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, 2005
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 13-349,1408
- ------------------------------------------------- -------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer
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) 317-5700
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, 2004 was
$(86,591,000), 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, 2005, the
Partnership has disposed of six 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.
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.
The Tax Credits are attached to a Local Partnership for the Credit Period and
are transferable with the property during the entirety of such ten year period.
If trends in the real estate market warranted the sale of a property, the
remaining Tax Credits would transfer to the new owner, thereby adding value to
the property on the market. However such value declines each year and is not
included in the financial statement carrying amount. The Credit Periods expired
at various times through December 31, 2003 with respect to the Local
Partnerships depending upon when the Credit Period commenced. However, 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.
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. At that time the property
investments themselves are reduced to estimated fair value (generally using the
discounted cash flow valuation method). Through March 31, 2005, the Partnership
has recorded approximately $23,937,000 as an aggregate loss on impairment of
assets or reduction to estimated fair value.
2
While the value of the remaining Tax Credits are a factor in calculating fair
value, the expiration of the Credit Period, in and of itself, is not the only
factor in determining whether there is an impairment and generally does not have
any adverse impact on the fair value of the Local Partnerships.
The Partnership no longer continues to meet its primary objective of generating
Tax Credits. The Partnership generated Tax Credits of approximately $69,000,
$69,000 and $1,274,000 during the tax years 2004, 2003 and 2002, 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.
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
21% 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.
Sales of Underlying Properties/Local Partnership Interests
- ----------------------------------------------------------
General
- -------
The Partnership is currently in the process of disposing of its investments. It
is anticipated that this process will take a number of years. As of March 31,
2005, the Partnership has sold its limited partnership interest in five Local
Partnerships and the property and the related assets and liabilities of one
Local Partnership. In addition, on December 29, 2004, the Partnership entered
into an agreement to sell its limited partnership interest in another Local
Partnership. There may be no assurance as to whether or when the Partnership
will dispose of its remaining investments or the amount of proceeds which may be
received. However, based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is unlikely that the proceeds from such sales received by the Partnership
will be sufficient to return to the limited partners their original investment.
On December 29, 2004, the Partnership entered into an agreement for the sale of
its limited partnership interest in Lancashire Towers Associates, Ltd.
("Lancashire") to an affiliate of the Local General Partner (as defined herein)
for a purchase price of $800,000. During the year ended March 31, 2005, in
accordance with SFAS No. 144 the Partnership deemed the building impaired and
wrote it down to its fair value which resulted in a loss on impairment of
$1,700,000. The sales documents have been executed and the funds are being held
in escrow waiting for approval of the sale from the Department of Housing and
Urban Development (HUD). Subsequently, on May 2, 2005, Lancashire was sold.
On October 7, 2004, the Partnership's limited partnership interest in Ashby
Apartments, Ltd. ("Ashby") was sold to the Local General Partner for
approximately $50,000, resulting in a capital contribution from the Local
General Partner of approximately $18,000. The sale resulted in the liquidation
of Ashby.
On October 7, 2004, the Partnership's limited partnership interest in Meredith
Apartments ("Meredith") was sold to the Local General Partner for approximately
$50,000, resulting in a capital distribution to the Local General Partner of
approximately $151,000. The sale resulted in the liquidation of Meredith.
On October 7, 2004, the Partnership's limited partnership interest in Ritz
Apartments LTD. ("Ritz") was sold to the Local General Partner for approximately
$50,000, resulting in a capital distribution to the Local General Partner of
approximately $34,000. The sale resulted in the liquidation of Ritz.
On July 15, 2004, the Partnership's limited partnership interest in WPL
Associates XXIII ("Benjamin's Corner") was sold to an unaffiliated third party
purchaser for approximately $690,000, resulting in a gain in the amount of
approximately $2,124,000.
3
On June 26, 2003, the property and the 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.
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").
Item 2. Properties
As of March 31, 2005 the Partnership held a 98% limited partnership interest in
55 Local Partnerships and a 26.46% limited partnership interest in one Local
Partnership (the other 71.54% limited partnership interest is held by an
affiliate of the Partnership with the same management); together these 56 Local
Partnerships own 60 apartment complexes. During the year ended March 31, 2005,
the Partnership sold its limited partnership interest in four Local
Partnerships. Through the year ended March 31, 2005, the Partnership has sold
the property and the related assets and liabilities of one Local Partnership and
its limited partnership interests in five Local Partnerships. 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.
4
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location -------------------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- -------------------------------------------------------- --------------- ------ ------ ------ ------ ------
C.V. Bronx Associates, L.P./ Gerald Gardens
Bronx, NY (121) June 1989 98 98 100 98 95
Michigan Rural Housing Limited Partnership
Michigan (192)(a) September 1989 97 97 95 86 96
Jefferson Limited Partnership
Schreveport, LA (69) December 1989 94 96 100 99 92
Inter-Tribal Indian Village Housing Development
Associates, L.P
Providence, RI (36) October 1989 97 94 100 100 100
RBM Associates/Spring Garden
Philadelphia, PA (8) December 1989 100 100 100 100 89
Glenbrook Associates
Atglen, PA (35) November 1989 100 100 94 100 100
Affordable Flatbush Associates
Brooklyn, NY (30) December 1989 100 97 97 97 93
Barclay Village II, LTD.
Chambersburg, PA (87) November 1989 100 98 95 99 99
1850 Second Avenue Associates, L.P.
New York, NY (48) October 1989 98 94 98 98 100
R.P.P. Limited Dividend Housing/ River Place
Detroit, MI (301) November 1989 93 90 91 94 97
Williamsburg Residential II, L.P.
Wichita, KS (50) November 1989 91 52 84 91 93
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 (d) 100 77 86 100
Ritz Apartments, LTD.
Salt Lake City, UT (30) August 1989 (d) 90 79 97 83
Ashby Apartments, LTD.
Salt Lake City, UT (27) August 1989 (d) 100 93 89 89
South Toledo Associates, LTD.
Toledo, OH (18) January 1990 100 100 100 89 100
Dunlap School Venture
Philadelphia, PA (35) January 1990 97 91 100 91 100
Philipsburg Elderly Housing Associates
Philipsburg, PA (103) February 1990 100 99 100 98 95
Franklin Elderly Housing Associates
Franklin, PA (89) February 1990 100 100 99 100 100
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA (103) February 1990 100 100 100 98 99
Lancashire Towers Associates Limited Partnership
Cleveland, OH (240) February 1990 91 91 91 100 92
Northwood Associates Limited Partnership
Toledo, OH (176) February 1990 (b) (b) (b) (b) 85
Brewery Renaissance Associates
Middletown, NY (53) February 1990 100 100 100 100 100
Brandywine Court Associates, L.P.
Jacksonville, FL (52) November 1989 90 92 100 96 87
Art Apartments Associates
Philadelphia, PA (30) March 1990 97 93 93 100 100
The Village at Carriage Hills, LTD.
Clinton, TN (48) March 1990 100 100 100 100 100
Mountainview Apartments, LTD.
Newport, TN (34) March 1990 100 98 100 100 100
The Park Village, Limited
Jackson, MS (24) March 1990 96 92 92 100 100
River Oaks Apartments, LTD.
Oneonta, AL (35) March 1990 97 94 94 100 100
Forrest Ridge Apartments, LTD.
Forrest City, AR (25) March 1990 96 96 88 100 100
The Hearthside Limited Dividend Housing Association
Limited Partnership
Portage, MI (101) March 1990 100 99 99 98 97
5
Local Partnership Schedule
--------------------------
(continued)
% of Units Occupied at May 1,
Name and Location -------------------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- -------------------------------------------------------- --------------- ------ ------ ------ ------ ------
Redemptorist Limited Partnership
New Orleans, LA (126) March 1990 98 94 82 88 94
Manhattan A Associates
New York, NY (99) April 1990 100 100 99 98 97
Broadhurst Willows, L.P.
New York, NY (129) April 1990 99 98 98 99 98
Weidler Associates Limited Partnership
Portland, OR (52) May 1990 94 83 94 98 94
Gentle Pines-West Columbia Associates, L.P.
Columbia, SC (150) June 1990 67 74 97 95 99
Lake Forest Estates II, LTD.
Livingston, AL (32) June 1990 100 88 100 87 100
Las Camelias Limited Partnership
Rio Piedras, PR (166) June 1990 95 97 94 100 99
WPL Associates XXIII
Portland, OR (48) July 1990 (d) 92 96 97 98
Broadway Townhouses L.P.
Camden, NJ (175) July 1990 100 100 100 99 99
Puerto Rico Historic Zone Limited Dividend Partnership
San Juan, PR (67) August 1990 96 99 99 99 99
Citrus Meadows Apartments, LTD.
Brandenton, FL (200) July 1990 86 77 86 95 96
Sartain School Venture
Philadelphia, PA (35) August 1990 97 94 100 97 97
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL (176) September 1990 99 97 97 98 99
Holly Hill, LTD.
Greenville, TN (46) October 1990 96 96 91 98 98
Mayfair Apartments LTD.
Morristown, TN (48) October 1990 98 96 98 89 100
Foxcroft Apartments LTD.
Troy, AL (48) October 1990 92 94 96 77 94
Canterbury Apartments, LTD.
Indianola, MS (48) October 1990 100 100 96 96 94
Cutler Canal III Associates, LTD.
Miami, FL (262) October 1990 97 96 98 98 99
Jefferson Place L.P.
Olathe, KS (352) October 1990 (c) (c) 89 90 96
Callaway Village, LTD.
Clinton, TN (46) November 1990 100 89 96 89 96
Commerce Square Apartments Associates L.P.
Smyrna, DE (80) December 1990 95 99 96 95 98
West 132nd Development Partnership
New York, NY (40) December 1990 100 100 100 100 100
Site H Development Co.
Brooklyn, NY (11) December 1990 100 100 100 100 93
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA (78) December 1990 99 90 87 95 86
Diamond Phase II Venture
Philadelphia, PA (32) December 1990 94 84 97 97 96
Bookbindery Associates
Philadelphia, PA (41) December 1990 98 90 90 95 98
The Hamlet, LTD.
Boynton Beach, FL (240) December 1990 97 99 92 90 96
Stop 22 Limited Partnership
Santurce, PR (153) December 1990 97 97 97 99 98
Knob Hill Apartments, LTD.
Greenville, TN (48) December 1990 100 100 100 98 100
Conifer James Street Associates
Syracuse, NY (73) December 1990 88 94 90 94 92
Longfellow Heights Apartments, L.P.
Kansas City, MO (104) March 1991 90 96 100 92 96
6
(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).
(d) The Partnership's limited partnership interest was sold during the fiscal
year ended March 31, 2005 (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 Guarantee Agreements (as defined herein)
aggregated approximately $18,700,000, of which all have expired as of March 31,
2005. 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. As of March 31, 2005,
the Credit Periods for all the properties have expired; however, 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.
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)
comprises 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.
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
7
PART II
Item 5. Market for the Registrant's Common Equity, Related Security Holder
Matters And Issuer Purchases of Equity Securities
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 June 2, 2005 the Partnership has approximately 9,112 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, 2005. The Partnership does not anticipate providing cash distributions to
BACs holders other than distributions of sale or refinancing proceeds upon the
disposition of Properties.
8
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 15,
---------------------------------------------------------------------------
OPERATIONS 2005 2004* 2003* 2002* 2001*
- ---------------------------------- ------------ ------------ ------------- ------------- -------------
Revenues $ 31,256,829 $ 31,145,070 $ 31,067,681 $ 30,517,091 $ 30,762,640
Operating expenses (45,312,877) (44,734,937) (47,924,683) (43,671,534) (43,741,986)
------------ ------------ ------------- ------------- -------------
Loss from operations before (14,056,048) (13,589,867) (16,857,002) (13,154,443) (12,979,346)
minority interest and
extraordinary item
Minority interest in loss of
subsidiary partnerships from
operations 288,676 279,605 281,528 265,741 211,041
Income (loss) from discontinued
operations including gain (loss)
on sale and minority interest 902,601 13,287,290 (968,267) (1,304,731) (1,279,004)
Extraordinary item -forgiveness
of indebtedness income 0 0 0 2,156,560 0
------------ ------------ ------------- ------------- -------------
Net loss (12,864,771) (22,972) (17,543,741) (12,036,873) (14,047,309)
============ ============ ============= ============= =============
Net loss - limited partners $(12,736,124) $ (22,742) $ (17,368,304) $ (11,916,504) $ (13,906,836)
============ ============ ============= ============= =============
Loss from operations per BAC $ (97.98) $ (94.73) $ (117.97) $ (91.73) $ (90.88)
Income (loss) from discontinued
operations per BAC 6.42 94.57 (6.89) (9.29) (9.10)
Extraordinary item per BAC 0 0 0 15.35 0
------------ ------------ ------------- ------------- -------------
Net loss per BAC $ (91.56) $ (.16) $ (124.86) $ (85.67) $ (99.98)
============ ============ ============= ============= =============
Year Ended March 15,
---------------------------------------------------------------------------
FINANCIAL POSITION 2005 2004 2003 2002 2001
- ---------------------------------- ------------ ------------ ------------- ------------- -------------
Total assets $173,313,829 $186,296,356 $ 200,113,780 $ 212,833,322 $ 224,963,913
============ ============ ============= ============= =============
Total liabilities $269,923,984 $270,046,767 $ 283,228,034 $ 277,364,748 $ 277,376,359
============ ============ ============= ============= =============
Minority interest $ (1,476,100) $ (1,481,127) $ (867,942) $ 71,145 $ 253,252
============ ============ ============= ============= =============
Total partners' deficit $(95,134,055) $(82,269,284) $ (82,246,312) $ (64,702,571) $ (52,665,698)
============ ============ ============= ============= =============
* Reclassified for comparative purposes.
During the year ended March 31, 2005 and 2004, total assets and liabilities
decreased primarily due to a decrease in property and equipment and mortgage
notes payable resulting from the sale of Local Partnerships. During the years
ended March 31, 2001 through 2003, total assets decreased primarily due to
depreciation, partially offset by net additions to property and equipment.
During the years ended March 31, 2001 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.
9
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
Through March 31, 2005, the Partnership had originally invested approximately
$109,000,000 (not including acquisition fees) of net proceeds in 62 Local
Partnerships, of which approximately $170,000 remains to be paid including
approximately $160,000 held in escrow. During the year ended March 31, 2005, the
Partnership sold its limited partnership interest in four Local Partnerships.
Through the year ended March 31, 2005, the Partnership has sold the property and
the related assets and liabilities of one Local Partnership and its limited
partnership interest in five Local Partnerships. For a discussion of these
sales, see Note 10 in Item 8.
