HomeMy WebLinkAbout2012-377 Co Manager - Housing for New Hope Outside agency $20,000 .7
2012-13 OUTSIDE AGENCY PERFORMANCE AGREEMENT
This Agreement, made and entered into the first day of July 2012, by and between the
County of Orange, a political subdivision of the State of North Carolina, 200 South
Cameron Street, Hillsborough, North Carolina, 27278, ("County") and Housing for New
Hope, a not-for-profit corporation, located at 18 West Colony Place, Suite 250, Durham,
NC,27705 ("Provider")
WITNESSETH:
WHEREAS,it is in the interests of the County that said program be assisted by the County
and thereby enhance its availability to residents of the County, and said program addresses
an important community human services need,as identified by the Board of Commissioners;
NOW, THEREFORE, in consideration of the above and the mutual covenants and
conditions hereafter set forth,the County and Housing for New Hope agree as follows:
1. Term of the Agreement. The term of this Agreement shall be a program year
beginning July 1,2012 to June 30,2013.
2. Scope of Services.
a. Provider will provide services, as outlined in the attached Outside Agency
Funding Application Scope of Services and any amendments or revision
thereto which is attached as Exhibit "B" and incorporated by reference, to
the residents of Orange County. The Scope of Services may be different
from the original application based on County appropriation; however, any
revisions or amendments to this Agreement must be approved in writing by
the County and attached to this Agreement.
b. The Provider shall be solely responsible for the means, methods, techniques,
sequence, safety program and procedures necessary to properly and fully
complete the work set forth in the Scope of Services.
3. Funding.
a. The County agrees to appropriate for the provision of services described in
Attachment B, Scope of Services and more particularly described in the
Program Budget,the maximum sum of$20,000.
b. All funds appropriated shall be used for purposes described in Attachment B.
Any funds not used for the purposes stated shall be returned to the County.
Any substantive changes in the use of funds must be authorized in writing by
the County prior to any expenditure of the funds by the Provider. If the
funds are expended not in accordance with the Scope of Services, at the
discretion of the County the Provider may be required to repay the funds to
the County.
c. The County's obligation to make each payment is contingent upon receipt of
Quarterly Progress Reports and satisfactory progress toward completion of
performance measures and accounting of expenditures as detailed in the
attached Scope of Services.
d. The Provider shall be paid in four equal installments in the amount of
$5,000, contingent upon receipt of the quarterly request for reimbursement
and related supporting documentation. The first installment shall be paid no
later than August 31 of the Program year and after execution of this Outside
Agency Performance Agreement by both the County and the Provider; the
remaining installments shall be disbursed on October 15, January 15 and
April 15 of the program year and upon satisfactory completion of(c) and the
information included in this paragraph.
e. Once Provider has satisfied its obligations as provided in (c) and (d) above,
payment will be made 30 days after receipt of the Quarterly Progress Report
and Request for Reimbursement or 30 days after due date of Quarterly
Progress Report whichever is later.
f. The County is not obligated to provide any other support to Provider in this
or in succeeding fiscal years.
4. Agency Reporting.
a. Provider will provide the Orange County a quarterly report that includes a
fiscal report, updates on 2012-13 performance measures and objectives as
provided in Scope of Services. Quarterly Progress Report dates are:July 1 --
September 15, September 16—December 15;December 16—March 15 and
March 16 -June 30. Quarterly reports are due on October 1, December 31,
April 1 and July 31 of the program year.
b. Reports shall be forwarded to the Orange County Manager's Office.
c. Provider agrees to allow the County to inspect its financial books and
records, which document costs of those services, upon reasonable notice
during normal working hours.
5. Termination.
a. In the event of any of the circumstances set forth below (hereinafter referred
to as "default"), the County may inu-nediately terminate this Agreement, in
whole or in part, and from time to time. Notice of termination must be in
writing, state the reason or reasons for the termination, and specify the
effective date of the termination:
Housing for New Hope
2012-13 Orange County Outside Agency Performance Agmement
Page 2
i. In the event that Provider shall cease to exist as an organization or
shall enter bankruptcy proceedings,be declared insolvent,or liquidate
all or substantially all of its assets, or significantly reduce its services
or accessibility to Orange County residents during the term of this
Agreement;or
ii. In the event that Provider shall fail to render a satisfactory
accounting as provided section 4 above, the County may terminate
this Agreement and Provider shall return all payments already made
to it by the County for services which have not been provided or for
which no satisfactory accounting has been rendered;or
iii. In the event of any fraudulent representation by the Provider in an
invoice or other verification required to obtain payment under this
Agreement or other dishonesty on a material matter relating to the
performance of services under this Agreement.
iv. Nonperformance,incomplete service or performance,or failure to
satisfactorily perform any part of the work identified in the Scope of
Services or to comply with any provision of this Agreement,as
determined by the County in its sole discretion.
v. Failure to adhere to the terms of applicable county,state or federal
laws,regulations,or stated public policy.
b. In the event of default by the Provider,the county may elect to terminate this
Agreement, in whole or in part and/or require the Provider to repay the
funds within seven (7) from written notice of default. The County may (but
shall not be required to)grant the Provider an opportunity to cure the default
without termination of this Agreement. This clause shall not be interpreted
to limit the County's remedies in law or in equity.
c. Notwithstanding the foregoing, either party may terminate the agreement at
any time without penalty; provided that written notice of such termination is
furnished to the other party at least 30 days prior to termination. In the
event of such termination, any payment due shall be prorated to the date of
termination and any unused funds shall be returned to the County within 10
days of termination.
d. Any termination of this Agreement for default under this section that is later
deemed to be unjustified shall be deemed a termination for convenience.
