Back to GetFilings.com
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, 2004
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
incorporation or organization) Identification No.)
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]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes No X
----- -----
The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 30, 2003 was
$(73,892,000), based on Limited Partner equity (deficit) as of such date.
DOCUMENTS INCORPORATED BY REFERENCE
None
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", and together
with the Related General Partner, the "General Partners"). The general partner
of the Related General Partner is Related Credit Properties III Inc., a Delaware
corporation. On November 17, 2003, CharterMac acquired Related Capital Company,
which is the indirect parent of RCC Manager LLC, the sole shareholder of Related
Credit Properties III Inc. Pursuant to the acquisition, CharterMac acquired
controlling interests in the General Partners. This acquisition did not affect
the Partnership or its day-to-day operations, as the majority of the General
Partners' management team remained unchanged.
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, and some of which ("Rehabilitation Projects"; and together with the
Apartment Complexes, the "Properties") are eligible for the historic
rehabilitation tax credit ("Historic Rehabilitation Tax Credit"; and together
with the Housing Tax Credit, the "Tax Credits"). 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. The Partnership does not
anticipate making any additional investments. As of March 31, 2004 the
Partnership has disposed of two of its 62 original Properties. See Item 2,
Properties, below.
Liberty Associates is the special limited partner in all of the remaining Local
Partnerships. Liberty Associates has certain rights and obligations in its role
as special limited partner which permit this affiliate of the registrant to
exercise control over the management and policies of the Local Partnerships.
The investment objectives of the Partnership are to:
1. Entitle qualified BACs holders to substantial 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 Property.
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
Properties.
4. Provide cash distributions when available from the operations of the
Properties, current taxes on which are expected to be substantially deferred.
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.
2
One of the Partnership's objectives is to entitle qualified BACs holders to 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 (the "Compliance Period") commencing at the beginning
of the Credit Period. Once a Local Partnership has become eligible to recognize
Housing Tax Credits, it may lose such eligibility and suffer an event of
"recapture" if (1) the Partnership ceases to meet qualification requirements ,
(2) there is a decrease in the qualified basis of the property, or (3) there is
a reduction in the taxpayer's interest in the property at any time during the
Compliance Period. None of the Local Partnerships in which the Partnership has
acquired an interest has suffered an event of recapture.
As of March 31, 2004, the Credit Periods for all of the Properties have expired,
although each Local Partnership must continue to comply with the Tax Credit
requirements until the end of the Compliance Period in order to avoid recapture
of the Tax Credits. The Compliance Periods are scheduled to expire at various
times through December 31, 2008.
The Partnership no longer continues to meet its primary objective of generating
Tax Credits. The Partnership generated Tax Credits of approximately $69,000,
$1,274,000 and $8,019,000 during the tax years 2003, 2002 and 2001,
respectively.
The Partnership 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.
Cash distributions received from the Local Partnerships have been relatively
immaterial. Management does not expect that the distributions received from the
Local Partnerships will be sufficient to permit cash distributions to BACs
holders. The Partnership does not anticipate providing cash distributions to
BACs holders other than distributions of sale or refinancing proceeds upon the
disposition of Properties.
There can be no assurance that the Partnership will continue to achieve any of
its investment objectives in the future.
Certain Subsidiary Partnerships are the beneficiaries of certain subsidy
agreements pursuant to which the United States Department of Housing and Urban
Development ("HUD") subsidizes the amount of rent that the Subsidiary
Partnership earns. Pursuant to those subsidy agreements, the Subsidiary
Partnerships are subject to HUD restrictions which limit annual cash
distributions to partners and restrict the Subsidiary Partnerships 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 Subsidiary Partnerships to qualify for the section 421A
program ("Section 421A Program") and the inclusionary zoning program
("Inclusionary Zoning Program"), they must comply with 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.
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, such as 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
owner's 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.
3
Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential properties.
Competition
- -----------
The real estate business is highly competitive and substantially all of the
Properties in which the Partnership has acquired an interest 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").
4
Item 2. Properties.
As of March 31, 2004 the Partnership held a 98% limited partnership interest in
59 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 60 Local
Partnerships own 64 apartment complexes. During the year ended March 31, 2004,
the Partnership sold the property and related assets and liabilities of one
Local Partnership. Through the year ended March 31, 2004, the Partnership has
sold the property and related assets and liabilities of one Local Partnership
and its limited partnership interest in a second Local Partnership. 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 15. Schedule III.
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- -------------- ---- ---- ---- ---- ----
C.V. Bronx Associates, L.P./
Gerald Gardens
Bronx, NY (121) June 1989 98 100 98 95 98
Michigan Rural Housing
Limited Partnership
Michigan (192)(a) September 1989 97 95 86 96 90
Jefferson Limited Partnership
Schreveport, LA (69) December 1989 96 100 99 92 96
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI (36) October 1989 94 100 100 100 100
RBM Associates/Spring Garden
Philadelphia, PA (8) December 1989 100 100 100 89 89
Glenbrook Associates
Atglen, PA (35) November 1989 100 94 100 100 100
Affordable Flatbush Associates
Brooklyn, NY (30) December 1989 97 97 97 93 100
Barclay Village II, LTD
Chambersburg, PA (87) November 1989 98 95 99 99 97
1850 Second Avenue Associates, L.P.
New York, NY (48) October 1989 94 98 98 100 100
R.P.P. Limited Dividend Housing/
River Place
Detroit, MI (301) November 1989 90 91 94 97 98
Williamsburg Residential II, L.P.
Wichita, KS (50) November 1989 52 84 91 93 64
West 104th Street Associates L.P.
New York, NY (56) December 1989 100 100 100 100 100
Meredith Apartments, LTD
Salt Lake City, UT (22) August 1989 100 77 86 100 91
Ritz Apartments, LTD
Salt Lake City, UT (30) August 1989 90 79 97 83 90
Ashby Apartments, LTD
Salt Lake City, UT (27) August 1989 100 93 89 89 85
South Toledo Associates, LTD
Toledo, OH (18) January 1990 100 100 89 100 100
Dunlap School Venture
Philadelphia, PA (35) January 1990 91 100 91 100 100
Philipsburg Elderly Housing
Associates
Philipsburg, PA (103) February 1990 99 100 98 95 96
5
Local Partnership Schedule
--------------------------
(continued)
-----------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- -------------- ---- ---- ---- ---- ----
Franklin Elderly Housing
Associates
Franklin, PA (89) February 1990 100 99 100 100 100
Wade D. Mertz Elderly Housing
Associates
Sharpsville, PA (103) February 1990 100 100 98 99 98
Lancashire Towers Associates
Limited Partnership
Cleveland, OH (240) February 1990 91 91 100 92 92
Northwood Associates Limited
Partnership
Toledo, OH (176) February 1990 (b) (b) (b) 85 97
Brewery Renaissance Associates
Middletown, NY (53) February 1990 100 100 100 100 96
Brandywine Court Associates, L.P.
Jacksonville, FL (52) November 1989 92 100 96 87 90
Art Apartments Associates
Philadelphia, PA (30) March 1990 93 93 100 100 90
The Village at Carriage Hills, LTD
Clinton, TN (48) March 1990 100 100 100 100 100
Mountainview Apartments, LTD
Newport, TN (34) March 1990 98 100 100 100 100
The Park Village, Limited
Jackson, MS (24) March 1990 92 92 100 100 100
River Oaks Apartments, LTD
Oneonta, AL (35) March 1990 94 94 100 100 97
Forrest Ridge Apartments, LTD
Forrest City, AR (25) March 1990 96 88 100 100 100
The Hearthside Limited Dividend
Housing Association Limited
Partnership
Portage, MI (101) March 1990 99 99 98 97 91
Redemptorist Limited Partnership
New Orleans, LA (126) March 1990 94 82 88 94 91
Manhattan A Associates
New York, NY (99) April 1990 100 99 98 97 98
Broadhurst Willows, L.P.
New York, NY (129) April 1990 98 98 99 98 95
Weidler Associates Limited
Partnership
Portland, OR (52) May 1990 83 94 98 94 98
Gentle Pines-West Columbia
Associates, L.P.
Columbia, SC (150) June 1990 74 97 95 99 89
Lake Forest Estates II, LTD
Livingston, AL (32) June 1990 88 100 87 100 100
Las Camelias Limited Partnership
Rio Piedras, PR (166) June 1990 97 94 100 99 92
WPL Associates XXIII
Portland, OR (48) July 1990 92 96 97 98 90
Broadway Townhouses L.P.
Camden, NJ (175) July 1990 100 100 99 99 100
6
Local Partnership Schedule
--------------------------
(continued)
-----------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- -------------- ---- ---- ---- ---- ----
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR (67) August 1990 99 99 99 99 97
Citrus Meadows Apartments, LTD
Brandenton, FL (200) July 1990 77 86 95 96 92
Sartain School Venture
Philadelphia, PA (35) August 1990 94 100 97 97 100
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL (176) September 1990 97 97 98 99 99
Holly Hill, LTD
Greenville, TN (46) October 1990 96 91 98 98 100
Mayfair Apartments LTD
Morristown, TN (48) October 1990 96 98 89 100 100
Foxcroft Apartments LTD
Troy, AL (48) October 1990 94 96 77 94 100
Canterbury Apartments, LTD
Indianola, MS (48) October 1990 100 96 96 94 100
Cutler Canal III Associates, LTD
Miami, FL (262) October 1990 96 98 98 99 99
Jefferson Place L.P.
Olathe, KS (352) October 1990 (c) 89 90 96 98
Callaway Village, LTD
Clinton, TN (46) November 1990 89 96 89 96 100
Commerce Square Apartments
Associates L.P.
Smyrna, DE (80) December 1990 99 96 95 98 96
West 132nd Development
Partnership
New York, NY (40) December 1990 100 100 100 100 97
Site H Development Co.
Brooklyn, NY (11) December 1990 100 100 100 93 100
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA (78) December 1990 90 87 95 86 94
Diamond Phase II Venture
Philadelphia, PA (32) December 1990 84 97 97 96 91
Bookbindery Associates
Philadelphia, PA (41) December 1990 90 90 95 98 95
The Hamlet, LTD
Boynton Beach, FL (240) December 1990 99 92 90 96 95
Stop 22 Limited Partnership
Santurce, PR (153) December 1990 97 97 99 98 99
Knob Hill Apartments, LTD
Greenville, TN (48) December 1990 100 100 98 100 100
Conifer James Street Associates
Syracuse, NY (73) December 1990 94 90 94 92 97
7
Local Partnership Schedule
--------------------------
(continued)
-----------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- -------------- ---- ---- ---- ---- ----
Longfellow Heights Apartments, L.P.
Kansas City, MO (104) March 1991 96 100 92 96 99
(a) Consists of five apartment complexes located throughout Michigan.
(b) The Partnership's limited partnership interest was sold during the fiscal
year ended March 31, 2002 (see Note 10 in Item 8. Financial Statements and
Supplemental Data).
(c) The property and the related assets and liabilities were sold during the
fiscal year ended March 31, 2004 (see Note 10 in Item 8. Financial
Statements and Supplemental Data).
The General Partners have generally required, in connection with the
Partnership's investments in the Local Partnerships, that the general partners
of each Local Partnership (the "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
("Guarantee Period"). In each case, the operating deficits have been 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 aggregated approximately
$18,700,000, of which all have expired as of March 31, 2004. 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 Housing Tax Credits are available for a ten-year period which commences when
the property is occupied by qualified tenants. However, the annual Housing Tax
Credit available in the year in which the Apartment Complex was first occupied
by qualified tenants must be prorated based upon the months remaining in the
year after the Apartment Complex was placed in service. The amount of the annual
Housing 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 was allocated Housing Tax Credits
only beginning in the month following the month in which the Partnership
acquired its interest. In addition, Housing 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 qualify 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. Maximum rents
for the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indexes in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.
Management annually reviews the physical state of the Properties and suggests to
the respective Local General Partner budget improvements, which improvements are
generally funded from cash flow from operations or release of replacement
reserve escrows to the extent available.
Management annually reviews the insurance coverage of the properties and
believes such coverage is adequate.
8
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.
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 these 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 10, 2004 the Partnership has approximately 9,103 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 Subsidiary Partnerships are subject to HUD restrictions which limit
annual cash distributions to partners and restrict the Subsidiary Partnerships
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 BACs holders as of March
31, 2004. The Partnership does not anticipate providing cash distributions to
BACs holders other than distributions of sale or refinancing proceeds upon the
disposition of Properties.
9
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.
Year Ended March 31,
-------------------------------------------------------------------------------------
OPERATIONS 2004 2003 2002 2001 2000
- ---------- ------------- ------------- ------------- ------------- -------------
Revenues $ 49,605,256 $ 36,597,281 $ 36,841,341 $ 37,266,093 $ 35,444,349
Operating expenses (49,901,192) (54,422,951) (51,253,195) (51,522,177) (51,605,028)
------------- ------------- ------------- ------------- -------------
Loss before minority inter-
est and extraordinary item (295,936) (17,825,670) (14,411,854) (14,256,084) (16,160,679)
Minority interest in loss of
subsidiary partnerships 272,964 281,929 218,421 208,775 214,105
Extraordinary item-
forgiveness of indebted-
ness income 0 0 2,156,560 0 0
------------- ------------- ------------- ------------- -------------
Net loss $ (22,972) $ (17,543,741) $ (12,036,873) $ (14,047,309) $ (15,946,574)
============= ============= ============= ============= =============
Net loss - limited partners $ (22,742) $ (17,368,304) $ (11,916,504) $ (13,906,836) $ (15,787,108)
============= ============= ============= ============= =============
Net loss per BAC $ (.16) $ (124.86) $ (85.67) $ (99.98) $ (113.49)
============= ============= ============= ============= =============
Year Ended March 31,
-------------------------------------------------------------------------------------
FINANCIAL POSITION 2004 2003 2002 2001 2000
- ------------------ ------------- ------------- ------------- ------------- -------------
Total assets $ 186,296,356 $ 200,113,780 $ 212,833,322 $ 224,963,913 $ 235,131,327
============= ============= ============= ============= =============
Total liabilities $ 270,046,767 $ 283,228,034 $ 277,364,748 $ 277,376,359 $ 272,523,628
============= ============= ============= ============= =============
Minority interest $ (1,481,127) $ (867,942) $ 171,145 $ 253,252 $ 1,226,088
============= ============= ============= ============= =============
Total partners'
deficit $ (82,269,284) $ (82,246,312) $ (64,702,571) $ (52,665,698) $ (38,618,389)
============= ============= ============= ============= =============
During the years ended March 31, 2000 through 2004, total assets decreased
primarily due to depreciation, partially offset by net additions to property and
equipment. During the years ended March 31, 2000 through 2003, total liabilities
increased primarily due to the accrual of principal and interest payments at one
of the Local Partnerships along with the increase in obligations at the
remaining Local Partnerships. During the year ended March 31, 2004, total assets
and liabilities decreased primarily due to a decrease in property and equipment
and mortgage notes payable resulting from the sale of Jefferson Place Limited
Partnership ("Jefferson Place").
10
Selected Quarterly Financial Date (Unaudited)
June 30, September 30, December 31, March 31,
2003 2003 2003 2004
------------ ------------ ------------ ------------
Revenues $ 9,232,708 $ 23,053,286 $ 8,890,793 $ 8,428,469
Operating expenses (12,792,656) (13,258,944) (11,906,510) (11,943,082)
------------ ------------ ------------ ------------
Loss before minority
interest (3,559,948) 9,794,342 (3,015,717) (3,514,613)
Minority interest in
loss of subsidiary
partnerships 63,464 62,064 59,137 88,299
------------ ------------ ------------ ------------
Net (loss) income $ (3,496,484) $ 9,856,406 $ (2,956,580) $ (3,426,314)
============ ============ ============ ============
Net (loss) income -
limited partnership $ (3,461,519) $ 9,757,842 $ (2,927,014) $ (3,392,051)
============ ============ ============ ============
Net (loss) income
per BAC $ (24.89) $ 70.15 $ (21.04) $ (24.38)
============ ============ ============ ============
June 30, September 30, December 31, March 31,
2002* 2002* 2002* 2003*
------------ ------------ ------------ ------------
Revenues $ 9,093,205 $ 9,077,884 $ 9,078,575 $ 9,347,617
Operating expenses (12,630,356) (12,349,766) (13,000,438) (16,442,391)
------------ ------------ ------------ ------------
Loss before minority
interest (3,537,151) (3,271,882) (3,921,863) (7,094,774)
Minority interest in
loss of subsidiary
partnerships 59,828 59,973 73,313 88,815
------------ ------------ ------------ ------------
Net loss $ (3,477,323) $ (3,211,909) $ (3,848,550) $ (7,005,959)
============ ============ ============ ============
Net loss - limited
partnership $ (3,442,550) $ (3,179,790) $ (3,810,065) $ (6,935,899)
============ ============ ============ ============
Net loss per BAC $ (24.75) $ (22.86) $ (27.39) $ (49.86)
============ ============ ============ ============
* Reclassified for comparative purposes.
11
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
- -------------------------------
Through March 31, 2004, the Partnership had originally invested approximately
$109,000,000 (not including acquisition fees) of net proceeds in 62 Local
Partnerships, of which approximately $178,000 remains to be paid including
approximately $160,000 held in escrow. During the year ended March 31, 2004, the
Partnership sold the property and the related assets and liabilities of one
Local Partnership. Through the year ended March 31, 2004, the Partnership has
sold the property and the related assets and liabilities of one Local
Partnership and its limited partnership interest in a second Local Partnership.
For a discussion of these sales, see Note 10 in Item 8.
During the year ended March 31, 2004, the Partnership's primary source of funds
included (i) working capital reserves and (ii) cash distributions from the
operations of the Local Partnerships, neither of which are substantial in
amount.
For the year ended March 31, 2004, cash and cash equivalents of the Partnership
decreased by approximately $1,442,000. This decrease was attributable to a
decrease in capitalization of consolidated subsidiaries attributable to minority
interest ($340,000), acquisition of property and equipment ($1,316,000), cost
paid relating to the sale of property ($181,000), net repayments on mortgage
notes ($2,740,000), a net increase in cash held in escrow relating to investing
activities ($23,000), a net increase in due to Local General Partners and
affiliates relating to investing and financing activities ($2,637,000) and an
increase in deferred costs ($4,000) which exceeded cash provided by operating
activities ($2,447,000), an increase in advances from debt guarantor ($462,000)
and proceeds from sale of property ($2,890,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
and amortization in the amount of approximately $10,179,000, gain on sale of
property ($13,943,000) and an increase in due to debt guarantor in the amount of
$3,153,000.
The Partnership has an unconsolidated working capital reserve of approximately
$411,000 at March 31, 2004.
The Partnership is not expected to have access to additional sources of
financing, and in particular will not have the ability to assess BACs 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 BACs 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 such sources are not available, such Local
Partnership would risk foreclosure on its Property if it was unable to
renegotiate the terms of its first mortgage and any other debt with the lenders
thereof. The risks associated with the need of such Local Partnership to
refinance its 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 towards the future operating expenses of the
Partnership. During the years ended March 31, 2004, 2003 and 2002, the amounts
received from operations of the Local Partnerships were approximately $330,000,
$774,000 and $216,000, respectively.
Partnership management fees owed to the General Partners amounted to
approximately $9,810,000 and $8,465,000 were accrued and unpaid at March 31,
2004 and 2003. Without the General Partners' continued accrual without payment
of these fees and expense reimbursements, the Partnership will not be in a
12
position to meet its obligations. The General Partners have allowed for the
accrual without payment of these amounts but are under no obligation to continue
to do so.
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 may also result in recapture of Tax Credits if the
investment is lost before the expiration of the Compliance 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 from 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.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership's accounting policies included in Note 2
to the consolidated financial statements in this annual report on Form 10-K.
a) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring such property and equipment. 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. The Partnership complies with Statement of Financial Accounting
Standards (SFAS) No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". A loss on impairment of assets is recorded when management
estimates 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. During the year ended March 31, 2004, the
Partnership has recorded approximately $0 as a loss on impairment of assets.
Through March 31, 2004, the Partnership has recorded approximately $22,237,000
as a loss on impairment of assets.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. Such
assets would be classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale as of March 31, 2004.
b) 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.
13
Tabular Disclosure of Contractual Obligations
- ---------------------------------------------
The following table summarized the Partnership's commitments as of March 31,
2004 to make future payments under its debt agreements and other contractual
obligations.
Less
than 1 - 3 3 - 5 More than
Total 1 Year Years Years 5 Years
------------ ------------ ------------ ------------ ------------
Mortgage notes
payable (a) $172,456,295 $ 6,198,393 $ 20,324,302 $ 10,992,396 $134,941,204
Due to debt
guarantor (b) 49,958,612 49,958,612 0 0 0
Land lease
obligations (c) 4,099,253 155,130 310,260 310,260 3,323,603
Developer loans and
accrued interest (d) 1,327,019 1,327,019 0 0 0
Land note payable (e) 1,445,106 1,445,106 0 0 0
------------ ------------ ------------ ------------ ------------
Total $229,286,285 $ 59,084,260 $ 20,634,562 $ 11,302,656 $138,264,807
============ ============ ============ ============ ============
(a) The mortgage and construction notes, which are collateralized by land and
buildings, are payable in aggregate monthly installments of approximately
$1,022,000, including principal and interest at rates varying from 0% to
11.5% per annum, through the year 2044. 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.
