
<PAGE>
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/ PAILET, MEUNIER AND LeBLANC, L.L.P.
Metairie, Louisiana
January 27, 1995
<PAGE>
[LEVINE, GREENBERG & COMPANY LETTERHEAD]
To the Partners
MANHATTAN A ASSOCIATES
(A LIMITED PARTNERSHIP)
105 West 128 Street
New York, New York 10029
Gentlemen:
We have audited the accompanying balance sheet of Manhattan A Associates (A
Limited Partnership) as of December 31, 1996 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 of 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 presently fairly, in
all material respects the financial position of MANHATTAN A ASSOCIATES (a
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.
/s/ Levine, Greenberg & Company
Certified Public Accountant
Hewlett New York
March 3, 1997
<PAGE>
[J. MANNING WINIKUS & CO. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
MANHATTAN A ASSOCIATES
(A LIMITED PARTNERSHIP)
New York, New York 10029
Gentlemen:
We have audited the accompanying balance sheet of MANHATTAN A ASSOCIATES (a
Limited Partnership) as of December 31, 1995 and the related statements of loss,
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.
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 MANHATTAN A ASSOCIATES (a
Limited Partnership) as of December 31, 1995 and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ J. MANNING WINIKUS & CO.
New York, New York
February 13, 1996
<PAGE>
[J. MANNING WINIKUS & CO. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
MANHATTAN A ASSOCIATES
(A LIMITED PARTNERSHIP)
New York, New York 10029
Gentlemen:
We have audited the accompanying balance sheet of MANHATTAN A ASSOCIATES (a
Limited Partnership) as of December 31, 1994 and the related statements of loss,
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.
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 MANHATTAN A ASSOCIATES (a
Limited Partnership) as of December 31, 1994 and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ J. MANNING WINIKUS & CO.
New York, New York
February 7, 1995
<PAGE>
[MERINA MCCOY GERRITZ, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
of Weidler Associates Limited Partnership
We have audited the accompanying balance sheets of the Weidler Associates
Limited Partnership as of December 31, 1996 and 1995, 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 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 Weidler Associates Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/ Merina McCoy Gerritz
---------------------------------
Merina McCoy Gerritz, CPA's, P.C.
West Linn, Oregon
February 25, 1997
<PAGE>
[MERINA McCOY GERRITZ, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
of Weidler Associates Limited Partnership
We have audited the accompanying balance sheets of the Weidler Associates
Limited Partnership as of December 31, 1995 and 1994, 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 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 Weidler Associates Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/ MERINA McCOY GERRITZ
Merina McCoy Gerritz, CPA's, P.C.
West Linn, Oregon
February 26, 1996
<PAGE>
[ASHER & COMPANY, LTD. LETTERHEAD]
Independent Auditors' Report
The Partners
Gentle Pines - West Columbia Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheet of Gentle Pines - West
Columbia Associates, L.P. (A Limited Partnership), HUD Project No. 054-36627, 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. The
financial statements as of December 31, 1995 were audited by other auditors,
whose report dated January 20, 1996 expressed an unqualified opinion on those
statements.
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 Gentle Pines - West Columbia
Associates, L.P. (A Limited Partnership), HUD Project No. 054-36627, as of
December 31, 1996, and the results of its operations, changes in its Partners'
capital, and its cash flows for the year ended December 31, 1996 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, 1997 on our
consideration of Gentle Pines - West Columbia Associates, L.P.'s (A Limited
Partnership), HUD Project No. 054-36627, internal control structure, and reports
dated January 22, 1997 on its compliance with specific requirements applicable
to major HUD programs and specific requirements applicable to affirmative fair
housing.
<PAGE>
Asher & Company, Ltd.
Page Two
The Partners
Gentle Pines - West Columbia Associates, L.P.
Our audit was made for the purpose of forming an opinion on the basic 1996
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic 1996 financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic 1996 financial statements taken as a whole.
/s/ Asher & Company, Ltd.
----------------------
ASHER & COMPANY, LTD.
Philadelphia, Pennsylvania
January 22, 1997
<PAGE>
[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD - PHILADELPHIA, PA]
Independent Auditor's Report on Basic
Financial Statements and Supplemental Data
To the Partners
Gentle Pines - West Columbia Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Gentle Pines - West
Columbia Associates, L.P. (A South Carolina Limited Partnership), HUD Project
#054-36627, as of December 31, 1995 and 1994, and the related statements of
profit and loss, partners' (deficit) and cash flows for the year ended December
31, 1995. 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 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 Gentle Pines - West Columbia
Associates, L.P. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 14 through 20) are presented for the purposes of
additional analysis and are not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly presented 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 the
following reports dated January 20, 1996 concerning Gentle Pines - West Columbia
Associates, L.P. (1) on the internal control structure, (2) on compliance with
specific requirements applicable to major HUD programs, (3) on compliance with
specific requirements applicable to affirmative fair housing, and (4) on
compliance with applicable laws and regulations.
/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants
January 20, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lake Forest Estates II, Ltd.
Livingston, Alabama
I have audited the accompanying balance sheets of Lake Forest Estates II, Ltd.,
a limited partnership, RHS Project No.: 01-060-630996944 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Lake Forest Estates II, Ltd., RHS
Project No.: 01-060-630996944 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements.
Such information has been subjected to the audit 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
In accordance with Government Auditing Standards, I have also issued a report
dated February 20, 1997 on my consideration of Lake Forest Estates II, Ltd.,
internal control structure and a report dated February 20, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 20, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lake Forest Estates II, Ltd.
Livingston, Alabama
I have audited the accompanying balance sheets of Lake Forest Estates II, Ltd.,
a limited partnership, RECD Project No.: 01-060-630996944 as of December 31,
1995 and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Lake Forest Estates II, Ltd., RECD
Project No.: 01-060-630996944 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 7, 1996 on my consideration of Lake Forest Estates II, Ltd.,
internal control structure and a report dated February 7, 1996 on its compliance
with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 7, 1996
<PAGE>
[AMILCAR TORRES RIVERA LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Las Camelias Limited Partnership
I have audited the accompanying balance sheet of Las Camelias Limited
Partnership as of December 31, 1996, and the related statement of loss, changes
in Partner's equity 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.
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 Las Camelias Limited Partnership as
of December 31, 1996, and the results of its operations, cash flows and changes
in partner's equity for the year then ended in conformity with generally
accepted accounting principles.
/s/ Amilcar Torres Rivera
--------------------------
Amilcar Torres Rivera, CPA
Stamp #1369538 of the
Puerto Rico Society of
CPA's has been affixed
to the original.
San Juan, Puerto Rico
February 12, 1997
<PAGE>
[AMILCAR TORRES RIVERA LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Las Camelias Limited Partnership
I have audited the accompanying balance sheet of Las Camelias Limited
Partnership as of December 31, 1995, and the related statement of loss, changes
in Partner's equity 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. 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 Las Camelias Limited
Partnership as of December 31, 1995, and the results of its operations, cash
flows and changes in partner's equity for the year then ended in conformity with
generally accepted accounting principles.
/s/ AMILCAR TORRES RIVERA
AMILCAR TORRES RIVERA, CPA
Stamp #1320017 of the
Puerto Rico Society of
CPA's has been affixed
to the original.
San Juan, Puerto Rico
January 29, 1996
<PAGE>
[AMILCAR TORRES RIVERA LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Las Camelias Limited Partnership
San Juan, Puerto Rico
I have audited the accompanying balance sheets of Las Camelias Limited
Partnership as of December 31, 1994 and 1993, and the related statements of
operations and changes in Partner's equity and cash flows for the years 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. 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 Las Camelias Limited
Partnership, at December 31, 1994 and 1993, and the results of its operations,
cash flows and changes in partner's equity for the year then ended in conformity
with generally accepted accounting principles.
/s/ AMILCAR TORRES RIVERA
AMILCAR TORRES RIVERA, CPA
License No. 1876
Stamp #1261781 was
affixed to the original
San Juan, Puerto Rico
February 3, 1995
<PAGE>
[DAVID W. SCOTT, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
522 NW 23rd, Suite 200
Portland, Oregon 97201
I have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 1996, and the related statements of operations,
changes in partnerships' 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.
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 WPL Associates XXIII 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.
/s/ David W. Scott, CPA, P.C.
-------------------------
David W. Scott, CPA, P.C.
Portland, Oregon
February 10, 1997
<PAGE>
[DAVID W. SCOTT, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
522 NW 23rd, Suite 200
Portland, Oregon 97201
I have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 1995, and the related statements of operations,
changes in partnerships' capital, and cash flows for the year ended December 31,
1995. 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.
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 WPL Associates XXIII Limited
Partnership at December 31, 1995, and the results of its operations and its cash
flows for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ DAVID W. SCOTT, CPA, P.C.
David W. Scott, CPA, P.C.
Portland, Oregon
February 14, 1996
<PAGE>
[DAVID W. SCOTT, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
522 NW 23rd, Suite 200
Portland, Oregon 97201
I have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 1994, and the related statements of operations,
changes in partnerships' capital and cash flows for the year ended December 31,
1994. 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.
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 WPL Associates XXIII Limited
Partnership at December 31, 1994, and the results of its operations and its cash
flows for the year ended December 31, 1994, in conformity with generally
accepted accounting principles.
/s/ DAVID W. SCOTT, CPA, P.C.
DAVID W. SCOTT, CPA, P.C.
Portland, Oregon
February 14, 1995
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Broadway Townhouses L.P.
We have audited the accompanying balance sheet of Broadway Townhouses L.P.
as of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), changes in 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 Broadway Townhouses L.P. as
of December 31, 1996, and the results of its operations, the changes in
partners' equity 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 23
through 28 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 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 reports dated
January 24, 1997 on our consideration of Broadway Townhouses Limited
Partnership'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
Bethesda, Maryland Federal Employer
January 24, 1997 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Broadway Townhouses L.P.
We have audited the accompanying balance sheet of Broadway Townhouses L.P.
as of December 31, 1995, and the related statements of profit and loss (on HUD
Form No. 92410), changes in 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 Broadway Townhouses L.P. as
of December 31, 1995, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
<PAGE>
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 23
through 28 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 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 27, 1996 on our consideration of Broadway Townhouses
Limited Partnership 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
Bethesda, Maryland Federal Employer
January 27, 1996 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Broadway Townhouses L.P.
We have audited the accompanying balance sheet of Broadway Townhouses L.P.
as of December 31, 1994, and the related statements of profit and loss (on HUD
Form No. 92410), changes in partners' capital (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 materia1 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 Broadway Townhouses L.P. as
of December 31, 1994, and the results of its operations, the changes in
partners' capital (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
<PAGE>
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 22
through 27 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 our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ REZNICK FEDDER & SILVERMAN
Bethesda, Maryland Federal Employer
January 27, 1995 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
[KEVANE PETERSON SOTO & PASARELL LETTERHEAD]
Independent Auditors' Report
To the Partners of
PUERTO RICO HISTORIC ZONE LTD DIVIDEND PARTNERSHIP
We have audited the accompanying statements of financial position of PUERTO
RICO HISTORIC ZONE LTD DIVIDEND PARTNERSHIP, FHA Project No. RQ46-K051-003-04 (a
limited partnership) as of December 31, 1996 and 1995, and the related
statements of profit and loss, changes in 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 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 PUERTO RICO HISTORIC ZONE
LTD DIVIDEND PARTNERSHIP as of December 31, 1996 and 1995, and the results of
its operations, changes in partners' equity and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
/s/ Kevane Peterson Soto & Pasarell
San Juan, Puerto Rico,
January 31, 1997.
<PAGE>
[KEVANE PETERSON SOTO & PASARELL LETTERHEAD]
Independent Auditors' Report
To the Partners of
PUERTO RICO HISTORIC ZONE
LIMITED DIVIDEND PARTNERSHIP:
We have audited the accompanying statements of financial position of PUERTO
RICO HISTORIC ZONE LTD DIVIDEND PARTNERSHIP (a Massachusetts limited
partnership) as of December 31, 1995 and 1994, and the related statements of
profit and loss, changes in 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 PUERTO RICO HISTORIC ZONE
LTD DIVIDEND PARTNERSHIP as of December 31, 1995 and 1994, and the results of
its operations, changes in partners' equity and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
/s/ KEVANE PETERSON SOTO & PASARELL
San Juan, Puerto Rico,
February 2, 1996.
1332615
Seal of the College of
Certified Public Accountants
of Puerto Rico
<PAGE>
[CHRISTOPHER, SMITH, GENTILE, LEONARD & BRISTOW, P.A. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Citrus Meadows Apartments, Ltd.
Bradenton, Florida
We have audited the accompanying balance sheet of Citrus Meadows Apartments,
Ltd., FHA Project No. 067-36654 (a limited partnership) (the partnership), as of
December 31, 1996, and the related statements of profit and loss, 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 Citrus Meadows Apartments, Ltd.
at December 31, 1996 and the results of its operations and its cash flows and
its changes in partners' equity (deficit) for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information included in the report
(shown on pages 12 through 17) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Citrus
Meadows Apartment, Ltd. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1997 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal control structure and a report dated January 21, 1997 on its compliance
with laws and regulations.
/s/ Christopher, Smith, Gentile,
Leonard & Bristow, P.A.
---------------------------------
CHRISTOPHER, SMITH, GENTILE,
LEONARD & BRISTOW, P.A.
Bradenton, Florida
January 21, 1997
<PAGE>
[CHRISTOPHER, SMITH, GENTILE, LEONARD & BRISTOW, P.A.
LETTERHEAD - BRADENTON, FL]
INDEPENDENT AUDITORS' REPORT
To the Partners
Citrus Meadows Apartments, Ltd.
Bradenton, Florida
We have audited the accompanying balance sheet of Citrus Meadows Apartments,
Ltd., FHA Project No. 067-36654 (a limited partnership) (the Partnership), as of
December 31, 1995, and the related statements of profit and loss, 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 Citrus Meadows Apartments, Ltd.
at December 31, 1995 and the results of its operations and its cash flows and
its changes in partners' equity (deficit) for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information included in the report
(shown on pages 12 through 17) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Citrus
Meadows Apartment, Ltd. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 12, 1996 on our consideration of Citrus Meadows Apartments,
Ltd.'s internal control structure and a report dated February 12, 1996 on its
compliance with laws and regulations.
/s/ CHRISTOPHER, SMITH, GENTILE,
LEONARD & BRISTOW, P.A.
CHRISTOPHER, SMITH, GENTILE,
LEONARD & BRISTOW, P.A.
February 12, 1996
<PAGE>
[CHRISTOPHER, SMITH, GENTILE, LEONARD & BRISTOW, P.A.
LETTERHEAD - BRADENTON, FL]
INDEPENDENT AUDITORS' REPORT
To the Partners
Citrus Meadows Apartments, Ltd.
Bradenton, Florida
We have audited the accompanying balance sheet of Citrus Meadows Apartments,
Ltd., FHA Project No. 067-36654 (a limited partnership) (the Partnership), as of
December 31, 1994, and the related statements of profit and loss, 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 Citrus Meadows Apartments, Ltd.
at December 31, 1994 and the results of its operations and its cash flows and
its changes in partners' equity (deficit) for the year then ended in conformity
with generally accepted accounting principles.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information included in the report
(shown on pages 14 through 19) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Citrus
Meadows Apartment, Ltd. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.
/s/ CHRISTOPHER, SMITH, GENTILE,
LEONARD & BRISTOW, P.A.
CHRISTOPHER, SMITH, GENTILE,
LEONARD & BRISTOW, P.A.
January 24, 1995
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Sartain School Venture (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Sartain School Venture (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of (loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Sartain School Venture (a
Limited Partnership) at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
February 8, 1997
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Sartain School Venture (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Sartain School Venture (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Sartain School Venture (a
Limited Partnership) at December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J. H. WILLIAMS & CO., LLP
Kingston, Pennsylvania
February 7, 1996
<PAGE>
[ASHER & COMPANY, LTD. LETTERHEAD]
Independent Auditors' Report
The Partners
Driftwood Terrace Associates, Ltd.