Short-Term
- ----------
During the year ended March 31, 2005, the Partnership's primary sources of funds
included: (i) working capital reserves; (ii) interest earned on the working
capital reserves; (iii) cash distributions from operations of the Local
Partnerships; and (iv) sales proceeds and distributions. Such funds are
available to meet the obligations of the Partnership but are not expected to be
significant. During the year ended March 31, 2005, cash distributions of
approximately $399,000 were received by the Partnership from operations of the
Local Partnerships. Additionally, during the year ended March 31, 2005,
approximately $690,000 of sales proceeds were received by the Partnership from
the sale of property.
For the year ended March 31, 2005, cash and cash equivalents of the Partnership
decreased approximately $697,000. This decrease was attributable to a decrease
in capitalization of consolidated subsidiaries attributable to minority interest
($57,000), acquisition of property and equipment ($1,545,000), net repayments on
mortgage notes ($2,620,000) and an increase in deferred costs ($33,000) which
exceeded cash provided by operating activities ($1,653,000), an increase in
advances from debt guarantor ($960,000), a net decrease in cash held in escrow
relating to investing activities ($185,000), proceeds from sale of properties
($691,000) and a net decrease in due to Local General Partners and affiliates
relating to investing activities ($68,000). Included in the adjustments to
reconcile the net loss to net cash provided by operating activities is
depreciation and amortization ($9,192,000), gain on discontinued operations
($903,000) and an increase in due to debt guarantor in the amount of $3,234,000.
Total expenses for the years ended March 31, 2005, 2004, and 2003, excluding
depreciation and amortization, loss on impairment of fixed assets, interest and
general and administrative-related parties, totaled $20,139,078, $19,618,644 and
$19,638,054, respectively.
For the years ended March 31, 2005 and 2004, accounts payable, accrued interest
payable and security deposits payable were as follows:
Accounts payable as of March 31, 2005 and 2004 was $5,393,345 and $6,547,074,
respectively. Accounts payable are short term liabilities which are expected to
be paid from operating cash flows, working capital balances at the Local
Partnership level, local general partner advances and in certain circumstances
advances from the Partnership. Because the provisions of the secondary loans
defer the payment of accrued interest of the respective Local Partnerships, the
Partnership believes it (and the applicable Local Partnerships) has sufficient
liquidity and ability to generate cash and to meet existing and known or
reasonably likely future cash requirements over both the short and long term.
Accrued interest payable as of March 31, 2005 and 2004 was $17,012,106 and
$15,895,951, respectively. Accrued interest payable represents the accrued
interest on all mortgage loans, which include primary and secondary loans.
Certain secondary loans have provisions such that interest is accrued but not
payable until a future date. The Partnership anticipates the payment of accrued
interest on the secondary loans (which make up the majority of the accrued
interest payable amount indicated in the above table and which have been
accumulating since the Partnership's investment in the respective Local
Partnership) will be made from future refinancings or sales proceeds of the
respective Local Partnerships. In addition, each Local Partnership's mortgage
notes are collateralized by the land and buildings of the respective Local
Partnership, and are without further recourse to the Partnership.
The Partnership has an unconsolidated working capital reserve of approximately
$343,000 at March 31, 2005.
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, 2005, 2004 and 2003, the amounts
received from operations of the Local Partnerships were approximately $399,000,
$330,000 and $774,000, respectively.
Partnership management fees owed to the General Partners amounted to
approximately $11,045,000 and $9,810,000 and were accrued and unpaid at March
31, 2005 and 2004. 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.
Long-Term
- ---------
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
10
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.
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.
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. 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.
In accordance with FASB 144, "Accounting for the Impairment of Disposal of
Long-Lived Assets", the results of discontinued operations are reported as a
separate component of income before extraordinary items on the Consolidated
Statements of Operations. Discontinued operations include the results of
operations and any gain or loss recognized for Local Partnerships that have been
disposed of or are held for sale. A gain or loss recognized on the disposal is
disclosed in the notes to the financial statements. Adjustments to amounts
previously reported in operations that are directly related to the disposal of a
Local Partnership are reclassified in the current period as discontinued
operations for comparability purposes. Assets and liabilities of a Local
Partnership that are classified as held for sale are presented separately in the
asset and liability sections, respectively, of the Consolidated Balance Sheets.
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, 2005, the Partnership has
recorded $1,700,000 as a loss on impairment of assets which is included in
discontinued operations. Through March 31, 2005, the Partnership has recorded
approximately $23,937,000 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. Property and equipment that are held for sale are included in
discontinued operations. There are two assets classified as property and
equipment-held for sale as of March 31, 2005: Michigan Rural Housing limited
Partnership ("Michigan Rural") and Lancashire Towers Associates Limited
Partnership ("Lancashire"). Subsequently, on May 3, 2005, the Partnership sold
its limited partnership interest in Lancashire (see Note 16).
Revenue Recognition
- -------------------
Rental income is earned primarily under standard residential operating leases
and is typically due the first day of each month, but can vary by property due
to the terms of the tenant leases. Rental income is recognized when earned and
as rents become due and charged to tenants' accounts receivable if not received
by the due date. Rental payments received in advance of the due date are
deferred until earned. Rental subsidies are recognized as rental income during
the month in which it is earned.
Other revenues are recorded when earned and consist of the following items:
Interest income earned on cash and cash equivalent balances and cash held in
escrow balances, income from forfeited security deposits, late charges, laundry
and vending income, and other rental related miscellaneous items.
11
Other revenues from operations include the following amounts at both the
Partnership and Local Partnership level:
March 31,
------------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 189,995 $ 178,526 $ 324,821
Other 1,118,305 831,147 1,007,985
---------- ---------- ----------
Total other revenue $1,308,300 $1,009,673 $1,332,806
========== ========== ==========
Other revenues from discontinued operations include the following amounts at
both the Partnership and Local Partnership level:
March 31,
------------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 8,367 $ 13,817 $ 20,968
Other 422,864 214,318 356,015
---------- ---------- ----------
Total other revenue $ 431,231 $ 228,135 $ 376,983
========== ========== ==========
Interest income is earned on cash and cash equivalent balances and cash held in
escrow balances. Other income includes income from forfeited security deposits,
late charges, laundry and vending income, and other rental related miscellaneous
items.
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.
Tabular Disclosure of Contractual Obligations
- ---------------------------------------------
The following table summarized the Partnership's commitments as of March 31,
2005 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) $159,944,368 $ 10,470,893 $ 10,835,822 $ 9,370,568 $129,267,085
Due to debt guarantor (b) 54,153,086 54,153,086 0 0 0
Land lease obligations (c) 2,851,696 68,084 136,168 136,168 2,511,276
Developer loans and
accrued interest (d) 1,335,500 1,335,500 0 0 0
Land note payable (e) 1,505,106 1,505,106 0 0 0
------------ ------------ ------------ ------------ ------------
Total $219,789,756 $ 67,532,669 $ 10,971,990 $ 9,506,736 $131,778,361
============ ============ ============ ============ ============
(a) The mortgage and construction notes, which are collateralized by land and
buildings, are payable in aggregate monthly installments of approximately
$909,000, 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 experienced significant losses from operations and 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 $54,153,086, 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) Three 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, 2004, those
Subsidiary Partnerships were committed to minimum future annual rentals on
the leases aggregating $68,084 for each of the next five years, and
$2,511,276 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.
12
New Accounting Pronouncements
- -----------------------------
On December 16, 2004, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets - An Amendment of
APB Opinion No. 29 ("SFAS No. 153"). The amendments made by SFAS No. 153 are
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for nonmonetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of nonmonetary
assets that do not have "commercial substance." SFAS No. 153 is effective for
nonmonetary asset exchanges occurring in fiscal period beginning after June 15,
2005. The Company does not believe that the adoption of SFAS No. 153 on June 15,
2005 will have a material effect on the Company's consolidated financial
statements.
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 were applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 (R) did not have a material impact on the Partnership's financial reporting
and disclosures.
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, 2005, 2004 and 2003 ("Fiscal 2004", "Fiscal 2003" and
"Fiscal 2002", 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 loss from operations for the 2004, 2003 and 2002 Fiscal Years totaled
$13,767,372, $13,310,262 and $16,575,474, respectively.
2004 vs. 2003
- -------------
Rental income decreased approximately 1% for Fiscal 2004 as compared to Fiscal
2003, primarily due to increased vacancies at one Local Partnership and the
Housing Assistance payments contract which expired during 2004 at a second Local
Partnership.
Other income increased approximately $299,000 for Fiscal 2004 as compared to
Fiscal 2003, primarily due to one Local Partnership modifying its primary
mortgage loan during the year ended December 31, 2004. The primary mortgage was
reduced in the amount of $1,500,000 with a corresponding increase in the support
loan. In addition, the note holder forgave all the delinquent interest and
related fees associated with the mortgage amounting to approximately $293,000
which is included in other income.
Total expenses, excluding repairs and maintenance, remained fairly consistent
with an increase of less than 1% for Fiscal 2004 as compared to Fiscal 2003.
Repairs and maintenance increased approximately $559,000 for Fiscal 2004 as
compared to Fiscal 2003, primarily due to the painting of the building's
exterior at one Local Partnership, landscaping and an increase in payroll at a
second Local Partnership and an increase in security costs and the painting of
the building's exterior at a third Local Partnership.
2003 vs. 2002
- -------------
Rental income increased approximately 1% for Fiscal 2003 as compared to Fiscal
2002 primarily due to rental rate increases.
Other income decreased approximately $323,000 for Fiscal 2003 as compared to
Fiscal 2002 primarily due to a decrease in reserve balances earning interest at
three Local Partnerships, a physical improvement grant received in 2002 at a
fourth Local Partnership, insurance recovery income received in 2002 at a fifth
Local Partnership and forgiveness of late fees at another Local Partnership.
Total expenses, excluding insurance, remained fairly consistent with a decrease
of approximately 7% for Fiscal 2003 as compared to Fiscal 2002.
Insurance expense increased approximately $259,000 for Fiscal 2003 as compared
to Fiscal 2002 primarily due to increases in insurance premiums at the Local
Partnerships.
Results of Operations of Certain Local Partnerships
- ---------------------------------------------------
(a) Subsidiary Partnership - Going Concerns and Uncertainties
13
R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- -------------------------------------------------------------------------------
River Place has experienced significant losses from operations and 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
$54,153,086, 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 2005. 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, 2005 and 2004. The net loss after minority interest for River
Place amounted to approximately $3,526,000, $3,249,000 and $3,127,000 for the
years ended March 31, 2005, 2004 and 2003, 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 2005 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, 2005 and 2004. The net loss after minority
interest for Brandywine amounted to approximately $94,000, $101,000 and $665,000
(which includes a $553,000 loss on impairment of fixed assets) for the years
ended March 31, 2005, 2004 and 2003, 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. The apartment units are no longer supported by project-based housing
subsidies. The Partnership has made no payments on its mortgage since May 2004.
As a result of this default, the mortgagee (HUD), as remedies, may call the
loan, take possession of the Project's assets or foreclose on the Project's real
estate. Accordingly, the entire balance of the mortgage loan has been classified
as a current liability as of December 31, 2004. Management believes that HUD
will sell, or attempt to sell, the mortgage note on March 16, 2005. If the sale
is successful, the Partnership intends to offer the new note holder the
Partnership's deed in lieu of foreclosure. 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,
2005 and 2004. The net loss after minority interest for Gentle Pines amounted to
approximately $437,000, $100,000 and $1,887,000 (which includes a $1,601,000
loss on impairment of fixed assets) for the years ended March 31, 2005, 2004 and
2003, respectively.
Affordable Flatbush Associates ("Affordable Flatbush")
- ------------------------------------------------------
The financial statements of Affordable Flatbush have been prepared assuming that
it will continue as a going concern. Affordable Flatbush has suffered recurring
losses from operations and has a net capital deficiency that raises substantial
doubt about its ability to continue as a going concern. The Partnership's
investment in Affordable Flatbush was written down to zero by prior years'
losses and the minority interest was approximately $14,000 and $10,000 at March
31, 2005 and 2004, respectively. The net loss after minority interest for
Affordable Flatbush amounted to approximately $34,000, $86,000 and $61,000 for
the years ended March 31, 2005, 2004, and 2003, respectively.
Citrus Meadows Apartments, LTD. ("Citrus Meadows")
- --------------------------------------------------
The financial statements of Citrus Meadows have been prepared assuming that it
will continue as a going concern. Citrus Meadows incurred a net loss of $776,599
during the current period and has incurred a Partner's deficit of $7,507,024
since inception. Current economic conditions have limited the ability of Citrus
Meadows to increase tenant occupancy. In response to economic conditions,
management has reduced expenses and increased advertising to attract new
tenants. Also, nonessential capital expenditures have either been eliminated or
postponed. With record low interest rates, more people are purchasing housing
instead of renting. At this time, the Local 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, 2005 and 2004. The net loss after minority
interest amounted to approximately $777,000, $568,000 and $912,000 for the years
ended March 31, 2005, 2004 and 2003, respectively. Subsequently, on May 6, 2005,
Gentle Pines transferred the deed to the property and the related assets and
liabilities to an unaffiliated third party in lieu of disclosure.
b) Subsidiary Partnership - Other
Jefferson Limited Partnership ("Jefferson")
- -------------------------------------------
At December 31, 2004 and 2003, Jefferson's current liabilities exceeded its
current assets by approximately $130,000 and $97,000, 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 $72,891
and $115,711 of current liabilities at December 31, 2004 and 2003, respectively,
are to related parties which do not intend to pursue payment beyond Jefferson's
14
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, 2004. The
Partnership's investment in Jefferson was written down to zero by prior years'
losses and the minority interest balance was $0 at each date. The net loss after
minority interest for Jefferson amounted to approximately $151,000, $217,000 and
$150,000 for the years ended March 31, 2005, 2004 and 2003, respectively.
Manhattan A Associates ("Manhattan A")
- --------------------------------------
The financial statements of Manhattan A have been prepared on the basis that it
is to continue as a going concern. The limited partners have made assertions
that they will continue to fund cash flow shortfalls as they have in the past.
The Partnership's investment in Manhattan A was approximately $755,000 at March
31, 2005 and the minority interest for Manhattan A was $0 at both March 31, 2005
and 2004. The net loss after minority interest for Manhattan A amounted to
approximately $113,000, $25,000 and $55,000 for the years ended March 31, 2005,
2004 and 2003, respectively.
Site H Development Co. ("Site H")
- ---------------------------------
The Partnership has not been provided with the Site H audited financial
statements for fiscal years 2005, 2004 and 2003, and as such has used estimates
in its Consolidated Financial Statements for three years.