(b) R.P.P. Limited Dividend Housing Association Limited Partnership ("River
Place") has been unable to generate sufficient cash flow to make the
required principal and interest payments under its loan agreements. River
Place's debt guarantor, General Retirement System of the City of Detroit
("GRS"), entered into an agreement with the Michigan State Housing
Authority (the "Authority") to purchase these loans upon the occurrence of
certain events. GRS has declared River Place in default under its
obligation to make the required payments. During 1996, GRS agreed to waive
its right of foreclosure under the mortgages, unless certain events occur,
through February 1, 2006. GRS has made advances for debt service and has
incurred certain fees relating to these loans totaling $49,958,612,
including accrued interest on such advances at a rate of 15%. Such amount
is included in the amount due to debt guarantor on the balance sheet.
(c) Four of the Subsidiary Partnerships are leasing the land on which the
Properties are located, for terms ranging from 28 to 99 years. The leases
on these Properties are noncancelable. At December 31, 2003 those
Subsidiary Partnerships were committed to minimum future annual rentals on
the leases aggregating $155,130 for each of the next five years, and
$3,323,603 total thereafter.
(d) See Note 8(C) i in Item 8. Financial Statements and Supplementary Data.
(e) See Note 8(C) ii in Item 8. Financial Statements and Supplementary Data.
Off Balance Sheet Arrangements
- ------------------------------
The Partnership has no off-balance sheet arrangements.
New Accounting Pronouncements
- -----------------------------
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 were applicable no later than December 15, 2003.
The Partnership has not created any variable interest entities after January 31,
2003. In December 2003 the FASB redeliberated certain proposed modifications and
revised FIN 46 ("FIN 46 (R)"). The revised provisions are applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 (R) is not anticipated to have a material impact on the Partnership's
financial reporting and disclosures.
14
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities (or assets in some
circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally was effective for all
financial instruments entered into or modified after May 31, 2003, and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does not have an impact on the Partnership's financial reporting and
disclosures.
Results of Operations
- ---------------------
The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2004, 2003 and 2002 ("Fiscal 2003", "Fiscal 2002" and
"Fiscal 2001", respectively).
The majority of the Local Partnerships' income continues to be in the form of
rental income, with the corresponding expenses (excluding loss on impairment of
assets) being divided among operations, depreciation and mortgage interest.
The net loss for the 2003, 2002 and 2001 Fiscal Years totaled $22,972,
$17,543,741 and $12,036,873, respectively.
2003 vs. 2002
- -------------
Rental income decreased approximately 1% for Fiscal 2003 as compared to Fiscal
2002. Excluding Jefferson Place, which was sold during Fiscal 2003 (see Note
10), rental income increased approximately 2% primarily due to rental rate
increases.
Other income decreased approximately $472,000 for Fiscal 2003 as compared to
Fiscal 2002. Excluding Jefferson Place, other income decreased approximately
$372,000 primarily due to a decrease in reserve balances earning interest at
three Local Partnerships, a physical improvement grant received in 2002 at one
Local Partnership, insurance recovery income received in 2002 at one Local
Partnership and forgiveness of late fees at another Local Partnership.
Total expenses, excluding Jefferson Place and insurance, remained fairly
consistent with a decrease of approximately 5% for Fiscal 2003 as compared to
Fiscal 2002.
Insurance expense increased approximately $267,000 for Fiscal 2003 as compared
to Fiscal 2002. Excluding Jefferson Place, insurance increased approximately
$294,000 primarily due to increases in insurance premiums at the Local
Partnerships.
A gain on sale of properties was recorded during Fiscal 2003.
2002 vs. 2001
- -------------
Rental income decreased approximately 2% for Fiscal 2002 as compared to Fiscal
2001. Excluding Northwood, which was sold during Fiscal 2001 (see Note 10),
rental income increased less than 1%, primarily due to rental rate increases.
Other income increased approximately $362,000 for Fiscal 2002 as compared to
Fiscal 2001. Excluding Northwood, other income increased approximately $416,000
primarily due to the receipt of a drugs elimination grant at one Local
Partnership and the write-off of receivables in Fiscal 2001 at a second Local
Partnership.
Total expenses, excluding Northwood, general and administrative and insurance,
remained fairly consistent with an increase of approximately 4% for Fiscal 2002
as compared to Fiscal 2001.
15
General and administrative increased approximately $1,097,000 for Fiscal 2002 as
compared to Fiscal 2001. Excluding Northwood, general and administrative
increased approximately $1,285,000 primarily due to supervisory management fees
paid at two Local Partnerships and increases in payroll and payroll related
expenses at several Local Partnerships.
Insurance increased approximately $341,000 for Fiscal 2002 as compared to Fiscal
2001. Excluding Northwood, insurance increased approximately $364,000 primarily
due to increased premiums at the Local Partnerships.
A loss on impairment of fixed assets of approximately $2,154,000 was recorded
during Fiscal 2002. A loss on sale of properties and forgiveness of indebtedness
income were recorded during Fiscal 2001.
Results of Operations of Certain Local Partnerships
- ---------------------------------------------------
R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
River Place has been unable to generate sufficient cash flow to make the
required principal and interest payments under its loan agreements. River
Place's debt guarantor, General Retirement System of the City of Detroit
("GRS"), entered into an agreement with the Michigan State Housing Authority
(the "Authority") to purchase these loans upon the occurrence of certain events.
GRS has declared River Place in default under its obligation to make the
required payments. During 1996, GRS agreed to waive its right of foreclosure
under the mortgages, unless certain events occur, through February 1, 2006. GRS
has made advances for debt service and has incurred certain fees relating to
these loans totaling $49,958,612, including accrued interest on such advances at
a rate of 15%. Such amount is included in the amount due to debt guarantor on
the balance sheet.
Management anticipates that River Place will be unable to make all of the
required debt service payments during 2004. 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 approximately $883,000 at
both March 31, 2004 and 2003. The net loss after minority interest for River
Place amounted to approximately $3,249,000, $3,127,000 and $3,190,000 for the
years ended March 31, 2004, 2003 and 2002, respectively.
Brandywine Court Associates, L.P. ("Brandywine")
- ------------------------------------------------
The financial statements of Brandywine have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of Brandywine as a going concern. Brandywine has had
recurring net losses and continues to have a substantial working capital
deficit. Furthermore, Brandywine's management continues to anticipate that the
property will need a new roof in the near future, the cost of which is expected
to exceed $150,000. Also, Brandywine's HAP Contract expires in 2004 and there
can be no assurance that it will be renewed. Brandywine's management has
determined that the Property is not eligible for financial relief from the
United States Department of Housing and Urban Development, since the Property
would require relief of debt in excess of the parameters allowed. Brandywine's
management continues to seek a buyer for the Property. In view of these matters,
there is substantial doubt as to the Partnership's ability to continue as a
going concern. The Partnership's investment in Brandywine has been written down
to zero by prior years' losses and the minority interest balance was
approximately $0 at both March 31, 2004 and 2003. The net loss after minority
interest for Brandywine amounted to approximately $101,000, $665,000 (which
includes a $553,000 loss on impairment of fixed assets) and $161,000 for the
years ended March 31, 2004, 2003 and 2002, respectively.
Gentle Pines - West Columbia Associates, L.P. ("Gentle Pines")
- --------------------------------------------------------------
The financial statements of Gentle Pines have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of Gentle Pines as a going concern. Gentle Pines has
had recurring net losses and continues to have a substantial working capital
deficit. A material number of apartment units are no longer supported by
project-based housing subsidies and the project-based HAP contract for the
16
remaining units expires on May 31, 2004. Management is seeking a nonprofit
organization with an affordable housing mission to acquire Gentle Pines. In view
of these matters, there is substantial doubt as to Gentle Pines' ability to
continue as a going concern. The Partnership's investment in Gentle Pines has
been written down to zero by prior years' losses and the minority interest
balance was $0 at both March 31, 2004 and 2003. The net loss after minority
interest for Gentle Pines amounted to approximately $100,000, $1,887,000 (which
includes a $1,601,000 loss on impairment of fixed assets) and $181,000 for the
years ended March 31, 2004, 2003 and 2002, respectively.
Jefferson Limited Partnership ("Jefferson")
- -------------------------------------------
At December 31, 2003 and 2002, Jefferson's current liabilities exceeded its
current assets by over $97,000 and $13,000, respectively. Although this
condition could raise substantial doubt about Jefferson's ability to continue as
a going concern, such doubt is alleviated by the fact that $115,711 and $43,322
of current liabilities at December 31, 2003 and 2002, 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, 2003. The
Partnership's investment in Jefferson was approximately $105,000 and $113,000 at
March 31, 2004 and 2003, respectively, and the minority interest balance was $0
at each date. The net loss after minority interest for Jefferson amounted to
approximately $217,000, $150,000 and $150,000 for the years ended March 31,
2004, 2003 and 2002, respectively.
Site H Development Co. ("Site H")
- ---------------------------------
The Partnership has not been provided with the Site H audited financial
statements for fiscal year 2003 and 2002, and as such has used estimates in its
Consolidated Financial Statements for both years.
Other Subsidiary Partnerships
- -----------------------------
Four of the Subsidiary Partnerships are leasing the land on which the Properties
are located for terms ranging from 28 to 99 years. The leases for these
Properties are noncancelable. At December 31, 2003, those Subsidiary
Partnerships were committed to minimum annual rentals on the leases aggregating
$155,130 for each of the next five years, and $3,323,603 in total thereafter.
Other
- -----
The Partnership's investments in the Local Partnerships are 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 the possibility 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, 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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership does not have any market risk sensitive instruments.
17
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 19
Consolidated Balance Sheets at March 31, 2004 and 2003 146
Consolidated Statements of Operations for the Years Ended
March 31, 2004, 2003 and 2002 147
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 31, 2004, 2003 and 2002 148
Consolidated Statements of Cash Flows for the Years Ended
March 31, 2004, 2003 and 2002 149
Notes to Consolidated Financial Statements 151
18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
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, 2004 and 2003, and the related consolidated statements of operations,
changes in partners' deficit, and cash flows for the years ended March 31, 2004,
2003 and 2002 (the 2003, 2002 and 2001 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 59 (Fiscal 2003), 60
(Fiscal 2002) and 61 (Fiscal 2001) subsidiary partnerships whose losses
aggregated $(15,889,757), ($15,565,338) and ($10,083,257) for the 2003, 2002 and
2001 Fiscal Years, respectively, and whose assets constituted 90% and 96% of the
Partnership's assets at March 31, 2004 and 2003, respectively, presented in the
accompanying consolidated financial statements. The financial statements of 57
(Fiscal 2003), 59 (Fiscal 2002) and 60 (Fiscal 2001) 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. The financial statements of one (Fiscal 2003 and Fiscal 2002)
subsidiary partnership was unaudited.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (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, 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, 2004 and 2003,
and the results of their operations and their cash flows for the years ended
March 31, 2004, 2003 and 2002, in conformity with U.S. generally accepted
accounting principles.
As discussed in Note 12(a), the consolidated financial statements include the
financial statements of three subsidiary partnerships with significant
contingencies and uncertainties. The financial statements of these subsidiary
partnerships were prepared assuming that they will continue as going concerns.
These subsidiary partnerships' net losses aggregated $3,449,244 (Fiscal 2003),
$5,678,496 (Fiscal 2002) and $3,532,309 (Fiscal 2001), and their assets
aggregated $13,201,742 and $14,043,226 at March 31, 2004 and 2003, respectively.
Management's plans in regard to these matters are also described in Note 12(a).
The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 15, 2004
19
[Letterhead of BERDON, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
C.V. Bronx Associates, L.P.
We have audited the accompanying balance sheets of C.V. Bronx Associates, L.P.
(a Delaware limited partnership) (the "Partnershp") as of December 31, 2003 and
2002, and the related statements of operations, 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 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, 2003 and 2002, and the results of its operations and its cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Berdon LLP
Certified Public Accountants
New York, N.Y.
February 6, 2004
20
[Letterhead of BERDON, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
C.V. Bronx Associates, L.P.
We have audited the accompanying balance sheets of C.V. Bronx Associates, L.P.
(a Delaware Limited Partnership) as of December 31, 2002 and 2001, and the
related statements of operations, 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 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, 2002 and 2001, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Berdon LLP
Certified Public Accountants
New York, N.Y.
February 12, 2003
21
[Letterhead of THEO CARSON & ASSOCIATES]
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, 2003 and 2002, and the
related statements of operations, changes in 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 have conducted the audits in accordance with auditing standards generally
accepted in the United States of America. 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, 2003 and 2002, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ Theo C. Carson & Associates
Kalamazoo, Michigan
February 4, 2004
22
[Letterhead of THEO CARSON & ASSOCIATES]
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, 2002 and 2001, and the
related statements of operations, changes in 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 have conducted the audits in accordance with auditing standards generally
accepted in the United States of America. 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, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ Theo C. Carson & Associates
Kalamazoo, Michigan
January 31, 2003
23
[Letterhead of COLE, EVANS & PETERSON]
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, 2003 and December 31, 2002, 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 U.S. 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, 2003 and December 31, 2002, and
the results of its operations and its cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.
Our audits were made primarily for the purpose of forming an opinion on the
basic financial statements for the years ended December 31, 2003 and December
31, 2002 taken as a whole. The supplementary Schedule 1 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 our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Cole, Evans & Peterson
January 31, 2004
Shreveport, Louisiana
24
[Letterhead of COLE, EVANS & PETERSON]
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, 2002 and December 31, 2001, 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 U.S. 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, 2002 and December 31, 2001, and
the results of its operations and its cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.
Our audits were made primarily for the purpose of forming an opinion on the
basic financial statements for the years ended December 31, 2002 and December
31, 2001 taken as a whole. The supplementary Schedule 1 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 our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Cole, Evans & Peterson
February 4, 2003
Shreveport, Louisiana
25
[Letterhead of DAMIANO & BURK]
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, 2003, and the related statements of operations
and changes in partners' deficit 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Inter-Tribal Indian Village Housing
Development Associates, L.P. as of December 31, 2003 and the results of its
operations, changes in partners' deficit and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.
In accordance with Government Auditing Standards, we have also issued our
reports on our test of its compliance with certain provisions of laws,
regulations, contracts and grants. Those reports are an integral part of the
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
The accompanying supplementary information included in the report shown on pages
13-19 is presented for the purposes of additional analysis and are not a
required part of the basic financial statements of Inter-Tribal Indian Village
Housing Development Associates, L.P. 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/ Damiano & Burk CPAs, PC
Lincoln, Rhode Island
January 19, 2004
26
[Letterhead of DAMIANO & BURK]
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, 2002, and the related statements of operations
and changes in partners' deficit 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Inter-Tribal Indian Village Housing
Development Associates, L.P. as of December 31, 2002 and the results of its
operations, changes in partners' deficit and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.
In accordance with Government Auditing Standards, we have also issued our
reports on our test of its compliance with certain provisions of laws,
regulations, contracts and grants. Those reports are an integral part of the
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
The accompanying supplementary information included in the report shown on pages
13-19 is presented for the purposes of additional analysis and are not a
required part of the basic financial statements of Inter-Tribal Indian Village
Housing Development Associates, L.P. 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/ Damiano & Burk CPAs, PC
Lincoln, Rhode Island
January 22, 2003
27
[Letterhead of DAMIANO & BURK]
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, 2001, and the related statements of operations
and changes in partners' equity (deficit) 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 auditing standards generally accepted
in the United States of America 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 Inter-Tribal Indian Village Housing
Development Associates, L.P. as of December 31, 2001 and the results of its
operations and the changes in partners' equity (deficit) and cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
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 15, 2002 on our
consideration of Inter-Tribal Indian Village Housing Development Associates,
L.P.'s internal control and reports dated January 15, 2002 on its compliance
with specific requirements applicable to non-major HUD programs. These reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
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 13-19 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Inter-Tribal Indian Village Housing Development Associates, L.P. 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/ Damiano & Burk CPAs, PC
Lincoln, Rhode Island
January 15, 2002
28
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
RBM Associates
We have audited the accompanying balance sheets of RBM Associates as of December
31, 2003 and 2002, and the related statements of profit and loss, 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 the 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 RBM Associates as of December
31, 2003 and 2002, and the results of its operations, changes in partners'
equity (deficit) and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2003, dated January 30, 2004, on our
consideration of RBM Associates' internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 24
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
Baltimore, Maryland
January 30, 2004
29
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
RBM Associates
We have audited the accompanying balance sheets of RBM Associates as of December
31, 2002 and 2001, and the related statements of profit and loss, 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 the 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 RBM Associates as of December
31, 2002 and 2001, and the results of its operations, changes in partners'
equity (deficit) and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2002, dated February 7, 2003, on our
consideration of RBM Associates' internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audits 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 26
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
Baltimore, Maryland
February 7, 2003
30
[Letterhead of McKONLY & ASBURY LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Glenbrook Associates
Lancaster, Pennsylvania
Rural Development
Allentown, Pennsylvania
We have audited the accompanying balance sheets of Glenbrook Associates (a
limited partnership) as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America 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, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in conformity with auditing standards generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 28, 2004 on our consideration of Glenbrook Associates' internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. This report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 16
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, LLP
Harrisburg, Pennsylvania
January 28, 2004
31
[Letterhead of McKONLY & ASBURY LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Glenbrook Associates
Lancaster, Pennsylvania
Rural Development
Allentown, Pennsylvania
We have audited the accompanying balance sheets of Glenbrook Associates (a
limited partnership) as of December 31, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America 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, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with auditing standards generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 2003 on our consideration of Glenbrook Associates' internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. This report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audits.
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 18 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, LLP
Harrisburg, Pennsylvania
January 17, 2003
32
[Letterhead of FELDMAN, HOLTZMAN, LUPO & ZERBO, LLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)
We have audited the accompanying balance sheets of Affordable Flatbush
Associates (A New York Limited Partnership) as of December 31, 2003 and December
31, 2002, 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 audits in accordance with auditing standards generally accepted
in the United States of America. 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 Affordable Flatbush Associates
(A New York Limited Partnership) at December 31, 2003 and December 31, 2002, and
the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Feldman, Holtzman, Lupo & Zerbo, LLC
Pompton Lakes, New Jersey
February 27, 2004
33
[Letterhead of FELDMAN, HOLTZMAN, LUPO & ZERBO, LLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)
We have audited the accompanying balance sheets of Affordable Flatbush
Associates (A New York Limited Partnership) as of December 31, 2002 and December
31, 2001, 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 audits in accordance with auditing standards generally accepted
in the United States of America. 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 Affordable Flatbush Associates
(A New York Limited Partnership) at December 31, 2002 and December 31, 2001, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/s/ Feldman, Holtzman, Lupo & Zerbo, LLC
Pompton Lakes, New Jersey
March 1, 2003
34
[Letterhead of WESSEL & COMPANY]
INDEPENDENT AUDITOR'S REPORT
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, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America 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 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 Barclay Village II, Ltd., PHFA
No. R-0039-8F, as of December 31, 2003 and 2002, and the results of its
operations, changes in partners' capital, and cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 13 to 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Auditing of HUD Programs issued by the U.S. Department of Housing and
Urban Development and the Pennsylvania Housing Finance Agency regulations, we
have also issued a report dated January 23, 2004, on our consideration of
Barclay Village II, Ltd.'s internal control and on our test of its compliance
certain provisions of laws, regulations, contracts and with specific
requirements applicable to major HUD Programs, Pennsylvania Housing Finance
Agency regulations, and specific requirements applicable to Fair Housing and
Nondiscrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Wessel & Company
Certified Public Accountants
Johnstown, Pennsylvania
January 23, 2004
35
[Letterhead of WESSEL & COMPANY]
INDEPENDENT AUDITOR'S REPORT
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, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America 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, 2002 and 2001, and the results of its
operations, changes in partners' capital, and cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 13 to 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Auditing of HUD Programs issued by the U.S. Department of Housing and
Urban Development and the Pennsylvania Housing Finance Agency regulations, we
have also issued a report dated February 10, 2003, on our consideration of
Barclay Village II, Ltd.'s internal control and on our test of its compliance
certain provisions of laws, regulations, contracts and with specific
requirements applicable to major HUD Programs, Pennsylvania Housing Finance
Agency regulations, and specific requirements applicable to Fair Housing and
Nondiscrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Wessel & Company
Certified Public Accountants
Johnstown, Pennsylvania
February 10, 2003
36
[Letterhead of BERDON, LLP]
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, 2003 and
2002, and the related statements of operations, 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Berdon, LLP
Certified Public Accountants
New York, N.Y.