Marlton, New Jersey
We have audited the balance sheet of Driftwood Terrace Associates, Ltd. (A
Limited Partnership), HUD Project No. 066-36678, as of December 31, 1996 and the
related statements of profit and loss, 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. The financial statements of Driftwood
Terrace Associates, Ltd. (A Limited Partnership), HUD Project No. 066-36678, as
of December 31, 1995 were audited by other auditors, whose report dated January
29, 1996 expressed an unqualified opinion on those statements.
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 Driftwood Terrace
Associates, Ltd. (A Limited Partnership), HUD Project No. 066-36678, as of
December 31, 1996 and the results of its operations, changes in its Partners'
deficit, 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 29, 1997 on our
consideration of Driftwood Terrace Associates, Ltd.'s (A Limited Partnership),
HUD Project No. 066-36678, internal control structure, and reports dated January
29, 1997 on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to affirmative fair housing.
<PAGE>
Asher & Company, Ltd.
Page Two
The Partners
Driftwood Terrace Associates, Ltd.
Our audit was made for the purpose of forming an opinion on the basic 1996
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic 1996 financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic 1996
financial statements and, in our opinion is fairly stated in all material
respects in relation to the basic 1996 financial statements taken as a whole.
/s/ Asher & Company, Ltd.
------------------------
ASHER & COMPANY, LTD.
Philadelphia, Pennsylvania
January 29, 1997
<PAGE>
[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD - PHILADELPHIA, PA]
Independent Auditor's Report on Basic
Financial Statements and Supplemental Data
To the Partners
Driftwood Terrace Associates, Ltd.
Marlton, New Jersey
We have audited the accompanying balance sheets of Driftwood Terrace
Associates, Ltd. (A Florida Limited Partnership), HUD Project #066-36678, as of
December 31, 1995 and 1994, and the related statements of profit and loss,
partners' capital (deficit) and cash flows for the year ended December 31, 1995.
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 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 Driftwood Terrace
Associates, Ltd. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 14 through 20) are presented for the purposes of
additional analysis and are not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly presented 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 the
following reports dated January 29, 1996 concerning Driftwood Terrace
Associates, Ltd. (1) on the internal control structure, (2) on compliance with
specific requirements applicable to major HUD programs, (3) on compliance with
specific requirements applicable to affirmative fair housing, and (4) on
compliance with applicable laws and regulations.
/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants
January 29, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Holly Hill, Ltd.
Greenville, Tennessee
I have audited the accompanying balance sheets of Holly Hill, Ltd., a limited
partnership, RHS Project No.: 48-30-621264791 as of December 31, 1996 and 1995,
and the related statements of operations, partners' deficit and cash flows for
the years 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 audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Holly Hill, Ltd., RHS Project No.:
48-30-621264791 as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 20, 1997 on my consideration of Holly Hill, Ltd., internal
control structure and a report dated February 20, 1997 on its compliance with
laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 20, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Holly Hill, Ltd.
Greenville, Tennessee
I have audited the accompanying balance sheets of Holly Hill, Ltd., a limited
partnership, RECD Project No.: 48-30-621264791 as of December 31, 1995 and 1994,
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. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Holly Hill, Ltd., RECD Project No.:
48-30-621264791 as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 23, 1996 on my consideration of Holly Hill, Ltd., internal
control structure and a report dated February 23, 1996 on its compliance with
laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 23, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Mayfair Apartments, Ltd.
Morristown, Tennessee
I have audited the accompanying balance sheets of Mayfair Apartments, Ltd., a
limited partnership, RHS Project No.: 48-032-630957575 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Mayfair Apartments, Ltd., RHS
Project No.: 48-032-630957575 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 20, 1997 on my consideration of Mayfair Apartments, Ltd.,
internal control structure and a report dated February 20, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 20, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Mayfair Apartments, Ltd.
Morristown, Tennessee
I have audited the accompanying balance sheets of Mayfair Apartments, Ltd., a
limited partnership, RECD Project No.: 48-032-630957575 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Mayfair Apartments, Ltd., RECD
Project No.: 48-032-630957575 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 24, 1996 on my consideration of Mayfair Apartments, Ltd.,
internal control structure and a report dated February 24, 1996 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 24, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Foxcroft Apartments, Ltd.
Troy, Alabama
I have audited the accompanying balance sheets of Foxcroft Apartments, Ltd., a
limited partnership, RHS Project No.: 01-055-630971151 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Foxcroft Apartments, Ltd., RHS
Project No.: 01 -055-630971151 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form FmHA 1930-8) Parts I through
II for the year ended December 31, 1996 and 1995, is presented for purposes of
complying with the requirements of the Rural Housing Services and is also not a
required part of the basic financial statements. Such information has been
subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 17, 1997 on my consideration of Foxcroft Apartments, Ltd.,
internal control structure and a report dated February 17, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 17, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Foxcroft Apartments, Ltd.
Troy, Alabama
I have audited the accompanying balance sheets of Foxcroft Apartments, Ltd., a
limited partnership, RECD Project No.: 01-055-630971151 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Foxcroft Apartments, Ltd., RECD
Project No.: 01-055-630971151 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 23, 1996 on my consideration of Foxcroft Apartments, Ltd.,
internal control structure and a report dated February 23, 1996 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 23, 1996
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Canterbury Apartments, Ltd.
Indianola, Mississippi
I have audited the accompanying balance sheets of Canterbury Apartments, Ltd., a
limited partnership, RHS Project No.: 28-067-630979083 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Canterbury Apartments, Ltd., RHS
Project No.: 28-067-630979083 as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the o requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 21, 1997 on my consideration of Canterbury Apartments, Ltd.,
internal control structure and a report dated February 21, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 21, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Canterbury Apartments, Ltd.
Indianola, Mississippi
I have audited the accompanying balance sheets of Canterbury Apartments, Ltd., a
limited partnership, RECD Project No.: 28-067-630979083 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Canterbury Apartments, Ltd., RECD
Project No.: 28-067-630979083 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 22, 1996 on my consideration of Canterbury Apartments, Ltd.,
internal control structure and a report dated February 22, 1996 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 22, 1996
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cutler Canal III Associates, Ltd.
We have audited the accompanying balance sheets of Cutler Canal III
Associates, Ltd., as of December 31, 1996 and 1995, 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 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 Cutler Canal III Associates,
Ltd. as of December 31, 1996 and 1995 and the results of its operations and its
cash flows for the years then ended, in conformity with generally accepted
accounting principles.
/s/ Reznick Fedder & Silverman
Charlotte, North Carolina
January 17, 1997
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cutler Canal III Associates, Ltd.
We have audited the accompanying balance sheets of Cutler Canal III
Associates, Ltd., as of December 31, 1995 and 1994, 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 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 Cutler Canal III Associates,
Ltd. as of December 31, 1995 and 1994 and the results of its operations and its
cash flows for the years then ended, in conformity with generally accepted
accounting principles.
/s/ REZNICK FEDDER & SILVERMAN
Charlotte, North Carolina
January 23, 1996
<PAGE>
[MUELLER, PROST, PURK & WILLBRAND, P.C. LETTERHEAD]
To the Partners
Jefferson Place, L.P.
Omaha, Nebraska
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Jefferson Place, L.P., (a
Missouri Limited Partnership) (the "Partnership"), as of December 31, 1996 and
1995, and the related statements of income, changes in 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 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 Jefferson Place, L.P., as of
December 31, 1996 and 1995, and the results of its operations and the changes in
partners' equity (deficit) and 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 experienced recurring losses from
operations and has a working capital deficiency and a net capital deficiency
that raise substantial doubt about the Partnership's ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Mueller, Prost, Purk & Willband, P.C.
Certified Public Accountants
St. Louis, Missouri
January 31, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Partners
Jefferson Place, L.P.
We have audited the accompanying balance sheet of Jefferson Place, L.P. (a
Missouri limited partnership) as of December 31, 1994 and 1993, and the related
statements of operations, partners' 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.
As discussed in Notes 3 and 8 to the financial statements, the holder of the
mortgage note payable of Jefferson Place, L.P. has agreed not to declare a
default under the terms of the mortgage note.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Jefferson Place, L.P. at
December 31, 1994 and 1993, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/ COOPERS & LYBRAND LLP
Omaha, Nebraska
January 27, 1995
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Callaway Village, Ltd.
Clinton, Tennessee
I have audited the accompanying balance sheets of Callaway Village, Ltd., a
limited partnership, RHS Project No.: 48-001-581172107 as of December 31, 1996
and 1995, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Callaway Village, Ltd., RHS Project
No.: 48-001-581172107 as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form 1930-8)
Parts I through II for the year ended December 31, 1996 and 1995, is presented
for purposes of complying with the requirements of the Rural Housing Services
and is also not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 15, 1997 on my consideration of Callaway Village, Ltd., internal
control structure and a report dated February 15, 1997 on its compliance with
laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 15, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Callaway Village, Ltd.
Clinton, Tennessee
I have audited the accompanying balance sheets of Callaway Village, Ltd., a
limited partnership, RECD Project No.: 48-001-581172107 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Callaway Village, Ltd., RECD
Project No.: 48-001-581172107 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 22, 1996 on my consideration of Callaway Village, Ltd., internal
control structure and a report dated February 22, 1996 on its compliance with
laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
February 22, 1996
<PAGE>
[HALBERT, KATZ & CO., P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Commerce Square Apartments Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of Commerce Square Apartments
Associates, L.P., as of December 31, 1996 and December 31, 1995, and the related
statements of loss, partners' capital and cash flows for the years 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 Commerce Square Apartments
Associates, L.P., as of December 31, 1996 and December 31, 1995, 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.
Our audits were made 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 page 11 and 12) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Commerce Square Apartments Associates, L.P. 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 financial statements taken as a whole.
/s/ Halbert, Katz & Co., P.C.
Philadelphia, Pennsylvania
January 30, 1997
<PAGE>
[HALBERT, KATZ & CO., P.C. LETTERHEAD - PHILADELPHIA, PENNSYLVANIA]
INDEPENDENT AUDITORS' REPORT
To the Partners
Commerce Square Apartments Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of Commerce Square Apartments
Associates, L.P., as of December 31, 1995 and December 31, 1994, and the related
statements of loss, partners' capital and cash flows for the years 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 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 Commerce Square Apartments
Associates, L.P., as of December 31, 1995 and December 31, 1994, 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, we have also issued a report
dated January 30, 1996, on our consideration of Commerce Square Apartments
Associates, L.P.'s, internal control structure.
Our audits were made 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 page 12 to 14) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Commerce Square Apartments Associates, L.P. 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 financial statements taken as a whole.
/s/ HALBERT, KATZ & CO., P.C.
January 30, 1996
<PAGE>
[KENNETH J. SCHUSTER LETTERHEAD]
Independent Auditors Report
To The Partners' of
West 132nd Development Partnership
(A New York Limited Partnership)
We have audited the balance sheet of West 132nd Development Partnership as of
December 31, 1996, and the related statements of income, 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.
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 amount 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 West 132nd Development
Partnership, at December 31, 1996 and the results of their operations, changes
in Partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ Kenneth J. Schuster
---------------------------
Certified Public Accountant
March 17, 1997
Syosset, New York
<PAGE>
[KENNETH J. SCHUSTER LETTERHEAD]
To The Partners' of
West 132nd Development Partnership
(A New York Limited Partnership)
We have audited the balance sheet of West 132nd Development Partnership as of
December 31, 1995, and the related statements of income, 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.
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 amount 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 West 132nd Development
Partnership, at December 31, 1995 and the results of their operations, changes
in Partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ KENNETH J. SCHUSTER
Certified Public Accountant
February 7, 1996
Syosset, New York
<PAGE>
[KENNETH J. SCHUSTER LETTERHEAD]
To The Partners' of
West 132nd Development Partnership
(A New York Limited Partnership)
We have audited the balance sheet of West 132nd Development Partnership as of
December 31, 1994, and the related statements of income, 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.
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 amount 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 West 132nd Development
Partnership, at December 31, 1994 and the results of their operations, changes
in Partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ KENNETH J. SCHUSTER
Certified Public Accountant
March 9, 1995
Syosset, New York
<PAGE>
[STEVEN M. WEINBERG LETTERHEAD]
To the Partners
Site H Development Company
(A Limited Partnership)
I have audited the accompanying statements of assets, liabilities, and partners'
capital of Site H Development Company a Limited Partnership) as of December 31,
1996 and 1995, and the related statements of revenues and expenses and cash
flows for the years 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.
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 the 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 assets, liabilities and partners' capital as of December
31, 1996 and 1995, and its revenues and expenses, and cash flows for the years
then ended, in conformity with generally accepted accounting principles.
/s/ Steven M. Weinberg
Brooklyn, New York
March 6, 1997
<PAGE>
[MILLER, BLAKENEY & CO.-LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Site H Development Company:
We have audited the accompanying balance sheet of Site H Development Company (A
New York Limited Partnership) as of December 31, 1994 and the related statements
of operations, changes in partners' capital and cash flows for the year 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 as to 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 or our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Site H Development Company as
of December 31, 1994 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ MILLER, BLAKENEY & CO.
New York, New York
April 26, 1995
<PAGE>
[ASHER & COMPANY, LTD. - LETTERHEAD]
Independent Auditors' Report
----------------------------
The Partners
L.I.H. Chestnut Associates, L.P.
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of L.I.H. Chestnut
Associates, L.P. (a Pennsylvania Limited Partnership) as of December 31, 1996
and 1995 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 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 L.I.H. Chestnut
Associates, L.P. as of December 31, 1996 and 1995 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 B to
the financial statements, the Partnership has suffered recurring losses from
operations and is in default of certain obligations under the terms of the
mortgage loan. These conditions raise substantial doubt about the
Partnership's ability to continue as a going concern at December 31, 1996. The
General Partner's plans regarding these matters are also described in Note B.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
<PAGE>
[ASHER & COMPANY, LTD. - LETTERHEAD]
Asher & Company, Ltd.
Page Two
The Partners
L.I.H. Chestnut Associates, L.P.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information is
presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such supplementary 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/ Asher & Company, Ltd.
-------------------------
ASHER & COMPANY, Ltd.
Philadelphia, Pennsylvania
January 31, 1997
<PAGE>
[ASHER & COMPANY, LTD.-LETTERHEAD - PHILADELPHIA, PA]
Independent Auditors' Report
The Partners
L.I.H. Chestnut Associates, L.P.
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of L.I.H. Chestnut
Associates, L.P. (a Pennsylvania Limited Partnership) as of December 31, 1995
and 1994 and the related statements of operations, 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 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 L.I.H. Chestnut Associates,
L.P. (a Pennsylvania Limited Partnership) as of December 31, 1995 and 1994 and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ ASHER & COMPANY, LTD.
ASHER & COMPANY, Ltd.
February 28, 1996, except for the last
paragraph Note F(a) as to which the
date is May 20, 1996
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Diamond Phase II Venture (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Diamond Phase II Venture (a
Limited Partnership) as of December 31, 1996 and 1995, and the related
statements of (lose), changes in partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Diamond Phase II Venture (a
Limited Partnership) at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
February 13, 1997
<PAGE>
[J.H. WILLIAMS & CO. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Diamond Phase II Venture (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Diamond Phase II Venture (a
Limited Partnership) as of December 31, 1995 and 1994, and the related
statements of income, changes in partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Diamond Phase II Venture (a
Limited Partnership) at December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J. H. WILLIAMS & CO. LLP
Kingston, Pennsylvania
February 10, 1996
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Bookbindery Associates (a Limited Partnership)
Reading, Pennsylvania
We have audited the accompanying balance sheets of Bookbindery Associates (a
Limited Partnership) as of December 31, 1996 and 1995, and the related
statements of (loss), changes in partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partners and its contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Bookbindery Associates (a
Limited Partnership) at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
February 10, 1997
<PAGE>
[J. H. WILLIAMS & CO., LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Bookbindery Associates (a Limited Partnership)
Reading, Pennsylvania
We have audited the accompanying balance sheets of Bookbindery Associates (a
Limited Partnership) as of December 31, 1995 and 1994, and the related
statements of income, changes in partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partners and its contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Bookbindery Associates (a
Limited Partnership) at December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ J.H. WILLIAMS & CO., LLP
Kingston, Pennsylvania
February 7, 1996
<PAGE>
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners
of The Hamlet, Ltd.