6. Insurance.
a. General Requirements. the Provider shall purchase and maintain,during the
period of performance of this Agreement,insurance:
Housin
gfor New Hope
2012-13 Orange County Outside Ageng Pe(orxance Agmement
Pa
ge 3
I I
i. Worker's Compensation. For protection from claims under workers'
or workmen's compensation acts;
ii. Comprehensive General Liability Insurance covering claims arising
out of or relating to bodily injury,including bodily injury, sickness,
disease or death of any of the Consultant's employees or any other
person and to real and personal property including loss of use
resulting thereof;
iii. Comprehensive Automobile Liability Insurance,including hired and
non-owned vehicles,if any,covering personal injury or death,and
property damage;and
iv. Professional Liability Insurance,covering personal injury,bodily
injury and property damage and claims arising out of or related to the
performance under this Agreement by the Consultant or his agents,
consultants and employees.
b. Limits of Coverage: Minimum limits of insurance coverage shall be as
follows:
INSURANCE DESCRIPTION MINIMUM REQUIRED COVERAGE
• Worker's Compensation Limits for Coverage A- Statutory State
NC&Coverage B-Employers Liability
$500,000 each accident,disease policy
limit and disease each employee
• Commercial General $1,000,000 Each Occurrence
Liability $2,000,000 Aggregate
• Automobile Liability $500,000 Combined Single Limit
• Professional Liability $1,000,000 Each Occurrence
$2,000,000 Aggregate
c. All insurance policies (with the exception of Worker's Compensation and
Professional Liability) required under this Agreement shall name the County
as an additional insured party and as a certificate holder. Evidence of such
insurance and all correspondence shall be sent to:
Orange County Risk Manager
Post Office Box 8181
Hillsborough,NC 27278
d. Nothing in this section is intended to affect or abrogate the County's
sovereign immunity defenses.
Housing for New Hope
2092-93 Orange County Outside Agency Performance Agmement
Page 4
7. Relationship of the Parties. Provider is an independent contractor of the County.
Provider represents that they has or will secure, at his own expense, all personnel
required in performing the services under this Agreement. Such personnel shall not
be employees or have any contractual relationship with the County. All personnel
engaged in work under this Agreement shall be fully qualified and shall be authorized
and permitted under federal, state and local law to perform such services.
8. Compliance with all Laws. The Provider, at its sole expense, shall comply with all
laws, ordinances, orders and regulations of the federal, state or local governments,as
well as their respective departments, commissions, boards, and officers,which are in
effect at the time of execution of this Agreement or are adopted at any time
following execution of this agreement.
9. Subcontract. The County and Provider deem the services provided under this
Agreement to be personal in nature and Provider may not subcontract any rights or
duties under this Agreement to any other party without prior written consent from
the County.
10. Assignment. The Provider shall not assign this Agreement, including the rights to
payment,to any other party without the prior written consent of the County.
11. Indemnification. Provider agrees to defend, indemnify, and hold harmless the
County, for all loss, liability, claims or expense (including reasonable attorney's fees)
arising from bodily injury, including death or property damage, to any person or
persons caused in whole or in part by the negligence or willful misconduct of the
Provider, except to the extent same are caused by the negligence or willful
misconduct of the County. It is the intent of this section to require Provider to
indemnify the County to the extent permitted under North Carolina law. Nothing in
this section is intended to affect or abrogate the County's sovereign immunity
defenses.
12. Non-Appropriation. This Agreement is subject to the availability of funds to
purchase the specified services and may be terminated at any time if such funds
become unavailable.
13. Non-Discrimination. Provider agrees as part of consideration of the granting of
funds by Orange County the parties hereto for themselves, their agents, officials,
employees and servants agree not to discriminate in any manner of these basis of
race,color,gender,national origin,age,handicap,religion, sexual orientation, familial
status or veterans status with reference to any activities carried out by the grantee,no
matter how remote. The parties hereto further agree in all respects to conform to
the provision and intent of Orange County Civil Rights Ordinance, as amended.
This provision is enforced by action for specific performance, injunctive relief, or
other remedy as by law provided; this provision shall be binding on the grantees, the
successors and assigns of the parties hereto with reference to the above subject
manner.
Housing for New Hope
2012-13 Orange County Outside Agency Performance Agreement
Page 5
14. Living Wage. Orange County is committed to providing its employees with a living
wage and encourages agencies if funds to pursue the same goal. The County's living
wage is $10.97 per hour. To the extent possible, Orange County recommends that
Housing for New Hope provide a living wage to its employees.
15. Notice. The Parties hereto agree and understand that written notice, mailed or
delivered, to the last known address shall constitute sufficient notice to the County
and the Provider. All notices required and/or made pursuant to this Agreement to
be given to the County and the Provides shall be in writing and mailed to the party
addressed as follows:
County:County Manager's Office Provider:Housing for New Hope
Orange County 18 West Colony Place
Post Office Box 8181 Suite 250
Hillsborough,NC 27278 Durham,NC 27705
16. Entire Agreement. This Agreement, including any referenced attachments,
constitutes the entire Agreement between the parties and shall supersede, replace or
nullify any and all prior Agreements of understandings;written or oral,relating to the
matters set forth herein,and any such prior Agreements or understandings shall have
no force or affect whatsoever on this Agreement. The County and Provider have
read this Agreement and agree to be bound by all of its terms, and further agree that
this Agreement constitutes the complete and exclusive statement of the Agreement
between the County and Provider.
17. Severability. All clauses found herein shall act independently of each other. If a
clause is found to be illegal or unenforceable, it shall have no effect on the other
provisions of this Agreement. It is understood by the parties hereto that if any part,
term or provision of this Agreement is by the Courts held to be illegal or in conflict
with any laws of the State of North Carolina or the United States, the validity of the
remaining portions or provisions shall not be affected, and the rights and obligations
of the parties shall be construed and enforced as if the Agreement did not contain
the particular part, term or provision held to be invalid.
18. Governing Law. The laws of the State of North Carolina shall govern all aspects of
this Agreement. In the event that it is necessary for either party to initiate legal
action regarding this Agreement, venue shall he in Orange County, North Carolina.
The parties hereby waive their right to trial by jury in any action,proceeding or claim,
arising out of this Agreement,which may be brought by either of the parties.
[SIGNATURES ON FOLLOWING PAGE]
Hou ing for New Hope
2012-13 Orange County Outside Agency Performance Agreement
Page 6
IN WITNESS WHEREOF,the Orange County and the Provider have signed this
Agreement,effective on the last date this Agreement is signed by both parties as indicated by
the dates set forth under signatures below.
