GREATER GADSDEN HOUSING AUTHORITY

GREATER GADSDEN HOUSING AUTHORITY FINANCIAL STATEMENTS JUNE 30, 2017

GREATER GADSDEN HOUSING AUTHORITY TABLE OF CONTENTS

MANAGEMENT'S DISCUSSION AND ANALYSIS INDEPENDENT AUDITORS' REPORT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE FINANCIAL STATEMENTS Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows Notes to Financial Statements SUPPLEMENTARY INFORMATION Schedule of Capital Fund Program Costs ? Uncompleted Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs Financial Data Schedules

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GREATER GADSDEN HOUSING AUTHORITY MANAGEMENT'S DISCUSSION & ANALYSIS

FOR THE YEAR ENDED JUNE 30, 2017

The Greater Gadsden Housing Authority (GGHA) presents this Management's Discussion and Analysis (MD&A) to be used in conjunction with the GGHA's financial statements for the period ended June 30, 2017.

Financial Highlights and Conclusions:

Total Revenues increased by $1,822,517 or 24.97%, from $7,299,819 at fiscal year ended 2016 to $9,122,336 at fiscal year ended 2017. Total Operating Revenues decreased by $219,773 or (3.22%) from $6,832,002 at fiscal year ended 2016 to $6,611,871 at fiscal year ended 2017. Total Non-Operating Revenue increased by $2,042,290 or 436.56%, from $467,817 at fiscal year ended 2016 to $2,510,107 at fiscal year ended 2017. This increase in revenue is primarily due to the sale of the Siberton property and the use of Capital Funds. The Siberton property was owned by the non-profit, Landmark Ventures, which produced a gain on the sale of fixed assets of $1,063,674. The GGHA held off on the use of capital funds for the fiscal year ended 2016 in order to combine grants and contract for services using both 2016 and 2017 capital fund grants. By using this strategy, Capital Fund Grants increased by $980,284 or 220.36% for fiscal year ended 2017, from $444,852 at fiscal year ended 2016 to $1,425,136 at fiscal year ended 2017.

The Siberton property of approximately 21.6 acres and located on County Road 77 in Gadsden, AL, was owned by the non-profit, Landmark Ventures. This property was held for sale for many years and had several contracts over the years for sales that did not go through. The value on the books for this property was $16,826, and the sales price was $1,150,000. Closing costs amounted to $69,500 netting cash of $1,080,500 paid to Landmark Ventures. The GGHA intends to implement a Homeownership Program for LowRent Housing residents with use of these funds.

Total Operating Expenses increased by a slight $34,487 or .42% from $8,221,815 at fiscal year ended 2016 to $8,256,302 at fiscal year ended 2017. This is a healthy trend and representative of the GGHA's efforts to minimize costs.

Net Position increased by $763,336 or 3.9%, from $19,548,061 in fiscal year ended 2016 to $20,311,397 in fiscal year ended 2017. The change in Net Position is the combined total of Total Revenue of $9,122,336 less Total Expenses of $8,359,000. This increase is primarily due to the proceeds of the sale of the Siberton property for fiscal year ended 2017, as well as the use of Capital Funds to repair and replace water lines and power poles at Colley Homes, Carver Village, Emma Sansom Homes, Gateway Village, Campbell Court, and Starnes Park.

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GREATER GADSDEN HOUSING AUTHORITY MANAGEMENT'S DISCUSSION & ANALYSIS - CONTINUED

FOR THE YEAR ENDED JUNE 30, 2017

Listed below is an analysis of the Statement of Revenues, Expenses, and Changes in Fund Net Position which reflect the increase(decrease) from fiscal year ended 2017 to fiscal year ended 2016 and the approximate percent of change.