Boynton Beach, Florida
We have audited the accompanying balance sheet of The Hamlet, Ltd. (a Florida
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 statements of The Hamlet, Ltd. as
of December 31, 1995, were audited by other auditors whose report dated January
31, 1996 expressed an unqualified opinion on those statements.
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 1996 financial statements referred to above present fairly,
in all material respects, the financial position of The Hamlet, Ltd. 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.
/s/ Deloitte & Touche LLP
Jacksonville, Florida
January 31, 1997
<PAGE>
[HABIF, AROGETI & WYNNE, P.C.-LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners
of The Hamlet, Ltd.
We have audited the accompanying balance sheet of THE HAMLET, LTD. [A FLORIDA
LIMITED PARTNERSHIP] as of December 31, 1995, and the related statements of
operations, changes in 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 statements of THE HAMLET, LTD. [A
FLORIDA LIMITED PARTNERSHIP] as of December 31, 1994 were audited by other
auditors whose report dated March 10, 1995 expressed an unqualified opinion on
those statements.
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 1995 financial statements referred to above present fairly,
in all material respects, the financial position of THE HAMLET, LTD. [A FLORIDA
LIMITED PARTNERSHIP] as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ HABIF, AROGETI & WYNNE, P.C.
Atlanta, Georgia
January 31, 1996
<PAGE>
[DELOITTE & TOUCHE LLP-LETTERHEAD - JACKSONVILLE, FLORIDA]
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners
of The Hamlet, Ltd.
Boynton Beach, Florida
We have audited the accompanying balance sheets of The Hamlet, Ltd. (a Florida
limited partnership) as of December 31, 1994 and 1993 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, such financial statements present fairly, in all material
respects, the financial position of The Hamlet, Ltd. as of December 31, 1994 and
1993, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche, LLP
March 10, 1995
<PAGE>
[ISRAEL ROLON LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP
I have audited the accompanying balance street of Stop 22 Limited
Partnership, H.U.D. Project No.: R2 46-E-006-014 and R2 46-E-001-013, as of
December 31, 1996, and the related statements of loss, changes in partners'
equity 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 end 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 Stop 22 Limited Partnership,
as of December 31, 1996, and the results of its operations, changes in partners'
equity, and cash flows for the year then ended in conformity with generally
accepted accounting principles.
<PAGE>
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, I have also issued reports dated February 27, 1997, on my
consideration of Stop 22 Limited Partnership's internal control structure and on
its compliance with specific requirements applicable to major HUD programs,
specific requirements applicable to Affirmative Fair Housing, and laws and
regulations applicable to the financial statements.
My 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 21 to 31) 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 my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Israel Rolon
------------------------
ISRAEL ROLON, C.P.A.
SAN JUAN, PUERTO RICO
FEBRUARY 27, 1997
FEDERAL EMPLOYER IDENTIFICATION NUMBER:
66-0392808
STAMP NUMBER 1414556 WAS
AFFIXED TO THE ORIGINAL
OF THIS REPORT.
<PAGE>
[ARMANDO A. SUAREZ CPA-LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of Stop 22
Limited Partnership
San Juan, Puerto Rico
I have audited the accompanying balance sheet of Stop 22 Limited Partnership, a
Delaware limited partnership (HUD Project No. R2 46-E-006-014 and R2
46-E-001-013), as of December 31, 1995 and the related statements of loss, cash
flows and changes in partners' equity 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 Stop 22 Limited
Partnership as of December 31, 1995, and the results of its operations and its
cash flows and its changes in partners' equity for the year then ended in
conformity with generally accepted accounting principles.
As more fully explained in Notes D and E, the partnership experienced
substantial operating deficits during the year just ended and had nine months
interest in arrears on its mortgage loan. As of the date of this report the
Lender and the Partnership were conducting negotiations to revise the loan
terms. Failure to successfully conclude such negotiation may result on a default
of the loan and foreclosure. Also, as explained on Note E, the Partnership has
not recognized a claim for $70,000 instituted against the Municipality of San
Juan for retroactive rent increases due under the Housing Assistant Payment
Contract since there is an uncertainty as to its collection.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
pages 19 through 32 is presented for the purpose of additional analysis and is
not a required part of the basic financial statements of Stop 22 Limited
Partnership. 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/ Armando A. Suarez, CPA
Armando A. Suarez, CPA
February 1, 1996
San Juan, Puerto Rico
The stamp No.1328737 of the P.R. Society of
CPA's was affixed to the original of this report.
<PAGE>
[ARMANDO A. SUAREZ CPA-LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of Stop 22
Limited Partnership
San Juan, Puerto Rico
I have audited the accompanying balance sheet of Stop 22 Limited Partnership, a
Delaware limited partnership (HUD Project No. R2 46-E-006-014 and R2
46-E-001-013), as of December 31, 1994 and the related statements of loss, cash
flows and changes in partners' equity 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 Stop 22 Limited
Partnership as of December 31, 1994, and the results of its operations and its
cash flows and its changes in partners' equity for the year then ended in
conformity with generally accepted accounting principles.
As more fully explained in Note F, the partnership experienced operating deficit
during this year and had five months interest in arrears on its mortgage loan.
Also, the Municipality of San Juan, as Public Housing Agency administering the
Housing Assistance Payment Contract has not established the rents in accordance
with HUD determinations. The financial statements do not consider adjustments
for the resulting effect that may arise from these events.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
pages 19 through 31 is presented for the purpose of additional analysis and is
not a required part of the basic financial statements of Stop 22 Limited
Partnership. 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/ Armando A. Suarez, CPA
Armando A. Suarez, CPA
April 5, 1995
San Juan, Puerto Rico
The stamp No.1257865 of the P.R. Society of
CPA's was affixed to the original of this report.
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knob Hill Apartments, Ltd.
Morristown, Tennessee
I have audited the accompanying balance sheets of Knob Hill Apartments, Ltd.,
a limited partnership, RHS Project No.: 48-032-638979224 as of December 31,
1996 and 1995, 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. My responsibility is to
express an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally acceptable auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I 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. I believe that the 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 Knob Hill Apartments, Ltd.,
RHS Project No.: 48-032-638979224 as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
10 through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I through II for the year ended December 31, 1996 and 1995, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements.
Such information has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 20, 1997 on my consideration of Knob Hill Apartments, Ltd.,
internal control structure and a report dated February 20, 1997 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 20, 1997
<PAGE>
[DONALD W. CAUSEY, CPA, P.C. LETTERHEAD - GADSDEN, ALABAMA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Knob Hill Apartments, Ltd.
Morristown, Tennessee
I have audited the accompanying balance sheets of Knob Hill Apartments, Ltd., a
limited partnership, RECD Project No.: 48-032-638979224 as of December 31, 1995
and 1994, 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. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the 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 I 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. I believe that the 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 Knob Hill Apartments, Ltd., RECD
Project No.: 48-032-638979224 as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form RECD 1930-8) Parts I through
III for the year ended December 31, 1995 and 1994, is presented for purposes of
complying with the requirements of the Rural Economic Community Development and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit 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.
In accordance with Government Auditing Standards, I have also issued a report
dated February 23, 1996 on my consideration of Knob Hill Apartments, Ltd.,
internal control structure and a report dated February 23, 1996 on its
compliance with laws and regulations.
/s/ Donald W. Causey, CPA, P.C.
February 23, 1996
<PAGE>
[CORTLAND L. BROVITZ & CO., P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer James Street Associates
(A Limited Partnership)
Syracuse, New York
We have audited the balance sheets of Conifer James Street Associates (A Limited
Partnership) as of December 31, 1996 and 1995 and the related statements of
changes in partners' equity, operations, 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 Conifer James Street Associates
(A Limited Partnership) as of December 31, 1996 and 1995, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.
Respectfully Submitted,
/s/ Cortland L. Brovitz & Co., P.C.
---------------------------------
Cortland L. Brovitz & Co., P.C.
Certified Public Accountants
Rochester, New York
January 22, 1997
<PAGE>
[CORTLAND L. BROVITZ & CO., P.C.-LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer James Street Associates
(A Limited Partnership):
We have audited the balance sheets of Conifer James Street Associates (A Limited
Partnership) as of December 31, 1995 and 1994 and the related statements of
changes in partners' capital operations, 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 Conifer James Street Associates
(A Limited Partnership) as of December 31, 1995 and 1994, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.
Respectfully Submitted,
/s/ Cortland L. Brovitz & Co., P.C.
Cortland L. Brovitz & Co., P.C.
Certified Public Accountants
Rochester, New York
January 22, 1996
<PAGE>
[RUBIN, BROWN, GORNSTEIN & CO. LLP LETTERHEAD]
Independent Auditors' Report
Partners
Longfellow Heights Apartments, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Longfellow Heights Apartments,
L.P., a limited partnership, as of December 31, 1996 and 1995 and the related
statements of income, 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 Longfellow Heights Apartments,
L.P. as of December 31, 1996 and 1995, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
January 21, 1997
<PAGE>
[RBG & CO. LETTERHEAD - ST. LOUIS, MISSOURI]
INDEPENDENT AUDITORS' REPORT
Partners
Longfellow Heights Apartments, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Longfellow Heights Apartments,
L.P., a limited partnership, as of December 31, 1995 and 1994 and the related
statements of income, 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 Longfellow Heights Apartments,
L.P. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ Rubin, Brown, Gornstein & Co. LLP
January 23, 1996
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31
------------------------
1997 1996
------------ ------------
ASSETS
<S> <C> <C>
Property and equipment - at cost, less accumulated
depreciation (Notes 2, 4 and 10) $240,343,013 $270,715,006
Cash and cash equivalents (Notes 2 and 10) 6,518,662 8,420,959
Cash held in escrow (Note 5) 15,777,598 16,832,443
Deferred costs - less accumulated amortization (Notes 2 and 6) 3,478,284 3,845,726
Other assets 2,753,083 2,307,734
------------ ------------
Total assets $268,870,640 $302,121,868
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable (Note 7) $200,800,132 $201,604,094
Due to debt guarantor (Notes 7 and 10a) 23,814,448 18,971,667
Accounts payable and other liabilities 20,885,235 21,196,194
Due to local general partners and affiliates (Note 8) 10,941,243 13,117,342
Due to general partners and affiliates (Note 8) 2,305,530 2,316,069
------------ ------------
258,746,588 257,205,366
------------ ------------
Minority interest (Note 2) 2,257,054 1,763,731
------------ ------------
Commitments and contingencies (Notes 7, 8 and 10)
Partners' capital:
Limited partners (139,101.5 BACs
issued and outstanding) (Note 1) 9,023,785 43,956,700
General partners (1,156,787) (803,929)
------------ ------------
Total partners' capital 7,866,998 43,152,771
------------ ------------
Total liabilities and partners' capital $268,870,640 $302,121,868
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-22-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended March 31
-------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Revenues
Rental income $ 31,997,180 $ 31,252,634 $ 30,504,144
Other 1,545,755 1,959,274 1,933,443
------------ ------------ ------------
33,542,935 33,211,908 32,437,587
------------ ------------ ------------
Expenses
General and administrative 5,605,944 6,158,752 5,681,223
General and administrative-related parties (Note 8) 3,361,278 2,637,073 2,840,531
Repairs and maintenance 4,785,295 4,331,313 4,168,229
Operating and other 4,384,824 4,260,943 4,239,490
Real estate taxes 1,988,029 1,989,457 1,847,964
Insurance 1,534,903 1,514,776 1,531,627
Interest 15,768,603 16,061,865 15,684,867
Depreciation and amortization 11,473,254 12,179,855 11,903,255
Provision for impairment of assets 20,083,101 0 0
------------ ------------ ------------
68,985,231 49,134,034 47,897,186
------------ ------------ ------------
Loss before minority interest (35,442,296) (15,922,126) (15,459,599)
Minority interest in loss of subsidiary partnerships 156,523 153,662 158,671
------------ ------------ ------------
Net loss $(35,285,773) $(15,768,464) $(15,300,928)
============ ============ ============
Net loss - limited partners $(34,932,915) $(15,610,779) $(15,147,919)
============ ============ ============
Number of BACs outstanding 139,101.5 139,101.5 139,101.5
============ ============ ============
Net loss per BAC $ (251.13) $ (112.23) $ (108.90)
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-23-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
YEARS ENDED MARCH 31, 1995, 1996 AND 1997
<TABLE>
<CAPTION>
Total Limited Partners General Partners
----- ---------------- ----------------
<S> <C> <C> <C>
Partners' capital - April 1, 1994 $ 74,222,163 $ 74,715,398 $ (493,235)
Net loss, year ended March 31, 1995 (15,300,928) (15,147,919) (153,009)
------------ ------------ ------------
Partners' capital - March 31, 1995 58,921,235 59,567,479 (646,244)
Net loss, year ended March 31, 1996 (15,768,464) (15,610,779) (157,685)
------------ ------------ ------------
Partners' capital - March 31, 1996 43,152,771 43,956,700 (803,929)
Net loss, year ended March 31, 1997 (35,285,773) (34,932,915) (352,858)
------------ ------------ ------------
Partners' capital - March 31, 1997 $ 7,866,998 $ 9,023,785 $ (1,156,787)
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-24-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Years Ended March 31
-------------------------------------------
1997 1996* 1995*
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(35,285,773) $(15,768,464) $(15,300,928)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 11,473,254 12,179,855 11,903,255
Loss on sale of property and equipment 170 16,258 6,386
Provision for impairment of assets 20,083,101 0 0
Minority interest in loss of subsidiary partnerships (156,523) (153,662) (158,671)
(Increase) decrease in assets
Cash held in escrow 906,997 144,143 (441,175)
Other assets (445,349) 161,674 (348,530)
Increase (decrease) in liabilities
Accounts payable and other liabilities (195,237) 2,021,307 2,014,504
Due to local general partners and affiliates 84,308 527,219 166,447
Due to local general partners and affiliates (444,256) 0 (402,232)
Due to general partners and affiliates (10,539) 832,075 407,761
Due to debt guarantor 2,306,775 2,724,344 3,508,023
------------ ------------ ------------
Total adjustments 33,602,701 18,453,213 16,655,768
------------ ------------ ------------
Net cash (used in) provided by operating activities (1,683,072) 2,684,749 1,354,840
------------ ------------ ------------
Cash flows from investing activities:
Acquisition of property and equipment (819,881) (1,290,504) (1,003,244)
Increase in cash held in escrow (667,023) (327,512) (679,249)
Decrease in cash held in escrow for real estate investments 814,871 379,247 672,600
Increase in due to local general partners and affiliates 60,000 60,000 307,622
Decrease in due to local general partners and affiliates (954,282) (773,729) (378,771)
------------ ------------ ------------
Net cash used in investing activities (1,566,315) (1,952,498) (1,081,042)
------------ ------------ ------------
Net cash from operating and investing activities,
carried forward (3,249,387) 732,251 273,798
------------ ------------ ------------
</TABLE>
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-25-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Years Ended March 31,
------------------------------------------
1997 1996* 1995*
------------ ------------ ------------
<S> <C> <C> <C>
Net cash from operating and investing activities,
brought forward (3,249,387) 732,251 273,798
------------ ------------ ------------
Cash flows from financing activities:
Decrease in deferred costs 162,464 0 0
Increase in deferred costs (159,673) 0 (5,334)
Repayments on mortgage notes (5,455,964) (989,032) (878,814)
Borrowings on mortgage notes 5,146,280 0 22,605
Due to debt guarantor 1,926,006 0 184,172
Increase in due to local general partners and affiliates 0 72 10,929
Decrease in due to local general partners and affiliates (39,119) 0 0
Decrease in capitalization of consolidated
subsidiaries attributable to minority interest (232,904) (368,953) (91,998)
------------ ------------ ------------
Net cash provided by (used in) financing activities 1,347,090 (1,357,913) (758,440)
------------ ------------ ------------
Net decrease in cash and cash equivalents (1,902,297) (625,662) (484,642)
Cash and cash equivalents at beginning of year 8,420,959 9,046,621 9,531,263
------------ ------------ ------------
Cash and cash equivalents at end of year $ 6,518,662 $ 8,420,959 $ 9,046,621
============ ============ ============
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 10,619,520 $ 10,331,751 $ 9,961,900
Supplemental disclosures of noncash investing
and financing activities:
Repayment of mortgage notes advanced by
debt guarantor $ 610,000 $ 575,000 $ 540,000
Increase in mortgage notes reclassified from accounts
payable and other liabilities 115,722 114,828 103,943
Conversion of notes payable to partners' equity 0 0 230,920
Reclassification of development fees payable
to contribution by minority interest shareholders 882,750 0 0
</TABLE>
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-26-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 1 - General
Liberty Tax Credit Plus III L.P., a Delaware limited partnership (the
"Partnership"), was organized on November 17, 1988. The Partnership had no
operations until commencement of the public offering on May 2, 1989. The general
partners of the Partnership are Related Credit Properties III L.P., a Delaware
limited partnership (the "Related General Partner"), and Liberty GP III Inc., a
Delaware corporation (the "Liberty General Partner"). The general partner of the
Related General Partner is Related Credit Properties III Inc., a Delaware
corporation.