February 3, 2004
37
[Letterhead of BERDON, LLP]
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, 2002 and
2001, and the related statements of operations, 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Berdon, LLP
Certified Public Accountants
New York, N.Y.
February 3, 2003
38
[Reznick Fedder & Silverman Letterhead]
INDEPENDENT AUDITORS' REPORT
To the 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,
2003 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. The 2002 financial statements
were audited by other auditors whose report dated January 24, 2003, on those
statements raised substantial doubt about the Partnership's ability to continue
as a going concern.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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, 2003, and the results of its
operations, the changes in partners' deficit and cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note F, 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 of assets or the amounts of
liabilities that may result from the outcome of this uncertainty.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
March 17, 2004
39
[Ernst & Young Letterhead]
Report of Independent Certified Public Accountants
Partners
R.P.P. Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheets of R.P.P. Limited Dividend
Housing Association Limited Partnership (the Partnership) as of December 31,
2002 and 2001, 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 auditing standards generally accepted
in 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 R.P.P. Limited Dividend Housing
Association Limited Partnership at December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 6, 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 of assets or the amounts of
liabilities that may result from the outcome of this uncertainty.
/s/ Ernst & Young LLP
West Palm Beach, Florida
January 24, 2003
40
[Letterhead of DICKEY, WOLF & HUMBARD, LLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Williamsburg Residential II, L.P.
We have audited the balance sheets of Williamsburg Residential II, L.P. (a
Kansas Limited Partnership) as of December 31, 2003 and 2002, and the related
statements of operations, 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 auditing standards generally accepted
in the United States of America. 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 Williamsburg Residential II,
L.P. as of December 31, 2003 and 2002, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Dickey, Wolf & Humbard, LLC
Certified Public Accountants
Harrisonville, MO
January 8, 2004
41
[Letterhead of DICKEY, WOLF & HUMBARD, LLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Williamsburg Residential II, L.P.
We have audited the balance sheets of Williamsburg Residential II, L.P. (a
Kansas Limited Partnership) as of December 31, 2002 and 2001, and the related
statements of operations, 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 auditing standards generally accepted
in the United States of America. 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 Williamsburg Residential II,
L.P. as of December 31, 2002 and 2001, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Dickey, Wolf & Humbard, LLC
Certified Public Accountants
Harrisonville, MO
January 9, 2003
42
[Letterhead of FELDMAN, HOLTZMAN, LUPO & ZERBO, LLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)
We have audited the accompanying balance sheets of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 2003 and December 31,
2002, 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 audits in accordance with auditing standards generally accepted
in the United States of America. 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 West 104th Street Associates,
L.P. at December 31, 2003 and December 31, 2002, and the results of its
operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
/s/ FELDMAN, HOLTZMAN, LUPO & ZERBO, LLC
Pompton Lakes, New Jersey
February 27, 2004
43
[Letterhead of FELDMAN, HOLTZMAN, LUPO & ZERBO, LLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)
We have audited the accompanying balance sheets of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 2002 and December 31,
2001, 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 audits in accordance with auditing standards generally accepted
in the United States of America. 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 West 104th Street Associates,
L.P. at December 31, 2002 and December 31, 2001, and the results of its
operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
/s/ FELDMAN, HOLTZMAN, LUPO & ZERBO, LLC
Pompton Lakes, New Jersey
March 1, 2003
44
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, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and the results of its operations and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 12, 2004
45
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, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of its operations and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 9, 2003
46
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, 2003 and 2002 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 auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and the results of its operations and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 9, 2004
47
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, 2002 and 2001 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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of its operations and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 9, 2003
48
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, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and the results of its operations and cash flows for
the years then ended, in conformity accounting principles generally accepted in
the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 12, 2004
49
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, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of its operations and cash flows for
the years then ended, in conformity accounting principles generally accepted in
the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 9, 2003
50
[Letterhead of DAUBY O'CONNOR & ZALESKI]
Independent Auditors' Report
To the Partners of
South Toledo Associates, Ltd.
(An Ohio Limited Partnership)
Toledo, Ohio
We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 2003, and the related
statements of profit and (loss), changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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.
(an Ohio Limited Partnership) as of December 31, 2003, and the results of its
operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 6, 2004 on our consideration of the Partnership's internal
controls and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
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 financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
January 6, 2004
Carmel, Indiana
51
[Letterhead of DAUBY O'CONNOR & ZALESKI]
Independent Auditors' Report
To the Partners of
South Toledo Associates, Ltd.
(An Ohio Limited Partnership)
Toledo, Ohio
We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 2002, and the related
statements of profit and (loss), changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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.
(an Ohio Limited Partnership) as of December 31, 2002, and the results of its
operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 7, 2003 on our consideration of the Partnership's internal
controls and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
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 financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
January 7, 2003
Carmel, Indiana
52
[Letterhead of DAUBY O'CONNOR & ZALESKI]
Independent Auditors' Report
To the Partners of
South Toledo Associates, Ltd.
Toledo, Ohio
We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 2001, and the related
statements of profit and loss (HUD Form 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 auditing standards generally accepted
in the United States of America 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.
(an Ohio Limited Partnership) as of December 31, 2001, and the results of its
operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 8, 2002, on our consideration of the Partnership's internal
controls and a report dated January 8, 2002, on its compliance with laws and
regulations.
The accompanying supplementary information 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 financial statements
taken as a whole.
/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
January 8, 2002
Carmel, Indiana
53
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Dunlap School Venture
We have audited the accompanying balance sheet of Dunlap School Venture as of
December 31, 2003 and 2002, and the related statements of profit and loss,
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Dunlap School Venture at
December 31, 2003 and 2002, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2003, dated January 30, 2004, on our
consideration of Dunlap School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 25
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.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 30, 2004
54
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Dunlap School Venture
We have audited the accompanying balance sheet of Dunlap School Venture as of
December 31, 2002 and 2001, and the related statements of profit and loss,
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 2002 financial statements referred to above present fairly,
in all material respects, the financial position of Dunlap School Venture at
December 31, 2002 and 2001, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2002, dated January 24, 2003, on our
consideration of Dunlap School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 24
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
Baltimore, Maryland
January 24, 2003
55
[Letterhead of BAKER NEWMAN & NOYES]
INDEPENDENT AUDITORS' REPORT
To the Partners of Philipsburg Elderly Housing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 16, 2004 on our consideration Philipsburg Elderly Housing
Associates (A Maine Limited Partnership) internal control and on our test of its
compliance with certain provisions of laws, regulations, contracts and grants.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be used in conjunction with this report
in considering the results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 15-18 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 required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our 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/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 16, 2004
56
[Letterhead of BAKER NEWMAN & NOYES]
INDEPENDENT AUDITORS' REPORT
To the Partners of Philipsburg Elderly Housing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 23, 2003 on our consideration Philipsburg Elderly Housing
Associates (A Maine Limited Partnership) internal control and on our test of its
compliance with certain provisions of laws, regulations, contracts and grants.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be used in conjunction with this report
in considering the results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 15-18 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 required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our 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/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 23, 2003
57
[Letterhead of BAKER NEWMAN & NOYES]
INDEPENDENT AUDITORS' REPORT
To the Partners of Franklin Elderly Housing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Franklin Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 2003 and 2002, and the related statements of profit and loss,
changes in 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 23, 2004 on our consideration of internal controls over
financial reporting of Franklin Elderly Housing Associates (A Maine Limited
Partnership) internal control and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grants. Those reports are an
integral part of an audit performed in accordance with Government Auditing
Standards and should be used in conjunction with this report in considering the
results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 15-18 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 required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our 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/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 23, 2004
58
[Letterhead of BAKER NEWMAN & NOYES]
INDEPENDENT AUDITORS' REPORT
To the Partners of Franklin Elderly Housing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Franklin Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 2002 and 2001, and the related statements of profit and loss,
changes in 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 21, 2003 on our consideration of internal controls over
financial reporting of Franklin Elderly Housing Associates (A Maine Limited
Partnership) internal control and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grants. Those reports are an
integral part of an audit performed in accordance with Government Auditing
Standards and should be used in conjunction with this report in considering the
results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 15-18 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 required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our 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/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 21, 2003
59
[Letterhead of BAKER NEWMAN & NOYES]
INDEPENDENT AUDITORS' REPORT
To the Partners of Wade D. Mertz Elderly Housing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 16, 2004 on our consideration of internal controls over
financial reporting of Wade D. Mertz Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
used in conjunction with this report in considering the results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 14-17 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 required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our 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/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 16, 2004
60
[Letterhead of BAKER NEWMAN & NOYES]
INDEPENDENT AUDITORS' REPORT
To the Partners of Wade D. Mertz Elderly Housing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 21, 2003 on our consideration of internal controls over
financial reporting of Wade D. Mertz Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
used in conjunction with this report in considering the results of our audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 14-17 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 required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our 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/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 21, 2003
61
[Letterhead of Saltz, Shamis & Goldfarb, Inc.]
Independent Auditor's Report
- ----------------------------
The General and Limited Partners
Lancashire Towers Associates Limited Partnership
We have audited the accompanying balance sheets of Lancashire Towers Associates
Limited Partnership (An Ohio Limited Partnership) as of December 31, 2003, and
the related statement of income, 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 as of December 31, 2002
were audited by Bick Fredman & Company whose Audit Department merged with Saltz,
Shamis & Goldfarb, Inc. as of October 1, 2003 and whose report dated January 10,
2003 expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America 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, 2003, and the results of its operations
and cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and 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 9, 2004 on our
consideration of Lancashire Towers Associates Limited Partnership's internal
control and reports dated January 9, 2004 on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination, and specific requirements
applicable to non-major HUD program transactions. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Saltz, Shamis & Goldfarb, Inc.
Cleveland, Ohio
January 9, 2004
62
[Letterhead of BICK FREDMAN & CO]
Independent Auditor's Report
The General and Limited Partners
Lancashire Towers Associates Limited Partnership
We have audited the accompanying balance sheets of Lancashire Towers Associates
Limited Partnership (An Ohio Limited Partnership) as of December 31, 2002 and
2001, and the related statement of income, 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 auditing standards generally accepted
in the United States of America 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 Lancashire Towers Associates
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 10, 2003 on our consideration of Lancashire Towers Associates
Limited Partnership's internal control and reports dated January 10, 2003 on its
compliance with laws and regulations. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
/s/ Bick Fredman & Co
Cleveland, Ohio
January 10, 2003
63
[INSERO, KASPERSKI, CIACCIA & CO. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Northwood Associates Limited Partnership
Toledo, Ohio
We have audited the accompanying balance sheets of Northwood Associates Limited
Partnership, HUD Project #042-44050-LDP, as of October 4, 2001 and December 31,
2000 and the related statements of changes in partners' equity, operations, and
cash flows for the period ended October 4, 2001 and the year ended December 31,
2000. 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 auditing standards generally accepted
in the United States of America 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 Northwood Associates Limited
Partnership as of October 4, 2001 and December 31, 2000, and the results of its
operations, changes in partners' equity, and cash flows for the period ended
October 4, 2001 and the year ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America.
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 February 8, 2002, on our
consideration of Northwood Associates Limited Partnership's internal control,
and reports dated February 8, 2002, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Respectfully Submitted,
/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
February 8, 2002
64
[Letterhead of FASMAN, KLEIN & FELDSTEIN]
INDEPENDENT AUDITOR'S REPORT
- ----------------------------
To the Partners,
Brewery Renaissance Associates, L.P.
We have audited the accompanying balance sheet of Brewery Renaissance
Associates, L.P. (the Partnership) as of December 31, 2003 and 2002 and the
related statements of operations, partners' capital and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our 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, 2003 and 2002, and the results of its operations and its
cash flows for the years 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 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.
Respectfully submitted,
/s/ FASMAN, KLEIN & FELDSTEIN
New City, NY
February 4, 2004
65
[Letterhead of FASMAN, KLEIN & FELDSTEIN]
INDEPENDENT AUDITOR'S REPORT
To the Partners,
Brewery Renaissance Associates, L.P.
We have audited the accompanying balance sheet of Brewery Renaissance
Associates, L.P. (the Partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brewery Renaissance Associates,
L.P. as of December 31, 2002 and 2001, and the results of its operations and its
cash flows for the years 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 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.
Respectfully submitted,
/s/ FASMAN, KLEIN & FELDSTEIN
New City, NY
March 11, 2003
66
[Letterhead of ASHER & COMPANY, LTD.]
Independent Auditors' Report
The Partners
Brandywine Court Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 2003
and 2002 and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2003. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 2003
and 2002, and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that
Brandywine Court Associates, L.P. (A Limited Partnership) will continue as a
going concern. As described in Note B and reported in the accompanying financial
statements, Brandywine Court Associates, L.P. (A Limited Partnership) has had
recurring net losses and has an increasing working capital deficit in recent
years. These conditions raise substantial doubt about Brandywine Court
Associates, L.P. (A Limited Partnership) ability to continue as a going concern.
Management's plans in regard to those matters are described in Note B. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the
Partnership cannot continue in existence.
Our audit was made for the purpose of forming an opinion on the basic 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 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 issued reports dated
January 20, 2004 on our consideration of Brandywine Court Associates, L.P.'s (A
Limited Partnership), HUD Project No. 063-94015, internal control and on our
tests of its compliance with certain provisions of laws, regulations, contracts,
and grants. These reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 20, 2004
67
[Letterhead of ASHER & COMPANY, LTD.]
Independent Auditors' Report
The Partners
Brandywine Court Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 2002
and 2001, and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2002. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 2002
and 2001, and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that
Brandywine Court Associates, L.P. (A Limited Partnership) will continue as a
going concern. As described in Note B and reported in the accompanying financial
statements, Brandywine Court Associates, L.P. (A Limited Partnership) has had
recurring net losses and has an increasing working capital deficit in recent
years. These conditions raise substantial doubt about Brandywine Court
Associates, L.P. (A Limited Partnership) ability to continue as a going concern.
Management's plans in regard to those matters are described in Note B. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the
Partnership cannot continue in existence.
Our audit was made for the purpose of forming an opinion on the basic 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 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 issued reports dated
January 20, 2003 on our consideration of Brandywine Court Associates, L.P.'s (A
Limited Partnership), HUD Project No. 063-94015, internal control and on our
tests of its compliance with certain provisions of laws, regulations, contracts,
and grants. These reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 20, 2003
68
[Letterhead of J.H. WILLIAMS & CO., LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Art Apartments Associates (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Art Apartments Associates (a
Limited Partnership) as of December 31, 2003 and 2002 and the related statements
of 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 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 auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and its results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
February 12, 2004
69
[Letterhead of J.H. WILLIAMS & CO., LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Art Apartments Associates (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Art Apartments Associates (a
Limited Partnership) as of December 31, 2002 and 2001, and the related
statements of 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 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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and its results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
January 29, 2003
70
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
The Village at Carriage Hills, Ltd.
Clinton, Tennessee
We have audited the accompanying balance sheets of The Village at Carriage Hills
Ltd., a limited partnership, RHS Project No.: 48-001-630980039 as of December
31, 2003 and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Village at Carriage Hills,
Ltd., RHS Project No.: 48-001-630980039 as of December 31, 2003 and 2002, and
the results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 15, 2004 on our consideration of The Village at Carriage Hills,
Ltd.'s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws and regulations. That report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 15, 2004
71
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
The Village at Carriage Hills, Ltd.
Clinton, Tennessee
We have audited the accompanying balance sheets of The Village at Carriage Hills
Ltd., a limited partnership, RHS Project No.: 48-001-630980039 as of December
31, 2002 and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Village at Carriage Hills,
Ltd., RHS Project No.: 48-001-630980039 as of December 31, 2002 and 2001, and
the results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 15, 2003 on our consideration of The Village at Carriage Hills,
Ltd.'s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 15, 2003
72
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Mountainview Apartments, Ltd.
Newport, Tennessee
We have audited the accompanying balance sheets of Mountainview Apartments,
Ltd., a limited partnership, RHS Project No.: 48-015-63097225 as of December 31,
2003 and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Mountainview Apartments, Ltd.,
RHS Project No.: 48-015-63097225 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 2004 on our consideration of Mountainview Apartments, Ltd.'s,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2004
73
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Mountainview Apartments, Ltd.
Newport, Tennessee
We have audited the accompanying balance sheets of Mountainview Apartments,
Ltd., a limited partnership, RHS Project No.: 48-015-63097225 as of December 31,
2002 and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Mountainview Apartments, Ltd.,
RHS Project No.: 48-015-63097225 as of December 31, 2002 and 2001, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 2003 on our consideration of Mountainview Apartments, Ltd.'s,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2003
74
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
The Park Village, Limited
Jackson, Mississippi
We have audited the accompanying balance sheets of The Park Village, Limited, a
limited partnership, as of December 31, 2003 and 2002, 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 the 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 the 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 Park Village, Limited, as
of December 31, 2003 and 2002, and the results of its operations and its cash
flows for the years then ended in conformity with auditing principles generally
accepted in the United States of America.
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 our opinion is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 2004
75
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
The Park Village, Limited
Jackson, Mississippi
We have audited the accompanying balance sheets of The Park Village, Limited, a
limited partnership, as of December 31, 2002 and 2001, 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 the 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 the 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 Park Village, Limited, as
of December 31, 2002 and 2001, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted auditing
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
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 our
opinion is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 25, 2003
76
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
River Oaks Apartments, Ltd.
Oneonta, Alabama
We have audited the accompanying balance sheets of River Oaks Apartments, Ltd.,
a limited partnership, RHS Project No.: 01-005-630988076 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 River Oaks Apartments, Ltd.,
RHS Project No.: 01-005-630988076 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 11
through 14 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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 23, 2004 on our consideration of River Oaks Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 2004
77
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
River Oaks Apartments, Ltd.
Oneonta, Alabama
We have audited the accompanying balance sheets of River Oaks Apartments, Ltd.,
a limited partnership, RHS Project No.: 01-005-630988076 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 River Oaks Apartments, Ltd.,
RHS Project No.: 01-005-630988076 as of December 31, 2002 and 2001, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 11
through 14 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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2003 on our consideration of River Oaks Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2003
78
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Forrest Ridge, Ltd.
Forrest City, Arkansas
We have audited the accompanying balance sheets of Forrest Ridge Apartments,
Ltd., a limited partnership, RHS Project No.: 03-062-630899211 as of December
31, 2003 and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Forrest Ridge Apartments, Ltd.,
RHS Project No.: 03-062-630899211 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 2004 on our consideration of Forrest Ridge Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 17, 2004
79
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Forrest Ridge, Ltd.
Forrest City, Arkansas
We have audited the accompanying balance sheets of Forrest Ridge Apartments,
Ltd., a limited partnership, RHS Project No.: 03-062-630899211 as of December
31, 2002 and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Forrest Ridge Apartments, Ltd.,
RHS Project No.: 03-062-630899211 as of December 31, 2002 and 2001, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 25, 2003 on our consideration of Forrest Ridge Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 25, 2003
80
[Letterhead of SCHOONOVER BOYER AND ASSOCIATES]
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, 2003 and 2002, and the related statements of
income (loss), 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 the financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America 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 The Hearthside Limited Dividend
Housing Association Limited Partnership as of December 31, 2003 and 2002, and
the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Schoonover Boyer & Associates
Columbus, Ohio
January 22, 2004
81
[Letterhead of SCHOONOVER BOYER AND ASSOCIATES]
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, 2002 and 2001, and the related statements of
income (loss), 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 the financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America 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 The Hearthside Limited Dividend
Housing Association Limited Partnership as of December 31, 2002 and 2001, and
the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Schoonover Boyer & Associates
Columbus, Ohio
January 24, 2003
82
[Letterhead of PAILET, MEUNIER AND LeBLANC, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
of Redemptorist Limited Partnership
New Orleans, Louisiana
We have audited the accompanying balance sheets of Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America 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, 2003 and 2002, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.
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 March 2, 2004, on our
consideration of Redemptorist Limited Partnership's internal control, and
reports dated March 2, 2004, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 18 to 32 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of Redemptorist Limited
Partnership. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
March 2, 2004
83
[Letterhead of PAILET, MEUNIER AND LeBLANC, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
of Redemptorist Limited Partnership
New Orleans, Louisiana
We have audited the accompanying balance sheets of Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America 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, 2002 and 2001, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.
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 February 10, 2003, on our
consideration of Redemptorist Limited Partnership's internal control, and
reports dated February 10, 2003, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 17 to 27 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of Redemptorist Limited
Partnership. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
February 10, 2003
84
[Letterhead of SATTY, LEVINE & CIACCO, CPAs, P.C.]
To the Partners
Manhattan A Associates
(A Limited Partnership)
New York, New York
We have audited the accompanying balance sheet of Manhattan A Associates (a
limited partnership) as of December 31, 2003 and 2002, 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 of these
financial statements based on our audits.