For an behalf of the Provider
r ��-�- d-i
Exec tive birector,Housing for New Hope Date
For and on behalf of Orange County Government
(b Z:Z- LL
Bernadette Pelissier, Chair Date
ATTEST
J&Je Al�:
Donna B ker, Clerk Date
Approv to nical content
4wen',Harv'f A istan Cou anager Date
App o ' d as t r and legal sufficiency
An tte M.Mo re, Staff Attorney Date
This instrument has been pre-audited in the manner required by the Local Government
Budget and Fiscal Control t
la w 'A lo 7
Clarence Grier,Assistant County Manager—CFO Date
HousingforNen,Hope
2012-93 Orange County Outside Agency Per(onwanceAgreement
Page 7
7
ATTACHMENT "A"
Orange County Certifications—2012-13
Outside Agency Performance Agreement
Chief Contact,Administrators, Chief Executive Officer and Chief Financial Officer
I certify that I have provided a list of the chief contact,administrators,chief executive officer
and chief financial officer for my agency with this Agreement and that I will keep it current
to the County of Orange. The list should be in writing with the name,title,residential
address;phone and email address and if possible, fax number.
Officers and Board of Directors
I certify that I have provided a current list of the Officers and Board of Directors with this
Agreement and that we will continue to update the list as changes occur. The list should be
in writing,with the name,physical address,mailing address and if possible,phone, fax and
email address.
Budget Submission
I certify that I have provided a budget for the period to be covered by funding Orange
County,and that any substantive changes made to this budget have been in advance
authorized in writing by Orange County.
Annual Financial Review
I certify that I have provided a copy of the latest annual Financial Review for our agency and
the budget adopted by the agency for the fiscal years encompassing this Agreement. If not,
please explain on a separate sheet of paper.
Alignment with Organization's Mission
I certify that the programs and services for which this funding is requested align with the
mission of the organization.
Intended Purpose
I certify that the funds provided to the agency under the terms of this Agreement will be
used for a public purpose and shall only be used for the purposes intended and any money
not used for those purposes will be promptly returned to Orange County.
Transparency
I certify that board meetings are open to the public with the exception of closed session
meetings. Additionally,all financial records are available for public inspection by request
upon reasonable notice.
Certified by:
) :�4
Title: �� `�'�\f J Vr�' bate: t f f L
Housing for New Hope
2092-93 Orange County Outside Agency Performance Agmement
Page 8
Housing for New Hope
Preventing and Ending Homelessness, One Valuable Person at a Time
Housing for New Hope's contact list includes:
Chief Executive Officer
Terry.Allebaugh
Email: terry@housingfomewhope.org
Phone: (919) 489-6282
Administrators
Connie Haines
Email: connie@housingfornewhope-org
Phone: (919) 489-6282
joi Stepney
Email: joi@housingfo.rnewhope.org
Phone: (919)489-6282
Melissa Hartzell
Email: melissa@housingfomewhope.org
Phone: (919) 489-6282
Chief Financial Officer
Connie Haines
Email: connie@housingfornewhope.org
Phone: (919) 489-6282
18 West Colony Place, Suite 250, Durham,NCI 27705 phone: (919) 489-6282 fax: (919) 489-6593
v,Avw.housingfornewhope.org
Hopsing for New Hope—Board of Directors
Peter Hausmann,Chair(WM) Adrian Brown(AAM)
Project Manager, C.T.Wilson Construction Director, Investor Relations
905 Lancaster Street Greater Durham Chamber of Commerce
Durham,NC 27701 501 Oakwood Avenue
919-286-4663 (hrn) Durham,NC 27701
919-730-8087 (cell) 919-328-8735 (wk)
peter.hausmann@ctwilson.com 919-886-1703 (hm&cell)
Term: 9/10 to 9/13 abrown@durhamchamber.org
Term#: 1 Term: 9/11 to 9/14
Term#: 1
Norma Martin,Vice Chair(AAF)
Partner,Martin &Company,Real Estate Kay Ferguson (WF)
Appraisers Mitigation Specialist
3608 Mossdale 3902 Tyndrum Drive
Durham,NC 27707 Durham,NC 27705
919-493-4093 (hrn&wk) 919-419-8447(hm)
azoaka&aol.com 919-270-8099 (cell)
Term: 9/10 to 9/13 kaymfetguson@gmaiLcotn
Term#: 3 Term: 09/11 to 09/14
Term# 1
Julie Russ,Treasurer (WF)
America Select Mortgage Daniel Hill (WM)
1705 Patrick Henry Lane Attorney/Mediator in Private Practice
Hillsborough,NC 27278 13 Clover Drive
919- 644-8202 (hrn) Chapel Hill NC 27517
julie.russ@gmail.com 919-260-2620 (cell)
Term: 9/09 to 9/12 919-942-7578 (hrn)
Term # 2 danbhiU@earthlink.net
Martha Milam,Secretary (WF) Term: 09/10 to 09/13
Tenn # 1
Partner,Reinhardt Milarn&Fisher,Attorney
4900 American Drive The Reverend Robert K. Kaynor(WM)
Durham,NC 27705 Rector, St. Stephen's Episcopal Church
919-534-1200 (wk) 3605 Rugby Road
919-383-5750 (hrn) Durham,NC 27707
mmn@rmi-law.com 919-724-7102 (hrn)
Term: 09/09 to 09/12 919-493-5451 (wk)
Term # 1 bob.kaynor@ssecdurham.org
Term: 9/09 to 9/12
Term #: 2
Housing for New Hope—Board of Directors
Larry Wilson(AAM) Sam Whiffed(AAM) New Hope
Retired Executive President,Alumni of Housing for N
4 Shadow Creek 500 McCalhe Avenue, Suite 405
Durham,NC 27712 Durham,NC 27704
919-477-9958 (hrn) 919-956-5835 (wk)
202-329-5229 (cell) 919-949-1125 (cell)
spydrdoc@frontier.com samw@housingfomewhope.org
Term: 9/10 to 9/13
Term#: 1 Term: 9/09 to 9/12
Term #: 2
James Baker (AAM)
Educator&Athletic Director Tom Bacon(WM)
3603 Highgate Drive,Apt. E AHEC Program Director
Durham,NC 27713 4201 Swarthmore Road
937-422-4987 (cell) Durham,NC 27707
jbaket3@live.com 919-403-9683 (hm)
Term: 9/12 to 9/15 919-966-8981 (wk)
Term #: 1 Toni.-bacon@med.unc.edu
Katie Crowe (WFM) Term: 9/12 to 9/15
Senior Pastor,Trinity Avenue Presbyterian Term#: 1
Church
927 W Trinity Avenue
Durham,NC 27701-1715
919-682-3865 (wk)
KCrowe@tririityave.org
Term: 9/12 to 9/15
Term#: 1
Terms are for three years.