The Partnership's business is to invest in other limited partnerships
("Local Partnerships" or "Subsidiaries" or "Subsidiary Partnerships") owning
leveraged apartment complexes ("Apartment Complexes") that are eligible for the
low-income housing tax credit ("Housing Tax Credit") enacted in the Tax Reform
Act of 1986, and to a lesser extent in Local Partnerships owning properties that
are eligible for the historic rehabilitation tax credit ("Historic
Rehabilitation Tax Credit").
The Partnership has acquired interests in 62 Local Partnerships as of March
31, 1997 and no further acquisitions are anticipated.
The Partnership is authorized to issue a total of 150,000 Beneficial
Assignment Certificates ("BACs"), which have been registered with the Securities
and Exchange Commission for sale to the public. Each BAC represents all of the
economic and virtually all of the ownership rights attributable to one-fifth of
a limited partnership interest. As of March 31, 1997, 139,101.5 have been
issued, and no further issuance of BACs is anticipated. The offering was
completed on March 30, 1990.
The terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the general partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Consolidation
The consolidated financial statements include the accounts of the
Partnership and 62 subsidiary partnerships in which the Partnership is the
principal limited partner. Through the rights of the Partnership and/or an
affiliate of the General Partners, which affiliate has a contractual obligation
to act on behalf of the Partnership, to remove the general partner of the
subsidiary partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary partnerships.
For financial reporting purposes, the Partnership's fiscal year ends on
March 31. All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31.
All intercompany accounts and transactions with the subsidiary partnerships
have been eliminated in consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arises from cash contributions and cash
distributions to the minority interest partners.
-27-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 2 - Summary of Significant Accounting Policies (Continued)
a) Basis of Consolidation (continued)
Losses attributable to minority interest which exceed the minority
interest's investment in a subsidiary have been charged to the Partnership. Such
losses aggregated approximately $659,000, $283,000 and $274,000 for the years
ended March 31, 1997, 1996 and 1995, respectively (the 1996, 1995 and 1994
fiscal years, respectively). The Partnership's investment in each subsidiary is
equal to the respective subsidiary's partners' equity less minority interest
capital, if any. In consolidation, all subsidiary partnership losses are
included in the Partnership's capital account except for losses allocated to
minority interest capital.
b) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks and
investments in short-term highly liquid instruments purchased with original
maturities of three months or less. Cash held in escrow has various use
restrictions and is not considered a cash equivalent.
c) Property and Equipment
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective April 1, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.
Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate disposition
of the property. Cost includes the purchase price, acquisition fees and
expenses, and any other costs incurred in acquiring the properties. The cost of
property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings. A provision for loss on impairment of
assets is recorded when estimated amounts recoverable through future operations
and sale of the property on an undiscounted basis are below depreciated cost.
Property investments themselves are reduced to estimated fair value (generally
using discounted cash flows) when the property is considered to be impaired and
the depreciated cost exceeds estimated fair value. For the year ended March 31,
1997, the Partnership has recorded approximately $20,083,000 as a provision for
loss on impairment of assets.
d) Income Taxes
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (see Note 9).
-28-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 2 - Summary of Significant Accounting Policies (Continued)
e) Organization and Offering Costs
Costs incurred to organize the Partnership, including but not limited to
legal, accounting, and registration fees, are considered deferred organization
expenses. These costs have been capitalized and are being amortized over a
60-month period. Costs incurred to sell BACs, including brokerage and the
nonaccountable expense allowance, are considered selling and offering expenses.
These costs are charged directly to limited partners' capital. (See Note 8).
f) Acquisition Fees and Expenses
Acquisition fees and other acquisition expenses incurred are charged to the
property accounts based on the cost of properties acquired.
g) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.
h) Use of 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.
i) Reclassification of Financial Statement Presentation
Certain reclassifications have been made to the Fiscal 1995 and 1994
Financial Statements to conform with the Fiscal 1996 financial statement
presentation. Such reclassifications had no effect on net loss as previously
reported.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments (all of which are held for non-trading
purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents and Cash Held in Escrow
The carrying amount approximates fair value.
Mortgage Notes Payable
The fair value of mortgage notes payable is estimated, where practicable,
based on the borrowing rate currently available for similar loans.
-29-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 3 - Fair Value of Financial Instruments (continued)
The estimated fair values of the Partnership's mortgage note payable are as
follows:
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount* Fair Value
------ ---------- ------- ----------
<S> <C> <C> <C> <C>
Mortgage Notes Payable for which it is:
Practicable to estimate fair value $ 15,076,362 $ 15,941,406 $ 15,134,514 $ 16,238,423
Not Practicable 185,723,770 (a) 186,469,580 (a)
</TABLE>
* Reclassified for comparative purposes
(a) Management believes it is not practical to estimate the fair value of
the mortgage notes payable because mortgage programs with similar
characteristics are not currently available to the partnerships.
Due to local general partners and affiliates
The estimated fair value of the Partnership's due to local general partners
and affiliates are as follows:
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount* Fair Value
------ ---------- ------- ----------
<S> <C> <C> <C> <C>
Due to local general partners
and affiliates for which it is:
Practicable to estimate fair value $10,941,243 $10,579,220 $13,117,342 $13,117,342
</TABLE>
The carrying amount of other assets and liabilities reported on the
statement of financial position that require such disclosure approximates fair
value.
NOTE 4 - Property and Equipment
The components of property and equipment are as follows:
<TABLE>
<CAPTION>
March 31
------------------------------ Estimated Useful
1997 1996 Lives
------------- ------------- --------------
<S> <C> <C> <C>
Land $ 12,894,634 $ 12,894,634 --
Building and improvements 285,043,002 313,826,317 15 to 40 years
Other 5,858,484 5,808,078 5 to 10 years
------------- -------------
303,796,120 332,529,029
Less: Accumulated depreciation (63,453,107) (61,814,023)
------------- -------------
$ 240,343,013 $ 270,715,006
============= =============
</TABLE>
-30-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 4 - Property and Equipment (continued)
Included in property and equipment is $8,346,089 of acquisition fees paid
to the general partners and $2,908,694 of acquisition expenses as of March 31,
1997 and 1996. In addition, as of March 31, 1997 and 1996, buildings and
improvements include $14,677,111 of capitalized interest.
Depreciation expense for the years ended March 31, 1997, 1996 and 1995
amounted to $11,108,603 $11,885,729 and $11,565,888, respectively.
In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developers' fees of $25,440,729 as of March 31, 1997
and 1996 to the Local General Partner and affiliates. Such fees have been
included in the cost of property and equipment.
During the 1996 Fiscal Year, there was a decrease in accumulated
depreciation in the amount of $305 due to write-offs on dispositions and
$9,469,214 due to the provision for impairment of assets relating to R.P.P.
Limited Dividend Housing Association Limited Partnership ("River Place").
As a result of River Place's recurring losses and operating cash shortfalls
(see Note 10), management of River Place determined that an evaluation of the
ongoing value of the real estate held for lease was necessary. Based upon this
evaluation, management of River Place determined that the real estate held for
lease, with a carrying value of approximately $34,088,000, was impaired and
wrote it down by $18,803,127 to its fair value. Fair value was determined based
on estimated future discounted cash flows over a projected holding period
including estimated sales proceeds, net of disposition costs, at the end of the
holding period.
Williamsburg Residential II, L.P. has experienced significant losses and
cash flow problems and is presently in default on the mortgage note. As a result
of the operating losses and cash flow problems, management of Williamsburg II
determined that an impairment of the property existed at December 31, 1996. The
impairment loss was determined to be $1,279,974. The amount of the impairment
loss was determined based on the difference in the carrying value of the
property and the valuation of the property based on capitalized cash flows.
NOTE 5 - Cash Held in Escrow
Cash held in escrow consists of the following:
March 31
-------------------------
1997 1996
----------- -----------
Purchase price payments* $ 1,071,897 $ 1,886,768
Real estate taxes, insurance and other (Note 10(a)) 8,049,300 9,095,341
Reserve for replacements 5,375,082 4,708,059
Tenants' security deposits 1,281,319 1,142,275
----------- -----------
$15,777,598 $16,832,443
=========== ===========
* Represents amounts to be paid to seller upon meeting specified rental
achievement criteria.
-31-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 6 - Deferred Costs
The components of deferred costs and their periods of amortization are as
follows:
<TABLE>
<CAPTION>
March 31,
----------------------------
1997 1996 Period
----------- ----------- -----------
<S> <C> <C> <C>
Financing expenses $ 4,579,439 $ 4,764,935 *
Organization expenses 829,921 907,230 60 months
----------- -----------
5,409,360 5,672,165
Less: Accumulated amortization (1,931,076) (1,826,439)
----------- -----------
$ 3,478,284 $ 3,845,726
=========== ===========
</TABLE>
* Over the life of the related mortgages.
Amortization of deferred costs for the years ended March 31, 1997, 1996 and
1995 amounted to $364,651, $294,126 and $337,367, respectively. During the year
ended March 31, 1997 there was a decrease in accumulated amortization due to the
write-off of fully amortized costs in the amount of $227,795 and the write-off
of $194,683 of deferred costs with accumulated amortization of $32,219.
NOTE 7 - Mortgage Notes Payable
The mortgage and construction notes, which are collateralized by land and
buildings, are payable in aggregate monthly installments of approximately
$1,107,000, including principal and interest at rates varying from 0% to 11.5%
per annum, through the year 2042. Each subsidiary partnership's mortgage note
payable is without further recourse and is collateralized by the land and
buildings of the respective subsidiary partnership and the assignment of certain
subsidiary partnership's rent and leases.
Annual principal payment requirements as of March 31, 1997 for each of the
next five fiscal years and thereafter are as follows:
Fiscal Year Ending Amount
------------------ ------
1997 $ 2,690,246
1998 2,777,962
1999 3,077,898
2000 3,416,729
2001 3,773,855
Thereafter 185,063,442
------------
$200,800,132
============
No adjustment has been made in the table above for the events of default
and other matters described in Note 10(a).
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<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 7 - Mortgage Notes Payable (continued)
The mortgage agreements require monthly deposits to replacement reserves of
approximately $93,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).
During 1996 and 1995, a Local Partnership, River Place, was unable to make
the required principal and interest payments on its debt. These payments of
$1,134,352 and $2,563,694 in 1996 and 1995, respectively, were paid by The
General Retirement System of the City of Detroit ("GRS"), the debt guarantor, on
behalf of the Local Partnership. The Local Partnership accrues interest on
payments made by the Guarantor at an interest rate of 15% per annum. The debt
payments and accrued interest thereon are included in due to debt guarantor.
Certain subsidiary partnerships have outstanding letters of credit totaling
approximately $122,000 at December 31, 1996, as required under the terms of the
mortgage notes and other agreements.
Las Camelias Limited Partnership
During June 1996, Las Camelias Limited Partnership completed a modification
of its mortgage debt, effective July 1, 1996, which reduced the stated rate from
10% to 8.25%, the pay rate from 9% to 7.25%, and extended the maturity date from
October 1, 2021 to February 1, 2026. The monthly payment which had been interest
only in the amount of $45,000 was reduced to a payment of principal and interest
in the amount of $40,931. The interest rate on the accrued but unpaid interest
(1%), which had been at 10%, was reduced to 8.25%.
The Hamlet, Ltd.
On September 30, 1996, The Hamlet, Ltd. ("Hamlet") refinanced its Nations
Bank loan which had a balance of $4,491,693 with a loan from Home Savings of
America in the amount of $4,700,000. The note bears interest at 9.15%. Principal
and interest of $38,326 is payable monthly from November 1, 1996 through October
1, 2011, when unpaid principal and interest become due. The loan is nonrecourse
and is collateralized by Hamlet's rental property.
Stop 22 Limited Partnership
As of May 1996, Stop 22 Limited Partnership ("Stop 22") had interest in
arrears totaling $540,000. This constituted an event under which the lender may
have declared the mortgage obligation in default. In May 1996, Stop 22 completed
a modification of its mortgage debt, effective November 1, 1995, which reduced
the stated rate from 10% to 8% and the pay rate from 9% to 7% resulting in a
reduction of the monthly interest only payments from $60,000 to $46,666. The
interest rate on the accrued but unpaid interest (1%), which had been at 10%,
was reduced to 8%. In connection with the modification the interest in arrears
was paid.
NOTE 8 - Related Party Transactions
Liberty Associates IV L.P. ("Liberty Associates"), an affiliate of the
General Partners, has a 1% and .998% (see Note 10 with respect to River Place)
interest as a Special Limited Partner in 61 and 1 of the Local Partnerships,
respectively.
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<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 8 - Related Party Transactions (continued)
The General Partners and their affiliates perform services for the
Partnership. The costs incurred for the years ended March 31, 1997, 1996 and
1995 are as follows:
A) Related Party Fees
As of March 31, 1997, the excess organization and offering costs totaled
$247,465 and is included in other assets.
Liberty Associates received cash distributions from the Local Partnerships
of $720, $863 and $821 during the years ended March 31, 1997, 1996 and 1995,
respectively.
Pursuant to the Partnership Agreement and the Local Partnership Agreements,
the General Partners and Liberty Associates received their allocable pro-rata
share of profits, losses and tax credits from the Partnership and the Local
Partnerships, respectively.
During 1996, Related G.P. Holdings, Inc., an affiliate of the Related
General Partner, purchased the general partner interest in the local general
partner of two subsidiary partnerships: 1850 Second Avenue Associates, L.P. and
C.V. Bronx Associates, L.P.
B) Guarantees
The Partnership has negotiated Operating Deficit Guarantee Agreements with
all Local Partnerships in which the General Partners of the Local Partnerships
have agreed to fund operating deficits for a specified period of time. The terms
of the Operating Deficit Guarantee Agreements vary for each Local Partnership,
with the maximum dollar amounts to be funded for a specified period of time,
generally three years, commencing at stabilization. The gross amount of the
Operating Deficit Guarantees aggregate approximately $18,700,000 of which
approximately $16,100,000, $15,600,000 and $12,000,000 had expired as of March
31, 1997, 1996 and 1995, respectively. As of March 31, 1997 and 1996,
approximately $ 3,980,000 and $4,233,000, respectively, has been funded by the
local general partners to meet such obligations. Amounts funded under such
agreements are treated as non-interest bearing loans, which will be repaid only
out of 50% of available cash flow or out of available net sale or refinancing
proceeds.