We conducted our audits with standards generally accepted in the United States
of America. 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 Manhattan A Associates as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on page ten is presented for purposes of additional analysis and is
not a required part of the basic financial statements of Manhattan A Associates.
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/ Satty, Levine & Ciacco, CPAs, P.C.
Jericho, New York
February 6, 2004
85
[Letterhead of Merina & Company, LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners/Owners
Weidler Associates Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheet of Weidler Associates Limited
Partnership as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America. 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 Weidler Associates Limited
Partnership as of December 31, 2003 and 2002, and the results of its operations
and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Merina & Company
West Linn, Oregon
February 26, 2004
86
[Letterhead of GREGG ASSOCIATES]
INDEPENDENT AUDITOR'S REPORT
To the Partners/Owners
Weidler Associates Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheets of Weidler Associates Limited
Partnership, HUD Project No. 126-35209, as of December 31, 2001 and 2000, and
the related statements of profit and loss, changes in partners' capital, and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America 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 Weidler Associates Limited
Partnership as of December 31, 2001 and 2000, and the results of its operations,
changes in partners' capital, and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 February 20, 2002, on our
consideration of Weidler Associates Limited Partnership's internal control, and
reports dated February 20, 2002, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD program transactions. These reports are an integral report of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 14-21 is presented for the purpose of additional analysis,
and is not a required part of the basic financial statements of Weidler
Associates Limited Partnership. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
GREGG ASSOCIATES, PC
/s/ David R. Gregg
David R. Gregg
Certified Public Accountant
Portland, Oregon
February 20, 2002
87
[Letterhead of ASHER & COMPANY, LTD.]
Independent Auditors' Report
- ----------------------------
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 Limited Partnership), HUD Project No. 054-94007, as of
December 31, 2003 and 2002, and the related statements of loss, Partners'
capital and cash flows for the year ended December 31, 2003. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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. (A Limited Partnership), HUD Project No. 054-94007, as of
December 31, 2003 and 2002, and the results of its operations, changes in its
Partners' capital, and its cash flows for the year ended December 31, 2003 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that Gental
Pines - West Columbia Associates, L.P. (A Limited Partnership) will continue as
a going concern. As described in Note B and reported in the accompanying
financial statements, Gentle Pines - West Columbia Associates, L.P. (A Limited
Partnership) has had recurring net losses and has an increasing working capital
deficit in recent years. These conditions raise substantial doubt about Gentle
Pines - West Columbia Associates, L.P.'s (A Limited Partnership) ability to
continue as a going concern. Management's plans in regard to those matters are
described in Note B. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Partnership cannot continue in existence.
Our audit was made for the purpose of forming an opinion on the basic 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 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 issued reports dated
January 29, 2004 on our consideration of Gentle Pines - West Columbia
Associates, L.P.'s (A Limited Partnership), HUD Project No. 054-94007, internal
control and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
/s/ Asher & Company, Ltd
Philadelphia, Pennsylvania
January 29, 2004
88
Independent Auditors' Report
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 Limited Partnership), HUD Project No. 054-36627, as of
December 31, 2002 and 2001, and the related statements of loss, Partners'
capital and cash flows for the year ended December 31, 2002. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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. (A Limited Partnership), HUD Project No. 054-36627, as of
December 31, 2002 and 2001, and the results of its operations, changes in its
Partners' capital, and its cash flows for the year ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that Gental
Pines - West Columbia Associates, L.P. (A Limited Partnership) will continue as
a going concern. As described in Note B and reported in the accompanying
financial statements, Gentle Pines - West Columbia Associates, L.P. (A Limited
Partnership) has had recurring net losses and has an increasing working capital
deficit in recent years. These conditions raise substantial doubt about Gentle
Pines - West Columbia Associates, L.P.'s (A Limited Partnership) ability to
continue as a going concern. Management's plans in regard to those matters are
described in Note B. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Partnership cannot continue in existence.
Our audit was made for the purpose of forming an opinion on the basic 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 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 issued reports dated
January 13, 2003 on our consideration of Gentle Pines - West Columbia
Associates, L.P.'s (A Limited Partnership), HUD Project No. 054-36627, internal
control and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
/s/ Asher & Company, Ltd
Philadelphia, Pennsylvania
January 13, 2003
89
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lake Forest Estates II, Ltd.
Livingston, Alabama
We 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, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Lake Forest Estates II, Ltd.,
RHS Project No.: 01-060-630996944 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 2004 on our consideration of Lake Forest Estates II, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2004
90
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lake Forest Estates II, Ltd.
Livingston, Alabama
We 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, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Lake Forest Estates II, Ltd.,
RHS Project No.: 01-060-630996944 as of December 31, 2002 and 2001, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 2003 on our consideration of Lake Forest Estates II, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2003
91
[Letterhead of AMILCAR TORRES RIVERA, CPA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Las Camelias Limited Partnership
I have audited the accompanying balance sheets of Las Camelias Limited
Partnership as of December 31, 2003 and 2002, and the related statements of
loss, changes in Partner's Deficiency 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 auditing standards generally accepted in
the United States of America which 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, 2003 and 2002, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Amilcar Torres Rivera, CPA
San Juan, Puerto Rico
Stamp #1941826 of the Puerto Rico Society of CPA's was affixed to the original.
January 30, 2004
92
[Letterhead of AMILCAR TORRES RIVERA, CPA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Las Camelias Limited Partnership
I have audited the accompanying balance sheets of Las Camelias Limited
Partnership as of December 31, 2002 and 2001, and the related statements of
loss, changes in Partner's Deficiency 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 auditing standards generally accepted in
the United States of America which 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, 2002 and 2001, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Amilcar Torres Rivera, CPA
San Juan, Puerto Rico
Stamp #1784086 of the Puerto Rico Society of CPA's was affixed to the original.
January 29, 2003
93
[Letterhead of DAVID W. SCOTT, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
522 NW 23rd, Suite 200
Portland, Oregon 97201
We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 2003, 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. 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 WPL Associates XXIII Limited
Partnership at December 31, 2003, 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.
Portland, Oregon
February 27, 2004
94
[Letterhead of DAVID W. SCOTT, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
522 NW 23rd, Suite 200
Portland, Oregon 97201
We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 2002, 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. 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 WPL Associates XXIII Limited
Partnership at December 31, 2002, 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.
Portland, Oregon
February 27, 2003
95
[Letterhead of DAVID W. SCOTT, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
522 NW 23rd, Suite 200
Portland, Oregon 97201
We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 2001, 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. 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 WPL Associates XXIII Limited
Partnership at December 31, 2001, 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.
Portland, Oregon
February 22, 2002
96
[Letterhead of REZNICK FEDDER & SILVERMAN]
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, 2003, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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, 2003, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 20,
2004 on our consideration of Broadway Townhouses L.P.'s internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
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 24 through 37
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
January 20, 2004
Taxpayer Identification Number: 52-1088612
Lead Auditor: James P. Martinko
97
[Letterhead of REZNICK FEDDER & SILVERMAN]
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, 2002, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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, 2002, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 30,
2003 on our consideration of Broadway Townhouses L.P.'s internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
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 24 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.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 20, 2003
Taxpayer Identification Number: 52-1088612
Lead Auditor: James P. Martinko
98
[Letterhead of REZNICK FEDDER & SILVERMAN]
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, 2001, 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 auditing standards generally accepted
in the United States of America 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, 2001, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
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 24 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 and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 31,
2002 on our consideration of Broadway Townhouses L.P.'s internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 31, 2002
Taxpayer Identification Number: 52-1088612
Lead Auditor: James P. Martinko
99
[Letterhead of JUAN P. SANTIAGO & ASSOCIATES]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Puerto Rico Historic Zone Limited Dividend Partnership
We have audited the accompanying balance sheet of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2003, 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 my
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2003, and the results of its
operations, the changes in partners' deficit and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audits of
HUD Programs issued by the U.S. Department of Housing and Urban Development we
have also issued a report dated January 29, 2004, on our consideration of Puerto
Rico Historic Zone Limited Dividend Partnership's internal control and reports
dated January 29, 2004, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and special requirements applicable to non-major HUD program
transactions. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 19 through 28
is presented for the purpose of additional analysis and is not required as part
of the basic financial statement. 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/ Juan P. Santiago
Lic. No. 692, In force
I.D. No. 66-0528810
Stamp No. 1934615 was affixed to the original of this report.
San Juan, Puerto Rico
February 29, 2004
100
[Letterhead of JUAN P. SANTIAGO & ASSOCIATES]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Puerto Rico Historic Zone Limited Dividend Partnership
We have audited the accompanying balance sheet of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2002, 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 my
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2002, and the results of its
operations, the changes in partners' deficit and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audits of
HUD Programs issued by the U.S. Department of Housing and Urban Development we
have also issued a report dated February 20, 2003, on our consideration of
Puerto Rico Historic Zone Limited Dividend Partnership's internal control and
reports dated February 20 2003, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-Discrimination, and special requirements applicable to non-major
HUD program transactions. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 19 through 28
is presented for the purpose of additional analysis and is not required as part
of the basic financial statement. 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/ Juan P. Santiago
Lic. No. 692, In force
I.D. No. 66-0528810
Stamp No. 1853087 was affixed to the original of this report.
San Juan, Puerto Rico
February 20, 2003
101
[Letterhead of JUAN P. SANTIAGO & ASSOCIATES]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Puerto Rico Historic Zone Limited Dividend Partnership
We have audited the accompanying balance sheet of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2001, 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 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 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 my
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2001, and the results of its
operations, the changes in partners' deficit and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audits of
HUD Programs issued by the U.S. Department of Housing and Urban Development we
have also issued a report dated February 19, 2002, on our consideration of
Puerto Rico Historic Zone Limited Dividend Partnership's internal control and
reports dated February 19, 2002, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-Discrimination, and special requirements applicable to non-major
HUD program transactions. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 19 through 23
is presented for the purpose of additional analysis and is not required as part
of the basic financial statement. 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/ Juan P. Santiago
Lic. No. 692, In force
I.D. No. 66-0528810
Stamp No. 1777085 was affixed to the original of this report.
San Juan, Puerto Rico
February 19, 2002
102
[Letterhead of CABLISH, GENTILE & GAY]
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. 067-94043 (a limited partnership) (the Partnership), as of
December 31, 2003, and the related statements of profit and loss, 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.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs, issued by
the U.S. Department of Housing and Urban Development, Office of Inspector
General, in August 1997. 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, 2003 and the results of its operations, cash flows and changes
in partners' equity (deficit) for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules included in the
financial statements (shown on pages 11 through 16) are presented for the
purpose 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 reports
dated January 28, 2004 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal controls and on its compliance with laws and regulations applicable to
the basic financial statements. In accordance with the Consolidated Audit Guide,
we have also issued reports dated January 28, 2004 on major HUD programs, and
the nonmajor HUD program.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 5 to the
financial statements, the Partnership's significant operating losses and low
occupancy rate raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Cablish, Gentile & Gay, CPA's LLC
BRADENTON, FLORIDA
January 28, 2004
103
[Letterhead of CABLISH, GENTILE & GAY]
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, 2002, and the related statements of profit and loss, 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.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs, issued by
the U.S. Department of Housing and Urban Development, Office of Inspector
General, in August 1997. 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, 2002 and the results of its operations, cash flows and 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 supplemental schedules included in the
financial statements (shown on pages 11 through 15) are presented for the
purpose 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 reports
dated February 1, 2003 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal controls and on its compliance with laws and regulations applicable to
the basic financial statements. In accordance with the Consolidated Audit Guide,
we have also issued reports dated February 1, 2003 on major HUD programs, and
the nonmajor HUD program.
/s/ Cablish, Gentile & Gay, CPA
BRADENTON, FLORIDA
February 1, 2003
104
[Letterhead of CABLISH, GENTILE & GAY]
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, 2001, and the related statements of profit and loss, 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.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs, issued by
the U.S. Department of Housing and Urban Development, Office of Inspector
General, in August 1997. 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, 2001 and the results of its operations, cash flows and 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 supplemental schedules included in the
financial statements (shown on pages 11 through 15) are presented for the
purpose 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 reports
dated February 9, 2002 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal controls and on its compliance with laws and regulations applicable to
the basic financial statements. In accordance with the Consolidated Audit Guide,
we have also issued reports dated February 9, 2002 on major HUD programs, and
the nonmajor HUD program.
/s/ Cablish, Gentile & Gay, CPA
BRADENTON, FLORIDA
February 9, 2002
105
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sartain School Venture
We have audited the accompanying balance sheet of Sartain School Venture as of
December 31, 2003 and 2002, and the related statements of profit and loss,
changes in 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 Sartain School Venture as of
December 31, 2003 and 2002, and the results of its operations, changes in
partners' deficit and its cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2003, dated February 6, 2004, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
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 24 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
Baltimore, Maryland
February 6, 2004
106
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sartain School Venture
We have audited the accompanying balance sheet of Sartain School Venture as of
December 31, 2001 and the related statements of profit and loss, changes in
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 Sartain School Venture for the year ended
December 31, 2000, were audited by other auditors whose report, dated January
13, 2001, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 audit provides a reasonable basis for our
opinion.
In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Sartain School Venture as of
December 31, 2001, and the results of its operations, changes in partners'
deficit and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
Our 2001 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 26 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 our report
for the year ended December 31, 2001, dated January 25, 2002, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 25, 2002
107
[ASHER & COMPANY, LTD. LETTERHEAD]
Independent Auditors' Report
The Partners
Driftwood Terrace Associates, Ltd.
Marlton, New Jersey
We have audited the accompanying balance sheets of Driftwood Terrace Associates,
Ltd. (A Limited Partnership), HUD Project No. 066-94031, as of December 31, 2003
and 2002 and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2003. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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. (A Limited Partnership), HUD Project No. 066-94031, as of December 31, 2003
and 2002 and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic 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 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 20, 2004 on our consideration of Driftwood Terrace Associates,
Ltd.'s (A Limited Partnership), HUD Project No. 066-94031, internal control and
on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grants. Those reports are an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 20, 2004
108
[ASHER & COMPANY, LTD. LETTERHEAD]
Independent Auditors' Report
The Partners
Driftwood Terrace Associates, Ltd.
Marlton, New Jersey
We have audited the accompanying balance sheets of Driftwood Terrace Associates,
Ltd. (A Limited Partnership), HUD Project No. 066-36678, as of December 31, 2002
and 2001 and the related statements of loss, Partners' capital and cash flows
for the year 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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. (A Limited Partnership), HUD Project No. 066-36678, as of December 31, 2002
and 2001, and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic 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 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 14, 2003 on our consideration of Driftwood Terrace Associates,
Ltd.'s (A Limited Partnership), HUD Project No. 066-36678, internal control and
on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grants. Those reports are an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 14, 2003
109
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Holly Hill, Ltd.
Greenville, Tennessee
We have audited the accompanying balance sheets of Holly Hill, Ltd., a limited
partnership, RHS Project No.: 48-030-621264791 as of December 31, 2003 and 2002,
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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Holly Hill, Ltd., RHS Project
No.: 48-030-621264791 as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 23, 2004 on our consideration of Holly Hill, Ltd.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 2004
110
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Holly Hill, Ltd.
Greenville, Tennessee
We have audited the accompanying balance sheets of Holly Hill, Ltd., a limited
partnership, RHS Project No.: 48-030-621264791 as of December 31, 2002 and 2001,
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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Holly Hill, Ltd., RHS Project
No.: 48-030-621264791 as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2003 on our consideration of Holly Hill, Ltd.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2003
111
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Mayfair Apartments, Ltd.
Morristown, Tennessee
We have audited the accompanying balance sheets of Mayfair Apartments, Ltd., a
limited partnership, RHS Project No.: 48-032-630957575 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Mayfair Apartments, Ltd., RHS
Project No.: 48-032-630957575 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
auditing standards generally accepted in the United States of America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with auditing standards generally accepted in the United States of
America, we have also issued a report dated February 20, 2004 on our
consideration of Mayfair Apartments, Ltd.'s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws and
regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004
112
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Mayfair Apartments, Ltd.
Morristown, Tennessee
We have audited the accompanying balance sheets of Mayfair Apartments, Ltd., a
limited partnership, RHS Project No.: 48-032-630957575 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Mayfair Apartments, Ltd., RHS
Project No.: 48-032-630957575 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
auditing standards generally accepted in the United States of America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with auditing standards generally accepted in the United States of
America, we have also issued a report dated February 24, 2003 on our
consideration of Mayfair Apartments, Ltd.'s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws and
regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 24, 2003
113
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Foxcroft Apartments, Ltd.
Troy, Alabama
We have audited the accompanying balance sheets of Foxcroft Apartments, Ltd., a
limited partnership, RHS Project No.: 01-055-630971151 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Foxcroft Apartments, Ltd., RHS
Project No.: 01-055-630971151 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 2004 on our consideration of Foxcroft Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 17, 2004
114
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Foxcroft Apartments, Ltd.
Troy, Alabama
We have audited the accompanying balance sheets of Foxcroft Apartments, Ltd., a
limited partnership, RHS Project No.: 01-055-630971151 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Foxcroft Apartments, Ltd., RHS
Project No.: 01-055-630971151 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2003 on our consideration of Foxcroft Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2003
115
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Canterbury Apartments, Ltd.
Indianola, Mississippi
We have audited the accompanying balance sheets of Canterbury Apartments, Ltd.,
a limited partnership, RHS Project No.: 28-067-630979083 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Canterbury Apartments, Ltd.,
RHS Project No.: 28-067-630979083 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2004 on our consideration of Canterbury Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004
116
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Canterbury Apartments, Ltd.
Indianola, Mississippi
We have audited the accompanying balance sheets of Canterbury Apartments, Ltd.,
a limited partnership, RHS Project No.: 28-067-630979083 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Canterbury Apartments, Ltd.,
RHS Project No.: 28-067-630979083 as of December 31, 2002 and 2001, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 25, 2003 on our consideration of Canterbury Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 25, 2003
117
[Letterhead from Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cutler Canal III Associates, Ltd.
We have audited the accompanying balance sheet of Cutler Canal III Associates,
Ltd., as of December 31, 2003 and 2002, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 Cutler Canal III Associates,
Ltd., as of December 31, 2003 and 2002, and the results of its operations and
its cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Reznick, Fedder & Silverman
Atlanta, Georgia
January 27, 2004
118
[Letterhead from KPMG/Greenville, SC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cutler Canal III Associates, Ltd.
We have audited the accompanying balance sheet of Cutler Canal III Associates,
Ltd., as of December 31, 2001, 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 management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 Cutler Canal III Associates,
Ltd., as of December 31, 2001 and the results of its operations, and its cash
flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information included in the
Schedule of Certain Expenses 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/ KPMG LLP
Greenville, South Carolina
February 13, 2002
119
[Letterhead of MUELLER, PROST, PURK & WILLBRAND, P.C.]
To the Partners
Jefferson Place, L.P.
Omaha, Nebraska
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets in liquidation of Jefferson
Place, L.P., (A Missouri Limited Partnership) (the "Partnership"), as of July
31, 2003, December 31, 2002 and 2001, and the related statements of income,
changes in partners' deficit and cash flows for the period and 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 U.S. 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.
As described in Note 1, to the financial statements, the partners of Jefferson
Place approved a plan of liquidation on May 1, 2003, and the Partnership began
liquidation shortly thereafter. As a result, the Partnership changed its basis
of accounting for the period ended July 31, 2003, from the accrual basis to the
liquidation basis.
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
July 31, 2003, December 31, 2002 and 2001, and the results of its operations and
its cash flows for the years then ended in conformity with U.S. generally
accepted accounting principles.
/s/ Mueller, Prost, Purk & Willbrand, P.C.
Certified Public Accountants
St. Louis, MO October 29, 2003
120
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Callaway Village, Ltd.
Clinton, Tennessee
We have audited the accompanying balance sheets of Callaway Village, Ltd., a
limited partnership, RHS Project No.: 48-001-581172107 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Callaway Village, Ltd., RHS
Project No.: 48-001-581172107 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 21, 2004 on our consideration of Callaway Village, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2004
121
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Callaway Village, Ltd.
Clinton, Tennessee
We have audited the accompanying balance sheets of Callaway Village, Ltd., a
limited partnership, RHS Project No.: 48-001-581172107 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America 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 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 the
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 Callaway Village, Ltd., RHS
Project No.: 48-001-581172107 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2003 on our consideration of Callaway Village, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2003
122
[Letterhead of Mayer Hoffman McCann P.C.]
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, 2003 and 2002, and the related statements
of loss, partners' capital (deficiency) and cash flows for the years then ended.
These financial statements are the responsibility of Commerce Square Apartments
Associates, L.P.'s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with U.S. generally accepted auditing
standards and standards applicable to financial audits contained in Government
Auditing Standard, 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, 2003 and 2002, and the results of its
operations, partners' capital (deficiency) and cash flows for the years then
ended in conformity with U.S. generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information, shown on
pages 12 to 23 is presented for the purpose of additional analysis and is not
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 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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 2004, on our consideration of Commerce Square Apartments
Associates, L.P.'s internal control and reports dated January 31, 2004, on its
compliance with specific requirements applicable to major HUD programs and
specific requirements applicable to Fair Housing and Non-Discrimination. Those
reports are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
/s/ Mayer Hoffman McCann P.C.