Board members are selected based on their
professional experience,their personal and
professional connections within the
community,and their diverse interests and
backgrounds.
Housing for New Hope strives to have a
board of directors that reflects the community
it serves.
2
"Exhibit B" - Scope of Services—FY 2011-12
Orange County Outside Agency Performance Agreement Certification
Funded Amount: $20,000
Agency
Housing for New Hope
Program
Homeless Outreach and Housing Support
Purpose
Homeless Outreach and Housing Support provides aggressive outreach and assistance obtaining
permanent housing targeted to homeless individuals and families who are not receiving the
necessary level of support due to their condition of homelessness and, for many, disabling
conditions.
Outcomes
The outcome objective of Housing for New Hope's work is to render services to homeless
individuals to help them break their cycle of homeless and enter into permanent housing.
Program Budget
Description Expense Justification
(use whole numbers)
Personnel-Salaries 6,639
Personnel-FICA and Fringe 4,374
Travel/Mileage 2,400
Office Supplies 2,404
Program Supplies
Advertising
Rent and Utilities
Miscellaneous 2,400 Admin Fee/Indirect Costs
Other Expense 1,783 Client assistance for rent,utilities,food,etc.
Total Program Expenses $ 20,000
{The
Program, Purpose and Outcomes sections will repeat, if the agency has multiple County funded programs.}
Certified By: dAJ, 4 Title: Date:t�t�- (Z
Orange County Outside Agency Performance Agreement
Housing for New Hope
t_ 1'revewing and Ending f-1olvelessness, (one Llaluayle Persm at a Ui 116
January 3,2012
Please find enclosed our most recent FYI 0/11 audit,for the period of September 1, 2010
through August 31,2011.
Our agency audit was conducted by the CPA firm of Petway, Mills&Pearson, PA,
located in Zebulon,N.C.
Feel free to let me know if any additional annual information is needed.
Thank you.
Connie Haines,Finance Director
Housing for New Hope
18 West Colony Place, Ste. 250
Durham,N.C. 27705
Ph. 919.489.6282
Fax 919.489.6593
18 West Colony Place, Suite 250, Durham, NC 27705 phone: (919) 489-6282 fax: (919) 489-6593
�N,v;,,a.housingfoi-newliope.org
r ,
FINANCIAL STATEMENTS
HOUSING FOR NEW HOPE, INC.
DURHAM, NORTH CAROLINA
FOR THE YEARS ENDED
AUGUST 31,2011 AND 2010
TABLE OF CONTENTS
Page s
Independent Auditors' Report 3
Financial Statements
Statements of Financial Position 4
Statements of Activities 5
Statements of Functional Expenses 7
Statements of Cash Flows 9
Notes to the Financial Statements 10
Compliance Section
Independent Auditors' Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards 20
Independent Auditors' Report on Compliance with Requirements That
Could Have a Direct and Material Effect on a Federal Program and on
Internal Control Over Compliance in Accordance with OMB Circular A-133 22
Schedule of Findings and Questioned Costs 24
Corrective Action Plan 26
Summary Schedule of Prior Year Audit Findings 27
Schedule of Expenditures of Federal and State Awards 28
Independent Auditors' Report
PETWAY To the Board of Directors
Housing for New Hope, Inc.
MILLS & Durham,North Carolina
PEARSON, PA We have audited the accompanying statements of financial position of the Housing for New
CEUVIEDPUBUCACCOUNTANTs Hope, Inc., (the Organization), as of August 31, 2011 and 2010, and the related statements of
activities, functional expenses and cash flows for the years then ended. These financial
C.Briggs Petway,Jr. statements are the responsibility of the Organization's management. Odr responsibility is to
Roger G.Mills express an opinion on these financial statements based on our audits.
Phyllis M.Pearson
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
Zebulon Office Government Auditing Standards, issued by the Comptroller General of the United States of
P.O.Box 1036 America. Those standards require that we plan and perform the audits to obtain'reasonable
1014 N.Arendell Ave. assurance about whether the financial statements are free of material misstatement An audit
Zebulon,NC 27597 includes examining, on a test basis, evidence supporting the amounts and disclosures in the
919.269.7405 financial statements. An audit also includes assessing the accounting principles used and
919.269.8728 Fax significant estimates made by management, .as well as evaluating the overall financial
Raleigh Office - statement presentation. We believe that our audits provide a reasonable basis for our opinion.
5116 Bur Oak Cr.
Raleigh,NC 27 r. In our opinion, based on our audits, the financial statements referred to above present fairly,-in
919.781.1047 all material respects, the respective financial position of Housing for New Hope, Inc. as of
919.781.1052 Fax August 31,2011 and 2010 and the changes in its net assets 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 our report dated
December 12, 2011, on our consideration of the Organization's internal controls over financial
reporting and our tests of its compliance with certain provisions of law, regulations, contracts,
grant agreements and other matters. The purpose of the report is to describe the scope of our
testing of internal control over financial reporting and compliance and 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.
Memberships:
Our audits were performed for the purpose of forming an opinion on the basic financial
North Carolina statements of Housing for New Hope, Inc., taken as a whole. The accompanying schedule of
Association of expenditures of federal and State awards as required by the U.S. Office of Management and
Certified Public Budget Circular A-133, Audits of States, Local Govemments and Non-Profit Organizations is
Accountants 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
American Institute respects,in relation to the basic financial statements taken as a whole.
of Certified Public
Accountants Q�
OA
PEfWA MILLS&PEARSON, PA
Certified Public Accountants
Medical Group Zebulon, North Carolina
Management
Association December 12,2011
HOUSING FOR NEW HOPE,INC.