Line item Analysis of Statement of Revenues, Expenses, and Changes in Fund Net Position

Operating Revenues: Tenant Rental Revenue (net) Other Revenue Fraud Recovery HUD Operating Grants Total Operating Revenue

Non-operating Revenue: HUD Capital Grants Gain on sale of fixed assets Investment Income - Unrestricted Investment Income - Restricted Total Non-Operating Revenue

June 30, 2017 June 30, 2016

$2,552,353 165,800 8,614

3,885,462 6,612,229

$ 2,515,922 156,673 3,884

4,155,523 6,832,002

1,425,136 1,069,025

15,700 246

2,510,107

444,852 3,561 19,087 317

467,817

Increase (Decrease)

% of Change

$ 36,431 9,127 4,730

(270,061) (219,773)

1.45% 5.83% 121.78% (6.50)% (3.22)%

980,284 1,065,464

(3,387) (71)

2,042,290

220.36% 29,920.36% (17.75)% (22.40)% 436.56%

Total Revenue

9,122,336

7,299,819

1,822,517 24.97%

Operating Expenses: Administration (lines 911 - 919) Tenant Services (lines 920 - 924) Ordinary Maintenance (941-945) General Expense (961-964) Utilities (931-938) Protective Services (952-953) Housing Assistance Payments Depreciation Total Operating Expenses

Non-Operating Expenses: Interest Expense (96710 and 96730) Casualty Losses (972) Total Non-Operating Expenses

1,375,281 910,341

1,825,517 408,826

1,556,207 166,064 426,843

1,587,223 8,256,302

72,827 29,871 102,698

1,334,297 915,885

1,756,808 461,072

1,467,126 167,622 450,053

1,668,952 8,221,815

105,179 3,156

108,335

40,984 (5,544) 68,709 (52,246) 89,081 (1,558) (23,210) (81,729) 34,487

3.07% (0.61)% 3.91% (11.33)% 6.07% (0.93)% (5.16)% (4.90)% 0.42%

(32,352) 26,715 (5,637)

(30.76)% 846.48%

(5.20)%

Total Expenses

8,359,000

8,330,150

28,850

0.35%

Increase (Decrease) in Net Position Net Position, Beginning of Year Net Position, End of Year

763,336 19,548,061 $20,311,397

(1,030,331) 20,578,392 $19,548,061

1,793,667 (1,030,331) $ 763,336

(174.09)% (5.01)% 3.90%

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GREATER GADSDEN HOUSING AUTHORITY MANAGEMENT'S DISCUSSION & ANALYSIS - CONTINUED

FOR THE YEAR ENDED JUNE 30, 2017

Listed below is an analysis of the Statement of Net Position which reflect the increase(decrease) from fiscal year ended 2017 to fiscal year ended 2016 and the approximate percent of change. Asset and Liability accounts are summarized as to current and non-current totals. Details may be found included with the financial statements.

Line item Analysis of Statement of Net Position

Current Assets Capital Assets Net of Depreciation Other Non-Current Assets

Total Assets

June 30, 2017

$ 5,267,039 18,054,426

245,781 $23,567,246

June 30, 2016

$ 4,547,493 18,281,518

221,995 $23,051,006

Increase (Decrease)

$ 719,546 (227,092)

23,786 $516,240

% of Change

15.82% (1.24)% 10.71% 2.24%

Current Liabilities Non-Current Liabilities

Total Liabilities

Investment in Capital Assets Restricted Net Position Unrestricted Net Position

Net Position

$ 921,284 2,334,565 3,255,849

15,547,335 260,844

4,503,218 $20,311,397

$ 838,704 2,664,241 3,502,945

15,453,318 212,596

3,882,147 $19,548,061

$ 82,580 (329,676) (247,096)

94,017 48,248 621,071 $763,336

9.85% (12.37)% (7.05)%

0.61% 22.69% 15.99% 3.90%

Summary of Capital Fund Program

The GGHA had three Capital Fund Program (CFP) grants in progress during fiscal year ended 2017, AL09P049501-14 (2014) in the amount of $1,218,358, AL09P049501-15 (2015) in the amount of $1,239,925, and AL09P049501-16 (2016) in the amount of $1,217,313.

As stated in fiscal year ended 2016 discussion, renovation of the Colley Homes Community began in fiscal year ended 2014 with a contract executed with JBS Construction, Inc. of Amory, Mississippi on June 19, 2013 for modernization of a total of 20 units. Funds from CFP AL09P049501-11 (2011) in the amount of $439,385 and a portion of the CFP AL09P049501-12 (2012) in the amount of $588,641 distributed the total contract amount of $1,028,027. CFP 50111 was completed and reviewed in fiscal year ended 2014 audit report. The balance of retainage left on CFP 501-12 was drawn down on December 30, 2015. A Final Cost Certification was approved by HUD for CFP AL09P049501-12 (2012) on June 14, 2016 and the final review by the auditor was completed in fiscal year ended June 30, 2016.

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