January 31, 2004
Plymouth Meeting, Pennsylvania
123
[Letterhead of HALBERT, KATZ & CO. P.C.]
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, 2001 and December 31, 2000, and the related
statements of loss, partners' capital (capital deficiency) 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 auditing standards generally accepted
in the United States of America. 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, 2001 and December 31, 2000, and the results
of its operations, changes in partners' capital (capital deficiency) and cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
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 13 to 15) 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 31, 2002
Philadelphia, Pennsylvania
124
[Letterhead of KOCH GROUP & COMPANY, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
West 132nd Development Partnership
We have audited the accompanying balance sheets of West 132nd Development
Partnership as of December 31, 2003 and the related statements of operations,
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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 132nd Development
Partnership, as of December 31, 2003 and the results of its operations, changes
in partners' equity and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ Koch Group & Company, LLP
New York, New York
February 4, 2004
125
[Letterhead of KOCH GROUP & COMPANY, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
West 132nd Development Partnership
We have audited the accompanying balance sheets of West 132nd Development
Partnership as of December 31, 2002 and the related statements of operations,
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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 West 132nd Development
Partnership, as of December 31, 2002 and the results of its operations, changes
in partners' equity and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ Koch Group & Company, LLP
New York, New York
January 6, 2003
126
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
West 132nd Development Partnership
We have audited the accompanying balance sheets of West 132nd Development
Partnership as of December 31, 2001 and 2000, 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 audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 West 132nd Development
Partnership, as of December 31, 2001 and 2000, and the results of its
operations, changes in partners' equity (deficit) and cash flows for the years
then ended, in conformity with accounting principles generally accepted in the
United States of America.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 9, 2002
127
[Letterhead of O'CONNOR DAVIES MUNNS & DOBBINS, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Site H Development Company
(A Limited Partnership)
We have audited the accompanying balance sheets of Site H Development Company (a
Limited Partnership) for the years ended December 31, 2001 and 2000, 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
Site H Development Company management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 aforementioned financial statements represent fairly, in all
material respects, the financial position of Site H Development Company as of
December 31, 2001 and 2000, and its operations, changes in its partners' capital
accounts and cash flows for the years then ended in conformity with the
accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information in schedules
of project operating expenses 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 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/ O'Connor Davies Munns & Dobbins, LLP
Harrison, NY
February 28, 2002
128
[Letterhead of Koch Group & Company, LLP]
Independent Auditor's Report
To the Partners
L.I.H. Chestnut Associates, L.P.
We have audited the accompanying balance sheets of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 2003 and 2002, and the related statements of profit and loss,
changes in partners' equity (deficiency), and cash flows for the years then
ended. These financial statements are the responsibility of L.I.H Chestnut
Associates, L.P.'s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 2003 and 2002, and the results of its operations, changes in
partners' equity (deficiency) and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (pages 23 to 26) is presented for purposes of additional analysis
and is not a required part of the of L.I.H. Chestnut Associates, L.P. 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.
In accordance with Government Auditing Standards, we have also issued our report
dated February 9, 2004 on our consideration of L.I.H. Chestnut Associates,
L.P.'s (A Pennsylvania limited partnership) internal control over financial
reporting and on our tests of its compliance with certain provision of laws,
regulators, contracts and grants. This report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
/s/ Koch Group & Company, LLP
New York, New York
February 9, 2004
129
[Letterhead of Koch Group & Company, LLP]
Independent Auditor's Report
To the Partners
L.I.H. Chestnut Associates, L.P.
We have audited the accompanying balance sheets of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 2002 and 2001, and the related statements of profit and loss,
changes in partners' equity (deficiency), and cash flows for the years then
ended. These financial statements are the responsibility of L.I.H Chestnut
Associates, L.P.'s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 2002 and 2001, and the results of its operations, changes in
partners' equity (deficiency) and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (pages 23 to 26) is presented for purposes of additional analysis
and is not a required part of the of L.I.H. Chestnut Associates, L.P. 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.
In accordance with Government Auditing Standards, we have also issued our report
dated January 29, 2003 on our consideration of L.I.H. Chestnut Associates,
L.P.'s (A Pennsylvania limited partnership) internal control over financial
reporting and on our tests of its compliance with certain provision of laws,
regulators, contracts and grants. This report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
/s/ Koch Group & Company, LLP
New York, New York
February 29, 2003
130
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Diamond Phase II Venture
We have audited the accompanying balance sheet of Diamond Phase II Venture as of
December 31, 2003 and 2002, and the related statements of profit and loss,
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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 the 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, financial statements referred to above present fairly, in all
material respects, the financial position of Diamond Phase II Venture at
December 31, 2003 and 2002, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2003, dated February 6, 2004, on our
consideration of Diamond Phase II Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 26
through 29 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
Baltimore, Maryland
February 6, 2004
131
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Diamond Phase II Venture
We have audited the accompanying balance sheet of Diamond Phase II Venture as of
December 31, 2002 and 2001, and the related statements of profit and loss,
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 audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 the 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, financial statements referred to above present fairly, in all
material respects, the financial position of Diamond Phase II Venture at
December 31, 2002 and 2001, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2002, dated January 24, 2003, on our
consideration of Diamond Phase II Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 25 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.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 24, 2003
132
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bookbindery Associates
We have audited the accompanying balance sheet of Bookbindery Associates as of
December 31, 2003 and 2002, and the related statements of profit and loss,
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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 the 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 Bookbindery Associates as of
December 31, 2003 and 2002, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2003, dated January 23, 2004, on our
consideration of Bookbindery Associates' internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 28
through 31 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
Baltimore, Maryland
January 23, 2004
133
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bookbindery Associates
We have audited the accompanying balance sheet of Bookbindery Associates as of
December 31, 2002 and 2001, and the related statements of profit and loss,
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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in 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 the 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 Bookbindery Associates as of
December 31, 2002 and 2001, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2002, dated January 31, 2003, on our
consideration of Bookbindery Associates' internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 27
through 30 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
Baltimore, Maryland
January 31, 2003
134
[Letterhead of BUCHBINDER TUNICK & COMPANY LLP]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of The Hamlet, Ltd.
We have audited the accompanying balance sheets of The Hamlet, Ltd. (a Florida
limited partnership) (Partnership) as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America. 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 The Hamlet, Ltd. as of December
31, 2003 and 2002, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 12
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 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/ BUCHBINDER TUNICK & COMPANY LLP
Rockville, Maryland
January 28, 2004
135
[Letterhead of BUCHBINDER TUNICK & COMPANY LLP]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of The Hamlet, Ltd.
We have audited the accompanying balance sheets of The Hamlet, Ltd. (a Florida
limited partnership) (the "Partnership") as of December 31, 2002 and 2001, and
the related statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 The Hamlet, Ltd. as of December
31, 2002 and 2001, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/ BUCHBINDER TUNICK & COMPANY LLP
Boca Raton, Florida
January 29, 2003
136
[Letterhead of ISRAEL ROLON, CPA]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY
- --------------------------------------------------------------------------------
INFORMATION
- -----------
TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP
I have audited the accompanying balance sheet of Stop 22 Limited Partnership,
H.U.D. Project No.: R2-46-E-006-014 and R2-46-E-00l-013, as of December 31,
2003, and the related statements of loss, changes in partners' deficit 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 auditing standards generally accepted in
the United States of America and the standards applicable to financial audits
contained in 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, 2003, and the results of its operations, changes in partners'
deficit, and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, I have also issued reports
dated February 12, 2004, on my consideration of Stop 22 Limited Partnership's
internal control, and on my test of its compliance with certain provision of
laws, regulations, contracts and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of my audit.
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 to 21 to 29) 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, C.P.A.
SAN JUAN, PUERTO RICO
February 12, 2004
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 1929520 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
137
[Letterhead of ISRAEL ROLON, CPA]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY
INFORMATION
TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP
I have audited the accompanying balance sheet of Stop 22 Limited Partnership,
H.U.D. Project No.: R2-46-E-006-014 and R2-46-E-00l-013, as of December 31,
2002, and the related statements of loss, changes in partners' deficit 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 auditing standards generally accepted in
the United States of America and the standards applicable to financial audits
contained in 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, 2002, and the results of its operations, changes in partners'
deficit, and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, I have also issued reports
dated February 13, 2003, on my consideration of Stop 22 Limited Partnership's
internal control, and on my test of its compliance with certain provision of
laws, regulations, contracts and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of my audit.
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 to 21 to 29) 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, C.P.A.
SAN JUAN, PUERTO RICO
February 13, 2003
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 1772481 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
138
[Letterhead of ISRAEL ROLON, CPA]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY
INFORMATION
TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP
I have audited the accompanying balance sheet of Stop 22 Limited Partnership,
H.U.D. Project No.: R2-46-E-006-014 and R2-46-E-00l-013, as of December 31,
2001, and the related statements of loss, changes in partners' deficit 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 auditing standards generally accepted in
the United States of America 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, 2001, and the results of its operations, changes in partners'
deficit, and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
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 a report dated February 14, 2002 on my
consideration of Stop 22 Limited Partnership's internal control and reports
dated February 14, 2002 on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-discrimination, and laws and regulations applicable to the financial
statements. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
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 to 21 to 29) 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, C.P.A.
SAN JUAN, PUERTO RICO
February 14, 2002
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 1772481 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
139
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knob Hill Apartments, Ltd.
Morristown, Tennessee
We have audited the accompanying balance sheets of Knob Hill Apartments, Ltd. a
limited partnership, RHS Project No.: 48-032-638979224 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America. 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 the 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 Knob Hill Apartments, Ltd., RHS
Project No 48-032-638979224 as of December 31, 2003 and 2002, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.
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 and II for the year ended December 31, 2003 and 2002, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2004 on our consideration of Knob Hill Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004
140
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knob Hill Apartments, Ltd.
Morristown, Tennessee
We have audited the accompanying balance sheets of Knob Hill Apartments, Ltd. a
limited partnership, RHS Project No.: 48-032-638979224 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America. 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 the 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 Knob Hill Apartments, Ltd., RHS
Project No 48-032-638979224 as of December 31, 2002 and 2001, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.
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 and II for the year ended December 31, 2002 and 2001, 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 our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 25, 2003 on our consideration of Knob Hill Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 25, 2003
141
[Letterhead of Salmin, Celona, Wehrle & Flaherty, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer James Street Associates
We have audited the accompanying balance sheets of Conifer James Street
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations and partners' capital (deficit), and cash flows
for the years then ended. These 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 auditing standards generally accepted
in the United States of America. 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
as of December 31, 2003 and 2002, and the results of its operations and cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Salmin, Celona, Wehrle & Flaherty, LLP
Rochester, New York
January 27, 2004
142
[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer James Street Associates
(A Limited Partnership)
Syracuse, New York
We have audited the accompanying balance sheets of Conifer James Street
Associates (A Limited Partnership) as of December 31, 2001 and 2000, 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 auditing standards generally accepted
in the United States of America. 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, 2001 and 2000, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Respectfully Submitted,
/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 30, 2002
143
[Letterhead of RBG & CO.]
Independent Auditors' Report
S2100-020
To The Partners
Longfellow Heights Apartments, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Longfellow Heights Apartments,
L.P., Project No. MHDC No. 89-583, a limited partnership, as of December 31,
2003 and 2002, and the related statements of income, 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 auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (shown on pages 15 to 24) 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 financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Rubin, Brown, Gornstern & Co. LLP
St. Louis, Missouri
January 29, 2004
144
[Letterhead of RBG & CO.]
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, 2002 and 2001, and the related
statements of income (loss), 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 audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Rubin, Brown, Gornstern & Co. LLP
St. Louis, Missouri
January 15, 2003
145
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
------------------------------
2004 2003
------------- -------------
Property and equipment - at cost, less accumulated
depreciation (Notes 2, 4 and 12) $ 163,934,774 $ 175,906,203
Cash and cash equivalents (Notes 2, 3 and 12) 3,656,322 5,098,740
Cash held in escrow (Notes 3 and 5) 13,258,260 13,369,452
Deferred costs - less accumulated amortization (Notes 2 and 6) 2,670,475 3,048,279
Other assets 2,776,525 2,691,106
------------- -------------
Total assets $ 186,296,356 $ 200,113,780
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage notes payable (Note 7) $ 172,456,295 $ 185,593,622
Due to debt guarantor (Note 12(a)) 49,958,612 46,343,389
Accounts payable and other liabilities 24,044,416 23,628,888
Due to local general partners and affiliates (Note 8) 11,682,238 17,303,330
Due to general partners and affiliates (Note 8) 11,905,206 10,358,805
------------- -------------
Total liabilities 270,046,767 283,228,034
------------- -------------
Minority interest (Note 2) (1,481,127) (867,942)
------------- -------------
Commitments and contingencies (Notes 7, 8 and 12)
Partners' deficit
Limited partners (139,101.5 BACs
issued and outstanding) (Note 1) (80,211,134) (80,188,392)
General partners (2,058,150) (2,057,920)
------------- -------------
Total partners' deficit (82,269,284) (82,246,312)
------------- -------------
Total liabilities and partners' deficit $ 186,296,356 $ 200,113,780
============= =============
See accompanying notes to consolidated financial statements.
146
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 31,
--------------------------------------------
2004 2003 2002
------------ ------------ ------------
Revenues
Rental income $ 34,424,770 $ 34,887,492 $ 35,577,622
Other 1,237,808 1,709,789 1,347,956
Gain (loss) on sale of properties (Note 10) 13,942,678 0 (84,237)
------------ ------------ ------------
49,605,256 36,597,281 36,841,341
------------ ------------ ------------
Expenses
General and administrative 7,580,353 7,964,568 6,825,933
General and administrative-related parties
(Note 8) 3,592,450 3,683,135 3,777,505
Repairs and maintenance 6,072,804 6,375,109 6,424,708
Operating and other 4,296,305 4,137,975 4,502,717
Real estate taxes 2,253,959 2,233,028 2,332,594
Insurance 2,120,548 1,854,026 1,513,080
Interest 13,805,397 14,819,895 15,037,842
Depreciation and amortization 10,179,376 11,201,335 10,838,816
Loss on impairment of fixed assets (Note 4) 0 2,153,880 0
------------ ------------ ------------
Total expenses 49,901,192 54,422,951 51,253,195
------------ ------------ ------------
Loss before minority interest and
extraordinary item (295,936) (17,825,670) (14,411,854)
Minority interest in loss of subsidiary
partnerships 272,964 281,929 218,421
------------ ------------ ------------
Loss before extraordinary item (22,972) (17,543,741) (14,193,433)
Extraordinary item -forgiveness of indebted-
ness income (Note 11) 0 0 2,156,560
------------ ------------ ------------
Net loss $ (22,972) $(17,543,741) $(12,036,873)
============ ============ ============
Loss before extraordinary item -
limited partners $ (22,742) $(17,368,304) $(14,051,498)
Extraordinary item - limited partners 0 0 2,134,994
------------ ------------ ------------
Net loss - limited partners $ (22,742) $(17,368,304) $(11,916,504)
============ ============ ============
Number of BACs outstanding 139,101.5 139,101.5 139,101.5
============ ============ ============
Loss before extraordinary item per BAC $ (.16) $ (124.86) $ (101.02)
Extraordinary item per BAC 0 0 15.35
------------ ------------ ------------
Net loss per BAC $ (.16) $ (124.86) $ (85.67)
============ ============ ============
See accompanying notes to consolidated financial statements.
147
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
Limited General
Total Partners Partners
------------ ------------ ------------
Partners' deficit - April 1, 2001 $(52,665,698) $(50,903,584) $ (1,762,114)
Net loss, year ended March 31, 2002 (12,036,873) (11,916,504) (120,369)
------------ ------------ ------------
Partners' deficit - March 31, 2002 (64,702,571) (62,820,088) (1,882,483)
Net loss, year ended March 31, 2003 (17,543,741) (17,368,304) (175,437)
------------ ------------ ------------
Partners' deficit - March 31, 2003 (82,246,312) (80,188,392) (2,057,920)
Net loss, year ended March 31, 2004 (22,972) (22,742) (230)
------------ ------------ ------------
Partners' deficit - March 31, 2004 $(82,269,284) $(80,211,134) $ (2,058,150)
============ ============ ============
See accompanying notes to consolidated financial statements.
148
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Year Ended March 31,
--------------------------------------------
2004 2003 2002
------------ ------------ ------------
Cash flows from operating activities:
Net loss $ (22,972) $(17,543,741) $(12,036,873)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 10,179,376 11,201,335 10,838,816
Loss on impairment of fixed assets 0 2,153,880 0
(Gain) loss on sale of property (13,942,678) 0 84,237
Forgiveness of debt 0 0 (2,156,560)
Interest added to mortgage note payable 362,358 345,811 326,085
Minority interest in loss of subsidiary
partnerships (272,964) (281,929) (218,421)
(Increase) decrease in assets:
Cash held in escrow 134,243 249,525 471,038
Other assets (148,441) (426,044) 25,192
Increase (decrease) in liabilities:
Due to debt guarantor 3,153,223 3,124,405 3,029,246
Accounts payable and other liabilities 784,877 1,669,863 1,244,255
Increase in due to local general partners
and affiliates 673,881 1,622,993 728,267
Decrease in due to local general partners
and affiliates 0 (396,170) 0
Due to general partners and affiliates 1,546,401 1,821,804 1,667,365
------------ ------------ ------------
Total adjustments 2,470,276 21,085,473 16,039,520
------------ ------------ ------------
Net cash provided by operating activities 2,447,304 3,541,732 4,002,647
------------ ------------ ------------
Cash flows from investing activities:
Acquisition of property and equipment (1,316,199) (1,193,381) (1,259,603)
Increase in cash held in escrow (105,383) (29,413) (175,587)
Decrease in cash held in escrow for
real estate investments 82,332 0 39,798
Proceeds from sale of property 2,890,000 0 80,000
Costs paid relating to sale of property (180,960) 0 (53,877)
Increase in due to local general partners
and affiliates 69,717 71,918 73,177
Decrease in due to local general partners
and affiliates 0 (433,206) (80,620)
------------ ------------ ------------
Net cash provided by (used in) investing activities 1,439,507 (1,584,082) (1,376,712)
------------ ------------ ------------
149
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(continued)
Year Ended March 31,
--------------------------------------------
2004 2003 2002
------------ ------------ ------------
Cash flows from financing activities:
Increase in deferred costs (4,150) (242,394) (1,817)
Repayments on mortgage notes (5,675,185) (8,972,058) (2,757,827)
Borrowings on mortgage notes 2,935,500 6,255,600 0
Advances from debt guarantor 462,000 360,000 895,000
Increase in due to local general partners
and affiliates 1,867 392,326 301,350
Decrease in due to local general partners
and affiliates (2,709,040) 0 0
(Decrease) increase in capitalization of
consolidated subsidiaries attributable
to minority interest (340,221) (757,158) 136,314
------------ ------------ ------------
Net cash used in financing activities (5,329,229) (2,963,684) (1,426,980)
------------ ------------ ------------
Net (decrease) increase in cash and cash
equivalents (1,442,418) (1,006,034) 1,198,955
Cash and cash equivalents at beginning
of year 5,098,740 6,104,774 4,905,819
------------ ------------ ------------
Cash and cash equivalents at end of year $ 3,656,322 $ 5,098,740 $ 6,104,774
============ ============ ============
Supplemental disclosure of cash flows
information:
Cash paid during the year for interest $ 8,571,124 $ 9,059,474 $ 9,395,348
============ ============ ============
Supplemental disclosures of noncash investing
and financing activities:
Forgiveness of indebtedness:
Decrease in accounts payable and other
liabilities $ 0 $ 0 $ 2,156,560
Summarized below are the components of the
(gain) loss on sale of properties:
Decrease in property and equipment, net of
accumulated depreciation $ 3,267,096 $ 0 $ 2,928,884
Decrease in cash held in escrow 0 0 442,164
Decrease in other assets 63,022 0 20,661
Decrease in mortgage notes payable (10,760,000) 0 (1,732,008)
Decrease in accounts payable and other
liabilities (369,349) 0 (72,395)
Decrease in due to local general partners and
affiliates (3,657,517) 0 (1,476,946)
Decrease in deferred costs 223,110 0 0
See accompanying notes to consolidated financial statements.
150
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
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", and together with the
Related General Partner, the "General Partners"). The general partner of the
Related General Partner is Related Credit Properties III Inc., a Delaware
corporation. On November 17, 2003, CharterMac acquired Related Capital Company,
which is the indirect parent of RCC Manager LLC, the sole shareholder of Related
Credit Properties III Inc. Pursuant to the acquisition, CharterMac acquired
controlling interests in the General Partners. This acquisition did not affect
the Partnership or its day-to-day operations, as the majority of the General
Partners' management team remained unchanged.