STATEMENTS OF FINANCIAL POSITION
AUGUST 31,2011 AND 2010
ASSETS
2011 2010
Current assets
Cash $ 74,245 $ 59,240
Restricted cash 13,287 69,864
Sales tax receivable 19,898 1,152
Grants receivable 320,196 259,457
Prepaid expenses 13,832 10,831
Total current assets 441,458 400,544
Property and equipment,net 3,857,988 3,509,322
TOTAL ASSETS $ 4,299,446 $ 3,909,866
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable and accrued expenses $ 139,304 $ 74,862
Line of credit 169,406 200,000
Notes payable-current portion 43,324 21,423
Accrued leave 23,298 24,963
Total current liabilities 375,332 321,248
Long-term liabilities
Notes payable, less current portion 1,463,508 1,338,404
Total long-term liabilities 1,463,508 1,338,404
Total liabilities 1,838,840 1,659,652
Net assets
Unrestricted 2,447,319 2,180,350
Temporarily restricted 13,287 69,864
Total net assets 2,460,606 2,250,214
TOTAL LIABILITIES AND NET ASSETS $ 4,299,446 $ 3,909,866
The accompanying notes are an integral part of the financial statements.
4
HOUSING FOR NEW HOPE,INC.
STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED AUGUST 31,2011 AND 2010
2011
Temporarily
Unrestricted Res ' Total
Support and revenues
Support
Grants and contracts
Federal grants $ - $ 919,982 $ 919,982
State and local grants - 592,692 592,692
Congregational support 83,307 82,960 166,267
Foundations - 229,465 229,465
Contributions
Cash 197,288 - 197,288
Donated space and forgiveness of debt 26,100 - 26,100
In-Kind contributions 3,525 - 3,525
Fund raising events 1,689 - 1,689
Total support 311,909 1,825,099 2,137,008
Revenues
Rental income 182,170 - 182,170
Interest income 17 - 17
Administrative fees 110,171 - 110,171
Other 3,234 - 3,234
Total revenues 295,592 - 295,592
Net assets released from restrictions
Satisfaction of program restrictions 1,881,676 (1,881,676) -
Total support and revenues 2,489,177 (56,577) 2,432,600
Expenses
Expenses
Program services 1,883,162 - 1,883,162
Supporting services 339,046 - 339,046
Total expenses 2,222,208 - 2,222,208
CHANGE IN NET ASSETS 266,969 (56,577) 210,392
Net assets-beginning of year 2,180,350 69,864 2,250,214
NET ASSETS-END OF YEAR $ 2,447,319 $ 13,287 $ 2,460,606
(continued)
The accompanying notes are an integral part of the financial statements.
5
1 ,
HOUSING FOR NEW HOPE,INC.
STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED AUGUST 31,2011 AND 2010
(continued)
2010
Temporarily
Unrestricted Restricted Total
Support and revenues
Support
Grants and contracts
Federal grants $ - $ 986,078 $ 986,078
State and local grants - 1,036,695 1,036,695
Congregational support 38,123 103,166 141,289
Foundations - 208,037 208,037
Contributions
Cash 148,998 - 148,998
Donated space and forgiveness of debt 3,500 - 3,500
In-Kind contributions - - -
Fund raising events 2,244 - 2,244
Total support 192,865 2,333,976 2,526,841
Revenues
Rental income 69,720 - 69,720
Interest income 209 - 209
Administrative fees 96,517 - 96,517
Other 1,621 - 1,621
Total revenues 168,067 - 168,067
Net assets released from restrictions
Satisfaction of program restrictions 2,284,173 (2,284,173) -
Total support and revenues 2,645,105 49,803 2,694,908
Expenses
Expenses
Program services 1,721,301 - 1,721,301
Supporting services 272,320 - 272,320
Total expenses 1,993,621 - 1,993,621
CHANGE IN NET ASSETS 651,484 49,803 701,287
Net assets-beginning of year,previously stated 1,573,537 20,061 1,593,598
Prior period adjustment (44,671) - (44,671)
Net assets-beginning of year,restated 1,528,866 20,061 1,548,927
NET ASSETS-END OF YEAR $ 2,180,350 $ 69,864 $ 2,250,214
The accompanying notes are an integral part of the financial statements.
6
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HOUSING FOR NEW HOPE,INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31,2011 AND 2010
2011 2010.
Cash flows from operating activities
Change in net assets 210,392 $ 701,287
Adjustments to reconcile change in net assets
to net cash provided by operating activities
Depreciation 114,658 75,018
(Gain)loss on disposal of equipment - (100)
Prior period adjustment (44,671)
Changes in current assets and liabilities:
Sales tax receivable (18,746) (533)
SSI client receivable 6,667
Grants receivable (60,739) (138,306)
Prepaid expenses (3,001) 9,772
Accounts payable and accrued expenses 64,442 (35,037)
Accrued leave (1,665) 5,196
. Not cash provided by operating activities 305,341 579,293
Cash flows from investing activities
Purchases of property and equipment (463,324) (1,486,561)
Not cash used by investing activities (463,324) (1,486,561)
Cash flows from financing activities
Proceeds from long-term debt 147,005 748,185
Proceeds from(repayment of)line of credit (30,594) 90,675
Not cash provided by financing activities 116,411 838,860
NET INCREASE(DECREASE) IN CASH (41,572) (68,408)
Cash-beginning of year 129,104 107,512
CASH-END OF YEAR $ 87,532 $ 129,104
Supplemental disclosures
Interest paid 14,129 $ 13,965
The accompanying notes are an integral part of the financial statements.
i
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Note 1 —The Organization
Housing for New Hope, Inc. (the Organization), a nonprofit corporation incorporated on November
2, 1993, is located in Durham, North Carolina. The mission of the Organization is to encourage
and assist homeless people and other persons in crisis to move toward lives marked by
increased levels of stability, dignity, hope and independence. The Organization provides a
continuum of care for the homeless including emergency assistance and homeless prevention
(Presbyterian Urban Ministry); outreach to mentally ill homeless in Durham and Orange counties
(P.A.T.H.); assistance to homeless individuals and individuals on the verge of homelessness to
obtain and maintain housing (Homeless Prevention/Rapid Re-housing Team); transitional
housing (Phoenix House and Dove House), and permanent, affordable housing (Sherwood Park,
Williams Square and Andover Apartments).