Other Subsidiary Partnerships
- -----------------------------
Three 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, 2004, those Subsidiary
Partnerships were committed to minimum annual rentals on the leases aggregating
$68,084 for each of the next five years, and $2,511,276 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 has mortgage notes that are payable in aggregate monthly
installments including principal and interest at rates varying from 0% to 11.5%
per annum. The Partnership does not believe there is a material risk associated
with the various interest rates associated with the mortgage notes as the
majority of the Local Partnership mortgage notes have fixed rates. The
Partnership currently discloses in Item 8, Note 3 of the Notes to Consolidated
Financial Statements, the fair value of the mortgage notes payable.
The Partnership does not have any market risk sensitive instruments.
15
Item 8. Financial Statements and Supplementary Data
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 17
Consolidated Balance Sheets at March 31, 2005 and 2004 142
Consolidated Statements of Operations for the Years
Ended March 31, 2005, 2004 and 2003 143
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 31, 2005, 2004 and 2003 144
Consolidated Statements of Cash Flows for the Years
Ended March 31, 2005, 2004 and 2003 145
Notes to Consolidated Financial Statements 146
16
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, 2005 and 2004, and the related consolidated statements of operations,
changes in partners' deficit, and cash flows for the years ended March 31, 2005,
2004 and 2003 (the 2004, 2003 and 2002 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 57 (Fiscal 2004), 58
(Fiscal 2003) and 60 (Fiscal 2002) subsidiary partnerships whose losses
aggregated ($12,756,453), ($15,889,757) and ($15,565,338) for the 2004, 2003 and
2002 Fiscal Years, respectively, and whose assets constituted 91% and 90% of the
Partnership's assets at March 31, 2005 and 2004, respectively, presented in the
accompanying consolidated financial statements. The financial statements of 56
(Fiscal 2004), 57 (Fiscal 2003) and 59 (Fiscal 2002) 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 2004, 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, 2005 and 2004,
and the results of their operations and their cash flows for the years ended
March 31, 2005, 2004 and 2003, in conformity with U.S. generally accepted
accounting principles.
As discussed in Note 12(a), the consolidated financial statements include the
financial statements of four 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 $4,833,531 (Fiscal 2004),
$4,016,930 (Fiscal 2003) and $6,590,417 (Fiscal 2002), and their assets
aggregated $18,259,224 and $19,370,800 at March 31, 2005 and 2004, 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, 2005
17
[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 "Partnership) as of December 31, 2004 and
2003, 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C.V. Bronx Associates, L.P. as
of December 31, 2004 and 2003, 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.
January 28, 2005
18
[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 "Partnership) 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
19
[Letterhead of LAYTON & RICHARDSON, P.C.]
INDEPENDENT AUDITOR'S REPORT
Partners of
Michigan Rural Housing Limited Partnership
We have audited the accompanying balance sheets of Michigan Rural Housing
Limited Partnership (a Michigan partnership) as of December 31, 2004 and 2003,
and the related statements of income, 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 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.
In our 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, 2004 and 2003, 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/ Layton & Richardson, P.C.
Certified Public Accountants
East Lansing, Michigan
February 8, 2005
20
[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
21
[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, 2004 and December 31, 2003, 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, 2004 and December 31, 2003, 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, 2004 and December
31, 2003 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 25, 2005
Shreveport, Louisiana
22
[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
23
[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, 2004, 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 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 Inter-Tribal Indian Village Housing
Development Associates, L.P. as of December 31, 2004 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 our
reports dated January 20, 2005, on our consideration of Inter-Tribal Indian
Village Housing Development Associates, L.P.'s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, grants, agreements and other matters. The purpose of
those reports is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing and not to
provide an opinion on the internal control over financial reporting or on
compliance. 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.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in the report shown on pages 13-19 is presented for the
purposes of additional analysis and is 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 20, 2005
24
[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
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, 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
26
[Letterhead of REZNICK GROUP. P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
RBM Associates
We have audited the accompanying balance sheets of RBM Associates as of December
31, 2004 and 2003, 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 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 RBM Associates as of December
31, 2004 and 2003, 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, 2004, dated February 4, 2005, 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 grant agreements and other matters. The purpose of that report is
to describe the scope of our testing of internal control over financial
reporting and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or on compliance. 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 2004 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 Group, P.C.
Baltimore, Maryland
February 4, 2005
27
[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
28
[Letterhead of McKONLY & ASBURY LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Glenbrook Associates Rural Development
Lancaster, Pennsylvania Lebanon, Pennsylvania
We have audited the accompanying Balance Sheets of Glenbrook Associates (a
limited partnership) as of December 31, 2004 and 2003, 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 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 Glenbrook Associates at
December 31, 2004 and 2003, 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 a report
dated January 28, 2005 on our consideration of Glenbrook Associates' internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, grant agreements, and other matters.
The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing
and not to provide an opinion on the internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in
accordance with GOVERNMENT AUDITING STANDARDS and should be considered in
assessing the results of our audits.
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 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, 2005
29
[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
30
[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, 2004 and December
31, 2003, 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, except for the uncertainties around the ability of Affordable
Flatbush Associates to continue as a going concern, as referenced below, 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, 2004 and December 31, 2003, 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 accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Feldman, Holtzman, Lupo & Zerbo, LLC
Pompton Lakes, New Jersey
February 28, 2005
31
[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
32
[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, 2004 and 2003, 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, 2004 and 2003, 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 28, 2005, on our consideration of
Barclay Village II, Ltd.'s internal control and on our test of its compliance
certain provisions of laws, regulations, contracts, grant agreements, and other
matters and with specific requirements applicable to major HUD Programs,
Pennsylvania Housing Finance Agency regulations, and specific requirements
applicable to Fair Housing and Nondiscrimination. The purpose of those reports
is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing and not to provide an
opinion on the internal control over financial reporting or on compliance. 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 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.
/s/ Wessel & Company
Certified Public Accountants
Johnstown, Pennsylvania
January 28, 2005
33
[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
34
[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, 2004 and
2003, 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 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 1850 Second Avenue Associates,
L.P. as of December 31, 2004 and 2003, 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 10, 2005
35
[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
36
[Reznick Group, P.C. 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,
2004 and 2003, 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 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 R.P.P. Limited Dividend Housing
Association Limited Partnership at December 31, 2004 and 2003, and the results
of its operations, the changes in partners' deficit and cash flows for the years
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 Group, P.C.
Bethesda, Maryland
January 26, 2005
37
[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 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 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
38
[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, 2004 and 2003, 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, 2004 and 2003, 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 31, 2005
39
[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
40
[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, 2004 and December 31,
2003, 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, 2004 and December 31, 2003, 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 28, 2005
41
[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
42
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 September 29, 2004 and December 31, 2003 and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended September 29, 2004 and 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. 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
September 29, 2004 and December 31, 2003, and the results of its operations and
cash flows for the period ended September 29, 2004 and for the year ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
November 30, 2004
43
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
44
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 September 29, 2004 and December 31, 2003 and the
related statements of operations, changes in partners' capital and cash flows
for the period ended September 29, 2004 and 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. 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
September 29, 2004 and December 31, 2003, and the results of its operations and
cash flows for the period ended September 29, 2004 and for the year ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
November 30, 2004
45
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
46
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 September 29, 2004 and December 31, 2003 and the
related statements of operations, changes in partners' capital (deficit) and
cash flows for the period ended September 29, 2004 and 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. 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
September 29, 2004 and December 31, 2003, and the results of its operations and
cash flows for the period ended September 29, 2004 and for the year ended
December 31, 2003, in conformity accounting principles generally accepted in the
United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
November 23, 2004
47
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
48
[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, 2004, 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 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, 2004, 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, 2005 on our consideration of the Partnership's 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.
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, 2005
Carmel, Indiana
49
[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
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, 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
51
[Letterhead of REZNICK GROUP, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Dunlap School Venture
We have audited the accompanying balance sheets of Dunlap School Venture as of
December 31, 2004 and 2003, 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, 2004 and 2003, 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, 2004, dated February 11, 2005, 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 grant agreements and other matters. The purpose of
that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on
compliance. 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 2004 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 Group, P.C.
Baltimore, Maryland
February 11, 2005
52
[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
53
[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, 2004 and 2003, 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, 2004 and 2003, 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 February 2, 2005 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, grant
agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is 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
February 2, 2005
54
[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
55
[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, 2004 and 2003, 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, 2004 and 2003, 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 25, 2005 on our consideration of Franklin Elderly Housing
Associates' (A Maine Limited Partnership) internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on
compliance. That report is 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 15-17 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 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 25, 2005
56
[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
57
[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, 2004 and 2003, 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, 2004 and 2003, 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 24, 2005 on our consideration of Wade D. Mertz Elderly
Housing Associates (A Maine Limited Partnership) internal controls over
financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal
control over financial reporting or on compliance. That report is 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 24, 2005
58
[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
59
[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, 2004 and
2003, 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 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 Lancashire Towers Associates
Limited Partnership as of December 31, 2004 and 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, we have also issued a report
dated January 13, 2005 on our consideration of Lancashire Towers Associates
Limited Partnership's internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and over
compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or over compliance. 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 audits.
/s/ Saltz, Shamis & Goldfarb, Inc.
CERTIFIED PUBLIC ACCOUNTANTS
Cleveland, Ohio
January 13, 2005
60
[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
61
[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, 2004 and 2003 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, 2004 and 2003 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 10, 2005
62
[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
63
[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, 2004
and 2003 and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2004. 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, 2004
and 2003, and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2004, 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
February 1, 2005 on our consideration of BRANDYWINE COURT ASSOCIATES, L.P.'S (A
LIMITED PARTNERSHIP), HUD PROJECT NO. 063-94015, internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of
those reports is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing and not to
provide an opinion on the internal control over financial reporting or on
compliance. 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
February 1, 2005
64
[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
65
[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, 2004 and 2003 and the related statements
of income, changes in partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's 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 partners and contracted
management agent, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Art Apartments Associates (a
Limited Partnership) at December 31, 2004 and 2003, and its 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/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
February 9, 2005
66
[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
67
[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, 2004 and 2003, 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, 2004 and 2003, 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 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, 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, 2005 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 23, 2005
68
[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
69
[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,
2004 and 2003, 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, 2004 and 2003, 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, 2004 and 2003, 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 18, 2005 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 18, 2005
70
[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
71
[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, 2004 and 2003, 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, 2004 and 2003, 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, 2005
72
[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
73
[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, 2004
and 2003, 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, 2004 and 2003, 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, 2005 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, 2005
74
[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
75
[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, 2004 and 2003, 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, 2004 and 2003, 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, 2005 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, 2005
76
[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
77
[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, 2004 and 2003, 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, 2004 and 2003, 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 28, 2005
78
[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
79
[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, 2004 and 2003, 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, 2004 and 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.
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 31, 2005, on our
consideration of Redemptorist Limited Partnership's internal control, and
reports dated January 31, 2005, 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
January 31, 2005
80
[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
81
[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, 2004 and 2003, 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, 2004 and 2003, 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 and eleven 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 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/ Satty, Levine & Ciacco, CPAs, P.C.
Jericho, New York
January 25, 2005
82
[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
83
[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 sheets of Weidler Associates Limited
Partnership as of December 31, 2004 and 2003, 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, 2004 and 2003, 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 15, 2005
84
[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
85
[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, 2004 and 2003, and the related statements of loss, Partners'
capital and cash flows for the year ended December 31, 2004. 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, 2004 and 2003, and the results of its operations, changes in its
Partners' capital, and its cash flows for the year ended December 31, 2004 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that GENTLE
PINES - WEST COLUMBIA ASSOCIATES, L.P. (A LIMITED PARTNERSHIP) will continue as
a going concern. As described in Notes A, B, and D and reported in the
accompanying financial statements, GENTLE PINES - WEST COLUMBIA ASSOCIATES, L.P.
(A LIMITED PARTNERSHIP) has lost its Project-based housing subsidiaries and
defaulted on its mortgage, which has exacerbated its recurring net losses and
working capital deficit. 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
February 9, 2005 on our consideration of GENTLE PINES - WEST COLUMBIA
ASSOCIATES, L.P.'S (A LIMITED PARTNERSHIP), HUD PROJECT NO. 054-94007, internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of those reports is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that
testing and not to provide an opinion on the internal control over financial
reporting or on compliance. 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
February 9, 2005
86
[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
87
[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, 2004
and 2003, 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, 2004 and 2003, 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, 2005 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
January 28, 2005
88
[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
89
[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, 2004 and 2003, 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, 2004 and 2003, 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 26, 2005
90
[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
91
[Letterhead of DAVID W. SCOTT, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
WPL Associates XXIII Limited Partnership
5335 SW Meadows Road, Suite 190
Lake Oswego, Oregon 97035
We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of July 15, 2004, and the related statements of operations,
changes in partnerships' capital, and cash flows for the period 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 July 15, 2004, and the results of its operations and its cash
flows for the period then ended, in conformity with generally accepted
accounting principles.
/s/ David W. Scott, CPA, P.C.
Portland, Oregon
November 18, 2004
92
[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
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, 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
94
[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
95
[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
96
[Letterhead of LUGO - CARRERAS & ASSOCIADOS, CSP]
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, 2004, 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, 2004, 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 31, 2005, on our consideration of Puerto
Rico Historic Zone Limited Dividend Partnership's internal control and reports
dated January 31, 2005, 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. 2027804 was affixed to the original of this report.
San Juan, Puerto Rico
January 31, 2005
97
[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
98
[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
99
[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, 2004, 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, 2004 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 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 12 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 February 7, 2005 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 7, 2005 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
February 7, 2005
100
[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
101
[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
102
[Letterhead of REZNICK GROUP, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sartain School Venture
We have audited the accompanying balance sheets of Sartain School Venture as of
December 31, 2004 and 2003, 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 Sartain School Venture as of
December 31, 2004 and 2003, 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, 2004, dated February 4, 2005, 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 grant agreements and other matters. The purpose of
that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing 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 2004 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 Group, P.C.
Baltimore, Maryland
February 4, 2005
103
[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
104
[LETTEHEAD OF ASHER & COMPANY, LTD.]
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, 2004
and 2003 and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2004. 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, 2004
and 2003 and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2004, 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 13, 2005 on our consideration of DRIFTWOOD TERRACE ASSOCIATES,
LTD.'S (A LIMITED PARTNERSHIP), HUD PROJECT NO. 066-94031, internal control over
financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements and other matters. the
purpose of those reports is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing
and not to provide an opinion on the internal control over financial reporting
or on compliance. 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, 2005
105
[LETTEHEAD OF ASHER & COMPANY, LTD.]
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
106
[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, 2004 and 2003,
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, 2004 and 2003, 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 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the 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, 2005 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, 2005
107
[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
108
[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, 2004
and 2003, 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, 2004 and 2003, 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, 2004 and 2003, 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, 2005 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, 2005
109
[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
110
[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, 2004
and 2003, 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, 2004 and 2003, 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, 2004 and 2003, 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, 2005 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, 2005
111
[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
112
[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, 2004
and 2003, 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, 2004 and 2003, 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, 2004 and 2003, 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 22, 2005 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 22, 2005
113
[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
114
[Letterhead from Reznick Group, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cutler Canal III Associates, Ltd.