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 ("Rehabilitation
Projects"' and together with the apartment complexes, the "Properties") that are
eligible for the historic rehabilitation tax credit ("Historic Rehabilitation
Tax Credit"; and together with the Housing Tax Credit, the "Tax Credits").
During the year ended March 31, 2004, the Partnership sold the property and the
related assets and liabilities of one Local Partnership. Through the year ended
March 31, 2004, the Partnership sold the property and the related assets and
liabilities of one Local Partnership and its limited partnership interest in a
second Local Partnership. For a discussion of these sales, see Note 10 in Item
8.
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, 2004, 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 61, 61 and 62 Subsidiary Partnerships in which the Partnership is the
principal limited partner for the years ended March 31, 2004, 2003, and 2002,
respectively. Through the rights of the Partnership and/or an affiliate of the
General Partners (which 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. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the Subsidiaries financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with U.S. generally accepted
accounting principles "GAAP").
151
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
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 arise from cash contributions and cash
distributions to the minority interest partners.
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 $0, $298,000 and $239,000 for the years ended March 31,
2004, 2003 and 2002, respectively (the 2003, 2002 and 2001 fiscal years,
respectively). The Partnership's investment in each Subsidiary is equal to the
respective Subsidiary partners' equity less minority interest capital, if any.
In consolidation, all Subsidiary Partnerships' 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
Property and equipment to be held and used are carried at cost, which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring such property and equipment. 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 loss on impairment of assets is recorded
when management estimates 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. During the year ended March 31,
2004, the Partnership has not recorded a loss on impairment of assets. Through
March 31, 2004, the Partnership has recorded approximately $22,237,000 as a loss
on impairment of assets.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. Such
assets would be classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale as of March 31, 2004.
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).
152
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
e) 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.
f) Use of Estimates
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those
estimates.
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.
The estimated fair values of the Partnership's mortgage note payable are as
follows:
March 31, 2004 March 31, 2003
--------------------------- ---------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------------ ------------ ------------ ------------
Mortgage notes payable for which it is:
Practicable to estimate fair value $ 81,933,174 $ 85,103,592 $123,622,052 $126,868,563
Not practicable $ 90,523,121 (*) $ 61,971,570 (*)
(*) Management believes it is not practicable to estimate the fair value of the
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the Local Partnerships.
153
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
Due to Local General Partners and Affiliates
- --------------------------------------------
The estimated fair value of the Partnership's due to the general partners of
each Local Partnership (the "Local General Partners") and affiliates are as
follows:
March 31, 2004 March 31, 2003
--------------------------- ---------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------------ ------------ ------------ ------------
Due to Local General Partners
and affiliates for which it is:
Not practicable to estimate fair value $11,682,238 (*) $17,303,330 (*)
(*) Management believes it is not practicable to estimate the fair value of due
to Local General Partners and affiliates, because market information on such
unique loans are not currently available to the Local Partnership.
The carrying amount of other financial instruments that require such disclosure
approximates fair value.
NOTE 4 - Property and Equipment
The components of property and equipment are as follows:
March 31, Estimated
------------------------------ Useful Lives
2004 2003 (Years)
------------- ------------- --------------
Land $ 12,155,359 $ 12,690,528
Building and improvements 267,056,970 279,391,078 15 to 40 years
Other 7,941,965 7,961,913 5 to 10 years
------------- -------------
287,154,294 300,043,519
Less: Accumulated depreciation (123,219,520) (124,137,316)
------------- -------------
$ 163,934,774 $ 175,906,203
============= =============
Included in property and equipment are $8,346,089 of acquisition fees paid to
the general partners and $2,908,694 of acquisition expenses as of March 31, 2004
and 2003. In addition, as of March 31, 2004 and 2003, buildings and improvements
include $14,677,111 of capitalized interest.
Depreciation expense for the years ended March 31, 2004, 2003 and 2002 amounted
to $10,020,532, $10,621,390 and $10,678,356, respectively.
In connection with the rehabilitation of the properties, the Subsidiary
Partnerships have incurred developers' fees of $25,440,729 as of both March 31,
2004 and 2003 to the Local General Partner and affiliates. Such fees have been
included in the cost of property and equipment.
During the 2003 and 2002 Fiscal Years, there was a decrease in accumulated
depreciation in the amount of $10,938,328 and $3,418,286, respectively, due to
write-offs on dispositions.
154
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
Impairment of Fixed Assets
- --------------------------
Gentle Pines - West Columbia Associates, L.P. ("Gentle Pines")
- ----------------------------------------------------------------
During the year ended March 31, 2003, in accordance with SFAS No. 144, Gentle
Pines deemed buildings to be impaired and were written down to their fair value.
Fair value, which was determined by reference to the debt level that Gentle
Pines can carry given that no debt relief has been arranged and that a lower
rent level is expected, exceeded the carrying value by approximately $1,600,888.
This impairment loss has been charged to operations for the year ended March 31,
2003. As a result of the impairment loss on the fixed assets, buildings and the
related accumulated depreciation were reduced by $3,950,981 and $2,350,093,
respectively.
Brandywine Court Associates, L.P. ("Brandywine")
- -----------------------------------------------
During the year ended March 31, 2003, in accordance with SFAS No. 144,
Brandywine deemed buildings to be impaired and were written down to their fair
value. Fair value, which was determined by reference to the debt level that
Brandywine can carry given that no debt relief is available from either
Jacksonville Housing Authority or the United States Department of Housing and
Urban Development and that a lower rent level is expected, exceeded the net
carrying value by $552,992. This impairment loss was charged to operations for
the year ended March 31, 2003. As a result of the impairment loss on the fixed
assets, buildings and the related accumulated depreciation were reduced by
$1,603,338 and $1,050,346, respectively.
NOTE 5 - Cash Held in Escrow
The components of cash held in escrow are as follows:
March 31,
-------------------------
2004 2003
----------- -----------
Purchase price payments* $ 159,597 $ 241,929
Real estate taxes, insurance and other 5,511,779 5,329,619
Reserve for replacements 6,326,495 6,221,112
Tenants' security deposits 1,260,389 1,576,792
----------- -----------
$13,258,260 $13,369,452
=========== ===========
*Represents amounts to be paid to seller upon meeting specified rental
achievement criteria.
NOTE 6 - Deferred Costs
The components of deferred costs and their periods of amortization are as
follows:
March 31,
--------------------------
2004 2003 Period
----------- ----------- -----------
Financing expenses $ 4,843,204 $ 5,131,285 *
Less: Accumulated amortization (2,172,729) (2,083,006)
----------- -----------
$ 2,670,475 $ 3,048,279
=========== ===========
*Over the life of the related mortgages.
155
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
Amortization of deferred costs for the years ended March 31, 2004, 2003 and 2002
amounted to $158,844, $579,945 and $160,460, respectively. During the years
ended March 31, 2004 and 2003, there was a decrease in accumulated amortization
due to the write-off of fully amortized costs in the amount of $69,121 and
$595,145, respectively. During the year ended March 31, 2004, financing expenses
decreased in the amount of $292,231 due to the sale of the property and the
related assets and liabilities of one Local Partnership. See Sale of Properties
(Note 10).
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
$1,022,000, including principal and interest at rates varying from 0% to 11.5%
per annum, through the year 2044. 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.
Citrus Meadows Apartments, Ltd. ("Citrus Meadows")
- --------------------------------------------------
On July 23, 2002, Citrus Meadows refinanced its existing mortgage indebtedness
in the amount of $5,009,000. The new mortgage in the amount of $5,318,700 bears
interest at the rate of 6.85% per annum and matures on August 1, 2037. Financing
costs of approximately $248,000 were incurred, and a replacement reserve of
approximately $212,000 and mortgage insurance and tax reserve of approximately
$93,000 were established.
South Toledo Associates, Ltd. ("South Toledo")
- ----------------------------------------------
On February 6, 2002, South Toledo refinanced its existing mortgage indebtedness
in the amount of $776,626. The new mortgage in the amount of $879,900 bears
interest at the rate of 6.75% per annum and matures on March 1, 2042. Financing
costs of approximately $39,000 were incurred, and a replacement reserve of
approximately $28,000 and mortgage insurance and tax reserve of approximately
$9,000 were established.
Inter-Tribal Indian Village Housing Development Associates, L.P. ("Indian
- --------------------------------------------------------------------------------
Village")
- ---------
Indian Village received $57,000 in additional financing through a note signed in
fiscal year 2002. The note is non-interest bearing and due in full July 18,
2032.
Annual principal payment requirements as of March 31, 2004 for each of the next
five fiscal years and thereafter are as follows:
Fiscal Year Ending Amount
- ------------------ ------------
2004 $ 6,198,393
2005 11,260,165
2006 9,064,137
2007 6,301,620
2008 4,690,776
Thereafter 134,941,204
------------
$172,456,295
============
No adjustment has been made in the table above for the events of default and
other matters described below and in Note 12(a).
The mortgage agreements require monthly deposits to replacement reserves of
approximately $108,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).
156
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
L.I.H Chestnut Associates, L.P. ("Chestnut")
- --------------------------------------------
Chestnut's Mortgage Agreement contains various covenants pertaining to payment
of monthly loan installments and maintenance of reserve funds. At December 31,
2003 and 2002, Chestnut was in violation of such covenants. As of February 9,
2004, PHFA has not waived the reserve funds requirements, and accordingly,
Chestnut is currently in default. Under the terms of the Mortgage Agreement, if
any event of default, as defined occurs, and is continuing, other rights may be
enforced on behalf of the lenders, inclusive of possession of the Property.
NOTE 8 - Related Party Transactions
As of March 31, 2004, Liberty Associates IV L.P. ("Liberty Associates"), an
affiliate of the General Partners, has a 1% and .998% (see Note 12a with respect
to River Place) interest as a special limited partner in 59 and 1 of the Local
Partnerships, respectively.
The General Partners and their affiliates and the Local General Partners and
their affiliates perform services for the Partnership and the Local
Partnerships, respectively. The costs incurred for the years ended March 31,
2004, 2003 and 2002 are as follows:
A) Guarantees
In November 2002, FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("FASB Interpretation No. 45"), was issued. The
accounting recognition provisions of FASB Interpretation No. 45 are effective
January 1, 2003 on a prospective basis. They require that a guarantor recognize,
at the inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing or modifying any guarantee after December 31,
2002. Under prior accounting principles, a guarantee would not have been
recognized as a liability until a loss was probable and reasonably estimated. At
March 31, 2004, the Partnership has not issued or modified any existing
guarantees and has determined that the adoption of the accounting recognition
provision of FASB Interpretation No. 45 would not have an impact on the
Partnership's future financial position or results of operations.
The Partnership negotiated Operating Deficit Guarantee Agreements with all Local
Partnerships in which the General Partners of the Local Partnerships 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 aggregated approximately $18,700,000 of which all have
expired as of March 31, 2004. At March 31, 2004 and 2003, the net amounts funded
by the Local General Partners to meet such obligations were approximately
$2,150,000 and $1,971,000, respectively. Amounts funded under such agreements
are treated as noninterest 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.
157
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
B) Related Party Fees
The costs incurred to related parties for the years ended March 31, 2004, 2003
and 2002 were as follows:
Year Ended March 31,
------------------------------------
2004 2003 2002
---------- ---------- ----------
Partnership management fees (i) $1,345,196 $1,429,500 $1,434,000
Expense reimbursement (ii) 290,714 272,714 239,696
Local administrative fee (iv) 150,619 199,000 206,796
---------- ---------- ----------
Total general and administrative
- General Partners 1,786,529 1,901,214 1,880,492
---------- ---------- ----------
Property management fees incurred to
affiliates of the Local General Partners (iii) 1,805,921 1,781,921 1,897,013
---------- ---------- ----------
Total general and administrative
- related parties $3,592,450 $3,683,135 $3,777,505
========== ========== ==========
(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 BACs holders 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 $9,810,000 and $8,465,000 were
accrued and unpaid at March 31, 2004 and 2003. Without the General Partners'
continued accrual without payment of these fees and expense reimbursements, the
Partnership will not be in a position to meet its obligations. The General
Partners have allowed for the accrual without payment of these amounts but are
under no obligation to continue to do so.
(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
$2,366,865, $2,362,241 and $2,384,810 for the years ended March 31, 2004, 2003
and 2002, respectively, of which $1,805,921, $1,781,921 and $1,897,013,
respectively, was incurred to affiliates of the Local General Partners.
(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.
Liberty Associates received cash distributions from the Local Partnerships of
$9,816, $8,060 and $7,548 during the years ended March 31, 2004, 2003 and 2002,
respectively.
158
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
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.
C) Due to Local General Partners and Affiliates
Due to Local General Partners and affiliates at March 31, 2004 and 2003 consists
of the following:
March 31,
-------------------------
2004 2003
----------- -----------
Operating deficit advances $ 2,149,580 $ 1,971,048
Development fees 385,821 385,821
Operating advances 5,116,978 4,823,112
Due to contractor 46,289 46,289
General Partner distributions 14,684 12,817
Developer loans and accrued interest (i) 1,327,019 1,317,302
Land note payable (ii) 1,445,106 1,385,106
Long-term note payable and accrued interest (iii) 0 4,984,714
Management and other operating fees 1,196,761 2,377,121
----------- -----------
$11,682,238 $17,303,330
=========== ===========
(i) Developer loans consist of the following:
March 31,
-----------------------
2004 2003
---------- ----------
Jefferson Limited Partnership -
This loan is unsecured, bears interest at an annually adjusted rate
(2.78% at December 31, 2003 and 4.98% at December 31, 2002)
and has no predetermined due date $ 100,000 $ 100,000
This note is unsecured, bears interest at 9.25% per annum
and is due in the event of sale or refinancing of the property 75,000 75,000
Citrus Meadows Apartments, Ltd. -
This loan bears no interest and can only be repaid with the pro-
ceeds from a sale or refinancing 985,784 985,784
Accrued interest on developer loans 166,235 156,518
---------- ----------
$1,327,019 $1,317,302
========== ==========
Interest expense incurred on developer loans amounted to $9,718,
$11,918 and $13,178 for the years ended March 31, 2004, 2003
and 2002, respectively.
159
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(ii) Land note payable consists of the following:
March 31,
-----------------------
2004 2003
---------- ----------
Citrus Meadows Apartments, Ltd. -
- -------------------------------
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 ac-
crued interest, is payable upon the sale of the property or in Au- $1,445,106 $1,385,106
gust 2037, whichever event occurs first. ========== ==========
Interest expense incurred on land note payable amounted to
$60,000 for each of the three years ended March 31, 2004, 2003
and 2002.
(iii) Long-term note payable consists of the following:
March 31,
-----------------------
2004 2003
---------- ----------
Jefferson Place L.P.
- --------------------
On July 30, 1997, an affiliate of the Local General Partner issued
a note payable in the sum of $3,500,000 to the Subsidiary
Partnership. Interest on this note, at the rate of 8.5% annually,
was payable monthly solely out of excess cash flow generated by the
Subsidiary Partnership. The principal in the amount of $2,709,040
was paid from the proceeds resulting from the sale of the Property.
The remaining principal balance in the amount of $790,960 and
accrued interest totaling $1,685,564 was forgiven by the Local
General Partner as of the date of the sale of the Property. All
payments under this $3,500,000 note were subordinate to payments
due under the $12,200,000 tax-exempt mortgage bonds. $ 0 $3,500,000
Accrued interest on note payable. 0 1,484,714
---------- ----------
$ 0 $4,984,714
========== ==========
For the years ended December 31, 2003, 2002 and 2001, interest
on this note amounted to $204,047, $389,129, and $360,182,
respectively. At December 31, 2002 and 2001, $91,629 and $68,361
was interest calculated on past accrued base
interest.
160
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
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:
Year Ended December 31,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------
Financial statement
Net loss $ (22,972) $(17,543,741) $(12,036,873)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes (95,895) 42,234 (24,459)
Difference between depreciation and amortization
expense recorded for financial statement and income
tax reporting purposes (1,978,505) (2,195,237) (2,797,359)
Difference between gain on sale of properties re-
corded for financial statement and income tax re-
porting purposes (6,013,468) 0 0
Loss on impairment recorded for financial statement
not deducted for tax purposes 0 2,153,880 0
Tax-exempt interest income (1,265) 0 (5,881)
Other 758,779 1,379,578 (40,824)
------------ ------------ ------------
Net loss as shown on the Partnership's income tax
return $ (7,354,326) $(16,163,286) $(14,905,396)
============ ============ ============
NOTE 10 - Sale of Properties
On June 26, 2003, the property and related assets and liabilities of Jefferson
Place L.P. ("Jefferson Place") were sold to an unaffiliated third party for
$13,650,000 resulting in a gain of approximately $13,943,000.
On October 4, 2001, the Partnership's limited partnership interest in Northwood
Associates Limited Partnership ("Northwood") was sold to an unaffiliated third
party purchaser for $180,000 and the assumption of the mortgage note, resulting
in a loss in the amount of approximately $84,000.
NOTE 11 - Forgiveness of Debt
On March 29, 2001, Lancashire Towers Associates Limited Partnership
("Lancashire") executed a note purchase agreement with the note holder whereby
all liabilities and obligations of Lancashire to such note holder were settled.
The loan was paid off from the amount of allowable surplus cash distributable to
the partners in 2001 and, therefore, no permission from HUD was necessary to
consummate this transaction. The resultant forgiveness of debt of $2,156,560 has
been recorded as an extraordinary item in the financial statements during the
year ended March 31, 2002.
161
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
NOTE 12 - Commitments and Contingencies
a) Subsidiary Partnerships - Going Concerns
R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- -------------------------------------------------------------------------------
River Place has been unable to generate sufficient cash flow to make the
required principal and interest payments under its loan agreements. River
Place's debt guarantor, General Retirement System of the City of Detroit
("GRS"), entered into an agreement with the Michigan State Housing Authority
(the "Authority") to purchase these loans upon the occurrence of certain events.
GRS has declared River Place in default under its obligation to make the
required payments. During 1996, GRS agreed to waive its right of foreclosure
under the mortgages, unless certain events occur, through February 1, 2006. GRS
has made advances for debt service and has incurred certain fees relating to
these loans totaling $49,958,612, including accrued interest on such advances at
a rate of 15%. Such amount is included in the amount due to debt guarantor on
the balance sheet.
Management anticipates that River Place will be unable to make all of the
required debt service payments during 2004. 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 approximately $883,000 at
both March 31, 2004 and 2003. The net loss after minority interest for River
Place amounted to approximately $3,249,000, $3,127,000 and $3,190,000 for the
years ended March 31, 2004, 2003 and 2002, respectively.
Brandywine Court Associates, L.P. ("Brandywine")
- ------------------------------------------------
The financial statements of Brandywine have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of Brandywine as a going concern. Brandywine has had
recurring net losses and continues to have a substantial working capital
deficit. Furthermore, Brandywine's management continues to anticipate that the
property will need a new roof in the near future, the cost of which is expected
to exceed $150,000. Also, Brandywine's HAP Contract expires in 2004 and there
can be no assurance that it will be renewed. Brandywine's management has
determined that the Property is not eligible for financial relief from the
United States Department of Housing and Urban Development, since the Property
would require relief of debt in excess of the parameters allowed. Brandywine's
management continues to seek a buyer for the Property. In view of these matters,
there is substantial doubt as to the Partnership's ability to continue as a
going concern. The Partnership's investment in Brandywine has been written down
to zero by prior years' losses and the minority interest balance was
approximately $0 at both March 31, 2004 and 2003. The net loss after minority
interest for Brandywine amounted to approximately $101,000, $665,000 (which
includes a $553,000 loss on impairment of fixed assets) and $161,000 for the
years ended March 31, 2004, 2003 and 2002, respectively.
Gentle Pines - West Columbia Associates, L.P. ("Gentle Pines")
- --------------------------------------------------------------
The financial statements of Gentle Pines have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of Gentle Pines as a going concern. Gentle Pines has
had recurring net losses and continues to have a substantial working capital
deficit. A material number of apartment units are no longer supported by
project-based housing subsidies and the project-based HAP contract for the
remaining units expired on May 31, 2004. Management is seeking a nonprofit
organization with an affordable housing mission to acquire Gentle Pines. In view
of these matters, there is substantial doubt as to Gentle Pines' ability to
continue as a going concern. The Partnership's investment in Gentle Pines has
162
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
been written down to zero by prior years' losses and the minority interest
balance was $0 at both March 31, 2004 and 2003. The net loss after minority
interest for Gentle Pines amounted to approximately $100,000, $1,887,000 (which
includes a $1,601,000 loss on impairment of fixed assets) and $181,000 for the
years ended March 31, 2004, 2003 and 2002, respectively.
b) Subsidiary Partnership - Other
WPL Associates XXIII L.P. ("Benjamin's Corner")
- -----------------------------------------------
Benjamin's Corner was party to a lawsuit filed against the landlord and owner of
the ground on which the projects are located. The lawsuit sought declaratory
judgment that Benjamin's Corner can deduct debt service from "Net Cash Flow"
under terms of the ground leases and that Benjamin's Corner is not in default of
the leases and is entitled to exercise its purchase options. The landlord filed
a counter-claim seeking damages of back rent and interest totaling $843,884 plus
interest and late charges on the ground lease payments. In May 2004, Benjamin's
Corner reached a mediated settlement with the owner of the land. Terms of the
settlement require that by June 30, 2004, Benjamin's Corner will exercise its
option and purchase the two parcels of land for $669,586 plus it will pay
deferred ground lease and accrued interest of $1,238,590, for a total settlement
amount of $1,908,176. Through December 31, 2003, Benjamin's Corner had accrued
deferred ground lease expense and interest thereon totaling $1,316,721.