Note 2—Summary of Significant Accounting Policies
Basis of accounting — The financial statements of the Organization have been prepared in
conformity with accounting principles generally accepted in the United States of America using
the accrual basis of accounting.
Basis of presentation — Financial statement presentation follows the provisions of the Financial
Accounting Standards Board ASC 958, Not-for-Profit Entities. Under FASB ASC 958, the
Organization is required to report information regarding its financial position and activities
according to three classes of net assets: unrestricted net assets,temporarily restricted net assets
and permanently restricted net assets. Net assets are defined as follows:
• Unrestricted— Unrestricted net assets include resources, which are available for
the support of the Organization's operating activities.
• Temporarily Restricted—Temporarily restricted net assets include resources that
have been donated to the Organization subject to restrictions as defined by the
donor. These restrictions are met either by the actions of the organization and/or
the passage of time.
• Permanently Restricted — Permanently restricted net assets include resources
that have donor-imposed restrictions stipulating that the resources be maintained
intact in perpetuity with the investment income to be used for operating activities.
Cash and cash equivalents — The Organization maintains its cash in bank demand deposit
accounts which at times, may exceed federally insured limits. At August 31, 2011, the
Organization had a balance of $102,219 in its bank, all of which was covered by federal
insurance. A portion of the Organization's cash is restricted for purposes as specified by donors.
Cash was restricted at August 31, 2011 and 2010 for purposes as specified in Note 7.
Accounts receivable—The Organization has elected to record bad debts using the direct write-
off method. Accounting principles generally accepted in the United States of America require that
the allowance method be used to recognize bad debts; however, the effect of using the direct
write-off method is not materially different from the result that would have been obtained under
the allowance method.
Property and Equipment— Property and equipment are recorded at cost or, if donated, at the
fair value at the date of donation. Depreciation is calculated using the straight-line method over
the estimated useful lives of the assets which range from three to forty years. The Organization
normally capitalizes all expenditures for property and equipment in excess of$1,000; however,
certain contractual arrangements require capitalization of expenditures in excess of$750.
10
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Contributions — The Organization follows FASB ASC 958, Not-for-Profit Entities whereby
contributions received are recorded as unrestricted, temporarily restricted or permanently
restricted support, depending on the existence and/or nature of any donor restrictions.
All donor restricted support is reported as an increase in temporarily or permanently restricted net
assets, depending on the nature of the restriction. When a restriction expires (that is, when a
stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net
assets are reclassified to unrestricted net assets and reported in the Statements of Activities as
net assets released from restrictions.
Donated space and forgiveness of debt — Donated space Is reflected as contributions in the
accompanying financial statements at its estimated values at the date of receipt. Forgiveness of
debt is recorded as revenue as the debt is forgiven.
Functional allocation of expenses—The cost of providing various programs and other activities
have been summarized on a functional basis in the Statements of Activities and Statements of
Functional Expenses. Accordingly, certain costs have been allocated among the program and
supporting services benefited.
Use of estimates — The preparation of financial statements in conformity with accounting
principles generally accepted In the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Tax status — The Organization is exempt from federal and state income taxes under Section
501(c)(3) of the U.S. Internal Revenue Code and the applicable state tax statutes. In addition,
the Organization qualifies for the charitable contributions deduction under Section 170(b)(1)(a)of
the U.S. Internal Revenue Code. Further, the Organization has been determined not to be a
private foundation under Section 509(a)(2)of the U.S. Internal Revenue Code.
FASB ASC 740 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FASB ASC 740 requires the
evaluation of tax positions taken or expected to be taken in the course of preparing financial
statements to determine whether the tax positions are "more-likely-than-not' to be sustained by
the applicable tax authority. As of the date of the independent auditors' report, the Organization
has no uncertain tax positions that qualify for either recognition or disclosure in the financial
statements. Income tax returns from 2007 through 2011 are open for examination by tax
authorities.
Statements of cash flows - The Organization considers all unrestricted cash, highly liquid
investments and cash restricted by donor accounts as cash equivalents for purposes of the
statements of cash flows. Highly liquid investments are not considered as cash equivalents if
they are purchased with resources that have donor-imposed restrictions that limit their use to
long-term investment.
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Note 3-Grants Receivable
Grants receivable consist of the following at August 31:
2011 2010
Housing and Urban Development $ 24,789 $ 66,770
Emergency Shelter Grant 14,990 10,746
Homeless Prevention Rapid Rehousing 63,119 88,512
County of Durham 82,548 80,653
City of Durham 100,031 -
Lincoln Community Health Center 10,022 -
Community Development Block Grant 3,020 3,156
Orange-Person-Chatham Area Program 21,677 9,720
320,196 $ 259,457
Note 4-Property and Equipment
Property and equipment consist of the following at August 31:
2011 2010
Buildings and improvements $ 3,429,726 $ 3,443,603
Vehicles 56,604 60,044
Furniture and equipment 151,434 151,434
Construction in Progress 332,151 18,031
Land 423,000 273,000
4,392,915 3,946,112
Less:accumulated depreciation (534,927) (436,790)
$ 3,857,988 $ 3,509,322
Depreciation expense was$114,658 and$75,018 at August 31,2011 and 2010.
Note 6-Line of Credit
On January 17, 1996, the Organization obtained a $30,000 line of credit with a bank with an
interest rate of 1.5%over prime. This line of credit serves as checking overdraft protection. There
were no amounts outstanding on this line of credit at August 31,2011 and 2010.
On February 10, 2010, the Organization obtained a $70,000 line of credit with a bank with an
interest rate of LIBOR plus 2.6% with minimum interest at 4%. This line of credit serves as an
operational line of credit and had a balance of $40,000 and $0 at August 31, 2011 and 2010,
respectively.
On May 12, 2009, the Organization obtained a line of credit with a bank for construction of
Williams Square. The tine of credit had an Interest rate of 4.0% and had a balance of$200,000
at August 31, 2010. During the year ended August 31, 2011 construction was complete, and the
credit line was paid off and closed.