We have audited the accompanying balance sheets of Cutler Canal III Associates,
Ltd., as of December 31, 2004 and 2003, 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 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, 2004 and 2003, 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 18
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/ Reznick Group, P.C.
Atlanta, Georgia
February 1, 2005
115
[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
116
[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
117
[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, 2004
and 2003, 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, 2004 and 2003, 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 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, 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 22, 2005 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 22, 2005
118
[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
119
[Letterhead of FISHBEIN & COMPANY, P.C..]
INDEPENDENT AUDITORS' REPORT
To the Partners
Commerce Square Apartments Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheet of COMMERCE SQUARE APARTMENTS
ASSOCIATES, L.P., as of December 31, 2004, and the related statements of profit
and loss, partners' deficiency and cash flows for the year then ended. These
financial statements are the responsibility of Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statement of Commerce Square Apartments Associates,
L.P. as of December 31, 2003, were audited by other auditors whose report dated
January 31, 2004 expressed an unqualified opinion on those statements.
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 considerations
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership' s internal
control over financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, 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 Commerce Square Apartments
Associates, L.P., as of December 31, 2004, and the results of its operations and
cash flows 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 basic
financial statements taken as a whole. The additional information included in
this report (shown on pages 12 to 14) is presented for the purposes 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 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/ Fishbein & Company, P.C.
January 28, 2005
Horsham, Pennsylvania
120
[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
121
[Letterhead of KOCH GROUP & COMPANY, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
West 132nd Development Partnership
We have audited the accompanying balance sheet of West 132nd Development
Partnership as of December 31, 2004 and the related statements of operations,
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. 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, 2004 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
Certified Public Accountants
New York, New York
January 24, 2005
122
[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
123
[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
124
[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, 2004 and 2003, 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, 2004 and 2003, 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 11, 2005 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,
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.
/s/ Koch Group & Company, LLP
New York, New York
February 11, 2005
125
[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
126
[Letterhead of REZNICK GROUP, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Diamond Phase II Venture
We have audited the accompanying balance sheets of Diamond Phase II Venture as
of December 31, 2004 and 2003, 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 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, 2004 and 2003, 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 our report
dated January 28, 2005, 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 grant agreements and
other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control
over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be
considered in assessing 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 2004 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 Group, P.C.
Baltimore, Maryland
January 28, 2005
127
[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
128
[Letterhead of REZNICK GROUP, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bookbindery Associates
We have audited the accompanying balance sheets of Bookbindery Associates as of
December 31, 2004 and 2003, 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 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, 2004 and 2003, 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, 2004, dated January 21, 2005, 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 grant agreements and other matters. The purpose of
that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing 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 2004 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 Group, P.C.
Baltimore, Maryland
January 21, 2005
129
[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
130
[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, 2004 and 2003, and the
related statements of operations, partners' equity (deficiency) 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, 2004 and 2003, 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
Rockville, Maryland
January 26, 2005
131
[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
132
[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,
2004, 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, 2004, 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 11, 2005, on my consideration of Stop 22 Limited Partnership's
internal control over financial reporting, and on my test of its compliance with
certain provision of laws, regulations, contracts and grant agreements, and
other matters. The purpose of those reports is to describe the scope of our
testing of internal control over financial reporting and compliance and the
results of that testing and not to provide an opinion on the internal control
over financial reporting or on compliance. 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 11, 2005
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 2016960 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
133
[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.
134
[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.
135
[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, 2004
and 2003, 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, 2004 and 2003, 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, 2005 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, 2005
136
[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
137
[Letterhead of Salmin, Celona, Wehrle & Flaherty, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer James Street Associates
We have audited the accompanying balance sheet of Conifer James Street
Associates (a limited partnership) as of December 31, 2004 and 2003, 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, 2004 and 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.
/s/ Salmin, Celona, Wehrle & Flaherty, LLP
Rochester, New York
January 19, 2005
138
[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
139
[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,
2004 and 2003, 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 consideration of
internal control over financial reporting as a basis of designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, 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, 2004 and 2003, 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 31, 2005
140
[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
141
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
------------------------------
2005 2004*
------------- -------------
Operating assets:
Property and equipment - at cost, less accumulated
depreciation (Notes 2, 4 and 12) $ 145,904,381 $ 163,934,774
Cash and cash equivalents (Notes 2, 3 and 12) 2,959,570 3,656,322
Cash held in escrow (Notes 3 and 5) 12,225,370 13,258,260
Deferred costs - less accumulated amortization (Notes 2 and 6) 2,528,664 2,670,475
Other assets 2,865,646 2,776,525
------------- -------------
Total operating assets 166,483,631 186,296,356
------------- -------------
Assets from discontinued operations (Note 13):
Property and equipment held for sale, net of accumulated
depreciation of $7,320,799 and $0, respectively (Note 4) 4,904,925 0
Net assets held for sale 1,925,273 0
------------- -------------
Total assets from discontinued operations 6,830,198 0
------------- -------------
Total assets $ 173,313,829 $ 186,296,356
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Operating liabilities:
Mortgage notes payable (Note 7) $ 159,944,368 $ 172,456,295
Due to debt guarantor (Note 12(a)) 54,153,086 49,958,612
Accounts payable 5,393,345 6,547,074
Accrued interest payable 17,012,106 15,895,951
Security deposit payable 1,455,489 1,601,391
Due to local general partners and affiliates (Note 8) 12,589,346 11,682,238
Due to general partners and affiliates (Note 8) 12,898,094 11,905,206
------------- -------------
Total operating liabilities 263,445,834 270,046,767
------------- -------------
Liabilities from discontinued operations (Note 13):
Mortgage notes payable of asset held for sale (Note 7) 6,917,348 0
Net liabilities held for sale including minority interest (439,198) 0
------------- -------------
Total liabilities from discontinued operations 6,478,150 0
------------- -------------
Minority interest (Note 2) (1,476,100) (1,481,127)
------------- -------------
Commitments and contingencies (Notes 7, 8 and 12)
Partners' deficit
Limited partners (139,101.5 BACs issued and outstanding) (Note 1) (92,947,257) (80,211,134)
General partners (2,186,798) (2,058,150)
------------- -------------
Total partners' deficit (95,134,055) (82,269,284)
------------- -------------
Total liabilities and partners' deficit $ 173,313,829 $ 186,296,356
============= =============
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
142
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended March 31,
--------------------------------------------
2005 2004* 2003*
------------ ------------ ------------
Operations:
Revenues
Rental income $ 29,948,529 $ 30,135,397 $ 29,734,875
Other 1,308,300 1,009,673 1,332,806
------------ ------------ ------------
Total Revenues 31,256,829 31,145,070 31,067,681
------------ ------------ ------------
Expenses
General and administrative 6,596,225 6,906,044 7,084,826
General and administrative-related parties (Note 8) 3,172,475 3,221,599 3,213,101
Repairs and maintenance 6,019,397 5,459,901 5,808,476
Operating and other 3,566,690 3,466,368 3,266,371
Real estate taxes 1,907,373 1,825,087 1,776,144
Insurance 2,049,393 1,961,244 1,702,210
Interest 12,809,557 12,764,122 13,236,279
Depreciation and amortization 9,191,767 9,130,572 9,683,396
Loss on impairment of fixed assets (Note 4) 0 0 2,153,880
------------ ------------ ------------
Total expenses 45,312,877 44,734,937 47,924,683
------------ ------------ ------------
Loss from operations before minority interest (14,056,048) (13,589,867) (16,857,002)
Minority interest in loss of subsidiary partnerships
from operations 288,676 279,605 281,528
------------ ------------ ------------
Loss from operations (13,767,372) (13,310,262) (16,575,474)
Discontinued operations (Note 13):
Income (loss) from discontinued operations (including
gain (loss) on sale of properties and minority
interest) 902,601 13,287,290 (968,267)
------------ ------------ ------------
Net loss $(12,864,771) $ (22,972) $(17,543,741)
============ ============ ============
Loss from operations - limited partners $(13,629,698) $(13,177,160) $(16,409,720)
Income (loss) from discontinued operations (including
gain (loss) on sale of properties and minority
interest) - limited partners 893,575 13,154,417 (958,584)
------------ ------------ ------------
Net loss - limited partners $(12,736,124) $ (22,742) $(17,368,304)
============ ============ ============
Number of BACs outstanding 139,101.5 139,101.5 139,101.5
============ ============ ============
Loss from operations per BAC $ (97.98) $ (94.73) $ (117.97)
Income (loss) from discontinued operations (including
gain (loss) on sale of properties and minority
interest) - per BAC 6.42 94.57 (6.89)
------------ ------------ ------------
Net loss per BAC $ (91.56) $ (.16) $ (124.86)
============ ============ ============
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
143
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, 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, 2004 (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)
Net loss, year ended March 31, 2005 (12,864,771) (12,736,123) (128,648)
------------ ------------ ------------
Partners' deficit - March 31, 2005 $(95,134,055) $(92,947,257) $ (2,186,798)
============ ============ ============
See accompanying notes to consolidated financial statements.
144
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Years Ended March 31,
--------------------------------------------
2005 2004* 2003*
------------ ------------ ------------
Cash flows from operating activities:
Net loss $(12,864,771) $ (22,972) $(17,543,741)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 9,191,767 9,130,572 9,683,396
Loss on impairment of fixed assets 0 0 2,153,880
(Income) loss from discontinued operations (902,601) (13,287,290) 968,267
Interest added to mortgage note payable 392,860 362,358 345,811
Minority interest in loss of subsidiary partnerships (288,676) (279,605) (281,528)
(Increase) decrease in assets:
Cash held in escrow (400,382) 236,304 332,142
Other assets (257,339) 258,007 (248,486)
Increase (decrease) in liabilities:
Due to debt guarantor 3,234,474 3,153,223 3,124,405
Accounts payable and other liabilities 1,581,926 492,496 1,694,342
Increase in due to local general partners and affiliates 974,861 673,881 1,622,993
Decrease in due to local general partners and affiliates (81,662) 0 (396,170)
Due to general partners and affiliates 1,072,888 1,540,914 1,821,804
------------ ------------ ------------
Total adjustments 14,518,116 2,280,860 20,820,856
------------ ------------ ------------
Net cash provided by operating activities 1,653,345 2,257,888 3,277,115
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of properties 690,645 2,890,000 0
Costs paid relating to sale of properties 0 (180,960) 0
Acquisition of property and equipment (1,544,564) (1,316,199) (1,193,381)
Decrease (increase) in cash held in escrow 155,932 (105,383) 47,847
Decrease in cash held in escrow for real estate investments 29,516 82,332 0
Increase in due to local general partners and affiliates 68,481 69,717 71,918
Decrease in due to local general partners and affiliates 0 0 (433,206)
------------ ------------ ------------
Net cash (used in) provided by investing activities (599,990) 1,439,507 (1,506,822)
------------ ------------ ------------
Cash flows from financing activities:
Increase in deferred costs (32,979) (4,150) (242,394)
Repayments on mortgage notes (3,766,127) (5,675,185) (8,972,058)
Borrowings on mortgage notes 1,146,464 2,935,500 6,255,600
Advances from debt guarantor 960,000 462,000 360,000
Increase in due to local general partners and affiliates 0 1,867 392,326
Decrease in due to local general partners and affiliates 0 (2,709,040) 0
Decrease in capitalization of consolidated subsidiaries
attributable to minority interest (57,465) (150,805) (569,801)
------------ ------------ ------------
Net cash used in financing activities (1,750,107) (5,139,813) (2,776,327)
------------ ------------ ------------
Net decrease in cash and cash equivalents (696,752) (1,442,418) (1,006,034)
Cash and cash equivalents at beginning of year 3,656,322 5,098,740 6,104,774
------------ ------------ ------------
Cash and cash equivalents at end of year $ 2,959,570 $ 3,656,322 $ 5,098,740
============ ============ ============
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 7,796,635 $ 8,571,124 $ 9,059,474
============ ============ ============
* Reclassified for comparative purposes.
145
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
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"). As of
March 31, 2005, the Credit Periods for all the properties have expired; however,
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. During the year ended March 31, 2005, the Partnership sold
its limited partnership interest in four Local Partnerships. Through the year
ended March 31, 2005, the Partnership sold the property and the related assets
and liabilities of one Local Partnership and its limited partnership interest in
five Local Partnerships. 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, 2005, 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 60, 61 and 62 Subsidiary Partnerships in which the Partnership is the
principal limited partner for the years ended March 31, 2005, 2004, and 2003,
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").
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 $177,000, $0 and $298,000 for the years ended March 31,
2005, 2004 and 2003, respectively (the 2004, 2003 and 2002 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
146
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
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.
In accordance with FASB 144, "Accounting for the Impairment of Disposal of
Long-Lived Assets", the results of discontinued operations are reported as a
separate component of income before extraordinary items on the Consolidated
Statements of Operations. Discontinued operations include the results of
operations and any gain or loss recognized for Local Partnerships that have been
disposed of or are held for sale. A gain or loss recognized on the disposal is
disclosed in the notes to the financials statements. Adjustments to amounts
previously reported in operations that are directly related to the disposal of a
Local Partnership are reclassified in the current period as discontinued
operations for comparability purposes. Assets and liabilities of a Local
Partnership that are classified as held for sale are presented separately in the
asset and liability sections, respectively, of the Consolidated Balance Sheets.
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, 2005, the Partnership has
recorded $1,700,000 as a loss on impairment of assets which is included in
discontinued operations. Through March 31, 2005, the Partnership has recorded
approximately $23,937,000 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 two assets classified as property and equipment-held for
sale as of March 31, 2005: Michigan Rural Housing Limited Partnership ("Michigan
Rural") and Lancashire Towers Associates Limited Partnership ("Lancashire").
Subsequently, on May 3, 2005 the Partnership sold its limited partnership
interest in Lancashire (see Note 16).
d) Revenue Recognition
Rental income is earned primarily under standard residential operating leases
and is typically due the first day of each month, but can vary by property due
to the terms of the tenant leases. Rental income is recognized when earned and
as rents become due and charged to tenants' accounts receivable if not received
by the due date. Rental payments received in advance of the due date are
deferred until earned. Rental subsidies are recognized as rental income during
the month in which it is earned.
Other revenues are recorded when earned and consist of the following items:
Interest income earned on cash and cash equivalent balances and cash held in
escrow balances, income from forfeited security deposits, late charges, laundry
and vending income, and other rental related miscellaneous items.