Therefore, in 2004 Benjamin's Corner will realize $78,131 in forgiveness of debt
income due to the reduction in the amount of deferred ground lease and accrued
interest. The Partnership's investment in Benjamin's Corner has been written
down to zero by prior years' losses and the minority interest balance was $0 at
both March 31, 2004 and 2003. The net loss after minority interest for
Benjamin's Corner amounted to approximately $266,000, $246,000 and $195,000 for
the years ended March 31, 2004, 2003 and 2002, respectively.
Citrus Meadows Apartments, LTD. ("Citrus Meadows")
- --------------------------------------------------
Citrus Meadows incurred a net loss of $567,686 during the current period and has
incurred a Partner's deficit of $6,730,425 since inception. Current economic
conditions have limited the ability of Citrus Meadows in increasing tenant
occupancy. In response to economic conditions, management has implemented
expense reduction and increased advertising to attract new tenants. Also,
nonessential capital expenditures have either been eliminated or postponed. With
interest rates being at record lows, more people are purchasing housing instead
of renting. In the interim, the General Partner is funding the deficit. Because
it is unclear whether Citrus Meadows will be successful in accomplishing these
objectives, there is uncertainty about Citrus Meadow's ability to continue as a
going concern. The financial statements do not include any adjustments that
might be necessary should Citrus Meadows be unable to continue as a going
concern. The Partnership's investment in Citrus Meadows has been written down to
zero by prior years' losses and the minority interest balance was $0 at both
March 31, 2004 and 2003. The net loss after minority interest for River Place
amounted to approximately $568,000, $912,000 and $538,000 for the years ended
March 31, 2004, 2003 and 2002, respectively.
Jefferson Limited Partnership ("Jefferson")
- -------------------------------------------
At December 31, 2003 and 2002, Jefferson's current liabilities exceeded its
current assets by over $97,000 and $13,000, respectively. Although this
condition could raise substantial doubt about Jefferson's ability to continue as
a going concern, such doubt is alleviated by the fact that $115,711 and $43,322
of current liabilities at December 31, 2003 and 2002, 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, 2003. The
Partnership's investment in Jefferson was approximately $105,000 and $113,000 at
March 31, 2004 and 2003, respectively, and the minority interest balance was $0
at each date. The net loss after minority interest for Jefferson amounted to
approximately $217,000, $150,000 and $150,000 for the years ended March 31,
2004, 2003 and 2002, respectively.
163
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
Site H Development Co. ("Site H")
- ---------------------------------
The Partnership has not been provided with the Site H audited financial
statements for fiscal years 2003 and 2002, and as such has used estimates in its
Consolidated Financial Statements for both years.
Leases
- ------
Four of the Subsidiary Partnerships are leasing the land on which the Properties
are located, for terms ranging from 28 to 99 years. The leases on these
Properties are noncancelable. At December 31, 2003 those Subsidiary Partnerships
were committed to minimum future annual rentals on the leases aggregating
$155,130 for each of the next five years, and $3,323,603 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, 2004, uninsured cash and
cash equivalents approximated $2,420,000.
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, such as 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
owner's 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.
River Place
- -----------
In order to enhance the marketability of the Variable Rate Limited Obligation
Multifamily Housing Revenue Refunding Bonds (the "2000 Bonds"), GRS entered into
an agreement with a bank whereby the bank issued a direct-pay letter of credit
on the account of River Place in favor of the Authority in the initial stated
amount equal to the initial aggregate principal amount of bonds plus 49 days of
interest on such amount totaling approximately $25,622,663 and $26,801,200 as of
December 31, 2003 and 2002, respectively. The letter of credit, which was due to
expire May 1, 2003, was extended. The extended letter of credit expires on the
earlier of : (i) May 16, 2005, unless extended; (ii) 10 days subsequent to
receipt of Default; (iii) date which the 2000 Bonds are fully repaid; or (iv)
date which the 2000 Bonds become supported by a Substitute Credit Facility.
164
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
e) Tax Credits
A portion of Housing Tax Credits are subject to recapture in future years if (1)
the Local Partnership ceases to meet qualification requirements, (2) there is a
decrease in the qualified basis of the Property, or (3) there is a reduction in
the taxpayer's interest in the Property 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 the tax years 2003, 2002 and 2001, the Partnership generated Housing Tax
Credits of approximately $69,000, $1,274,000 and $8,019,000, respectively.
165
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. The Chief Executive
Officer and Chief Financial Officer of Related Credit Properties III Inc., the
general partner of Related Credit Properties III L.P. and of Liberty GP III
Inc., each of which is a general partner of the Partnership, has evaluated the
effectiveness of the Partnership's disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended ("Exchange Act") as of the end of the period covered by
this report. Based on such evaluation, such officer has concluded that, as of
the end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) Internal Control over Financial Reporting. There have not been any changes
in Partnership's internal control over financial reporting during the fiscal
year to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Partnership's internal control over
financial reporting.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no directors or executive officers. On November 17, 2003,
CharterMac acquired Related Capital Company, which is indirect parent of RCC
Manager L.L.C., the sole shareholder of the general partner of the Related
General Partner. Pursuant to the acquisition, CharterMac acquired controlling
interests in the General Partners. Alan P. Hirmes replaced Stephen M. Ross as
Director of the general partner of the Related General Partner and also replaced
Michael Brenner as Director of the Liberty General Partner, each effective April
1, 2004, as a result of this acquisition. This acquisition did not affect the
Partnership or its day-to-day operations as the majority of the General
Partners' management team remained unchanged. The Partnership has not adopted a
separate code of ethics because the Partnership has no directors or executive
officers. However, the parent company of Related Capital Company, which controls
the General Partners, has adopted a code of ethics. See
http://www.chartermac.com. 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.
Related Credit Properties III, L.P.
- -----------------------------------
Name Position
- ---- --------
Alan P. Hirmes Director, President and Chief Executive Officer
Stuart J. Boesky Senior Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Glenn F. Hopps Treasurer and Assistant Vice President
Teresa Wicelinski Secretary
ALAN P. HIRMES, 49, has been a Certified Public Accountant in New York since
1978. Prior to joining Related Capital Company ("Capital") in October 1983, Mr.
Hirmes was employed by Weiner & Co., certified public accountants. Mr. Hirmes is
166
also a Vice President of Capital. Mr. Hirmes graduated from Hofstra University
with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Trustees
of CharterMac and American Mortgage Acceptance Company ("AMAC").
STUART J. BOESKY, 48, 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. Mr. Boesky also serves
on the Board of Trustees of CharterMac and AMAC.
MARC D. SCHNITZER, 43, joined Capital in January 1988 after receiving his Master
of Business Administration degree from The Wharton School of The University of
Pennsylvania in December 1987. From 1983 to 1986, Mr. Schnitzer was a Financial
Analyst with The First Boston Corporation in New York, an international
investment banking firm. Mr. Schnitzer received a Bachelor of Science degree,
summa cum laude, in Business Administration, from the School of Management at
Boston University in May 1983. Mr. Schnitzer also serves on the Board of
Trustees of CharterMac.
DENISE L. KILEY, 44, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in Capital
sponsored corporate, public and private equity and debt funds. Prior to joining
Capital in 1990, Ms. Kiley had experience acquiring, financing and asset
managing multifamily residential properties. From 1981 through 1985, she was an
auditor with Price Waterhouse. Ms. Kiley holds a Bachelor of Science degree in
Accounting from Boston College. Ms. Kiley also serves on the Board of Trustees
of CharterMac.
GLENN F. HOPPS, 41, joined Capital in December, 1990, and prior to that date was
employed by Marks Shron & Company and Weissbarth, Altman and Michaelson,
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science degree in Accounting.
TERESA WICELINSKI, 38, joined Capital in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski graduated from Pace University with a Bachelor of Arts degree in
Accounting.
Liberty GP III Inc.
- -------------------
Name Position
- ---- --------
Alan P. Hirmes Director, President and Chief Executive Officer
Stuart J. Boesky Executive Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
Biographical information with respect to Messrs. Hirmes, Boesky, Hopps,
Schnitzer, Ms. Kiley and Ms. Wicelinski is set forth above.
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
167
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.
Name and Address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- -------------- -------------------- -------------------- ----------
General Partnership Related Credit Properties $1,000 capital contribution - 50%
Interest in the III L.P. directly owned
Partnership 625 Madison Avenue
New York, NY 10022
General Partnership Liberty GP III Inc. $1,000 capital contribution - 50%
Interest in the 625 Madison Avenue directly owned
Partnership New York, NY 10022
As of March 31, 2004, Liberty Associates holds a 1% and .998% (see Item 7 with
respect to River Place) limited partnership interest in 60 and 1 Local
Partnerships, respectively.
Except as set forth in the table below, no person is known by the Partnership to
be the beneficial owner of more than 5% of the Limited Partnership Interests or
BACs, neither the Liberty General Partner nor any director or executive officer
of the Liberty General Partner owns any Limited Partnership Interests or BACs,
and 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 or BACs. The following table sets forth the number of BACs
beneficially owned, as of June 2, 2004, 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 Liberty General Partner and (iii) the directors and executive
officers of the general partner of the Related General Partner and Liberty
General Partner as a group. Unless otherwise noted, all BACs are owned directly
with sole voting and dispositive powers.
168
Amount and Nature of
Name of Beneficial Owner (1) Beneficial Ownership Percent of Class
- ------------------------ -------------------- ----------------
Lehigh Tax Credit Partners, Inc. 13,127.66 (2) (3) 9.4%
J. Michael Fried 13,127.66 (2) (3) (4) 9.4%
Alan P. Hirmes 13,127.66 (2) (3) (4) 9.4%
Stuart J. Boesky 13,127.66 (2) (3) (4) 9.4%
Mark D. Schnitzer - -
Denise L. Kiley - -
Glenn F. Hopps - -
Teresa Wicelinski - -
All directors and executive officers 13,127.66 (2) (3) (4) 9.4%
of the general partner of the
Related General Partner as a group
(seven persons)
(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 the Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh I") 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
I and the General Partners (the "Standstill Agreement"), Lehigh I agreed that,
prior to April 4, 2007 (the "Standstill Expiration Date"), it will not and it
will cause certain affiliates (including Lehigh II) 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 BACs, (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 I 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,
that Lehigh I 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 I also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, that Lehigh I is entitled to vote its BACs as it
determines with regard to any proposal (i) to remove the General Partners as a
general partner of the Partnership or (ii) concerning the reduction of any fees,
profits, distributions or allocations for the benefit of the General Partners or
their affiliates. The address of each of the Partnership, Lehigh I and the
General Partners is 625 Madison Avenue, New York, New York 10022.
(3) All of such BACs represent BACs owned directly by Lehigh I and Lehigh Tax
Credit Partners II, L.L.C. ("Lehigh II") for which the Managing Member serves as
managing member. As of June 2, 2004, Lehigh I held 6,458.33 BACs and Lehigh II
held 6,520.33 BACs.
169
(4) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein, except for J. Michael Fried, who
owns only an economic interest.
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 in Note 8 to
the Financial Statements in Item 8, which are 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 or the directors and executive officers of the general partner of the
Related General Partner.
Item 14. Principal Accountant Fees and Services.
Audit Fees
- ----------
The aggregate fees billed by Trien Rosenberg Rosenberg Weinberg Ciullo and
Fazzari LLP and their respective affiliates (collectively, "Trien") for
professional services rendered for the audit of our annual financial statements
for the years ended March 31, 2004 and 2003 and for the reviews of the financial
statements included in the Partnership's Quarterly Reports on Form 10-Q for
those years were $57,200 and $57,200, respectively.
Audit Related Fees
- ------------------
None.
Tax Fees
- --------
The aggregate fees billed by Weiser LLP (formerly, Rubin and Katz LLP) and their
respective affiliates (collectively, "Weiser") for professional services
rendered for the preparation of our annual tax returns for the years ended
December 31, 2003 and 2002 were approximately $11,500 and $11,000, respectively.
All Other Fees
- --------------
None.
The Partnership is not required to have, and does not have, a stand alone audit
committee.
170
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Sequential
Page
----------
(a) 1. Financial Statements
--------------------
Report of Independent Registered Public Accounting Firm 19
Consolidated Balance Sheets at March 31, 2004 and 2003 146
Consolidated Statements of Operations for the Years Ended
March 31, 2004, 2003 and 2002 147
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 31, 2004, 2003 and 2002 148
Consolidated Statements of Cash Flows for the Years Ended
March 31, 2004, 2003 and 2002 149
Notes to Consolidated Financial Statements 151
(a) 2. Financial Statement Schedules
-----------------------------
Report of Independent Registered Public Accounting Firm 178
Schedule I - Condensed Financial Information of Registrant 179
Schedule III - Real Estate and Accumulated Depreciation 182
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.
(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 172
(31.1) Certification Pursuant to Rule13a-14(a) or Rule 15d-14(a). 176
(32.1) Certification Pursuant to Rule 13a-14(b) or rule 15d-14(b)
and Section 1350 of Title 18 of the United States
Code (18 U.S.C. 1350). 177
** 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 (Registra-
tion No. 33-25732)
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter.
171
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(continued)
Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------ ---------------
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
Mayfair Apartments LTD. TN
Foxcroft Apartments LTD. AL
Canterbury Apartments, LTD. MS
Cutler Canal III Associates, LTD. FL
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
172
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(continued)
Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------ ---------------
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.
173
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.,
its general partner
Date: June 23, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Director, President, Chief Executive
Officer and Chief Financial Officer
By: LIBERTY GP III INC.,
a General Partner
Date: June 23, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Director, President, Chief Executive Offi-
cer and Chief Financial Officer
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
- ------------------ ---------------------------------------- -------------
Director, President and Chief Executive
Officer and Chief Financial Officer
of Related Credit Properties
III Inc., (a general partner
of Related Credit Properties III L.P.)
/s/ Alan P. Hirmes (a General Partner of Registrant))
- ------------------ and Liberty GP III, Inc.
Alan P. Hirmes (a General Partner of Registrant) June 23, 2004
Treasurer (principal accounting officer)
of Related Credit Properties
III Inc., (a general partner
of Related Credit Properties III L.P.)
/s/ Glenn F. Hopps (a General Partner of Registrant))
- ------------------ and Liberty GP III, Inc.
Glenn F. Hopps (a General Partner of Registrant) June 23, 2004
CERTIFICATION PURSUANT TO RULE
13a-14(a) OR RULE 15d-14(a)
I, Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of
Related Credit Properties III Inc. the general partner of Related Credit
Properties III L.P. and of Liberty GP III Inc, each of which is a General
Partner of Liberty Tax Credit Plus III L.P. (the "Partnership"), hereby certify
that:
1. I have reviewed this annual report on Form 10-K for the year ended
March 31, 2004 of the Partnership;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the Partnership as of, and for, the periods presented in this annual
report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(f) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Partnership and I
have:
a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the Partnership
including its consolidated subsidiaries, is made known to me by others
within those entities, particularly during the period in which this
annual report was being prepared;
b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles; and
c) evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report my conclusion about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this annual report based on such evaluation;
and
d) disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the year ending
March 31, 2004 that has materially affected, or is reasonably likely to
materially affect, the Partnership's internal control over financial
reporting; and
5. I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the Partnership's auditors and to
the boards of directors of the General Partners:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal control over financial reporting.
Date: June 23, 2004
-------------
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Chief Executive Officer and
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
RULE 13a-14(b) OR RULE 15d-14(b) AND
SECTION 1350 OF TITLE 18 OF THE
UNITED STATES CODE (18 U.S.C. 1350)
In connection with the Annual Report of Liberty Tax Credit Plus III L.P. (the
"Partnership") on Form 10-K for the year ended March 31, 2004 as filed with the
Securities and Exchange Commission ("SEC") on the date hereof (the "Report"), I,
Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of Related
Credit Properties III Inc., the General Partner of Related Credit Properties
III, L.P. and of Liberty GP III Inc., each of which is a general partner of the
Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
A signed original of this written statement required by Section 906 has been
provided to the Partnership and will be retained by the Partnership and
furnished to the SEC or its staff upon request.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Chief Executive Officer and
Chief Financial Officer
June 23, 2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Partners of
Liberty Tax Credit Plus III L.P. 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 15
on page 19, and based on the reports of other auditors, we have also audited
supporting Schedule I for the 2003, 2002 and 2001 Fiscal Years and Schedule III
at March 31, 2004. 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 12(a), the consolidated financial statements include the
financial statements of three subsidiary partnerships with significant
contingencies and uncertainties. The financial statements of these subsidiary
partnerships were prepared assuming that they will continue as going concerns.
These three subsidiary partnerships' net losses aggregated $3,449,244 (Fiscal
2003), $5,678,496 (Fiscal 2002) and $3,532,309 (Fiscal 2001), and their assets
aggregated $13,201,742 and $14,043,226 at March 31, 2004 and 2003, respectively.
Management's plans in regard to these matters are also described in Note 12(a).
The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 15, 2004
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,
-------------------------
2004 2003
----------- -----------
Cash and cash equivalents $ 429,291 $ 485,377
Cash held in escrow 159,597 241,929
Investment and advances in subsidiary partnerships 20,867,156 23,766,355
Other assets 245,465 398,139
----------- -----------
Total assets $21,701,509 $24,891,800
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Due to general partner and affiliates $11,464,620 $ 9,860,805
Other liabilities 63,502 53,685
----------- -----------
Total liabilities 11,528,122 9,914,490
Partners' equity 10,173,387 14,977,310
----------- -----------
Total liabilities and partners' equity $21,701,509 $24,891,800
=========== ===========
Investments in subsidiary 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.
179
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
Year Ended March 31,
-----------------------------------------
2004 2003 2002
----------- ----------- -----------
Revenues
Other income $ 2,199 $ 1,000 $ 2,838
----------- ----------- -----------
Expenses
General and administrative 367,141 206,143 164,821
General and administrative-related parties 1,635,910 1,740,087 1,673,696
----------- ----------- -----------
Total expenses 2,003,051 1,946,230 1,838,517
----------- ----------- -----------
Loss from operations (2,000,852) (1,945,230) (1,835,679)
Distribution income of subsidiary partnerships
in excess of investments 28,305 22,853 31,217
Loss on sale on investment of subsidiary
partnership 0 0 (84,237)
Equity in loss of subsidiary partnerships* (2,831,376) (4,752,705) (2,199,566)
----------- ----------- -----------
Net loss $(4,803,923) $(6,675,082) $(4,088,265)
=========== =========== ===========
* Includes suspended prior year losses in excess of investment in accordance
with the equity method of accounting amounting to $(13,138,050), $0 and $0,
for 2004, 2003, and 2002, respectively.
180
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended March 31,
-----------------------------------------
2004 2003 2002
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(4,803,923) $(6,675,082) $(4,088,265)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash
used in operating activities:
Loss on sale on investment of subsidiary
partnership 0 0 84,237
Distribution income from subsidiary partnerships
in excess of investments (28,305) (22,853) (31,217)
(Increase) decrease in assets:
Other assets 152,674 (152,673) 0
Increase (decrease) in liabilities:
Due to general partners and affiliates 1,603,815 1,828,424 1,700,551
Other liabilities 9,732 47,418 (77)
----------- ----------- -----------
Total adjustments 1,737,916 1,700,316 1,753,494
----------- ----------- -----------
Net cash used in operating activities (3,066,007) (4,974,766) (2,334,771)
----------- ----------- -----------
Cash flows from investing activities:
Equity in loss of subsidiary partnerships 2,831,376 4,752,705 2,199,566
Proceeds on sale of property 0 0 26,123
Distributions from subsidiary partnerships 330,098 774,218 215,690
Investments and advances
in subsidiary partnerships (233,885) (144,870) (401,830)
Decrease in cash held in escrow-
purchase price payments 82,332 0 39,798
----------- ----------- -----------
Net cash provided by investing activities 3,009,921 5,382,053 2,079,347
----------- ----------- -----------
Net (decrease) increase in cash and cash
equivalents (56,086) 407,287 (255,424)
Cash and cash equivalents, beginning of year 485,377 78,090 333,514
----------- ----------- -----------
Cash and cash equivalents, end of year $ 429,291 $ 485,377 $ 78,090
=========== =========== ===========
181
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2004
Initial Cost to Partnership Cost Capitalized
----------------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnerships' Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------- ------------- ------------- ----------------
C.V. Bronx Associates, L.P.