The Operating Deficit Guarantee Agreements were negotiated to protect the
Partnership's interest in the Local Partnerships and to provide incentive to the
Local General Partners to generate positive cash flow.
C) Other Related Parties Expenses
The costs incurred to related parties for the years ended March 31, 1997,
1996 and 1995 were as follows:
Year Ended March 31,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
Partnership management fees (i) $1,434,000 $ 750,000 $1,059,108
Expense reimbursement (ii) 172,345 174,662 173,790
Property management fees (iii) 1,644,501 1,610,911 1,492,133
Local administrative fee (iv) 110,432 101,500 115,500
---------- ---------- ----------
$3,361,278 $2,637,073 $2,840,531
========== ========== ==========
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<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 8 - Related Party Transactions (continued)
(i) The General Partners are entitled to receive a partnership management
fee after payment of all Partnership expenses, which together with the local
annual administrative fees will not exceed a maximum of 0.5% per annum of
invested assets (as defined in the Partnership Agreement), for administering the
affairs of the Partnership. The partnership management fee subject to the
foregoing limitation, will be determined by the General Partners in their sole
discretion based upon their review of the Partnership's investments. Unpaid
partnership management fees for any year will be accrued without interest and
will be payable only to the extent of available funds after the Partnership has
made the distributions to the limited partners of sale or refinancing proceeds
equal to their original capital contributions plus a 10% priority return thereon
(to the extent not theretofore paid out of cash flow). Partnership management
fees owed to the General Partners amounting to approximately $1,774,000 were
accrued and unpaid at March 31, 1997 and 1996.
(ii) The Partnership reimburses the General Partners and their affiliates
for actual Partnership operating expenses incurred by the General Partners and
their affiliates on the Partnership's behalf. The amount of reimbursement from
the Partnership is limited by the provisions of the Partnership Agreement.
Another affiliate of the General Partners performs asset monitoring for the
Partnership. These services include site visits and evaluations of the
subsidiary partnerships' performance.
(iii) The subsidiary partnerships incurred property management fees
amounting to $2,056,191, $1,995,155 and $1,914,475 for the years ended March
31,1997, 1996 and 1995, respectively, of which $1,644,501, $1,610,911 and
$1,492,133, respectively, were incurred to affiliates of the subsidiary
partnerships' general partners. Included in amounts incurred to affiliates of
the subsidiary partnerships' general partners was $73,927, $76,396 and $74,217
for the years ended March 31, 1997, 1996 and 1995, respectively, which was also
incurred to an affiliate of the Related General Partner.
(iv) Liberty Associates, a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.
D) Due to Local General Partners and Affiliates
Due to local general partners and affiliates at March 31, 1997
and 1996 consists of the following:
March 31
----------------------------
1997 1996
----------- -----------
Operating deficit advances $ 2,013,745 $ 2,402,696
Development fees 2,094,617 3,882,738
Operating advances 3,175,416 3,091,108
Due to contractor 46,289 49,603
General Partner distributions 662,607 701,726
Developer loans (i) 1,400,170 1,445,767
Land note payable (ii) 1,025,096 965,096
Management and other operating fees 523,303 578,608
----------- -----------
$10,941,243 $13,117,342
=========== ===========
-35-
<PAGE>
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 8 - Related Party Transactions (continued)
D) Due to Local General Partners and Affiliates (continued)
<TABLE>
<CAPTION>
March 31
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
(i) Developer loans consist of the following:
Jefferson Limited Partnership- $ 100,000 $ 100,000
This loan is unsecured, bears interest at an annually
adjusted rate (5.77% at March 31, 1996 and 6.58% at
March 31, 1995) and has no predetermined due date
This note is unsecured, bears interest at 9.25% per annum 75,000 75,000
and is due in the event of sale or refinancing of the
property
Lancashire Towers Associates Limited Partnership - 0 63,167
This loan bore interest at 12% per annum and was payable
only out of available surplus cash. On March 4, 1996 the
loan was paid in full
Northwood Associates Limited Partnership - 239,386 221,816
This loan bears interest at 12% per annum and is payable
only out of available surplus cash
Citrus Meadows Apartments, Ltd. - 985,784 985,784
This loan bears no interest and can only be repaid
with the proceeds from a sale or refinancing
---------- ----------
$1,400,170 $1,445,767
========== ==========
Interest expense incurred on developer loans amounted to
$32,312, $38,910 and $45,443 for the years ended March 31,
1997, 1996 and 1995, respectively.
(ii) Land note payable consists of the following:
Citrus Meadows Apartments, Ltd. - $1,025,096 $ 965,096
The land for this subsidiary partnership was purchased ========== ==========
from the local general partner for a $600,000 note which
accrues interest at 10% per annum. The principal balance,
together with the accrued interest, is payable upon the sale
of the property or in December 2004, whichever event
occurs first.
</TABLE>
Interest expense incurred on land note payable amounted to $60,000 for each
of the three years ended March 31, 1997, 1996 and 1995.
-36-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 9 - Income Taxes
A reconciliation of the financial statement net loss to the income tax loss
for the Partnership and its consolidated subsidiaries follows:
<TABLE>
<CAPTION>
Years Ended December 31
--------------------------------------------
1996 1995 1994
------------ ------------ ------------
Financial statement
<S> <C> <C> <C>
Net loss $(35,285,773) $(15,768,464) $(15,300,928)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes 637,510 (665,038) 599,733
Difference between depreciation and amortization
expense recorded for financial statement and income
tax reporting purposes (1,137,185) (1,343,380) (1,323,335)
Tax-exempt interest income (133,699) (138,990) (105,503)
Expenses and fees not deductible for income
tax purposes 0 909,915 0
Provision for impairment of assets 20,083,101 0 0
Other (5,861) 757,254 597,998
------------ ------------ ------------
Net loss as shown on the Partnership's
income tax return $(15,841,907) $(16,248,703) $(15,532,035)
============ ============ ============
</TABLE>
NOTE 10 - Commitments and Events of Default
a) Subsidiary Partnerships - Going Concerns
Williamsburg Residential II, L.P.
In November 1996, the general partner of Williamsburg Residential II, L.P.
("Williamsburg II") stopped making the mortgage note payments which constituted
an event of default. The general partner also communicated to the limited
partners its desire to withdraw as general partner and property manager in an
effort to eliminate the need for it to further secure loans from its affiliated
entities to keep the project going. The limited partners retained a national
property management firm to operate the property effective January 1, 1997 and
replaced the general partner effective January 16, 1997.
The new general partner, which is an affiliate of the Related General
Partner, has been in contact with the lender, Federal National Mortgage
Association ("FNMA"), shortly after the default. Williamsburg II entered into a
Forbearance Agreement with FNMA on January 27, 1997. The agreement called for
back payments to be made and provided Williamsburg II 60 days to work out a loan
agreement. A
-37-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 10 - Commitments and Events of Default (continued)
a) Subsidiary Partnerships - Going Concerns (continued)
subsequent extension of the forbearance agreement runs through July 25, 1997.
The general framework of the proposed loan modification agreement calls for: 1.
Williamsburg II to deposit an amount approximately equal to six months payments
into a debt service escrow fund to be utilized as needed; 2. Payments of
interest only on the loan for 36 months; 3. The waiving of replacement reserve
escrow payments during 1997; 4. Excess net operating income to be turned over to
the loan servicer monthly. FNMA's standard modification documentation will be
used after which FNMA will not exercise further remedies relating to the
default. The factors mentioned above raise substantial doubt about Williamsburg
II's ability to continue as a going concern. The auditors for Williamsburg II
modified their report for the 1996 Fiscal Year due to the uncertainty of the
subsidiary partnership to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. The Partnership's investment in Williamsburg II had been written
down to zero by prior years' losses and the minority interest balance was zero
at March 31, 1997 and 1996. Williamsburg II's net loss after minority interest
amounted to approximately $1,368,000 (after provision for impairment of assets
of approximately $1,279,974), $77,000 and $48,000 for the years ended March 31,
1997, 1996 and 1995, respectively.
R.P.P. Limited Dividend Housing Association Limited Partnership
During the 1996, 1995 and 1994 Fiscal Years, R.P.P. Limited Dividend
Housing Association Limited Partnership ("River Place"), a subsidiary
partnership, experienced significant losses from operations.
River Place's long-term debt consists of borrowings under two loan
agreements with the Michigan State Housing Development Authority (the
"Authority") whereby the Authority issued Limited Obligation Revenue Bonds and
loaned the proceeds to River Place in the original amounts of $21,000,000 (the
"First Loan") and $14,000,000 (the "Second Loan") (collectively hereinafter
referred to as the "Loans").
The First Loan, with an outstanding balance of $18,690,000 at December 31,
1996, requires semi-annual payments of principal and interest on April 1 and
October 1 and matures on October 1, 2011. Interest is payable at a variable rate
no lower than 5% and no greater than 8%. At December 31, 1996, the interest rate
was approximately 5.13%.
The Second Loan, with an outstanding balance of $12,700,000 at December 31,
1996, requires semi-annual payments of principal and interest on June 1 and
December 1 and matures on June 1, 2018. Interest is payable at a fixed rate of
5.5%.
The Loans are nonrecourse and are secured by mortgages which are
collateralized by the real estate held for lease.
To enhance the credit of River Place, the General Retirement System of the
City of Detroit ("GRS") entered into an agreement with the Authority to purchase
the Loans upon the occurrence of certain events, as defined. The commitment to
purchase the First Loan is supported by securities pledged as collateral by GRS
and the commitment to purchase the Second Loan is supported by a direct pay
letter of credit issued by a bank in the initial stated amount equal to the
initial aggregate principal amount of the bonds plus 210 days' interest (at
7.25%) on such amounts. The letter of credit expires on August 1, 2000 and is
secured by a reimbursement agreement and a note issued by River Place. Until
expiration, a support fee for the letter of credit is payable at .35% per annum
of the average daily stated amount payable.
-38-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 10 - Commitments and Events of Default (continued)
a) Subsidiary Partnerships - Going Concerns (continued)
GRS' Commitment is nonrecourse and is secured by a second mortgage which is
collateralized by the real estate held for lease. Commitment fees equal to 1.5%
of the outstanding principal balance of the First Loan plus six months interest,
adjusted for the Annual Credit, as defined, are payable annually to GRS. These
fees totaled approximately $263,000 in 1996 and are included in interest and
related fees in the statement of operations. River Place has been unable to pay
these fees owed to GRS, totaling $2,052,912 at December 31, 1996, which are
included in due to debt guarantor in the consolidated balance sheets.
River Place has been unable to generate sufficient cash flows to meet a
majority of its required principal and interest payments under the Loans. GRS
has been making these payments, which totaled $1,134,352 in 1996, on behalf of
River Place. As a result, GRS has declared River Place in default under its
obligation to make these payments. As of December 31, 1996, GRS has made
advances to River Place to meet its debt service requirements totaling
$13,997,565 which remain unpaid by River Place and are included in due to debt
guarantor in the consolidated balance sheets. Interest on these advances is
accrued by River Place at 15%. Interest accrued during 1996 totaled $2,024,728
and is included in interest and related fees in the statement of operations. As
of December 31, 1996, unpaid interest on these advances totals $7,763,971 and is
included in due to debt guarantor in the consolidated balance sheets.
GRS agreed to waive its right of foreclosure under the mortgage held by
GRS, unless certain events occur, through February 1, 2006, upon the execution
and delivery of the amended local partnership agreement, dated July 1, 1996.
Significant provisions of the amended local partnership agreement include (a)
admittance of GRS RP General Corp., an affiliate of GRS, as the general partner
(b) restrictions on the general partner's authority to sell the project prior to
February 1, 2006 unless the sale is an arm's length sale to an unrelated third
party, (c) the authority of the general partner to require each of the partners
to make additional capital contributions to River Place in an aggregate amount
up to the then-existing amount of all indebtedness of River Place, including all
amounts then owed to GRS under mortgages executed and delivered by River Place
and those certain repayment agreements executed and delivered by River Place to
GRS in connection with such mortgages, and (d) the admissions of two additional
limited partners with an interest of .001% each and the reduction of the special
limited partner's interest from 1% to .998%. However, through the rights of the
Partnership and/or an affiliate of the General Partners, which affiliate has a
contractual obligation to act on behalf of the Partnership, to approve certain
major operating and financial decisions, the Partnership continues to have a
controlling financial interest in River Place.
Management anticipates that River Place will be unable to make all of the
required debt service payments during 1997. However, there is no guarantee that
GRS, or any other persons, will continue to make these payments on behalf of
River Place. These items raise substantial doubt about River Place's ability to
continue as a going concern.
The financial statements of River Place have been prepared assuming that
River Place will continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
The Partnership's investment in River Place has been written down to zero by
prior years' losses and the minority interest balance was $882,750 and $0 at
March 31, 1997 and 1996, respectively. The net loss after minority interest for
River Place amounted to approximately $22,373,000 (after provision for
impairment of assets of approximately $18,803,000), $5,166,000 and $4,799,000
for the years ended March 31, 1997, 1996 and 1995, respectively.
-39-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 10 - Commitments and Events of Default
a) Subsidiary Partnerships - Going Concerns
Jefferson Place L.P.
Jefferson Place, L.P. ("Jefferson Place") has consistently been unable to
generate sufficient cash flow from operations to pay the interest obligation on
its mortgage note payable and has a working capital deficiency and a net capital
deficiency at March 31, 1997. Jefferson Place has, however, generated cash flows
sufficient to cover the cost of operations before payment of interest on the
mortgage note payable. The terms of the mortgage note payable provide that the
difference between the stated interest rate and the actual interest paid per
month is accrued and that such amount bears interest at the same rate as the
mortgage note (8.5%) and is payable from excess cash flow in future months. The
mortgagee has agreed not to declare a default under the terms of the mortgage
note payable through December 2002. These items raise substantial doubt about
Jefferson Place's ability to continue as a going concern. The financial
statements for Jefferson Place do not include any adjustments that might result
from the outcome of this uncertainty. Jefferson Place has addressed this concern
by implementing an operating plan designed to reposition the project and
substantially increase long-term cash flow from operations. This plan includes:
(1) investment of a significant portion of property cash flow in upgrading and
improving the condition and appearance of the project; and (2) implementation of
stringent resident qualification standards designed to improve the resident
profile and, ultimately, property operations. In addition, Jefferson Place is
also considering requesting the reissuance of the bonds at lower interest rates
so that the project can support monthly interest payments. The Partnership's
investment in Jefferson Place has been written down to zero by prior years'
losses and the minority interest balance was $0 at March 31, 1997 and 1996. The
net loss after minority interest for Jefferson Place amounted to approximately
$1,032,000, $1,069,000, and $1,016,000 for the years ended March 31, 1997, 1996
and 1995, respectively.
L.I.H. Chestnut Associates, L.P.
L.I.H. Chestnut Associates, L.P. ("Chestnut") has sustained recurring
losses from operations. At December 31, 1996, Chestnut had not made certain
payments required under the terms of the mortgage loan and, as a result, is in
default. Chestnut's continued existence is dependent on its resolution of the
default under the mortgage loan. These items raise substantial doubt about
Chestnut's ability to continue as a going concern. The financial statements for
Chestnut do not include any adjustments that might result from the outcome of
this uncertainty. Management of Chestnut is in discussion with the first
mortgagee and Chestnut's general and limited partners in an attempt to resolve
the default. The Partnership's investment in Chestnut has been written down to
zero by prior years' losses and the minority interest balance was $1,147,000 at
March 31, 1997 and 1996. The net loss after minority interest for Chestnut
amounted to approximately $348,000, $306,000 and $328,000 for the years ended
March 31, 1997, 1996 and 1995, respectively.
b) Subsidiary Partnerships - Other
Jefferson Limited Partnership
At December 31, 1996 and 1995 Jefferson Limited Partnership's ("Jefferson")
current liabilities exceeded its current assets by over $220,000 and $201,000,
respectively. Although this condition could raise substantial doubt about
Jefferson's ability to continue as a going concern, such doubt is alleviated as
follows:
-40-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 10 - Commitments and Events of Default (continued)
b) Subsidiary Partnerships - Other (continued)
1. Under the HUD regulatory agreement, Jefferson is precluded from
paying, except from surplus cash, certain related party payables that
are included in current liabilities which at December 31, 1996 and
1995 totaled $166,523 and $141,381, respectively.