Other revenues from operations include the following amounts at both the
Partnership and Local Partnership level:
March 31,
------------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 189,995 $ 178,526 $ 324,821
Other 1,118,305 831,147 1,007,985
---------- ---------- ----------
Total other revenue $1,308,300 $1,009,673 $1,332,806
========== ========== ==========
Other revenues from discontinued operations include the following amounts at
both the Partnership and Local Partnership level:
March 31,
--------------------------------------
2005 2004 2003
-------- -------- --------
Interest $ 8,367 $ 13,817 $ 20,968
Other 422,864 214,318 356,015
-------- -------- --------
Total other revenue $431,231 $228,135 $376,983
======== ======== ========
Interest income is earned on cash and cash equivalent balances and cash held in
escrow balances. Other income includes income from forfeited security deposits,
late charges, laundry and vending income, and other rental related miscellaneous
items.
e) 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).
147
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
f) 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.
g) 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.
h) New Accounting Pronouncements
On December 16, 2004, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets - An Amendment of
APB Opinion No. 29 ("SFAS No. 153"). The amendments made by SFAS No. 153 are
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for nonmonetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of nonmonetary
assets that do not have "commercial substance." SFAS No. 153 is effective for
nonmonetary asset exchanges occurring in fiscal period beginning after June 15,
2005. The Company does not believe that the adoption of SFAS No. 153 on June 15,
2005 will have a material effect on the Company's consolidated financial
statements.
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 was 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 are applicable no later than July 1, 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 were applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 and FIN 46 (R) did not have a material impact on the Partnership's financial
reporting and disclosures.
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.
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 from
operations are as follows:
March 31, 2005 March 31, 2004
----------------------------- -----------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------- ------------ ------------- -------------
Mortgage notes payable for which it is:
Practicable to estimate fair value $ 73,920,908 $ 76,481,343 $ 81,933,174 $ 85,103,592
Not practicable $ 86,023,460 (*) $ 90,523,121 (*)
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LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
The estimated fair values of the Partnership's mortgage notes payable from
discontinued operations are as follows:
March 31, 2005 March 31, 2004
----------------------------- -----------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------- ------------ ------------- -------------
Mortgage notes payable for which it is:
Practicable to estimate fair value $ 4,535,363 $ 4,535,363 $ 0 $ 0
Not practicable $ 2,381,985 (*) $ 0 (*)
(*) 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.
Due to Local General Partners and Affiliates
- --------------------------------------------
The estimated fair value of the Partnership's due to the Local General Partners
and affiliates from operations are as follows:
March 31, 2005 March 31, 2004
----------------------------- -----------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------- ------------ ------------- -------------
Due to Local General Partners and
affiliates for which it is:
Not practicable to estimate fair value $ 12,589,346 (*) $ 11,682,238 (*)
The estimated fair value of the Partnership's due to the Local General Partners
and affiliates from discontinued operations are as follows:
March 31, 2005 March 31, 2004
----------------------------- -----------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------- ------------ ------------- -------------
Due to Local General Partners and
affiliates for which it is:
Not practicable to estimate fair value $ 25,700 (*) $ 0 (*)
(*) 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 from operations are as follows:
March 31, Estimated
--------------------------- Useful Lives
2005 2004 (Years)
------------ ------------ --------------
Land $ 11,562,462 $ 12,155,359 -
Buildings and improvements 248,257,564 267,056,970 15 to 40 years
Other 7,957,724 7,941,965 5 to 10 years
------------ ------------
267,777,750 287,154,294
Less: Accumulated depreciation (121,873,369) (123,219,520)
------------ ------------
$145,904,381 $163,934,774
============ ============
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, 2005
and 2004. In addition, as of March 31, 2005 and 2004, buildings and improvements
include $14,677,111 of capitalized interest.
Depreciation expense for the years ended March 31, 2005, 2004 and 2003 amounted
to $9,023,735, $8,982,072 and $10,621,390, respectively.
149
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
In connection with the rehabilitation of the properties, the Subsidiary
Partnerships have incurred developers' fees of $25,440,729 as of both March 31,
2005 and 2004 to the Local General Partner and affiliates. Such fees have been
included in the cost of property and equipment.
During the 2004 and 2003 Fiscal Years, there was a decrease in accumulated
depreciation in the amount of $10,396,886 and $10,938,328, respectively, and
$7,320,799 and $0 of these write-offs are related to the discontinued assets.
The components of property and equipment held for sale from discontinued
operations are as follows:
March 31, Estimated
--------------------------- Useful Lives
2005 2004 (Years)
------------ ------------ --------------
Land $ 417,822 $ 0 -
Buildings and improvements 11,649,849 0 15 to 40 years
Other 158,053 0 5 to 10 years
------------ ------------
12,225,724 0
Less: Accumulated depreciation (7,320,799) 0
------------ ------------
$ 4,904,925 $ 0
============ ============
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, the
management of 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, was less than the carrying value by
approximately $1,600,888. This impairment loss has been charged to operations
for the year ended March 31, 2004. 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 wrote them 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 the
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, 2004. 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.
Lancashire Towers Associates Limited Partnership ("Lancashire")
- ---------------------------------------------------------------
On December 29, 2004, the Partnership entered into an agreement for the sale of
its limited partnership interest in Lancashire to an affiliate of the Local
General Partner for a purchase price of $800,000. At this time, in accordance
with SFAS No. 144 the Partnership deemed the building impaired and wrote it down
to its fair value which resulted in a loss on impairment of $1,700,000. The
sales documents have been executed and the funds are being held in escrow
waiting for approval of the sale from the Department of Housing and Urban
Development ("HUD"). Subsequently, on May 2, 2005, Lancashire was sold.
NOTE 5 - Cash Held in Escrow
The components of cash held in escrow from operations are as follows:
March 31,
---------------------------
2005 2004
----------- -----------
Purchase price payments* $ 130,081 $ 159,597
Real estate taxes, insurance and other 5,355,973 5,511,779
Reserve for replacements 5,400,499 6,326,495
Tenants' security deposits 1,338,817 1,260,389
----------- -----------
$12,225,370 $13,258,260
=========== ===========
150
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
The discontinued assets cash held in escrow consists of the following:
March 31,
--------------------------
2005 2004
---------- ----------
Real estate taxes, insurance, and other $ 276,558 $ 0
Reserve for replacements 777,133 0
Tenants security deposits 127,035 0
---------- ----------
$1,180,726 $ 0
========== ==========
*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 from
operations are as follows:
March 31,
--------------------------
2005 2004 Period
----------- ----------- ------------
Financing expenses $ 4,769,175 $ 4,843,204 *
Less: Accumulated amortization (2,240,511) (2,172,729)
----------- -----------
$ 2,528,664 $ 2,670,475
=========== ===========
* Over the life of the related mortgages.
Amortization of deferred costs for the years ended March 31, 2005, 2004 and 2003
amounted to $171,411, $158,844 and $579,945, 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 $103,629 and
$69,121, respectively. Of these decreases, $64,414 and $0, respectively, were
related to the discontinued assets.
There were no deferred costs relating to discontinued assets as of March 31,
2005 and 2004.
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
$909,000, 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.
151
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
Annual principal payment requirements as of March 31, 2005 for each of the next
five fiscal years and thereafter are as follows:
Fiscal Year Ending Amount
- ------------------ ------------
2005 $ 12,083,526
2006 6,900,980
2007 3,827,021
2008 4,244,745
2009 5,000,610
2010 127,887,486
------------
Thereafter $159,944,368
============
The mortgage agreements require monthly deposits to replacement reserves of
approximately $98,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).
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,
2004 and 2003, Chestnut was in violation of such covenants. As of June 24, 2005,
Pennsylvania Housing Finance Agency ("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. Accordingly, the entire balance of the mortgage note
has been classified as a current liability as of December 31, 2004.
Accrued interest payable at March 31, 2005 and 2004 was approximately
$17,012,000 and $15,896,000, respectively. Interest accrues on all mortgage
loans, which include primary and secondary loans. Certain secondary loans have
provisions such that interest is accrued but not payable until a future date.
The Partnership anticipates the payment of accrued interest on the secondary
loans (which make up the majority of the accrued interest payable amount and
which have been accumulating since the Partnership's investment in the
respective Local Partnership) will be made from future refinancings or sales
proceeds of the respective Local Partnerships.
Annual principal payment requirements as of March 31, 2005 for each of the next
five fiscal years and thereafter for the discontinuing liabilities are as
follows:
Fiscal Year Ending Amount
- ------------------ ------------
2005 $ 192,640
2006 210,212
2007 227,327
2008 244,668
2009 263,356
Thereafter 5,779,145
------------
$ 6,917,348
============
Accrued interest payable for the discontinued liabilities at March 31, 2005 and
2004 was $0 for both years. Interest accrues on all mortgage loans, which
include primary and secondary loans. Certain secondary loans have provisions
such that interest is accrued but not payable until a future date. The
Partnership anticipates the payment of accrued interest on the secondary loans
(which make up the majority of the accrued interest payable amount and which
have been accumulating since the Partnership's investment in the respective
Local Partnership) will be made from future refinancings or sales proceeds of
the respective Local Partnerships.
NOTE 8 - Related Party Transactions
As of March 31, 2005, 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 55 and one 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,
2005, 2004 and 2003 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 were 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
152
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
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, 2005, 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.
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.
B) Related Party Fees
The costs incurred to related parties for the years ended March 31, 2005, 2004
and 2003 were as follows:
Years Ended March 31,
------------------------------------
2005 2004* 2003*
---------- ---------- ----------
Partnership management fees (i) $1,235,500 $1,345,196 $1,429,500
Expense reimbursement (ii) 327,712 290,714 272,714
Local administrative fee (iv) 85,500 88,721 87,704
---------- ---------- ----------
Total general and administrative - General Partners 1,648,712 1,724,631 1,789,918
---------- ---------- ----------
Property management fees incurred to affiliates of
the Local General Partners (iii) 1,523,763 1,496,968 1,423,183
---------- ---------- ----------
Total general and administrative - related parties $3,172,475 $3,221,599 $3,213,101
========== ========== ==========
* Reclassified for comparative purposes.
Related Party Fees - discontinued operations
Years Ended March 31,
------------------------------
2005 2004 2003
-------- -------- --------
Local administrative fee (iv) $ 12,500 $ 61,898 $111,296
-------- -------- --------
Total general and administrative-General Partners 12,500 61,898 111,296
-------- -------- --------
Property management fees incurred to affiliates of
the Local General Partners (iii) 245,206 308,953 358,738
-------- -------- --------
Total general and administrative-related
parties $257,706 $370,851 $470,034
======== ======== ========
(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 $11,045,000 and $9,810,000 were
accrued and unpaid at March 31, 2005 and 2004. 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.
153
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
(iii) The Subsidiary Partnerships incurred property management fees amounting to
$2,333,822, $2,366,865 and $2,362,241 for the years ended March 31, 2005, 2004
and 2003, respectively. Of these fees, $1,768,969, $1,805,921 and $1,781,921,
respectively, was incurred by affiliates of the Local General Partners, which
includes $245,206, $308,953 and $358,738 of fees relating to discontinued
operations.
(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,
approximately, $6,000, $10,000 and $8,000 during the years ended March 31, 2005,
2004 and 2003, respectively.
Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partners and Liberty Associates received their allocable pro rata share
of profits, losses and tax credits from the Partnership and the Local
Partnerships, respectively.
C) Due to Local General Partners and Affiliates
Due to Local General Partners and affiliates at March 31, 2005 and 2004 consists
of the following:
March 31,
-----------------------------
2005 2004
------------ ------------
Operating deficit advances $ 2,133,675 $ 2,149,580
Development fees 385,821 385,821
Operating advances 5,625,641 5,116,978
Due to contractor 46,289 46,289
General Partner distributions 0 14,684
Developer loans and accrued interest (i) 1,335,500 1,327,019
Land note payable (ii) 1,505,106 1,445,106
Management and other operating fees 1,557,314 1,196,761
------------ ------------
$ 12,589,346 $ 11,682,238
============ ============
Due to Local General Partners and affiliates at March 31, 2005 and 2004 included
in the discontinued liabilities consists of the following:
March 31,
-----------------------------
2005 2004
------------ ------------
General Partner distributions $ 20,000 $ 0
Management and other operating fee 5,700 0
------------ ------------
$ 25,700 $ 0
============ ============
(i) Developer loans consist of the following:
March 31,
------------------------------
2005 2004
------------ ------------
Jefferson Limited Partnership -
- -------------------------------
This loan is unsecured, bears interest at an annually
adjusted rate (1.52% at December 31, 2004 and 2.78% at
December 31, 2003) 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
Accrued interest on developer loans 174,716 166,235
Citrus Meadows Apartments, Ltd. -
- ---------------------------------
This loan bears no interest and can only be repaid with
the proceeds from a sale or refinancing. 985,784 985,784
------------ ------------
$ 1,335,500 $ 1,327,019
============ ============
Interest expense incurred on developer loans amounted
to $8,458, $9,718 and $11,918 for the years ended March
31, 2005, 2004 and 2003, respectively.
154
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
(ii) Land note payable consists of the following:
March 31,
------------------------------
2005 2004
------------ ------------
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 accrued interest, is payable
upon the sale of the property or in August 2037,
whichever event occurs first. $ 1,505,106 $ 1,445,106
============ ============
Interest expense incurred on land note payable amounted to $60,000 for each of
the three years ended March 31, 2005, 2004 and 2003.
The Partnership had negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships had
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements varied for each Local Partnership,
with maximum dollar amounts to be funded for a specified period of time,
generally three years, commencing on the break-even date.
Amounts funded under the Operating Deficit Guaranty Agreements were treated as
non-interest bearing loans, which will be paid only out of available cash flow
or out of available net sale or refinancing proceeds. As of March 31, 2005,
there was approximately $2,134,000 advanced under the Operating Deficit Guaranty
Agreements. Any amounts funded under such agreements would be reflected under
"Due to local general partner and affiliates" on our financial statements. As of
March 31, 2005, all Operating Deficit Guaranty Agreements have expired.
NOTE 9 - Taxable Net Loss
A reconciliation of the financial statement net loss to the taxable net loss for
the Partnership and its consolidated Subsidiaries follows:
Years Ended December 31,
---------------------------------------------
2004 2003 2002
------------ ------------- ------------
Financial statement net loss
$(12,864,771) $ (22,972) $(17,543,741)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes 44,931 (95,895) 42,234
Difference between depreciation and amortization
expense recorded for financial statement and income
tax reporting purposes (1,611,877) (1,978,505) (2,195,237)
Difference between gain on sale of properties
recorded for financial statement and income tax
reporting purposes 107,656 (6,013,468) 0
Loss on impairment recorded for financial statement
not deducted for tax purposes 1,700,000 0 2,153,880
Tax-exempt interest income (4,236) (1,265) 0
Other 506,533 757,779 1,379,578
------------ ------------- ------------
Taxable net loss as shown on the Partnership's
income tax
return $(12,121,764) $ (7,354,326) $(16,163,286)
============ ============= ============
NOTE 10 - Sale of Properties
The Partnership is currently in the process of disposing of its investments. It
is anticipated that this process will take a number of years. As of March 31,
2005, the Partnership has sold its limited partnership interest in five Local
Partnerships and the property and the related assets and liabilities of one
Local Partnership. In addition, on December 29, 2004, the Partnership entered
into an agreement to sell its limited partnership interest in another Local
Partnership. There may be no assurance as to when the Partnership will dispose
155
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
of its remaining investments or the amount of proceeds which may be received.