Bronx, NY $ 0 $ 1,705,800 $ 0 $ 4,279,915
Michigan Rural Housing Limited Partnership
Michigan 4,564,968 141,930 4,013,207 2,229,006
Jefferson Limited Partnership
Schreveport, LA 1,371,172 65,000 3,289,429 48,125
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 1,657,588 36,643 3,290,524 253,881
RBM Associates
Philadelphia, PA 975,000 0 1,590,733 78,286
Glenbrook Associates
Atglen, PA 1,627,757 137,000 2,833,081 133,767
Affordable Flatbush Associates
Brooklyn, NY 1,357,287 0 2,551,365 250,945
Barclay Village II, LTD
Chambersburg, PA 2,266,237 204,825 3,249,918 711,382
1850 Second Avenue Associates, L.P.
New York, NY 0 920,472 6,262,968 1,165
R.P.P. Limited Dividend Housing
Detroit, MI 25,110,000 0 29,051,380 6,786
Williamsburg Residential II, L.P.
Witchita, KS 1,452,201 358,305 2,713,872 (1,211,361)
West 104th Street Associates, L.P.
New York, NY 0 0 0 3,158,423
Meredith Apartments, LTD
Salt Lake City, UT 537,285 40,000 1,500,117 20,962
Ritz Apartments, LTD
Salt Lake City, UT 302,238 59,760 592,704 90,563
Ashby Apartments, LTD
Salt Lake City, UT 302,438 50,850 549,611 186,611
South Toledo Associates, LTD
Toledo, OH 871,910 47,571 1,411,386 49,991
Dunlap School Venture
Philadelphia, PA 2,439,173 5,352 4,522,721 168,953
Philipsburg Elderly Housing Associates
Philipsburg, PA 2,678,229 45,000 4,092,500 583,689
Franklin Elderly Housing Associates
Franklin, PA 1,938,312 165,000 2,594,447 322,933
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 2,979,813 65,000 4,234,049 820,709
Gross Amount at which Carried at Close of Period
---------------------------------------------------------
Buildings and
Subsidiary Partnerships' Residential Property Land Improvements Total
- --------------------------------------------- ------------- ------------- -------------
C.V. Bronx Associates, L.P.
Bronx, NY $ 1,439,504 $ 4,546,211 $ 5,985,715
Michigan Rural Housing Limited Partnership
Michigan 148,716 6,235,427 6,384,143
Jefferson Limited Partnership
Schreveport, LA 71,786 3,330,768 3,402,554
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 43,429 3,537,619 3,581,048
RBM Associates
Philadelphia, PA 6,786 1,662,233 1,669,019
Glenbrook Associates
Atglen, PA 143,786 2,960,062 3,103,848
Affordable Flatbush Associates
Brooklyn, NY 6,787 2,795,523 2,802,310
Barclay Village II, LTD
Chambersburg, PA 211,611 3,954,514 4,166,125
1850 Second Avenue Associates, L.P.
New York, NY 392,457 6,792,148 7,184,605
R.P.P. Limited Dividend Housing
Detroit, MI 18,158,537 18,165,323 7,767,831
Williamsburg Residential II, L.P.
Witchita, KS 362,484 1,498,332 1,860,816
West 104th Street Associates, L.P.
New York, NY 6,787 3,151,636 3,158,423
Meredith Apartments, LTD
Salt Lake City, UT 46,787 1,514,292 1,561,079
Ritz Apartments, LTD
Salt Lake City, UT 66,547 676,480 743,027
Ashby Apartments, LTD
Salt Lake City, UT 57,637 729,435 787,072
South Toledo Associates, LTD
Toledo, OH 51,677 1,457,271 1,508,948
Dunlap School Venture
Philadelphia, PA 9,458 4,687,568 4,697,026
Philipsburg Elderly Housing Associates
Philipsburg, PA 68,101 4,653,088 4,721,189
Franklin Elderly Housing Associates
Franklin, PA 169,106 2,913,274 3,082,380
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 69,106 5,050,652 5,119,758
Life on which
Depreciation in
Year of Latest Income
Accumulated Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Depreciation Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------ ------------- ------------------
C.V. Bronx Associates, L.P.
Bronx, NY $ 2,149,650 1990 June 1989 15-27.5 years
Michigan Rural Housing Limited Partnership
Michigan 3,174,466 1989 Sept. 1989 27.5 years
Jefferson Limited Partnership
Schreveport, LA 1,595,512 1990 Dec. 1989 27.5 years
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 1,742,070 1989 Oct. 1989 27.5 years
RBM Associates
Philadelphia, PA 554,628 1989 Dec. 1989 40 years
Glenbrook Associates
Atglen, PA 1,475,618 1989 Nov. 1989 3-27.5 years
Affordable Flatbush Associates
Brooklyn, NY 1,484,872 1989 Dec. 1989 27.5 years
Barclay Village II, LTD
Chambersburg, PA 2,121,066 1989 Nov. 1989 5-27.5 years
1850 Second Avenue Associates, L.P.
New York, NY 3,428,441 1989 Nov. 1989 27.5 years
R.P.P. Limited Dividend Housing
Detroit, MI 1989 Nov. 1989 27-31.5 years
Williamsburg Residential II, L.P.
Witchita, KS 727,249 1989 Nov. 1989 40 years
West 104th Street Associates, L.P.
New York, NY 1,358,704 1990 Dec. 1989 27.5 years
Meredith Apartments, LTD
Salt Lake City, UT 801,661 1989 Aug. 1989 27.5 years
Ritz Apartments, LTD
Salt Lake City, UT 348,254 1989 Aug. 1989 27.5 years
Ashby Apartments, LTD
Salt Lake City, UT 339,157 1989 Aug. 1989 27.5 years
South Toledo Associates, LTD
Toledo, OH 513,715 1988 Jan. 1990 40 years
Dunlap School Venture
Philadelphia, PA 1,606,115 1989 Jan. 1990 40 years
Philipsburg Elderly Housing Associates
Philipsburg, PA 2,571,563 1990 Feb. 1990 15-27.5 years
Franklin Elderly Housing Associates
Franklin, PA 1,702,579 1989 Feb. 1990 7-24 years
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 2,924,405 1989 Feb. 1990 27.5 years
182
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2004
(continued)
Initial Cost to Partnership Cost Capitalized
----------------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnerships' Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------- ------------- ------------- ----------------
Lancashire Towers Associates L.P.
Cleveland, OH 2,533,915 265,000 6,871,575 372,566
Northwood Associates Limited Partnership
Toledo, OH (c) 0 200,000 4,065,856 (4,265,856)
Brewery Renaissance Associates
Middletown, NY 3,375,000 77,220 102,780 6,227,311
Brandywine Court Associates, L.P.
Jacksonville, FL 1,375,041 78,000 1,960,262 (1,443,846)
Art Apartments Associates
Philadelphia, PA 1,050,342 13,695 2,713,615 107,247
The Village at Carriage Hills, LTD
Clinton, TN 1,445,482 86,663 1,753,799 126,667
Mountainview Apartments, LTD,
Newport, TN 1,027,096 49,918 1,254,182 135,129
The Park Village, Limited
Jackson, MS 331,807 44,102 749,940 93,183
River Oaks Apartments, LTD
Oneonta, AL 1,052,205 80,340 1,221,336 87,800
Forrest Ridge Apartments, LTD
Forrest City, AR 807,046 36,000 1,016,647 72,859
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 2,772,504 242,550 4,667,594 122,075
Redemptorist L.P.
New Orleans, LA 2,884,068 0 6,497,259 279,736
Manhattan A Associates
New York, NY 3,209,459 1,092,959 5,991,888 427,468
Broadhurst Willows, L.P.
New York, NY 0 102,324 5,151,039 147,493
Weidler Associates Limited Partnership
Portland, OR 1,230,490 225,000 0 2,175,715
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 3,487,778 327,650 4,276,739 (3,763,023)
Lake Forest Estates II, LTD
Livingston, AL 951,563 21,623 1,182,480 62,019
Las Camelias L.P.
Rio Piedras, PR 6,714,871 249,000 6,400 9,851,709
WPL Associates XIIII
Portland, OR 2,044,080 0 3,721,763 173,781
Broadway Townhouses L.P.
Camden, NJ 10,493,689 163,000 5,120,066 14,430,086
Gross Amount at which Carried at Close of Period
---------------------------------------------------------
Buildings and
Subsidiary Partnerships' Residential Property Land Improvements Total
- --------------------------------------------- ------------- ------------- -------------
Lancashire Towers Associates L.P.
Cleveland, OH 269,106 7,240,035 7,509,141
Northwood Associates Limited Partnership
Toledo, OH (c) 0 0 0
Brewery Renaissance Associates
Middletown, NY 81,326 6,325,985 6,407,311
Brandywine Court Associates, L.P.
Jacksonville, FL 82,106 512,310 594,416
Art Apartments Associates
Philadelphia, PA 17,801 2,816,756 2,834,557
The Village at Carriage Hills, LTD
Clinton, TN 90,769 1,876,360 1,967,129
Mountainview Apartments, LTD,
Newport, TN 54,024 1,385,205 1,439,229
The Park Village, Limited
Jackson, MS 48,208 839,017 877,225
River Oaks Apartments, LTD
Oneonta, AL 84,446 1,305,030 1,389,476
Forrest Ridge Apartments, LTD
Forrest City, AR 40,106 1,085,400 1,125,506
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 246,656 4,785,563 5,032,219
Redemptorist L.P.
New Orleans, LA 4,106 6,772,889 6,776,995
Manhattan A Associates
New York, NY 1,097,065 6,415,250 7,512,315
Broadhurst Willows, L.P.
New York, NY 106,430 5,294,426 5,400,856
Weidler Associates Limited Partnership
Portland, OR 229,106 2,171,609 2,400,715
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 331,756 509,610 841,366
Lake Forest Estates II, LTD
Livingston, AL 25,729 1,240,393 1,266,122
Las Camelias L.P.
Rio Piedras, PR 298,878 9,808,231 10,107,109
WPL Associates XIIII
Portland, OR 4,106 3,891,438 3,895,544
Broadway Townhouses L.P.
Camden, NJ 167,106 19,546,046 19,713,152
Life on which
Depreciation in
Year of Latest Income
Accumulated Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Depreciation Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------ ------------- ------------------
Lancashire Towers Associates L.P.
Cleveland, OH 3,651,700 1989 Feb. 1990 27.5 years
Northwood Associates Limited Partnership
Toledo, OH (c) 0 1989 Feb. 1990 27.5 years
Brewery Renaissance Associates
Middletown, NY 2,946,061 1990 Feb. 1990 27.5 years
Brandywine Court Associates, L.P.
Jacksonville, FL 51,515 1988 Nov. 1989 7-27.5 years
Art Apartments Associates
Philadelphia, PA 1,425,059 1990 Mar. 1990 27.5 years
The Village at Carriage Hills, LTD
Clinton, TN 942,735 1990 Mar. 1990 25-40 years
Mountainview Apartments, LTD,
Newport, TN 712,818 1990 Mar. 1990 25-40 years
The Park Village, Limited
Jackson, MS 440,807 1990 Mar. 1990 25-40 years
River Oaks Apartments, LTD
Oneonta, AL 501,139 1990 Mar. 1990 25-40 years
Forrest Ridge Apartments, LTD
Forrest City, AR 410,062 1990 Mar. 1990 25-40 years
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 2,802,222 1990 Mar. 1990 15-27.5 years
Redemptorist L.P.
New Orleans, LA 3,174,433 1990 Mar. 1990 27.5 years
Manhattan A Associates
New York, NY 3,245,017 1990 Apr. 1990 27.5 years
Broadhurst Willows, L.P.
New York, NY 3,077,710 1990 Apr. 1990 10-25 years
Weidler Associates Limited Partnership
Portland, OR 1,041,154 1990 May 1990 15-27.5 years
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 54,845 1990 June 1990 27.5 years
Lake Forest Estates II, LTD
Livingston, AL 460,514 1990 June 1990 25-40 years
Las Camelias L.P.
Rio Piedras, PR 4,418,827 1990 June 1990 27.5 years
WPL Associates XIIII
Portland, OR 2,013,549 1990 July 1990 27.5 years
Broadway Townhouses L.P.
Camden, NJ 8,004,549 1990 July 1990 27.5 years
183
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2004
(continued)
Initial Cost to Partnership Cost Capitalized
----------------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnerships' Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------- ------------- ------------- ----------------
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 4,025,000 0 0 6,534,016
Citrus Meadows Apartments, LTD
Brandenton, FL 7,384,149 610,073 0 9,493,111
Sartain School Venture
Philadelphia, PA 1,901,012 3,883 3,486,875 139,237
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL 6,653,554 270,000 7,753,765 350,595
Holly Hill, LTD
Greenville, TN 1,368,343 50,000 1,631,820 149,136
Mayfair Apartments LTD
Morristown, TN 1,353,005 50,000 1,614,861 161,725
Foxcroft Apartments
LTD. Troy, AL 1,222,707 75,000 1,382,973 149,479
Canterbury Apartments, LTD
Indianola, MS 1,404,018 33,000 1,738,871 109,282
Cutler Canal III Associates, LTD
Miami, FL 7,460,074 1,269,265 0 12,392,962
Jefferson Place L.P.
Olathe, KS (d) 0 531,063 13,477,553 0
Callaway Village, LTD
Clinton, TN 1,377,568 66,000 1,613,920 124,511
Commerce Square Apartments Associates L.P.
Smyrna, DE 2,818,036 303,837 0 4,801,536
West 132nd Development Partnership
New York, NY 1,448,733 0 0 2,641,552
Site H Development Co.
Brooklyn, NY 615,729 0 1,346,000 44,416
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 5,724,935 752,000 693,995 6,417,790
Diamond Phase II Venture
Philadelphia, PA 1,791,800 0 0 4,016,758
Bookbindery Associates
Philadelphia, PA 1,498,236 0 0 3,856,033
The Hamlet, LTD
Boynton, FL 8,053,337 1,180,482 0 13,407,827
Stop 22 Limited Partnership
Santurce, PR 9,668,642 0 4,025,481 7,103,557
Knob Hill Apartments, LTD
Greenville, TN 1,457,275 75,085 0 1,850,895
Gross Amount at which Carried at Close of Period
---------------------------------------------------------
Buildings and
Subsidiary Partnerships' Residential Property Land Improvements Total
- --------------------------------------------- ------------- ------------- -------------
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 156,842 6,377,174 6,534,016
Citrus Meadows Apartments, LTD
Brandenton, FL 812,609 9,290,575 10,103,184
Sartain School Venture
Philadelphia, PA 7,989 3,622,006 3,629,995
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL 274,106 8,100,254 8,374,360
Holly Hill, LTD
Greenville, TN 54,106 1,776,850 1,830,956
Mayfair Apartments LTD
Morristown, TN 54,106 1,772,480 1,826,586
Foxcroft Apartments
LTD. Troy, AL 79,106 1,528,346 1,607,452
Canterbury Apartments, LTD
Indianola, MS 37,106 1,844,047 1,881,153
Cutler Canal III Associates, LTD
Miami, FL 1,273,507 12,388,720 13,662,227
Jefferson Place L.P.
Olathe, KS (d) 0 0 0
Callaway Village, LTD
Clinton, TN 70,106 1,734,325 1,804,431
Commerce Square Apartments Associates L.P.
Smyrna, DE 307,943 4,797,430 5,105,373
West 132nd Development Partnership
New York, NY 13,106 2,628,446 2,641,552
Site H Development Co.
Brooklyn, NY 4,106 1,386,310 1,390,416
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 759,229 7,104,556 7,863,785
Diamond Phase II Venture
Philadelphia, PA 22,081 3,994,677 4,016,758
Bookbindery Associates
Philadelphia, PA 29,105 3,826,928 3,856,033
The Hamlet, LTD
Boynton, FL 1,184,587 13,403,722 14,588,309
Stop 22 Limited Partnership
Santurce, PR 216,918 10,912,120 11,129,038
Knob Hill Apartments, LTD
Greenville, TN 79,190 1,846,790 1,925,980
Life on which
Depreciation in
Year of Latest Income
Accumulated Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Depreciation Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------ ------------- ------------------
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 2,868,415 1990 Aug. 1990 27.5 years
Citrus Meadows Apartments, LTD
Brandenton, FL 4,550,061 1990 July 1990 27.5 years
Sartain School Venture
Philadelphia, PA 1,262,523 1990 Aug. 1990 15-40 years
Driftwood Terrace Associates, LTD
Ft. Lauderdale, FL 4,834,200 1989 Sept. 1990 27.5 years
Holly Hill, LTD
Greenville, TN 875,841 1990 Oct. 1990 25-40 years
Mayfair Apartments LTD
Morristown, TN 650,127 1990 Oct. 1990 25-40 years
Foxcroft Apartments
LTD. Troy, AL 582,349 1990 Oct. 1990 25-40 years
Canterbury Apartments, LTD
Indianola, MS 688,848 1990 Oct. 1990 25-40 years
Cutler Canal III Associates, LTD
Miami, FL 3,836,876 1990 Oct. 1990 40 years
Jefferson Place L.P.
Olathe, KS (d) 1990 Oct. 1990 19 years
Callaway Village, LTD
Clinton, TN 655,209 1990 Nov. 1990 25-40 years
Commerce Square Apartments Associates L.P.
Smyrna, DE 1,477,144 1990 Dec. 1990 40 years
West 132nd Development Partnership
New York, NY 879,212 1990 Dec. 1990 40 years
Site H Development Co.
Brooklyn, NY 704,351 1990 Dec. 1990 27.5 years
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 2,694,504 1990 Dec. 1990 35 years
Diamond Phase II Venture
Philadelphia, PA 1,250,888 1990 Dec. 1990 40 years
Bookbindery Associates
Philadelphia, PA 1,205,675 1990 Dec. 1990 40 years
The Hamlet, LTD
Boynton, FL 5,985,402 1990 Dec. 1990 27.5 years
Stop 22 Limited Partnership
Santurce, PR 4,927,380 1990 Dec. 1990 27.5-31.5 years
Knob Hill Apartments, LTD
Greenville, TN 651,953 1990 Dec. 1990 25-40 years
184
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2004
(continued)
Initial Cost to Partnership Cost Capitalized
----------------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnerships' Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------- ------------- ------------- ----------------
Conifer James Street Associates
Syracuse, NY 2,153,930 57,034 0 4,540,211
Longfellow Heights Apartments, L.P.
Kansas City, MO 3,907,968 0 7,739,692 260,962
------------- ------------- ------------- -------------
$ 172,456,295 $ 12,730,274 $ 183,175,038 $ 91,248,982
============= ============= ============= =============
Gross Amount at which Carried at Close of Period
---------------------------------------------------------
Buildings and
Subsidiary Partnerships' Residential Property Land Improvements Total
- --------------------------------------------- ------------- ------------- -------------
Conifer James Street Associates
Syracuse, NY 61,139 4,536,106 4,597,245
Longfellow Heights Apartments, L.P.
Kansas City, MO 204 8,000,450 8,000,654
------------- ------------- -------------
$ 12,155,359 $ 274,998,935 $ 287,154,294
============= ============= =============
Life on which
Depreciation in
Year of Latest Income
Accumulated Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Depreciation Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------ ------------- ------------------
Conifer James Street Associates
Syracuse, NY 2,170,835 1990 Dec. 1990 15-27.5 years
Longfellow Heights Apartments, L.P.
Kansas City, MO 2,705,455 1991 Mar. 1991 15-40 years
-------------
$ 123,219,520
=============
(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.
(c) The Partnership's Limited Partnership Interest was sold during the fiscal
year ended March 31, 2002. (d) The Property and the related assets and
liabilities were sold during the fiscal year ended March 31, 2004.
Cost of Property and Equipment Accumulated Depreciation
----------------------------------------------- -----------------------------------------------
Year Ended March 31,
--------------------------------------------------------------------------------------------------
2004 2003 2002 2004 2003 2002
------------- ------------- ------------- ------------- ------------- -------------
Balance at beginning of period $ 300,043,519 $ 304,422,304 $ 308,198,819 $ 124,137,316 $ 116,934,212 $ 108,363,090
Additions during period:
Improvements 1,316,200 1,195,300 1,208,819
Depreciation expense 10,020,532 10,621,390 10,678,356
Deductions during period:
Dispositions (14,205,425) (5,574,085) (4,985,334) (10,938,328) (3,418,286) (2,107,234
------------- ------------- ------------- ------------- ------------- -------------
Balance at close of period $ 287,154,294 $ 300,043,519 $ 304,422,304 $ 123,219,520 $ 124,137,316 $ 116,934,212
============= ============= ============= ============= ============= =============
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.
185