2. In addition to the related party payables mentioned above, $47,216 and
$53,077 of current liabilities at December 31, 1996 and 1995,
respectively, are to related parties which do not intend to pursue
payment beyond Jefferson's ability to pay.
Accordingly, management believes that Jefferson has the ability to continue
as a going concern for at least one year from December 31, 1996. The
Partnership's investment in Jefferson was approximately $940,000 and $1,073,000
at March 31, 1997 and 1996, respectively, and the minority interest balance was
$0 at each date. The net loss after minority interest for Jefferson amounted to
approximately $133,000, $146,000 and $141,000 for the years ended March 31,
1997, 1996 and 1995, respectively.
West 132nd Development Partnership
West 132nd Development Partnership ("West 132nd") has received notification
of default on its mortgages due to its arrears on the mortgage debt and related
escrow accounts. As of December 31, 1996, West 132nd owed approximately $44,000
toward its prior monthly installments, inclusive of principal, interest and
escrows. West 132nd is currently negotiating with the lender to arrange a
payment schedule for those arrears. The Partnership investment in West 132nd was
approximately $552,000 and $628,000 at March 31, 1997 and 1996, respectively,
and the minority interest balance was $0 and $1,352, respectively. The net loss
after minority interest for West 132nd amounted to approximately $76,000,
$62,000 and $129,000 for the years ended March 31, 1997, 1996 and 1995,
respectively.
Wade D. Mertz Elderly Housing Associates
On July 29, 1996, Wade D. Mertz Elderly Housing Associates ("Wade D.
Mertz") received a notice from the Internal Revenue Service ("IRS") that they
would be examining Wade D. Mertz's federal income tax return for the year ended
December 31, 1994. The IRS commenced the examination on August 13, 1996,
completed its field work in early September and on May 20, 1997 notified Wade D.
Mertz that they had concluded their audit and that they were proposing no
adjustments for the return.
Leases
Four of the subsidiary partnerships are leasing the land on which the
Projects are located, for terms ranging from 28 to 99 years. At December 31,
1996, the subsidiary partnerships were committed to minimum future annual
rentals on the noncancelable leases aggregating $155,130 for each of the next
five years, and $4,448,684 in total thereafter.
c) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") up to $100,000. As of March 31, 1997, uninsured cash and
cash equivalents approximated $3,688,000.
-41-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 10 - Commitments and Events of Default (continued)
d) Other
The Partnership is subject to the risks incident to potential losses
arising from the management and ownership of improved real estate. The
Partnership can also be affected by poor economic conditions generally, however
no more than 20% of the properties are located in any single state. There are
also substantial risks associated with owning properties receiving government
assistance, for example the possibility that Congress may not appropriate funds
to enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owners equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence, without HUD's approval. Furthermore there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.
In order for certain subsidiaries to qualify for the Section 421A Program,
and the Inclusionary Zoning Program they are subject to certain requirements by
local authorities as to the level of rent that may be charged to tenants, the
tenants' incomes, the obligation to operate the property in accordance with rent
stabilization guidelines, and restrictions on the rate at which housing units
may be released from such guidelines.
Also, certain subsidiary partnerships obtain grants from local authorities
to fund construction costs of the properties and in order to qualify must
maintain the low-income nature of the property, among other provisions.
e) Tax Credits
A portion of the low-income housing tax credits are subject to recapture in
future years if (i) the partnership ceases to meet qualification requirements,
(ii) there is a decrease in the qualified basis of the Projects, or (iii) there
is a reduction in the taxpayer's interest in the Project at any time during the
15-year Compliance Period that began with the first tax year of the credit
period. None of the Local Partnerships in which the Partnership has acquired an
interest has suffered an event of recapture.
During Fiscal Years 1996, 1995 and 1994, the Partnership generated
low-income housing tax credits of approximately $19,673,000, $19,673,000 and
$19,765,000, respectively.
-42-
<PAGE>
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 Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partners. Certain information
concerning the directors and executive officers of the Liberty General Partner
and of Related Credit Properties III Inc., the general partner of the Related
General Partner, are set forth below.
Name Position
---- --------
Stephen M. Ross Director
J. Michael Fried President, Chief Executive Officer and Director
Alan P. Hirmes Senior Vice President
Stuart J. Boesky Vice President
Richard A. Palermo Treasurer and Assistant Vice President
Lynn A. McMahon Secretary
STEPHEN M. ROSS, 57, is a Director of the general partner of the Related
General Partner. Mr. Ross is also President, Director and shareholder of The
Related Realty Group, Inc., the General Partner of The Related Companies, L.P.
He graduated from the University of Michigan School of Business Administration
with a Bachelor of Science degree and from Wayne State University School of Law
with a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments.
J. MICHAEL FRIED, 53, is President, Chief Executive Officer and a Director
of the general partner of the Related General Partner. Mr. Fried is the sole
shareholder of one of the general partners of Related Capital Company
("Capital"), a real estate finance and acquisition affiliate of the Related
General Partner. In that capacity, he is the chief executive officer of Capital,
and is responsible for initiating and directing all of Capital's syndication,
finance, acquisition and investor reporting activities. Mr. Fried practiced
corporate law in New York City with the law firm of Proskauer Rose Goetz &
Mendelsohn from 1974 until he joined Capital in 1979. Mr. Fried graduated from
Brooklyn Law School with a Juris Doctor degree, magna cum laude; from Long
Island University Graduate School with a Master of Science degree in Psychology;
and from Michigan State University with a Bachelor of Arts degree in History.
-43-
<PAGE>
ALAN P. HIRMES, 42, is a Senior Vice President of the general partner of
the Related General Partner. Mr. Hirmes has been a Certified Public Accountant
in New York since 1978. Prior to joining Capital in October 1983, Mr. Hirmes was
employed by Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a
Vice President of Capital. Mr. Hirmes graduated from Hofstra University with a
Bachelor of Arts degree.
STUART J. BOESKY, 41, is Vice President of the general partner of the
Related General Partner. Mr. Boesky practiced real estate and tax law in New
York City with the law firm of Shipley & Rothstein from 1984 until February 1986
when he joined Capital. From 1983 to 1984 Mr. Boesky practiced law with the
Boston law firm of Kaye, Fialkow, Richard & Rothstein (which subsequently merged
with Strook & Strook & Lavan) and from 1978 to 1980 was a consultant
specializing in real estate at the accounting firm of Laventhol & Horwath. Mr.
Boesky graduated from Michigan State University with a Bachelor of Arts degree
and from Wayne State School of Law with a Juris Doctor degree. He then received
a Master of Laws degree in Taxation from Boston University School of Law.
RICHARD A. PALERMO, 37, is Treasurer of the general partner of the Related
General Partner. Mr. Palermo has been a Certified Public Accountant in New York
since 1985. Prior to joining Related in September 1993, Mr. Palermo was employed
by Sterling Grace Capital Management from October 1990 to September 1993,
Integrated Resources, Inc. from October 1988 to October 1990 and E.F. Hutton &
Company, Inc. from June 1986 to October 1988. From October 1982 to June 1986,
Mr. Palermo was employed by Marks Shron & Company and Mann Judd Landau,
certified public accountants. Mr. Palermo graduated from Adelphi University with
a Bachelor of Business Administration Degree.
LYNN A. McMAHON, 41, is Secretary of the general partner of the Related
General Partner. Since 1983, she has served as Assistant to the President of
Capital. From 1978 to 1983 she was employed at Sony Corporation of America in
the Government Relations Department.
-44-
<PAGE>
Liberty GP III Inc.
- - -------------------
Name Position
---- --------
Paul L. Abbott Chairman of the Board, President,
Chief Executive Officer, Chief
Financial Officer and Director
Donald E. Petrow Vice President
PAUL L. ABBOTT, 51, is an Executive Vice President of Lehman and Chairman
of the Board, President, Chief Executive Officer, Chief Financial Officer and
Director of the Liberty General Partner. Mr. Abbott joined Lehman in August
1988, and is responsible for investment management of residential, commercial
and retail real estate. Prior to joining Lehman, Mr. Abbott was a real estate
consultant and senior officer of a privately held company specializing in the
syndication of private real estate limited partnerships. From 1974 through 1983,
Mr. Abbott was an officer of two life insurance companies and a director of an
insurance agency subsidiary. Mr. Abbott received his formal education in the
undergraduate and graduate schools of Washington University in St. Louis.
DONALD E. PETROW, 40, is a First Vice President of Lehman and Vice
President of the Liberty General Partner. From March 1989, he has been
responsible for the investment management of various investment portfolios,
including but not limited to, federal insured mortgages, residential real
estate, broadcasting and energy. From November 1981 to February 1989, Mr.
Petrow, as a Vice President of Lehman, was involved in investment banking
activities relating to partnership finance and acquisition. Prior to joining
Lehman, Mr. Petrow was employed in accounting and equipment leasing firms. Mr.
Petrow holds a B.S. Degree in accounting from Saint Peters College and an M.B.A.
in Finance from Pace University.
-45-
<PAGE>
Item 11. Executive Compensation.
The Partnership has no officers or directors. The Partnership does not pay
or accrue any fees, salaries or other forms of compensation to the directors or
officers of the Liberty General Partner or of the general partner of the Related
General Partner for their services. Certain directors and officers of the
Liberty General Partner and of the general partner of the Related General
Partner receive compensation from the General Partners and their affiliates for
services performed for various affiliated entities which may include services
performed for the Partnership.
Under the terms of the Partnership Agreement, the General Partners and
their affiliates are entitled to receive compensation from the Partnership in
consideration of certain services rendered to the partnership by such parties.
In addition, the General Partners are entitled to 1% of all cash distributions
and Tax Credit allocations and a subordinated 15% interest in Net Sales or
Refinancing Proceeds. See Note 8 to the Financial Statements in Item 8 for a
presentation of the types and amounts of compensation paid to the General
Partners and their affiliates, which information is incorporated herein by
reference thereto. Tabular information concerning salaries, bonuses and other
types of compensation payable to executive officers have not been included in
this annual report. As noted above, the Partnership has no executive officers.
The levels of compensation payable to the General Partners and/or their
affiliates is limited by the terms of the Partnership Agreement and may not be
increased therefrom on a discretionary basis.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- - -------------- ---------------- -------------------- --------
<S> <C> <C> <C>
General Partnership Related Credit Properties $1,000 capital contribution - 50%
Interest in the Partnership III L.P. directly owned
625 Madison Avenue
New York, NY 10022
Liberty GP III Inc. $1,000 capital contribution - 50%
c/o Lehman Brothers directly owned
3 World Financial Center
New York, NY 10285
</TABLE>
Liberty Associates IV L.P. holds a 1% and .998% (see Item 7. with respect
to River Place) limited partnership interest in 61 and 1 Local Partnerships,
respectively.
No person is known by the Partnership to be the beneficial owner of more
than 5% of the Limited Partnership Interests and neither the Liberty General
Partner nor any director or executive officer of the Liberty General Partner
owns any Limited Partnership Interests or BACs. Neither the Related General
Partner nor any director or executive officer of the general partner of the
Related General Partner owns any Limited Partnership Interests. The following
table sets forth the number of BACs beneficially owned, as of June 25, 1997, by
(i) each BACs holder known to the Partnership to be a beneficial owner of more
than 5% of the BACs, (ii) each director and executive officer of the general
partner of the Related General Partner and (iii) the directors and executive
officers of the general partner of the Related General Partner as a group.
Unless otherwise noted, all BACs are owned directly with sole voting and
dispositive powers.
-46-
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner (1) Beneficial Ownership Percent of Class
- - ---------------------------- -------------------- ----------------
<S> <C> <C>
Lehigh Tax Credit Partners L.L.C. 12,293.66 (2) 8.8%
Lehigh Tax Credit Partners, Inc. 12,293.66 (2) (3) 8.8%
J. Michael Fried 12,293.66 (2) (3) (4) 8.8%
Alan P. Hirmes 12,293.66 (2) (3) (4) 8.8%
Stuart J. Boesky 12,293.66 (2) (3) (4) 8.8%
Stephen M. Ross - -
Richard A. Palermo - -
Lynn A. McMahon - -
All directors and executive officers 12,293.66 (2) (3) (4) 8.8%
of the general partner of the
Related General Partner as a group
(six persons)
</TABLE>
(1) The address for each of the persons in the table is 625 Madison Avenue,
New York, New York 10022.
(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh") and Lehigh Tax Credit Partners, Inc., (the "Managing Member") on June
10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter agreement dated April 4, 1997 among the Partnership, Lehigh
and the Related General Partner (the "Standstill Agreement"), Lehigh agreed
that, prior to April 4, 2007 (the "Standstill Expiration Date"), it will not and
it will cause certain affiliates not to (i) acquire, attempt to acquire or make
a proposal to acquire, directly or indirectly, more than 45% (including BACs
acquired through all other means) of the outstanding BAC's, (ii) seek to propose
to enter into, directly or indirectly, any merger, consolidation, business
combination, sale or acquisition of assets, liquidation, dissolution or other
similar transaction involving the Partnership, (iii) make, or in any way
participate, directly or indirectly, in any "solicitation" of "proxies" or
"consents" (as such terms are used in the proxy rules of the Commission) to vote
any voting securities of the Partnership, (iv) form, join or otherwise
participate in a "group" (within the meaning of Section 13 (d)(3) of the
Securities and Exchange Act of 1934) with respect to any voting securities of
the Partnership, except those affiliates bound by the Standstill Agreement will
not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (v) disclose in writing to any third
party any intention, plan or arrangement inconsistent with the terms of the
Standstill Agreement, or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the
Standstill Agreement. In addition, Lehigh agreed that until the Standstill
Expiration Date it will not sell any BACs acquired by it unless the buyer of
such BACs agrees to be bound by the Standstill Agreement; provided, however,
Lehigh may make transfers in the secondary market to any purchaser which
represents that following such sale it will not own three (3%) percent or more
of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, Lehigh is entitled to vote its BACs as it determines
with regard to any proposal (i) to remove the Related General Partner as a
general partner of the Partnership or (ii) concerning the reduction of any fees,
profits, distributions or allocations for the benefit of the Related General
Partner or its affiliates. The addresses of each of the Partnership, Lehigh and
the Related General Partner is 625 Madison Avenue, New York, New York 10022.
-47-
<PAGE>
(3) All of such BACs represent BACs owned directly by Lehigh, for which the
Managing Member serves as managing member.
(4) Each such party serves as a director and executive officer of the
Managing Member and owns an equity interest therein.
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with
the General Partners and its affiliates, as discussed in Item 11 and also Note 8
to the Financial Statements in Item 8, which is incorporated herein by reference
thereto. However, there have been no direct financial transactions between the
Partnership and the directors and executive officers of the Liberty General
Partner and of the general partner of the Related General Partner.
-48-
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 21
Consolidated Balance Sheets at March 31, 1997 and 1996 175
Consolidated Statements of Operations for the years ended
March 31, 1997, 1996 and 1995 176
Consolidated Statements of Changes in Partners' Capital
for the years ended March 31, 1997, 1996 and 1995 177
Consolidated Statements of Cash Flows for the years
ended March 31, 1997, 1996 and 1995 178
Notes to Consolidated Financial Statements 180
(a) 2. Financial Statement Schedules
Independent Auditors' Report 208
Schedule I - Condensed Financial Information of Registrant 209
Schedule III - Real Estate and Accumulated Depreciation 212
All other schedules have been omitted because they are not
required or because the required information is contained
in the financial statements or notes thereto.