However, based on the historical operating results of the Local Partnerships and
the current economic conditions, including changes in tax laws, it is unlikely
that the proceeds from such sales received by the Partnership will be sufficient
to return to the limited partners their original investment.
On December 29, 2004, the Partnership entered into an agreement for the sale of
its limited partnership interest in Lancashire Towers Associates, Ltd.
("Lancashire") to an affiliate of the Local General Partner (as defined herein)
for a purchase price of $800,000. During the year ended March 31, 2005, in
accordance with SFAS No. 144 the Partnership deemed the building impaired and
wrote it down to its fair value which resulted in a loss on impairment of
$1,700,000. The sales documents have been executed and the funds are being held
in escrow waiting for approval of the sale from the Department of Housing and
Urban Development (HUD). Subsequently, on May 2, 2005, Lancashire was sold.
On October 7, 2004, the Partnership's limited partnership interest in Ashby
Apartments, Ltd. ("Ashby") was sold to the Local General Partner for
approximately $50,000, resulting in a capital contribution from the Local
General Partner of approximately $18,000. The sale resulted in the liquidation
of Ashby.
On October 7, 2004, the Partnership's limited partnership interest in Meredith
Apartments ("Meredith") was sold to the Local General Partner for approximately
$50,000, resulting in a capital distribution to the Local General Partner of
approximately $151,000. The sale resulted in the liquidation of Meredith.
On October 7, 2004, the Partnership's limited partnership interest in Ritz
Apartments LTD. ("Ritz") was sold to the Local General Partner for approximately
$50,000, resulting in a capital distribution to the Local General Partner of
approximately $34,000. The sale resulted in the liquidation of Ritz.
On July 15, 2004, the Partnership's limited partnership interest in WPL
Associates XXIII ("Benjamin's Corner") was sold to an unaffiliated third party
purchaser for approximately $690,000, resulting in a gain in the amount of
approximately $2,124,000.
On June 26, 2003, the property and the 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.
NOTE 11 - Forgiveness of Debt
On March 29, 2001, 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.
NOTE 12 - Commitments and Contingencies
a) Subsidiary Partnerships - Going Concerns
R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- -------------------------------------------------------------------------------
River Place has experienced significant losses from operations and 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
$54,153,086, 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 2005. 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, 2005 and 2004. The net loss after minority interest for River
Place amounted to approximately $3,526,000, $3,249,000 and $3,127,000 for the
years ended March 31, 2005, 2004 and 2003, 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 2005 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
156
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
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, 2005 and 2004. The net loss after minority
interest for Brandywine amounted to approximately $94,000, $101,000 and $665,000
(which includes a $553,000 loss on impairment of fixed assets) for the years
ended March 31, 2005, 2004 and 2003, 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. The apartment units are no longer supported by project-based housing
subsidies. The Partnership has made no payments on its mortgage since May 2004.
As a result of this default, the mortgagee (HUD), as remedies, may call the
loan, take possession of the Project's assets or foreclose on the Project's real
estate. Accordingly, the entire balance of the mortgage loan has been classified
as a current liability as of December 31, 2004. Management believes that HUD
will sell, or attempt to sell, the mortgage note. 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, 2005 and 2004. The net loss after minority interest for Gentle Pines
amounted to approximately $437,000, $100,000 and $1,887,000 (which includes a
$1,601,000 loss on impairment of fixed assets) for the years ended March 31,
2005, 2004 and 2003, respectively. Subsequently, on May 6, 2005, Gentle Pines
transferred the deed to the property and the related assets and liabilities to
an unaffiliated third party in lieu of foreclosure.
Affordable Flatbush Associates ("Affordable Flatbush")
- ------------------------------------------------------
The financial statements of Affordable Flatbush have been prepared assuming that
it will continue as a going concern. Affordable Flatbush has suffered recurring
losses from operations and has a net capital deficiency that raises substantial
doubt about its ability to continue as a going concern. The Partnership's
investment in Affordable Flatbush was written down to zero by prior years'
losses and the minority interest was approximately $14,000 and $10,000 at March
31, 2005 and 2004, respectively. The net loss after minority interest for
Affordable Flatbush amounted to approximately $34,000, $86,000 and $61,000 for
the years ended March 31, 2005, 2004, and 2003, respectively.
Citrus Meadows Apartments, LTD. ("Citrus Meadows")
- --------------------------------------------------
The financial statements of Citrus Meadows have been prepared assuming that it
will continue as a going concern. Citrus Meadows incurred a net loss of $776,599
during the current period and has incurred a Partner's deficit of $7,507,024
since inception. Current economic conditions have limited the ability of Citrus
Meadows to increase tenant occupancy. In response to economic conditions,
management has reduced expenses and increased advertising to attract new
tenants. Also, nonessential capital expenditures have either been eliminated or
postponed. With record low interest rates, more people are purchasing housing
instead of renting. At this time, the Local 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, 2005 and 2004. The net loss after minority
interest amounted to approximately $777,000, $568,000 and $912,000 for the years
ended March 31, 2005, 2004 and 2003, respectively.
b) Subsidiary Partnership - Other
Jefferson Limited Partnership ("Jefferson")
- -------------------------------------------
At December 31, 2004 and 2003, Jefferson's current liabilities exceeded its
current assets by approximately $130,000 and $97,000, 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 $72,891
and $115,711 of current liabilities at December 31, 2004 and 2003, 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, 2004. The
Partnership's investment in Jefferson was written down to zero by prior years'
losses and the minority interest balance was $0 at each date. The net loss after
minority interest for Jefferson amounted to approximately $151,000, $217,000 and
$150,000 for the years ended March 31, 2005, 2004 and 2003, respectively.
Manhattan A Associates ("Manhattan A")
- --------------------------------------
The financial statements of Manhattan A have been prepared on the basis that it
is to continue as a going concern. The limited partners have made assertions
that they will continue to fund cash flow shortfalls as they have in the past.
The Partnership's investment in Manhattan A was approximately $755,000 at March
31, 2005 and the minority interest for Manhattan A was $0 at both March 31, 2005
and 2004. The net loss after minority interest for Manhattan A amounted to
approximately $113,000, $25,000 and $55,000 for the years ended March 31, 2005,
2004 and 2003, respectively.
Site H Development Co. ("Site H")
- ---------------------------------
The Partnership has not been provided with the Site H audited financial
statements for fiscal years 2005, 2004 and 2003, and as such has used estimates
in its Consolidated Financial Statements for three years.
157
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
Leases
- ------
Three 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, 2004 those Subsidiary
Partnerships were committed to minimum future annual rentals on the leases
aggregating $68,084 for each of the next five years, and $2,511,276 total
thereafter.
One Local Partnership has entered into an agreement (Master Lease) that expires
in 2012, wherein the Local Partnership is guaranteed annual rental revenue. The
following is a schedule by year of future minimum rentals to be received under
the Master Lease as of December 31, 2004:
Year Ended December 31,
- ------------------------
2005 $ 146,139
2006 152,133
2007 158,370
2008 164,863
2009 171,458
2010 and thereafter 364,910
------------
$ 1,157,873
============
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, 2005, uninsured cash and
cash equivalents approximated $2,291,000.
d) Cash Distributions
Cash distributions from the Local Partnerships to the Partnership are restricted
by the provisions of the respective Local Partnership agreements and/or HUD.
Such cash distributions are typically made from surplus cash flow.
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 2004, 2003 and 2002, the Partnership generated Housing Tax
Credits of approximately $69,000, $69,000 and $1,274,000, respectively.
f) 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 $24,382,857 and $25,622,663 as of
December 31, 2004 and 2003, 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, 2007, 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.
158
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
NOTE 13 - Discontinued Operations
The following table summarizes the financial position and results of operations
of the Local Partnerships that are classified as discontinued operations. As of
March 31, 2005, Ashby, Benjamin's Corner, Lancashire, Meredith, Michigan Rural
and Ritz were classified as discontinued operations in the Consolidated
Financial Statements.
Consolidated Balance Sheets:
March 31, March 31,
2005 2004
----------- -----------
Assets
Property and equipment - less
accumulated depreciation of
$7,320,799 and $0, respectively $ 4,904,925 $ 0
Cash and cash equivalents 640,686 0
Cash held in escrow 1,180,726 0
Other assets 103,861 0
----------- -----------
Total assets $ 6,830,198 $ 0
=========== ===========
Liabilities
Mortgage notes payable $ 6,917,348 $ 0
Accounts payable and other liabilities 285,741 0
Due to local general partners and
affiliates 25,700 0
Due to general partners and affiliates 2,500 0
Minority interest (753,139) 0
----------- -----------
Total liabilities $ 6,478,150 $ 0
=========== ===========
For the year ended March 31, 2005, Ashby, Benjamin's Corner, Lancashire,
Meredith, Michigan Rural and Ritz were classified as discontinued operations on
the Consolidated Financial Statements. For the years ended March 31, 2004 and
2003, Ashby, Benjamin's Corner, Jefferson Place, Lancashire, Meredith, Michigan
Rural and Ritz were classified as discontinued operations on the Consolidated
Statements of Operations.
159
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
Consolidated Statements of Discontinued Operations:
Years Ended March 31,
-----------------------------------------------
2005 2004 2003
------------ ------------ ------------
Revenues
Rental income $ 3,139,484 $ 4,289,373 $ 5,152,617
Other 431,231 228,135 376,983
Gain on sale of properties 2,124,097 13,942,678 0
------------ ------------ ------------
Total revenue 5,694,812 18,460,186 5,529,600
------------ ------------ ------------
Expenses
General and administrative 417,072 674,310 879,742
General and administrative-related parties (Note 8) 257,706 370,851 470,034
Repairs and maintenance 401,161 612,903 566,633
Operating 699,030 829,937 871,604
Taxes 325,181 428,872 456,884
Insurance 112,540 159,304 151,816
Interest 276,540 1,041,275 1,583,616
Depreciation and amortization 648,700 1,048,803 1,517,939
Loss on impairment of fixed assets 1,700,000 0 0
------------ ------------ ------------
Total expenses 4,837,930 5,166,255 6,498,268
------------ ------------ ------------
Income (loss) before minority interest 856,882 13,293,931 (968,668)
Minority interest in loss of subsidiaries from
discontinued operations 45,719 (6,641) 401
------------ ------------ ------------
Total income (loss) from discontinued operations
(including gain on sale of properties) $ 902,601 $ 13,287,290 $ (968,267)
============ ============ ============
Income (loss) - limited partners from discontinued
operations (including gain on sale of properties) $ 893,575 $ 13,154,417 $ (958,584)
============ ============ ============
Number of BACs outstanding 139,101.5 139,101.5 139,101.5
============ ============ ============
Income (loss) discontinued operations (including gain on
sale of properties) per BAC $ 6.42 $ 94.57 $ (6.89)
============ ============ ============
160
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
NOTE 14 - Selected Quarterly Financial Data (Unaudited)
The following table summarizes the Partnership's quarterly results of operations
for the years ended March 31, 2005 and 2004. The fluctuations between the
quarters are primarily due to the sales of Local Partnerships (see Note 10).
Quarter Ended
------------------------------------------------------------
June 30, September 30, December 31, March 31,
2004 2004 2004 2005
------------ ------------ ------------ ------------
Revenues $ 7,703,577 $ 7,741,565 $ 7,768,205 $ 8,043,482
Operating expenses (10,908,362) (11,332,950) (11,244,042) (11,827,523)
------------ ------------ ------------ ------------
Loss from operations before minority
interest (3,204,785) (3,591,385) (3,475,837) (3,784,041)
Minority interest in loss of subsidiary
partnerships from operations 61,880 77,904 66,507 82,385
(Loss) income from discontinued operations
(including gain (loss) of
properties and minority interest) (12,601) 224,101 2,284,230 (1,593,129)
------------ ------------ ------------ ------------
Net loss $ (3,155,506) $ (3,289,380) $ (1,125,100) $ (5,294,785)
============ ============ ============ ============
Net loss limited partnership $ (3,123,951) $ (3,256,486) $ (1,113,849) $ (3,565,445)
============ ============ ============ ============
Net loss per BAC from operations $ (22.37) $ (25.00) $ (24.26) $ (26.35)
Net (loss) income per BAC from
discontinued operations (0.09) 1.59 16.26 (11.34)
------------ ------------ ------------ ------------
Net loss per BAC $ (22.46) $ (23.41) $ (8.00) $ (37.69)
============ ============ ============ ============
Quarter Ended
------------------------------------------------------------
June 30, September 30, December 31, March 31,
2003* 2003* 2003* 2004*
------------ ------------ ------------ ------------
Revenues $ 7,848,980 $ 7,730,723 $ 7,984,852 $ 7,580,515
Operating expenses (11,204,983) (11,562,775) (11,032,213) (10,934,966)
------------ ------------ ------------ ------------
Loss from operations before minority
interest (3,356,003) (3,832,052) (3,047,361) (3,354,451)
Minority interest in loss of subsidiary
partnerships from operations 65,892 63,806 48,376 101,531
(Loss) income from discontinued 3,624,652
operations (including gain (loss)of
properties and minority interest) (206,373) 13,624,652 42,404 (173,393)
------------ ------------ ------------ ------------
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 per BAC from operations $ (23.42) $ (26.82) $ (21.34) $ (23.15)
Net (loss) income per BAC from
discontinued operations (1.47) 96.97 0.30 (1.23)
------------ ------------ ------------ ------------
Net (loss) income per BAC $ (24.89) $ 70.15 $ (21.04) $ (24.38)
============ ============ ============ ============
* Reclassified for comparative purposes.
161
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
NOTE 15 - Subsequent Events
On May 26, 2005, the Partnership sold 50% of its limited partnership interest in
Michigan Rural Housing Limited Partnership ("Michigan Rural") to an affiliate of
the Local General Partner for $100,000. The unaffiliated party has the option to
buy the remaining interest during the period starting on January 1, 2007 and
ending on February 28, 2007. There is no guarantee that the sale will actually
occur.