On February 9, 2011. the Organization obtained a line of credit with a bank for renovation of
apartments at Cole Mill Road. The line of credit had an Interest rate of LIBOR plus 2.6% with
minimum interest at 4%and had a balance of$129,406 at August 31, 2011.
12
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Note 6—Notes Payable
Notes payable consist of the following at August 31:
2011 2010
Note payable to the City of Durham,interest free,forgiven in annual
principal installments of$3,500,through September 2015;secured by
a deed of trust on property $ 14,000 $ 17,500
Note payable to the City of Durham,interest free,with monthly principal
payments of$260,through October,2015;secured by a deed of trust
on property 10,894 14,270
Note payable to the County of Durham,interest free,with annual principal
payments of$3,820,through January 2011;secured by a deed of trust
on property - 494
Note payable to City of Durham,interest free,due in monthly principal
payments of$342,matures on July 1,2035;secured by deed of trust
on property 97,626 102,079
Note payable to North Carolina Housing Finance Agency in the amount
$182,800,which consists of the following:
$107,800 for 30 years,matures on September 30,2035,payment
in monthly installments of$300,no interest 86,238 90,131
$75,000 for 30 years which is deferred for 20 years until
September 2026,and forgivable by 10%per year for 10 years 75,000 75,000
Note payable to North Carolina Housing Finance Agency,interest free,
forgiven annually at 10%after twenty years(March 2027) 154,170 154,170
Note payable to City of Durham,interest free,forgiven annually at 10%
after twenty years(June 2026) 140,155 140,155
Note payable to City of Durham,interest free,forgiven in annual principal
installments of$22,600 through April 2030 429,400 452,000
Note payable to RBC in the amount of$316,000,interest at 3%,payable in
monthly installments of$1,340,matures May 26,2030 with balloon
payment of$139,446 due on that date 307,411 314,028
Note payable to North Carolina Housing Finance Agency in the amount of
$191,938,interest at 0%,payable in full on January 1,2040 191,938 -
Total notes payable - 1,506,832 1,359,827
Less: current portion (43,324) (21,423)
$ 1,463,508 $ 1,338,404
13
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Interest expense was $14,129 and $13,965 for the years ended August 31, 2011 and 2010,
respectively.
On July 15, 2010, the Organization entered into a loan agreement with Self-Help Federal Credit
Union in an amount of up to $433,000 for the acquisition, construction and leasing of
Neighborhood Stabilization Program-eligible property in Durham, North Carolina - Cole Mill
Place. Interest-only payments are due beginning on the first day of the month following the month
in which the first advance is made and thereafter until April 1, 2011. Interest Is at 5.15%.
Beginning May 1, 2011 and thereafter on the first day of each successive month, principal and
interest payments are due based on the interest rate and amortization schedule of 29.6 years. A
final payment of all unpaid principal and interest is due October 1, 2041. As of August 31, 2011
the Organization has received no advances under this loan agreement.
Note 7-Temporarily Restricted Net Assets
Temporarily restricted net assets are available for the following purposes:
Nature of Restriction 2011 2010
PATH-Durham Leased Housing $ 7,996 $ 14,494
Assertive Engagement-Kate B. Reynolds - 38,788
PUM-System of Care 5,291 -
Dove House-Sisters of Mercy 16,582
$ 13,287 $ 69,864
Note 8-Not Assets Released from Restrictions
Net assets were released from contractual restrictions by incurring expenses satisfying the
restricted purposes of the grant award are as follows:
2011 2010
Presbyterian Urban Ministry $ 53,174 $ 70,311
Andover Apartments 1 21,067 18,875
PATH 354,482 341,021
Phoenix House 99,441 112,689
Dove House 80,689 72,743
Sherwood Park Apartments 22,868 23,940
Andover Apartments 11 23,924 24,160
Williams Square 46,406 820,227
Assertive Engagement 245,947 315,719
Orange County 59,912 -
Homeless Prevention/Rapid Re-housing 341,098 343,061
Cole Mill Road 340,953 -
Administration 191,715 140,837
Fundraising - 700
$ 1,881,676 $ 2,2841173
14
' r
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Note 9—Grant Audits
The Organization receives grant funds. Such funds are subject to final approval by the grantor
agencies and deficiencies, if any,are the responsibility of the Organization.
Note 10—Operating Leases
The Organization leases one facility for its PATH, Presbyterian Urban Ministry and Homeless
Prevention/Rapid Re-housing programs in Durham, North Carolina under an operating lease
agreement. This lease has monthly payments of$650. Total rent expense recognized under the
lease agreement was$7,800 and $7,800 at August 31,2011 and 2010, respectively.
Note 11 —Pension Plan
The Organization has a tax-deferred annuity plan qualified under Section 403(b) of the Internal
Revenue Code. The plan covers full-time employees of the Organization. Employees may make
contributions to the plan up to the maximum amount allowed by the Internal Revenue Code. For
the years ended August 31, 2011 and 2010, the amounts contributed by the Organization to the
pension plan were$18,463 and$19,497, respectively.
Note 12—Donated Space and Forgiveness of Debt
Forgiveness of debt was of$26,100 and$3,500 during 2011 and 2010, respectively.
Note 13—Concentrations of Funding
For the fiscal year ended August 31, 2011 the Organization received approximately 50% of its
funding from the U.S. Department of Housing and Urban Development and the North Carolina
Department of Health and Human Services.
For the fiscal year ended August 31, 2010 the Organization received approximately 70% of its
funding from The Durham Center and U.S. Department of Housing and Urban Development.
Note 14—Description of Program Services
Presbyterian Urban Ministry — Presbyterian Urban Ministry provides emergency financial
assistance and pastoral counseling for the poor of Durham. Clients include single parent families,
disabled adults,and the elderly.
PATH —The PATH Program stands for Projects in Assisting Transition from Homeless. Funded
through a contract with the Durham Center, PATH provides outreach to homeless people living in
camps, abandoned houses and shelters who indicate mental illness. The Organization's staff
provides counseling, access to housing and services through the Durham Center and the
Orange-Person-Chatham Program,
Homeless PreventiorVRaoid Re-housing — The Homeless Prevention/Rapid Re-housing team
provides homelessness prevention assistance to households who would otherwise become
homeless and rapidly re-houses persons who are homeless.