-49-
<PAGE>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(continued)
Sequential
Page
----------
(a) 3. Exhibits
(3A) Form of Amended and Restated Agreement of Limited Partnership
of Liberty Tax Credit Plus III L.P. (attached to Prospectus
as Exhibit A)**
(3B) Certificate of Limited Partnership of Liberty Tax Credit
Plus III L.P., together with amendments filed on
November 17, 1988**
(4) Form of Subscription Agreement (attached to Prospectus
as Exhibit B)
(10A) Escrow Agreement between Registrant and Bankers Trust
Company**
(10B) Forms of Purchase Agreements for purchase of Local
Partnership Interests**
(21) Subsidiaries of the Registrant 204
(27) Financial Data Schedule (filed herewith) 215
** Incorporated herein by reference to exhibits filed with
Pre-Effective Amendment No. 1 to Liberty Tax
Credit Plus III L.P.'s Registration Statement on Form S-11
(Registration No. 33-25732)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
-50-
<PAGE>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(continued)
(c) Subsidiaries of the Registrant (Exhibit 21)
Jurisdiction
of Formation
------------
C.V. Bronx Associates, L.P. NY
Michigan Rural Housing Limited Partnership MI
Jefferson Limited Partnership LA
Inter-Tribal Indian Village Housing Development Associates, L.P. RI
RBM Associates PA
Glenbrook Associates PA
Affordable Flatbush Associates NY
Barclay Village II, LTD. PA
1850 Second Avenue Associates, L.P. NY
R.P.P. Limited Dividend Housing MI
Williamsburg Residential II, L.P. KS
West 104th Street Associates L.P. NY
Meredith Apartments, LTD. UT
Ritz Apartments, LTD. UT
Ashby Apartments, LTD. UT
South Toledo Associates, LTD. OH
Dunlap School Venture PA
Philipsburg Elderly Housing Associates PA
Franklin Elderly Housing Associates PA
Wade D. Mertz Elderly Housing Associates PA
Lancashire Towers Associates Limited Partnership OH
Northwood Associates Limited Partnership OH
Brewery Renaissance Associates NY
Brandywine Court Associates, L.P. FL
Art Apartments Associates PA
The Village at Carriage Hills, LTD. TN
Mountainview Apartments, LTD. TN
The Park Village, Limited MS
River Oaks Apartments, LTD. AL
Forrest Ridge Apartments, LTD. AR
The Hearthside Limited Dividend Housing Association Limited Partnership MI
Redemptorist Limited Partnership LA
Manhattan A Associates NY
Broadhurst Willows, L.P. NY
Weidler Associates Limited Partnership OR
Gentle Pines-West Columbia Associates, L.P. SC
Lake Forest Estates II, LTD. AL
Las Camelias Limited Partnership PR
WPL Associates XXIII OR
Broadway Townhouses L.P. NJ
Puerto Rico Historic Zone Limited Dividend Partnership PR
Citrus Meadows Apartments, LTD. FL
Sartain School Venture PA
Driftwood Terrace Associates, LTD. FL
Holly Hill, LTD. TN
-51-
<PAGE>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(continued)
(c) Subsidiaries of the Registrant (Exhibit 21)
Jurisdiction
of Formation
------------
Mayfair Apartments LTD. TN
Foxcroft Apartments LTD. AL
Canterbury Apartments, LTD. MS
Cutler Canal III Associates, LTD. FL
Jefferson Place L.P. KS
Callaway Village, LTD. TN
Commerce Square Apartments Associates L.P. DE
West 132nd Development Partnership NY
Site H Development Co. NY
L.I.H. Chestnut Associates, L.P. PA
Diamond Phase II Venture PA
Bookbindery Associates PA
The Hamlet, LTD. FL
Stop 22 Limited Partnership PR
Knob Hill Apartments, LTD. TN
Conifer James Street Associates NY
Longfellow Heights Apartments, L.P. MO
(d) Not applicable.
-52-
<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.
LIBERTY TAX CREDIT PLUS III L.P.
(Registrant)
By: RELATED CREDIT PROPERTIES III L.P.,
a General Partner
By: RELATED CREDIT PROPERTIES III INC.,
a General Partner therein
Date: June 27, 1997 By: /s/ J. Michael Fried
--------------------
J. Michael Fried
President, Chief Executive Officer
and Director
(principal executive officer)
By: Liberty GP III Inc.
a General Partner
Date: June 27, 1997 By: /s/ Paul L. Abbott
------------------
Paul L. Abbott
Chairman of the Board, President,
Chief Executive Officer, Chief
Financial Officer and Director
-55-
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Signature Title Date
- - ----------------------- ---------------------------- --------------
President, Chief Executive
Officer (principal
executive officer) and
Director of Related Credit
Properties III Inc.,
general partner of Related
/s/ J. Michael Fried Credit Properties III L.P.
- - ----------------------- (a General Partner
J. Michael Fried of Registrant) June 27, 1997
Senior Vice President
(principal financial officer)
of Related Credit Properties
III Inc. general partner of
/s/ Alan P. Hirmes Related Credit Properties III
- - ----------------------- L.P. (a General Partner of )
Alan P. Hirmes Registrant June 27, 1997
Treasurer (principal
accounting officer)
of Related Credit Properties
III Inc. general partner of
/s/ Richard A. Palermo Related Credit Properties III
- - ----------------------- L.P. (a General Partner of
Richard A. Palermo Registrant) June 27, 1997
Director of Related Credit
Properties III Inc., general
/s/ Stephen M. Ross partner of Related Credit .
- - ----------------------- Properties III L.P. (a General June 27, 1997
Stephen M. Ross Partner of Registrant)
Chairman of the Board,
President, Chief
/s/ Paul L. Abbott Executive Officer (principal
- - ------------------------ executive officer), Chief
Paul L. Abbott Financial Officer and Director
of Liberty GP III Inc. (a General
Partner of Registrant) June 27, 1997
-56-
<PAGE>
[TRIEN, ROSENBERG, ROSENBERG, WEINBERG, CIULLO & FAZZARI, LLP - LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Liberty Tax Credit Plus L.P. III and Subsidiaries
(A Delaware Limited Partnership)
In connection with our audits of the consolidated financial statements of
Liberty Tax Credit Plus III L.P. and Subsidiaries (a Delaware Limited
Partnership) included in the Form 10-K as presented in our opinion dated June
30, 1997 on page 21 and based on the reports of other auditors, we have also
audited supporting Schedule I for the 1996, 1995 and 1994 Fiscal Years and
Schedule III as of March 31, 1997. In our opinion, and based on the reports of
the other auditors, these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.
As discussed in Note 10(a), the consolidated financial statements include
the financial statements of five subsidiary partnerships with significant
contingencies and uncertainties. The financial statements of four of these
subsidiary partnerships were prepared assuming that each will continue as a
going concern. These subsidiary partnerships have been unable to generate
sufficient cash flow to pay their mortgage obligations. The four subsidiary
partnerships' net losses after minority interests aggregated $25,919,773 (Fiscal
1996), $6,618,418 (Fiscal 1995) and $6,190,080 (Fiscal 1994) and their assets
aggregated $37,266,711 and $59,224,657 at March 31, 1997 and 1996, respectively.
Management's plans in regard to these matters are also described in Note 10(a).
The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
/s/ TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP
TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP
New York, New York
June 30, 1997
-57-
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships)
CONDENSED BALANCE SHEETS
ASSETS
March 31
---------------------------
1997 1996
----------- -----------
Cash and cash equivalents $ 2,837,023 $ 4,492,602
Cash held in escrow 1,071,897 1,886,768
Investment in subsidiary partnerships 55,100,895 62,820,499
Other assets 245,466 245,466
----------- -----------
Total assets $59,255,281 $69,445,335
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Due to general partner and affiliates $ 1,917,071 $ 1,958,583
Other liabilities 0 2,893
----------- -----------
Total liabilities 1,917,071 1,961,476
Partners' equity 57,338,210 67,483,859
----------- -----------
Total liabilities and partners' equity $59,255,281 $69,445,335
=========== ===========
Investments in sudsidiary partnerships are recorded in accordance with the
equity method of accounting, under which investments are not reduced below zero.
Accordingly, partners' equity on the consolidated balance sheet will differ from
partners' equity shown above.
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended March 31
--------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Revenues
Other income $ 131,606 $ 141,845 $ 171,729
------------ ------------ ------------
Total revenues $ 131,606 $ 141,845 $ 171,729
------------ ------------ ------------
Expenses
General and administrative 248,865 227,513 239,942
General and administrative-related parties 1,606,344 924,662 1,232,898
Amortization 0 0 5,000
------------ ------------ ------------
Total expenses 1,855,209 1,152,175 1,477,840
------------ ------------ ------------
Loss from operations (1,723,603) (1,010,330) (1,306,111)
------------ ------------ ------------
Distribution income of subsidiary partnerships
in excess of investments 12,956 2,681 0
Equity in loss of subsidiary partnerships (8,435,002) (7,545,818) (7,130,614)
------------ ------------ ------------
Net loss $(10,145,649) $ (8,553,467) $ (8,436,725)
============ ============ ============
</TABLE>
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended March 31
--------------------------------------------
1997 1996 1995*
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(10,145,649) $ (8,553,467) $ (8,436,725)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization 0 0 5,000
(Increase) decrease in assets:
Other assets 0 52,348 (52,349)
Cash held in escrow 0 672,600 0
Increase (decrease) in liabilities:
Due to general partners and affiliates (41,512) 767,976 963,973
Other liabilities (2,893) 2,893 (21,409)
------------ ------------ ------------
Total adjustments (44,405) 1,495,817 895,215
------------ ------------ ------------
Net cash used in operating activities (10,190,054) (7,057,650) (7,541,510)
------------ ------------ ------------
Cash flows from investing activities:
Equity in loss of subsidiary partnerships 8,435,002 7,545,818 7,130,614
Distributions from subsidiary partnerships 99,473 187,921 112,579
Investments in subsidiary partnerships (814,871) (379,247) (707,599)
Decrease in cash held in escrow-
purchase price payments 814,871 379,247 0
------------ ------------ ------------
Net cash provided by investing activities 8,534,475 7,733,739 6,535,594
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents (1,655,579) 676,089 (1,005,916)
------------ ------------ ------------
Cash and cash equivalents, beginning of year 4,492,602 3,816,513 4,822,429
------------ ------------ ------------
Cash and cash equivalents, end of year $ 2,837,023 $ 4,492,602 $ 3,816,513
============ ============ ============
</TABLE>
*Reclassified for comparative purposes.
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 1997
<TABLE>
<CAPTION>
Initial Cost
to Partnership Cost
------------------------------ Capitalized
Carrying Buildings Subsequent to
Amount of and Acquisition:
Description Mortgages Land Improvements Improvements
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
C.V. Bronx Associates, L.P.
Bronx, NY $ 0 $ 1,705,800 $ 0 $ 4,244,915
Michigan Rural Housing Limited Partnership
Michigan 4,711,773 141,930 4,013,207 1,927,859
Jefferson Limited Partnership
Schreveport, LA 1,378,235 65,000 3,289,429 50,806
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 1,651,096 36,643 3,290,524 78,864
RBM Associates
Philadelphia, PA 975,000 0 1,590,733 72,853
Glenbrook Associates
Atglen, PA 1,655,430 137,000 2,833,081 123,724
Affordable Flatbush Associates
Brooklyn, NY 1,655,438 0 2,551,365 175,614
Barclay Village II, LTD
Chambersburg, PA 2,725,933 204,825 3,249,918 527,397
1850 Second Avenue Associates, L.P.
New York, NY 0 920,472 6,262,968 (54,340)
R.P.P. Limited Dividend Housing
Detroit, MI 31,390,000 0 29,051,380 (13,457,858)
Williamsburg Residential II, L.P.
Witchita, KS 1,516,177 358,305 2,713,872 (1,211,361)
West 104th Street Associates, L.P.
New York, NY 0 0 0 3,011,826
Meredith Apartments, LTD
Salt Lake City, UT 648,454 40,000 1,500,117 20,962
Ritz Apartments, LTD
Salt Lake City, UT 319,340 59,760 592,704 77,291
Ashby Apartments, LTD
Salt Lake City, UT 319,340 50,850 549,611 128,546
South Toledo Associates, LTD
Toledo, OH 842,883 47,571 1,411,386 44,416
Dunlap School Venture
Philadelphia, PA 2,483,226 5,352 4,522,721 145,546
Philipsburg Elderly Housing Associates
Philipsburg, PA 3,276,037 45,000 4,092,500 418,562
Franklin Elderly Housing Associates
Franklin, PA 2,355,849 165,000 2,594,447 135,748
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 3,538,212 65,000 4,234,049 499,949
Lancashire Towers Associates L.P.
Cleveland, OH 3,346,216 265,000 6,871,575 318,666
Northwood Associates Limited Partnership
Toledo, OH 2,145,953 200,000 4,065,856 311,266
Brewery Renaissance Associates
Middletown, NY 3,375,000 77,220 102,780 6,149,166
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at which
Carried At Close of Period
------------------------------------------------
Buildings
and Accumulated
Description Land Improvements Total Depreciation
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
C.V. Bronx Associates, L.P.
Bronx, NY $ 1,439,504 $ 4,511,211 $ 5,950,715 $ 942,772
Michigan Rural Housing Limited Partnership
Michigan 148,716 5,934,280 6,082,996 1,527,580
Jefferson Limited Partnership
Schreveport, LA 71,786 3,333,449 3,405,235 763,327
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 43,429 3,362,602 3,406,031 873,750
RBM Associates
Philadelphia, PA 6,786 1,656,800 1,663,586 260,775
Glenbrook Associates
Atglen, PA 143,786 2,950,019 3,093,805 714,787
Affordable Flatbush Associates
Brooklyn, NY 6,787 2,720,192 2,726,979 714,088
Barclay Village II, LTD
Chambersburg, PA 211,611 3,770,529 3,982,140 994,103
1850 Second Avenue Associates, L.P.
New York, NY 392,457 6,736,643 7,129,100 1,665,206
R.P.P. Limited Dividend Housing
Detroit, MI 6,786 15,586,736 15,593,522 826,104
Williamsburg Residential II, L.P.
Witchita, KS 362,484 1,498,332 1,860,816 436,334
West 104th Street Associates, L.P.
New York, NY 6,787 3,005,039 3,011,826 590,733
Meredith Apartments, LTD
Salt Lake City, UT 46,787 1,514,292 1,561,079 389,895
Ritz Apartments, LTD
Salt Lake City, UT 66,547 663,208 729,755 184,767
Ashby Apartments, LTD
Salt Lake City, UT 57,637 671,370 729,007 169,390
South Toledo Associates, LTD
Toledo, OH 51,677 1,451,696 1,503,373 256,287
Dunlap School Venture
Philadelphia, PA 9,458 4,664,161 4,673,619 755,080
Philipsburg Elderly Housing Associates
Philipsburg, PA 68,101 4,487,961 4,556,062 1,285,863
Franklin Elderly Housing Associates
Franklin, PA 169,106 2,726,089 2,895,195 852,694
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 69,106 4,729,892 4,798,998 1,472,955
Lancashire Towers Associates L.P.
Cleveland, OH 269,106 7,186,135 7,455,241 1,826,551
Northwood Associates Limited Partnership
Toledo, OH 204,106 4,373,016 4,577,122 1,087,130
Brewery Renaissance Associates
Middletown, NY 81,326 6,247,840 6,329,166 1,344,807
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements is
Description Renovation Acquired Computed(a)(b)
----------- ---- ---- --------------
<S> <C> <C> <C>
C.V. Bronx Associates, L.P.