On May 6, 2005, Gentle Pines - West Columbia Associates, L.P. transferred the
deed to the property and the related assets and liabilities to an unaffiliated
third party in lieu of foreclosure. The transfer will result in a gain of
approximately $3,445,000 which will be recognized on the Partnership's Form 10-Q
dated June 30, 2005.
On May 2, 2005, HUD approved the sale of Lancashire as stated in Note 10 and the
Partnership received the $800,000 previously held in escrow. The sale will
result in a loss of approximately $168,000 which will be recognized on the
Partnership's Form 10-Q dated June 30, 2005.
On April 29, 2005, the property and the related assets and liabilities of
Brandywine Court Associates, L.P. ("Brandywine") were sold to an unaffiliated
third party for approximately $1,380,000. The sale will result in a gain of
approximately $1,369,000 which will be recognized on the Partnership's Form 10-Q
dated June 30, 2005.
On April 22, 2005, the Partnership sold 10% of its limited partnership interest
in Stop 22 Limited Partnership ("Stop 22") to the Local General Partner for
$200,000. The Local General Partner has the option to buy the remaining interest
during the period starting on January 1, 2006 and ending January 31, 2006. There
is no guarantee that the sale will occur.
162
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 (a)
Glenn F. Hopps Treasurer and Assistant Vice President
Teresa Wicelinski Secretary
(a) On February 25, 2005, Ms. Kiley announced her retirement as Chief Credit
Officer and trustee of CharterMac, the indirect parent of RCC Manager LLC, the
sole shareholder of the General Partner. Upon her retirement, she will also
resign from her position as Vice President of the General Partner.
ALAN P. HIRMES, 50, 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
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, 49, 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, 44, 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.
163
DENISE L. KILEY, 45, 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. As noted above, Ms. Kiley is retiring from CharterMac.
GLENN F. HOPPS, 42, 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, 39, 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 (a)
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
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 and
Related Security Holder Matters
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, 2005, Liberty Associates holds a 1% and .998% (see Item 7 with
respect to River Place) limited partnership interest in 55 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, 2005, 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.
164
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 (a) - -
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, 2005, Lehigh I held 6,458.33 BACs and Lehigh II
held 6,520.33 BACs.
(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 for professional services rendered
for the audit of our annual financial statements and for the reviews of the
financial statements included in the Partnership's Quarterly Reports on Form
10-Q were $57,200 for both the years ended March 31, 2005 and 2004.
Audit Related Fees
- ------------------
None
165
Tax Fees
- --------
The aggregate fees billed by Weiser LLP (formerly, Rubin and Katz LLP) and their
respective affiliates for professional services rendered for the preparation of
our annual tax returns for the years ended December 31, 2004 and 2003 were
approximately $12,000 and $11,500, respectively.
All Other Fees
- --------------
None
The Partnership is not required to have, and does not have, a stand alone audit
committee.
166
PART IV
Item 15. Exhibits and Financial Statement Schedules
Sequential
Page
----------
(a) 1. Financial Statements
--------------------
Report of Independent Registered Public Accounting Firm 17
Consolidated Balance Sheets at March 31, 2005 and 2004 142
Consolidated Statements of Operations for the Years
Ended March 31, 2005, 2004 and 2003 143
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 31, 2005, 2004 and 2003 144
Consolidated Statements of Cash Flows for the Years
Ended March 31, 2005, 2004 and 2003 145
Notes to Consolidated Financial Statements 146
(a) 2. Financial Statement Schedules
-----------------------------
Report of Independent Registered Public Accounting Firm 173
Schedule I - Condensed Financial Information of Registrant 174
Schedule III - Real Estate and Accumulated Depreciation 177
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 168
(31.1) Certification Pursuant to Rule13a-14(a) or Rule 15d-14(a) 171
(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) 172
** Incorporated herein by reference to exhibits filed with
Pre-Effective Amendment No. 1 to Liberty Tax Credit
Plus III L.P.'s Registration Statement on Form S-11
(Registration No. 33-25732)
167
Item 15. Exhibits and Financial Statement Schedules (continued)
Jurisdiction
of Organization
---------------
Subsidiaries of the Registrant (Exhibit 21)
------------------------------
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
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
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
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
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
168
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 28, 2005
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 28, 2005
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Director, President, Chief Executive Officer
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.,
/s/ Alan P. Hirmes (a general partner of Related Credit Properties III L.P.)
- ------------------ (a General Partner of Registrant)) and Liberty GP III, Inc. June 28, 2005
Alan P. Hirmes (aGeneral Partner of Registrant) -------------
Treasurer (principal accounting officer) of Related Credit
/s/ Glenn F. Hopps Properties III Inc., (a general partner of Related Credit
- ------------------ Properties III L.P.) (a General Partner of Registrant)) and June 28, 2005
Glenn F. Hopps Liberty GP III, Inc. (a General Partner of Registrant) -------------
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, 2005 of the Partnership;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
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 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
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
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
report is 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;
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 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 Partnership's
fourth fiscal quarter 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 28, 2005
-------------
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, 2005 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 28, 2005
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 17, and based on the reports of other auditors, we have also audited
supporting Schedule I for the 2004, 2003 and 2002 Fiscal Years and Schedule III
at March 31, 2005. 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 four 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 $4,833,531 (Fiscal 2004),
$4,016,930 (Fiscal 2003) and $6,590,417 (Fiscal 2002), and their assets
aggregated $18,259,224 and $19,370,800 at March 31, 2005 and 2004, 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, 2005
173
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,
-------------------------------
2005 2004
------------ ------------
Cash and cash equivalents $ 353,403 $ 429,291
Cash held in escrow 130,081 159,597
Investment and advances in subsidiary partnerships 17,057,554 20,867,156
Other assets 245,465 245,465
------------ ------------
Total assets $ 17,786,503 $ 21,701,509
============ ============
LIABILITIES AND PARTNERS' EQUITY
Due to general partner and affiliates $ 12,501,181 $ 11,464,620
Other liabilities 54,896 63,502
------------ ------------
Total liabilities 12,556,077 11,528,122
Partners' equity 5,230,426 10,173,387
------------ ------------
Total liabilities and partners' equity $ 17,786,503 $ 21,701,509
============ ============
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.
174
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
Years Ended March 31,
-----------------------------------------
2005 2004 2003
----------- ----------- -----------
Revenues
Other income $ 5,382 $ 2,199 $ 1,000
----------- ----------- -----------
Expenses
General and administrative 190,898 367,141 206,143
General and administrative-related parties 1,563,212 1,635,910 1,740,087
----------- ----------- -----------
Total expenses 1,754,110 2,003,051 1,946,230
----------- ----------- -----------
Loss from operations (1,748,728) (2,000,852) (1,945,230)
Distribution income of subsidiary partnerships
in excess of investments 76,021 28,305 22,853
Gain on sale of investment in subsidiary partnership 2,124,097 0 0
Equity in loss of subsidiary partnerships* (5,394,351) (2,831,376) (4,752,705)
----------- ----------- -----------
Net loss $(4,942,961) $(4,803,923) $(6,675,082)
=========== =========== ===========
* Includes suspended prior year losses in excess of investment in accordance
with the equity method of accounting amounting to $(2,214,646),
$(13,138,050) and $0, for 2005, 2004, and 2003, respectively.
175
s
LIBERTY TAX CREDIT PLUS III L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
Years Ended March 31,
-----------------------------------------
2005 2004 2003
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(4,942,961) $(4,803,923) $(6,675,082)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash used in operating
activities:
Gain on sale of investment in subsidiary partnership (2,124,097) 0 0
Distribution income from subsidiary partnerships
in excess of investments (76,021) (28,305) (22,853)
(Increase) decrease in assets:
Other assets 159,410 152,674 (152,673)
Increase (decrease) in liabilities:
Due to general partners and affiliates 1,036,561 1,603,815 1,828,424
Other liabilities (8,606) 9,732 47,418
----------- ----------- -----------
Total adjustments (1,012,753) 1,737,916 1,700,316
----------- ----------- -----------
Net cash used in operating activities (5,955,714) (3,066,007) (4,974,766)
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from sale of investment in subsidiary partnership 690,645 0 0
Equity in loss of subsidiary partnerships 5,394,351 2,831,376 4,752,705
Distributions from subsidiary partnerships 399,328 330,098 774,218
Investments and advances in subsidiary partnerships (634,014) (233,885) (144,870)
Decrease in cash held in escrow- purchase price payments 29,516 82,332 0
----------- ----------- -----------
Net cash provided by investing activities 5,879,826 3,009,921 5,382,053
----------- ----------- -----------
Net (decrease) increase in cash and cash equivalents (75,888) (56,086) 407,287
Cash and cash equivalents, beginning of year 429,291 485,377 78,090
----------- ----------- -----------
Cash and cash equivalents, end of year $ 353,403 $ 429,291 $ 485,377
=========== =========== ===========
176
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2005
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 (f) 4,535,363 141,930 4,013,207 2,261,446
Jefferson Limited Partnership
Schreveport, LA 1,366,802 65,000 3,289,429 48,125
Inter-Tribal Indian Village Housing Development
Associates, L.P.
Providence, RI 1,647,787 36,643 3,290,524 262,873
RBM Associates
Philadelphia, PA 975,000 0 1,590,733 78,286
Glenbrook Associates
Atglen, PA 1,622,165 137,000 2,833,081 133,767
Affordable Flatbush Associates
Brooklyn, NY 1,284,473 0 2,551,365 286,637
Barclay Village II, LTD.
Chambersburg, PA 2,199,965 204,825 3,249,918 715,567
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 23,895,000 0 29,051,380 (10,416,463)
Williamsburg Residential II, L.P.
Witchita, KS 1,432,427 358,305 2,713,872 (1,211,361)
West 104th Street Associates, L.P.
New York, NY 0 0 0 3,212,573
Meredith Apartments, LTD.
Salt Lake City, UT (e) (f) 0 40,000 1,500,117 (1,540,117)
Ritz Apartments, LTD.
Salt Lake City, UT (e) (f) 0 59,760 592,704 (652,464)
Ashby Apartments, LTD.
Salt Lake City, UT (e) (f) 0 50,850 549,611 (600,461)
South Toledo Associates, LTD.
Toledo, OH 866,904 47,571 1,411,386 54,391
Dunlap School Venture
Philadelphia, PA 2,432,460 5,352 4,522,721 168,953
Philipsburg Elderly Housing Associates
Philipsburg, PA 2,560,769 45,000 4,092,500 583,689
Franklin Elderly Housing Associates
Franklin, PA 1,857,370 165,000 2,594,447 322,933
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 2,811,828 65,000 4,234,049 914,968
Lancashire Towers Associates L.P.
Cleveland, OH (f) 2,381,985 265,000 6,871,575 (1,327,434)
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 6,409,969
Brandywine Court Associates, L.P.
Jacksonville, FL 1,362,938 78,000 1,960,262 (1,443,846)
Art Apartments Associates
Philadelphia, PA 1,030,577 13,695 2,713,615 110,247
Gross Amount at which Carried at Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnerships' Residential Property Land Improvements Total Depreciation
- ------------------------------------------------------- ------------ -------------- ---------------- --------------
C.V. Bronx Associates, L.P.
Bronx, NY $ 1,439,504 $ 4,546,211 $ 5,985,715 $ 2,300,807
Michigan Rural Housing Limited Partnership
Michigan (f) 148,716 6,267,867 6,416,583 3,408,214
Jefferson Limited Partnership
Schreveport, LA 71,786 3,330,768 3,402,554 1,715,733
Inter-Tribal Indian Village Housing Development
Associates, L.P.
Providence, RI 43,429 3,546,611 3,590,040 1,870,171
RBM Associates
Philadelphia, PA 6,786 1,662,233 1,669,019 596,039
Glenbrook Associates
Atglen, PA 143,786 2,960,062 3,103,848 1,580,696
Affordable Flatbush Associates
Brooklyn, NY 6,787 2,831,215 2,838,002 1,582,911
Barclay Village II, LTD.
Chambersburg, PA 211,611 3,958,699 4,170,310 2,286,535
1850 Second Avenue Associates, L.P.
New York, NY 392,457 6,792,148 7,184,605 3,649,876
R.P.P. Limited Dividend Housing
Detroit, MI 6,786 18,628,131 18,634,917 8,906,761
Williamsburg Residential II, L.P.
Witchita, KS 362,484 1,498,332 1,860,816 768,807
West 104th Street Associates, L.P.
New York, NY 6,787 3,205,786 3,212,573 1,470,235
Meredith Apartments, LTD.
Salt Lake City, UT (e) (f) 0 0 0 0
Ritz Apartments, LTD.
Salt Lake City, UT (e) (f) 0 0 0 0
Ashby Apartments, LTD.
Salt Lake City, UT (e) (f) 0 0 0 0
South Toledo Associates, LTD.
Toledo, OH 51,677 1,461,671 1,513,348 551,756
Dunlap School Venture
Philadelphia, PA 9,458 4,687,568 4,697,026 1,723,618
Philipsburg Elderly Housing Associates
Philipsburg, PA 68,101 4,653,088 4,721,189 2,755,724
Franklin Elderly Housing Associates
Franklin, PA 169,106 2,913,274 3,082,380 1,833,953
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 69,106 5,144,911 5,214,017 3,144,354
Lancashire Towers Associates L.P.
Cleveland, OH (f) 269,106 5,540,035 5,809,141 3,912,585
Northwood Associates Limited Partnership
Toledo, OH (c) 0 0 0 0
Brewery Renaissance Associates
Middletown, NY 81,326 6,508,643 6,589,969 3,233,973
Brandywine Court Associates, L.P.
Jacksonville, FL 82,106 512,310 594,416 85,289
Art Apartments Associates
Philadelphia, PA 17,801 2,819,756 2,837,557 1,529,016
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Renovation Acquired Computed (a)(b)
- ------------------------------------------------------- ------------- ------------ -----------------
C.V. Bronx Associates, L.P.
Bronx, NY 1990 June 1989 15-27.5 years
Michigan Rural Housing Limited Partnership
Michigan (f) 1989 Sept. 1989 27.5 years
Jefferson Limited Partnership
Schreveport, LA 1990 Dec. 1989 27.5 years
Inter-Tribal Indian Village Housing Development
Associates, L.P.
Providence, RI 1989 Oct. 1989 27.5 years
RBM Associates
Philadelphia, PA 1989 Dec. 1989 40 years
Glenbrook Associates
Atglen, PA 1989 Nov. 1989 3-27.5 years
Affordable Flatbush Associates
Brooklyn, NY 1989 Dec. 1989 27.5 years
Barclay Village II, LTD.
Chambersburg, PA 1989 Nov. 1989 5-27.5 years
1850 Second Avenue Associates, L.P.
New York, NY 1989 Nov. 1989 27.5 years
R.P.P. Limited Dividend Housing
Detroit, MI 1989 Nov. 1989 27-31.5 years
Williamsburg Residential II, L.P.
Witchita, KS 1989 Nov. 1989 40 years
West 104th Street Associates, L.P.
New York, NY 1990 Dec. 1989 27.5 years
Meredith Apartments, LTD.
Salt Lake City, UT (e) (f) 1989 Aug. 1989 27.5 years
Ritz Apartments, LTD.
Salt Lake City, UT (e) (f) 1989 Aug. 1989 27.5 years
Ashby Apartments, LTD.
Salt Lake City, UT (e) (f) 1989 Aug. 1989 27.5 years
South Toledo Associates, LTD.
Toledo, OH 1988 Jan. 1990 40 years
Dunlap School Venture
Philadelphia, PA 1989 Jan. 1990 40 years
Philipsburg Elderly Housing Associates
Philipsburg, PA 1990 Feb. 1990 15-27.5 years
Franklin Elderly Housing Associates
Franklin, PA 1989 Feb. 1990 7-24 years
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 1989 Feb. 1990 27.5 years
Lancashire Towers Associates L.P.
Cleveland, OH (f) 1989 Feb. 1990 27.5 years
Northwood Associates Limited Partnership
Toledo, OH (c) 1989 Feb. 1990 27.5 years
Brewery Renaissance Associates
Middletown, NY 1990 Feb. 1990 27.5 years
Brandywine Court Associates, L.P.
Jacksonville, FL 1988 Nov. 1989 7-27.5 years
Art Apartments Associates
Philadelphia, PA 1990 Mar. 1990 27.5 years
177
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2005
(continued)
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.
The Village at Carriage Hills, LTD.
Clinton, TN 1,440,469 86,663 1,753,799 134,458
Mountainview Apartments, LTD,
Newport, TN 1,023,512 49,918 1,254,182 135,129
The Park Village, Limited
Jackson, MS 322,073 44,102 749,940 93,183
River Oaks Apartments, LTD.
Oneonta, AL 1,047,927 80,340 1,221,336 87,800
Forrest Ridge Apartments, LTD.
Forrest City, AR 1,053,510 36,000 1,016,647 337,101
The Hearthside Limited Dividend Housing Associates
Limited Partnership
Portage, MI 2,740,791 242,550 4,667,594 126,755
Redemptorist L.P.
New Orleans, LA 2,791,904 0 6,497,259 279,736
Manhattan A Associates
New York, NY 3,022,478 1,092,959 5,991,888 427,468
Broadhurst Willows, L.P.
New York, NY 0 102,324 5,151,039 271,304
Weidler Associates Limited Partnership
Portland, OR 1,222,231 225,000 0 2,175,715
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 3,474,221 327,650 4,276,739 (3,763,023)
Lake Forest Estates II, LTD.
Livingston, AL 947,922 21,623 1,182,480 80,487
Las Camelias L.P.
Rio Piedras, PR 6,786,365 249,000 6,400 9,844,078
WPL Associates XIIII
Portland, OR (e)(f) 0 0 3,721,763 (3,721,763)
Broadway Townhouses L.P.
Camden, NJ 10,440,832 163,000 5,120,066 14,430,086
Puerto Rico Historic Zone Limited Dividend Partnership
San Juan, PR 4,025,000 0 0 6,536,098
Citrus Meadows Apartments, LTD.
Brandenton, FL 7,342,637 610,073 0 9,540,950
Sartain School Venture
Philadelphia, PA 1,892,280 3,883 3,486,875 146,954
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL 6,582,072 270,000 7,753,765 345,795
Holly Hill, LTD.
Greenville, TN 1,363,164 50,000 1,631,820 157,445
Mayfair Apartments LTD.
Morristown, TN 1,347,884 50,000 1,614,861 161,725
Foxcroft Apartments LTD.
Troy, AL 1,217,216 75,000 1,382,973 149,479
Canterbury Apartments, LTD.
Indianola, MS 1,398,179 33,000 1,738,871 114,274
Gross Amount at which Carried at Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnerships' Residential Property Land Improvements Total Depreciation
- ------------------------------------------------------- ------------ -------------- ---------------- --------------
C.V. Bronx Associates, L.P.
The Village at Carriage Hills, LTD.
Clinton, TN 90,769 1,884,151 1,974,920 1,014,681
Mountainview Apartments, LTD,
Newport, TN 54,024 1,385,205 1,439,229 763,326
The Park Village, Limited
Jackson, MS 48,208 839,017 887,225 472,743
River Oaks Apartments, LTD.
Oneonta, AL 84,446 1,305,030 1,389,476 533,094
Forrest Ridge Apartments, LTD.
Forrest City, AR 40,106 1,349,642 1,389,748 450,432
The Hearthside Limited Dividend Housing Associates
Limited Partnership
Portage, MI 246,656 4,790,243 5,036,899 2,985,591
Redemptorist L.P.
New Orleans, LA 4,106 6,772,889 6,776,995 3,423,032
Manhattan A Associates
New York, NY 1,097,065 6,415,250 7,512,315 3,484,583
Broadhurst Willows, L.P.
New York, NY 106,430 5,418,237 5,524,667 3,272,855
Weidler Associates Limited Partnership
Portland, OR 229,106 2,171,609 2,400,715 1,122,369
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 331,756 509,610 841,366 85,000
Lake Forest Estates II, LTD.
Livingston, AL 25,729 1,258,861 1,284,590 492,426
Las Camelias L.P.
Rio Piedras, PR 298,878 9,800,600 10,099,478 4,756,845
WPL Associates XIIII
Portland, OR (e)(f) 0 0 0 0
Broadway Townhouses L.P.
Camden, NJ 167,106 19,546,046 19,713,152 8,485,526
Puerto Rico Historic Zone Limited Dividend Partnership
San Juan, PR 156,842 6,379,256 6,536,098 3,098,210
Citrus Meadows Apartments, LTD.
Brandenton, FL 812,609 9,338,414 10,151,023 4,892,005
Sartain School Venture
Philadelphia, PA 7,989 3,629,723 3,637,712 1,353,578
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL 274,106 8,095,454 8,369,560 5,089,681
Holly Hill, LTD.
Greenville, TN 54,106 1,785,159 1,839,265 938,191
Mayfair Apartments LTD.
Morristown, TN 54,106 1,772,480 1,826,586 699,325
Foxcroft Apartments LTD.
Troy, AL 79,106 1,528,346 1,607,452 621,582
Canterbury Apartments, LTD.
Indianola, MS 37,106 1,849,039 1,886,145 733,090
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Renovation Acquired Computed (a)(b)
- ------------------------------------------------------- ------------- ------------ -----------------
C.V. Bronx Associates, L.P.
The Village at Carriage Hills, LTD.
Clinton, TN 1990 Mar. 1990 25-40 years
Mountainview Apartments, LTD,
Newport, TN 1990 Mar. 1990 25-40 years
The Park Village, Limited
Jackson, MS 1990 Mar. 1990 25-40 years
River Oaks Apartments, LTD.
Oneonta, AL 1990 Mar. 1990 25-40 years
Forrest Ridge Apartments, LTD.
Forrest City, AR 1990 Mar. 1990 25-40 years
The Hearthside Limited Dividend Housing Associates
Limited Partnership
Portage, MI 1990 Mar. 1990 15-27.5 years
Redemptorist L.P.
New Orleans, LA 1990 Mar. 1990 27.5 years
Manhattan A Associates
New York, NY 1990 Apr. 1990 27.5 years
Broadhurst Willows, L.P.
New York, NY 1990 Apr. 1990 10-25 years
Weidler Associates Limited Partnership
Portland, OR 1990 May 1990 15-27.5 years
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 1990 June 1990 27.5 years
Lake Forest Estates II, LTD.
Livingston, AL 1990 June 1990 25-40 years
Las Camelias L.P.
Rio Piedras, PR 1990 June 1990 27.5 years
WPL Associates XIIII
Portland, OR (e)(f) 1990 July 1990 27.5 years
Broadway Townhouses L.P.
Camden, NJ 1990 July 1990 27.5 years
Puerto Rico Historic Zone Limited Dividend Partnership
San Juan, PR 1990 Aug. 1990 27.5 years
Citrus Meadows Apartments, LTD.
Brandenton, FL 1990 July 1990 27.5 years
Sartain School Venture
Philadelphia, PA 1990 Aug. 1990 15-40 years
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL 1989 Sept. 1990 27.5 years
Holly Hill, LTD.
Greenville, TN 1990 Oct. 1990 25-40 years
Mayfair Apartments LTD.
Morristown, TN 1990 Oct. 1990 25-40 years
Foxcroft Apartments LTD.
Troy, AL 1990 Oct. 1990 25-40 years
Canterbury Apartments, LTD.
Indianola, MS 1990 Oct. 1990 25-40 years
178
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2005
(continued)
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.
Cutler Canal III Associates, LTD.
Miami, FL 7,373,778 1,269,265 0 12,392,962
Jefferson Place L.P.
Olathe, KS (d) 0 531,063 13,477,553 (14,008,616)
Callaway Village, LTD.
Clinton, TN 1,372,052 66,000 1,613,920 132,166
Commerce Square Apartments Associates L.P.
Smyrna, DE 2,839,861 303,837 0 4,836,103
West 132nd Development Partnership
New York, NY 1,396,497 0 0 2,641,552
Site H Development Co.
Brooklyn, NY 583,554 0 1,346,000 44,416
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 5,691,108 752,000 693,995 6,417,790
Diamond Phase II Venture
Philadelphia, PA 1,772,533 0 0 4,016,758
Bookbindery Associates
Philadelphia, PA 1,492,101 0 0 3,865,263
The Hamlet, LTD.
Boynton, FL 7,993,405 1,180,482 0 13,507,827
Stop 22 Limited Partnership
Santurce, PR 9,890,147 0 4,025,481 7,110,062
Knob Hill Apartments, LTD.
Greenville, TN 1,452,541 75,085 0 1,850,895
Conifer James Street Associates
Syracuse, NY 2,011,401 57,034 0 4,551,284
Longfellow Heights Apartments, L.P.
Kansas City, MO 3,871,258 0 7,739,692 260,964
Less: Discontinued operations and dispositions (6,917,348) (1,288,603) (34,792,386) (23,855,265)
------------- ------------ ------------ ---------------
$ 159,944,368 $ 11,441,671 $148,382,652 $ 107,953,427
============= ============ ============ ===============
Gross Amount at which Carried at Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnerships' Residential Property Land Improvements Total Depreciation
- ------------------------------------------------------- ------------ -------------- ---------------- --------------
C.V. Bronx Associates, L.P.
Cutler Canal III Associates, LTD.
Miami, FL 1,273,507 12,388,720 13,662,227 4,201,828
Jefferson Place L.P.
Olathe, KS (d) 0 0 0 0
Callaway Village, LTD.
Clinton, TN 70,106 1,741,980 1,812,086 699,878
Commerce Square Apartments Associates L.P.
Smyrna, DE 307,943 4,831,997 5,139,940 1,616,102
West 132nd Development Partnership
New York, NY 13,106 2,628,446 2,641,552 944,949
Site H Development Co.
Brooklyn, NY 4,106 1,386,310 1,390,416 754,700
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 759,229 7,104,556 7,863,785 2,905,437
Diamond Phase II Venture
Philadelphia, PA 22,081 3,994,677 4,016,758 1,351,880
Bookbindery Associates
Philadelphia, PA 29,105 3,836,158 3,865,263 1,302,177
The Hamlet, LTD.
Boynton, FL 1,184,587 13,503,722 14,688,309 6,467,448
Stop 22 Limited Partnership
Santurce, PR 216,918 10,918,625 11,135,543 5,322,941
Knob Hill Apartments, LTD.
Greenville, TN 79,190 1,846,790 1,925,980 698,480
Conifer James Street Associates
Syracuse, NY 61,139 4,547,179 4,608,318 2,337,215
Longfellow Heights Apartments, L.P.
Kansas City, MO 206 8,000,450 8,000,656 2,915,915
Less: Discontinued operations and dispositions (417,822) (11,807,902) (12,225,724) (7,320,799)
----------- ------------- ------------- --------------
$11,562,462 $ 256,215,288 $ 267,777,750 $ 121,873,369
=========== ============= ============= ==============
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements is
Subsidiary Partnerships' Residential Property Renovation Acquired Computed (a)(b)
- ------------------------------------------------------- ------------- ------------ -----------------
C.V. Bronx Associates, L.P.
Cutler Canal III Associates, LTD.
Miami, FL 1990 Oct. 1990 40 years
Jefferson Place L.P.
Olathe, KS (d) 1990 Oct. 1990 19 years
Callaway Village, LTD.
Clinton, TN 1990 Nov. 1990 25-40 years
Commerce Square Apartments Associates L.P.
Smyrna, DE 1990 Dec. 1990 40 years
West 132nd Development Partnership
New York, NY 1990 Dec. 1990 40 years
Site H Development Co.
Brooklyn, NY 1990 Dec. 1990 27.5 years
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 1990 Dec. 1990 35 years
Diamond Phase II Venture
Philadelphia, PA 1990 Dec. 1990 40 years
Bookbindery Associates
Philadelphia, PA 1990 Dec. 1990 40 years
The Hamlet, LTD.
Boynton, FL 1990 Dec. 1990 27.5 years
Stop 22 Limited Partnership
Santurce, PR 1990 Dec. 1990 27.5-31.5 years
Knob Hill Apartments, LTD.
Greenville, TN 1990 Dec. 1990 25-40 years
Conifer James Street Associates
Syracuse, NY 1990 Dec. 1990 15-27.5 years
Longfellow Heights Apartments, L.P.
Kansas City, MO 1991 Mar. 1991 15-40 years
Less: Discontinued operations and dispositions
(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.
(e) The Partnership's Limited Partnership Interest was sold during the fiscal
year ended March 31, 2005.
(f) These properties are included in discontinued operations for the year ended
March 31, 2005.
179
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2005
(continued)
Cost of Property and Equipment Accumulated Depreciation
------------------------------------------ -------------------------------------------
Years Ended March 31,
----------------------------------------------------------------------------------------
2005 2004 2003 2005 2004 2003
------------- ------------ ------------ ------------ ------------- -------------
Balance at beginning of period $ 287,154,294 $300,043,519 $304,422,304 $123,219,520 $ 124,137,316 $ 116,934,212
Additions during period:
Improvements 1,649,756 1,316,200 1,195,300
Depreciation expense 9,023,735 10,020,532 10,621,390
Deductions during period:
Discontinued operations and dispositions (21,026,300) (14,205,425) (5,574,085) (10,369,886) (10,938,328) (3,418,286)
------------- ------------ ------------ ------------ ------------- -------------
Balance at close of period $ 267,777,750 $287,154,294 $300,043,519 $121,873,369 $ 123,219,520 $ 124,137,316
============= ============ ============ ============ ============= =============
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.
180