Bronx, NY 1990 June 1989 15-27.5 years
Michigan Rural Housing Limited Partnership
Michigan 1989 Sept. 1989 27.5 years
Jefferson Limited Partnership
Schreveport, LA 1990 Dec. 1989 27.5 years
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 1989 Oct. 1989 27.5 years
RBM Associates
Philadelphia, PA 1989 Dec. 1989 40 years
Glenbrook Associates
Atglen, PA 1989 Nov. 1989 27.5 years
Affordable Flatbush Associates
Brooklyn, NY 1989 Dec. 1989 27.5 years
Barclay Village II, LTD
Chambersburg, PA 1989 Nov. 1989 27.5 years
1850 Second Avenue Associates, L.P.
New York, NY 1989 Nov. 1989 27.5 years
R.P.P. Limited Dividend Housing
Detroit, MI 1989 Nov. 1989 27-31 years
Williamsburg Residential II, L.P.
Witchita, KS 1989 Nov. 1989 40 years
West 104th Street Associates, L.P.
New York, NY 1990 Dec. 1989 27.5 years
Meredith Apartments, LTD
Salt Lake City, UT 1989 Aug. 1989 27.5 years
Ritz Apartments, LTD
Salt Lake City, UT 1989 Aug. 1989 27.5 years
Ashby Apartments, LTD
Salt Lake City, UT 1989 Aug. 1989 27.5 years
South Toledo Associates, LTD
Toledo, OH 1988 Jan. 1990 40 years
Dunlap School Venture
Philadelphia, PA 1989 Jan. 1990 40 years
Philipsburg Elderly Housing Associates
Philipsburg, PA 1990 Feb. 1990 27.5 years
Franklin Elderly Housing Associates
Franklin, PA 1989 Feb. 1990 27.5 years
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 1989 Feb. 1990 27.5 years
Lancashire Towers Associates L.P.
Cleveland, OH 1989 Feb. 1990 27.5 years
Northwood Associates Limited Partnership
Toledo, OH 1989 Feb. 1990 27.5 years
Brewery Renaissance Associates
Middletown, NY 1990 Feb. 1990 27.5 years
</TABLE>
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 1997
<TABLE>
<CAPTION>
Initial Cost
to Partnership Cost
------------------------------ Capitalized
Carrying Buildings Subsequent to
Amount of and Acquisition:
Description Mortgages Land Improvements Improvements
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Brandywine Court Associates, L.P.
Jacksonville, FL 1,434,112 78,000 1,960,262 69,916
Art Apartments Associates
Philadelphia, PA 1,150,697 13,695 2,713,615 56,237
The Village at Carriage Hills, LTD
Clinton, TN 1,473,005 86,663 1,753,799 58,758
Mountainview Apartments, LTD,
Newport, TN 1,044,744 49,918 1,254,182 60,361
The Park Village, Limited
Jackson, MS 379,613 44,102 749,940 70,247
River Oaks Apartments, LTD
Oneonta, AL 1,073,654 80,340 1,221,336 51,117
Forrest Ridge Apartments, LTD
Forrest City, AR 824,050 36,000 1,016,647 63,884
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 2,940,239 242,550 4,667,594 61,725
Redemptorist L.P.
New Orleans, LA 2,827,106 0 6,497,259 51,202
Manhattan A Associates
New York, NY 4,153,624 1,092,959 5,991,888 358,970
Broadhurst Willows, L.P.
New York, NY 0 102,324 5,151,039 53,644
Weidler Associates Limited Partnership
Portland, OR 1,269,384 225,000 0 2,162,927
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 3,652,434 327,650 4,276,739 154,993
Lake Forest Estates II, LTD
Livingston, AL 969,820 21,623 1,182,480 47,776
Las Camelias L.P.
Rio Piedras, PR 6,361,166 249,000 6,400 9,263,253
WPL Associates XIIII
Portland, OR 2,256,039 0 3,721,763 173,781
Broadway Townhouses L.P.
Camden, NJ 10,754,004 163,000 5,120,066 14,424,001
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 4,025,000 0 0 6,486,343
Citrus Meadows Apartments, LTD
Brandenton, FL 7,323,400 610,073 0 9,377,919
Sartain School Venture
Philadelphia, PA 1,962,305 3,883 3,486,875 118,629
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL 7,021,951 270,000 7,753,765 193,081
Holly Hill, LTD
Greenville, TN 1,393,621 50,000 1,631,820 116,552
Mayfair Apartments LTD
Morristown, TN 1,377,999 50,000 1,614,861 78,719
Foxcroft Apartments
LTD. Troy, AL 1,249,993 75,000 1,382,973 114,551
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at which
Carried At Close of Period
------------------------------------------------
Buildings
and Accumulated
Description Land Improvements Total Depreciation
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Brandywine Court Associates, L.P.
Jacksonville, FL 82,106 2,026,072 2,108,178 611,491
Art Apartments Associates
Philadelphia, PA 17,801 2,765,746 2,783,547 663,004
The Village at Carriage Hills, LTD
Clinton, TN 90,769 1,808,451 1,899,220 455,238
Mountainview Apartments, LTD,
Newport, TN 54,024 1,310,437 1,364,461 355,022
The Park Village, Limited
Jackson, MS 48,208 816,081 864,289 216,093
River Oaks Apartments, LTD
Oneonta, AL 84,446 1,268,347 1,352,793 248,680
Forrest Ridge Apartments, LTD
Forrest City, AR 40,106 1,076,425 1,116,531 198,785
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 246,656 4,725,213 4,971,869 1,515,377
Redemptorist L.P.
New Orleans, LA 4,106 6,544,355 6,548,461 1,506,372
Manhattan A Associates
New York, NY 1,097,065 6,346,752 7,443,817 1,544,041
Broadhurst Willows, L.P.
New York, NY 106,430 5,200,577 5,307,007 1,795,529
Weidler Associates Limited Partnership
Portland, OR 229,106 2,158,821 2,387,927 476,817
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 331,756 4,427,626 4,759,382 1,409,788
Lake Forest Estates II, LTD
Livingston, AL 25,729 1,226,150 1,251,879 218,987
Las Camelias L.P.
Rio Piedras, PR 298,878 9,219,775 9,518,653 2,014,070
WPL Associates XIIII
Portland, OR 4,106 3,891,438 3,895,544 974,282
Broadway Townhouses L.P.
Camden, NJ 167,106 19,539,961 19,707,067 4,513,650
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 156,842 6,329,501 6,486,343 1,267,980
Citrus Meadows Apartments, LTD
Brandenton, FL 812,609 9,175,383 9,987,992 2,188,902
Sartain School Venture
Philadelphia, PA 7,989 3,601,398 3,609,387 578,532
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL 274,106 7,942,740 8,216,846 2,926,235
Holly Hill, LTD
Greenville, TN 54,106 1,744,266 1,798,372 412,476
Mayfair Apartments LTD
Morristown, TN 54,106 1,689,474 1,743,580 304,317
Foxcroft Apartments
LTD. Troy, AL 79,106 1,493,418 1,572,524 263,653
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements is
Description Renovation Acquired Computed(a)(b)
----------- ---- ---- --------------
<S> <C> <C> <C>
Brandywine Court Associates, L.P.
Jacksonville, FL 1988 Nov. 1989 27.5 years
Art Apartments Associates
Philadelphia, PA 1990 Mar. 1990 27.5 years
The Village at Carriage Hills, LTD
Clinton, TN 1990 Mar. 1990 25-40 years
Mountainview Apartments, LTD,
Newport, TN 1990 Mar. 1990 25-40 years
The Park Village, Limited
Jackson, MS 1990 Mar. 1990 40 years
River Oaks Apartments, LTD
Oneonta, AL 1990 Mar. 1990 25-40 years
Forrest Ridge Apartments, LTD
Forrest City, AR 1990 Mar. 1990 25-40 years
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 1990 Mar. 1990 15-27.5 years
Redemptorist L.P.
New Orleans, LA 1990 Mar. 1990 27.5 years
Manhattan A Associates
New York, NY 1990 Apr. 1990 27.5 years
Broadhurst Willows, L.P.
New York, NY 1990 Apr. 1990 25 years
Weidler Associates Limited Partnership
Portland, OR 1990 May 1990 15-27.5 years
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 1990 June 1990 27.5 years
Lake Forest Estates II, LTD
Livingston, AL 1990 June 1990 25-40 years
Las Camelias L.P.
Rio Piedras, PR 1990 June 1990 27.5 years
WPL Associates XIIII
Portland, OR 1990 July 1990 27.5 years
Broadway Townhouses L.P.
Camden, NJ 1990 July 1990 27.5 years
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 1990 Aug. 1990 27.5 years
Citrus Meadows Apartments, LTD
Brandenton, FL 1990 July 1990 27.5 years
Sartain School Venture
Philadelphia, PA 1990 Aug. 1990 15-40 years
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL 1989 Sept. 1990 27.5 years
Holly Hill, LTD
Greenville, TN 1990 Oct. 1990 25-40 years
Mayfair Apartments LTD
Morristown, TN 1990 Oct. 1990 25-40 years
Foxcroft Apartments
LTD. Troy, AL 1990 Oct. 1990 25-40 years
</TABLE>
<PAGE>
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 1997
<TABLE>
<CAPTION>
Initial Cost
to Partnership Cost
------------------------------ Capitalized
Carrying Buildings Subsequent to
Amount of and Acquisition:
Description Mortgages Land Improvements Improvements
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Canterbury Apartments, LTD
Indianola, MS 1,433,550 33,000 1,738,871 56,072
Cutler Canal III Associates, LTD
Miami, FL 7,890,584 1,269,265 0 11,933,201
Jefferson Place L.P.
Olathe, KS 12,800,000 531,063 13,477,553 44,416
Callaway Village, LTD
Clinton, TN 1,407,599 66,000 1,613,920 102,054
Commerce Square Apartments Associates L.P.
Smyrna, DE 2,882,728 303,837 0 4,785,670
West 132nd Development Partnership
New York, NY 1,758,392 0 0 2,774,352
Site H Development Co.
Brookyn, NY 770,861 0 1,346,000 44,416
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 6,209,514 752,000 693,995 6,279,561
Diamond Phase II Venture
Philadelphia, PA 1,888,883 0 0 3,989,774
Bookbindery Associates
Philadelphia, PA 1,529,189 0 0 3,841,469
The Hamlet, LTD
Boynton, FL 8,350,005 1,180,482 0 13,324,425
Stop 22 Limited Partnership
Santurce, PR 8,527,146 0 4,025,481 6,856,316
Knob Hill Apartments, LTD
Greenville, TN 1,480,586 75,085 0 1,822,528
Conifer James Street Associates
Syracuse, NY 2,510,607 57,034 0 4,433,443
Longfellow Heights Apartments, L.P.
Kansas City, MO 4,132,936 0 7,739,692 194,108
------------ ------------ ------------ ------------
$200,800,132 $ 12,730,274 $183,175,038 $107,890,808
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at which
Carried At Close of Period
------------------------------------------------
Buildings
and Accumulated
Description Land Improvements Total Depreciation
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Canterbury Apartments, LTD
Indianola, MS 37,106 1,790,837 1,827,943 329,274
Cutler Canal III Associates, LTD
Miami, FL 1,273,507 11,928,959 13,202,466 1,421,132
Jefferson Place L.P.
Olathe, KS 535,169 13,517,863 14,053,032 4,024,075
Callaway Village, LTD
Clinton, TN 70,106 1,711,868 1,781,974 304,376
Commerce Square Apartments Associates L.P.
Smyrna, DE 307,943 4,781,564 5,089,507 631,185
West 132nd Development Partnership
New York, NY 13,106 2,761,246 2,774,352 411,617
Site H Development Co.
Brookyn, NY 4,106 1,386,310 1,390,416 351,896
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 759,229 6,966,327 7,725,556 1,125,528
Diamond Phase II Venture
Philadelphia, PA 22,081 3,967,693 3,989,774 530,193
Bookbindery Associates
Philadelphia, PA 29,105 3,812,364 3,841,469 515,513
The Hamlet, LTD
Boynton, FL 1,184,587 13,320,320 14,504,907 2,598,685
Stop 22 Limited Partnership
Santurce, PR 216,918 10,664,879 10,881,797 2,151,799
Knob Hill Apartments, LTD
Greenville, TN 79,190 1,818,423 1,897,613 300,034
Conifer James Street Associates
Syracuse, NY 61,139 4,429,338 4,490,477 958,673
Longfellow Heights Apartments, L.P.
Kansas City, MO 204 7,933,596 7,933,800 1,204,828
------------ ------------ ------------ ------------
$ 12,894,634 $290,901,486 $303,796,120 $ 63,453,107
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements is
Description Renovation Acquired Computed(a)(b)
----------- ---- ---- --------------
<S> <C> <C> <C>
Canterbury Apartments, LTD
Indianola, MS 1990 Oct. 1990 25-40 years
Cutler Canal III Associates, LTD
Miami, FL 1990 Oct. 1990 40 years
Jefferson Place L.P.
Olathe, KS 1990 Oct. 1990 19 years
Callaway Village, LTD
Clinton, TN 1990 Nov. 1990 25-40 years
Commerce Square Apartments Associates L.P.
Smyrna, DE 1990 Dec. 1990 27.5-40 years
West 132nd Development Partnership
New York, NY 1990 Dec. 1990 40 years
Site H Development Co.
Brookyn, NY 1990 Dec. 1990 27.5 years
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 1990 Dec. 1990 35 years
Diamond Phase II Venture
Philadelphia, PA 1990 Dec. 1990 40 years
Bookbindery Associates
Philadelphia, PA 1990 Dec. 1990 40 years
The Hamlet, LTD
Boynton, FL 1990 Dec. 1990 27.5 years
Stop 22 Limited Partnership
Santurce, PR 1990 Dec. 1990 27.5-31.5 years
Knob Hill Apartments, LTD
Greenville, TN 1990 Dec. 1990 40 years
Conifer James Street Associates
Syracuse, NY 1990 Dec. 1990 15-27.5 years
Longfellow Heights Apartments, L.P.
Kansas City, MO 1991 Mar. 1991 40 years
</TABLE>
(a) Personal property is depreciated primarily by the straight line method over
the estimated useful life ranging from 5 to 10 years
(b) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight line method over the estimated useful
life determined by the Partnership date of acquisition.
<TABLE>
<CAPTION>
Cost of Property and Equipment Accumulated Depreciation
------------------------------------------ ------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------
1997 1996 1995 1997 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $332,529,029 $331,283,225 $330,297,974 $ 61,814,023 $ 49,956,736 $ 38,402,455
Additions during period:
Improvements 819,881 1,290,504 1,003,244
Depreciation expense 0 0 0 11,108,603 11,885,729 11,565,888
Deductions during period:
Provision for impairment 29,552,315 0 0 9,469,214 0 0
Dispositions 475 44,700 17,993 305 28,442 11,607
------------ ------------ ------------ ------------ ------------ ------------
Balance at close of period $303,796,120 $332,529,029 $331,283,225 $ 63,453,107 $ 61,814,023 $ 49,956,736
============ ============ ============ ============ ============ ============
</TABLE>
At the time the local partnerships were acquired by Liberty Tax Credit Plus III
L.P., the entire purchase price paid by Liberty Tax Credit Plus III L.P. was
pushed down to the local partnerships as property and equipment with an
offsetting credit to capital. Since the projects were in the construction phase
at the time of acquisition, the capital accounts were insignificant at the time
of purchase. Therefore, there are no material differences between the original
cost basis for tax and GAAP.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the
financial statements for Liberty Tax Credit Plus III L.P. and is qualified in
its entirety by reference to such financial statements
</LEGEND>
<CIK> 0000843076
<NAME> Liberty Tax Credit Plus III L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 6,518,662
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,530,681
<PP&E> 303,796,120
<DEPRECIATION> 63,453,107
<TOTAL-ASSETS> 268,870,640
<CURRENT-LIABILITIES> 57,946,456
<BONDS> 200,800,132
0
0
<COMMON> 0
<OTHER-SE> 7,866,998
<TOTAL-LIABILITY-AND-EQUITY> 268,870,640
<SALES> 0
<TOTAL-REVENUES> 33,542,935
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 53,060,105
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,768,603
<INCOME-PRETAX> (35,442,296)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,442,296)
<EPS-PRIMARY> (251.13)
<EPS-DILUTED> 0
</TABLE>