Phoenix House — Phoenix House offers a structured housing environment for single homeless
men as they make the transition from Nving on the streets and in shelters to independent living in
the community. The Phoenix House provides transitional housing, supportive services,
employment assistance and recovery programming for men who are alcohol and drug
dependent..
15
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Dove House — Dove House offers a structured housing environment for single women as they
make the transition from living on the streets and in shelters to independent living in the
community. The Dove House provides transitional housing, supportive services, employment
assistance,and recovery programming for women who are alcohol and drug dependent.
Sherwood Park Apartments — Sherwood Park Apartments provides permanent, affordable
housing with access to supportive services for men and women who have low-paying jobs or are
on disability. Accessible services include employment assistance, alcohol and drug counseling
and home-buying workshops.
Andover I and 11 and Williams Square—These apartments provide permanent, affordable housing
with access to supportive services for men and women who have low-paying jobs or are on
disability. Accessible services include employment assistance, alcohol and drug counseling and
home-buying workshops.
Assertive Engagement - The Assertive Engagement Team provides supportive services and
ongoing case management to the uninsured chronically homeless. Activities of the team
include providing mental health and substance abuse services, assisting with the obtainment of
income and health insurance, making connections with family and other social supports, and
helping find permanent housing.
Cole Mill Place — These apartments will serve entry-level city, county, university, and hospital
employees and many others who work in the community and earn at or below 50 percent of area
median household income. Construction at the site began in the summer of 2011, and housing is
scheduled to be ready for occupancy by the end of 2011.
Note 15—Prior Period Adjustment
In 2010, the Organization evaluated how social security income received on behalf of clients was
previously recorded. These amounts were previously recorded as revenue but should have been
recorded as a liability. As a result, a prior period adjustment of$44,671 was made to beginning
net assets.
Note 16—Subsequent Events
The Organization has evaluated subsequent events from the date of the balance sheet through
the date the report is available which is the of the date of the independent auditors' report. The
Organization has not evaluated subsequent events after that date. There were no subsequent
events during this period that require disclosure.
16
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
Note 17-Fair Value
The Organization's assets and liabilities are reported at fair value in the accompanying balance
sheet.
Fair Value Measurement Using:
Quoted
Prices in Quoted
Active Prices in
Market for Active Market Significant
Identical for Similar Unobserva
Assets Assets(Level ble Inputs
Fair Value (Level 1) 2) (Level 3)
August 31,2011
Assets:
Cash $ 87,532 $ 87,532 $ - $ -
Sales tax receivable 19,898 - 19,898 -
Grants receivable 320,196 - 320,196 -
Prepaid Expenses 13,832 - 13,832 -
Property and equipment, net 3,857,988 - 3,857,988 -
Liabilities:
Accounts payable and accrued expenses $ 139,304 $ - $ 139,304 $ -
Line of credit 169,406 - 169,406 -
Accrued leave 23,298 - 23,298 -
Notes payable 1,506,832 - 1,506,832 -
August 31,2010
Assets:
Cash $ 129,104 $ 129,104 $ - $ -
Sales tax receivable 1,152 - 1,152 -
Grants receivable 259,457 - 259,457 -
Prepaid Expenses 10,831 - 10,831 -
Property and equipment, net 3,509,322 - 3,509,322 -
Liabilities:
Accounts payable and accrued expenses $ 74,862 $ - $ 74,862 $ -
Line of credit 200,000 - 200,000 -
Accrued leave 24,963 - 24,963 -
Notes payable 1,359,827 - 1,359,827 -
The Financial Accounting Standards Board's Codification of Professional Standards establishes a
fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
This hierarchy consists of three broad levels: Level 1 inputs consist of values in active markets for
identical assets and have the highest priority, Level 2 inputs consist of values in inactive markets
and Level 3 inputs have values based on unobservable inputs and have the lowest priority.
17
HOUSING FOR NEW HOPE, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2011 AND 2010
The Organization uses appropriate valuation techniques based on the available inputs to
measure the fair value of its assets. When available, the Organization measures fair value using
Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 3
inputs were only used when Level I or Level 2 inputs were not available.
Level I Fair Value Measurements
The Organization's cash Is an asset that can be priced in an active market.
Level 2 Fair Value Measurements
The carrying value of receivables, prepaid expenses, property and equipment, accounts payable
and accrued expenses, line of credit and notes payable approximate fair value due to the short
maturity of these Items, however there is not an active market for these assets and liabilities.
Level 3 Fair Value Measurements
There are no level 3 fair value measurements.
Independent Auditors' Report On Internal Control Over Financial Reporting and On
PETWAY Compliance and Other Matters Based on an Audit Of Financial Statements
MILLS & Performed In Accordance With Government Auditina Standards
PEARSON, PA To the Board of Directors
CBRnFrEDPUB ICAccouNmArm Housing for New Hope, Inc.
Durham, North Carolina
C.Briggs Petway,Jr.
Roger G.Mills We have audited the accompanying financial statements of Housing for New Hope, Inc.
Phyllis M.Pearson (the Organization) as of and for the year ended August 31, 2011, which collectively
comprises Housing for New Hope, Inc.'s basic financial statements and have issued our
report thereon dated December 12, 2011. We conducted our audit in accordance with
Zebulon Office auditing standards generally accepted in the United States of America and the standards
P.O.Box 1036 applicable to financial.audits contained in Government Auditing Standards, issued by the
1014 N.Arendell Ave. Comptroller General of the United States of America.
Zebulon,NC 27597
919269.7405 Internal Control Over Financial Re na
919269.8728 Fax
The management of Housing for New Hope, Inc. is responsible for establishing and
Raleigh Office maintaining effective internal control over financial reporting. In planning and performing
5116 Bur Oak Cr. our audit, we considered Housing for New Hope, Inc.'s internal control over financial
Raleigh,NC 27612 reporting as a basis for designing our auditing procedures for the purpose of expressing
919.7811047 our opinions on the financial statements, but not for the purpose of expressing an opinion
919.781.1052 Fax on the effectiveness of Housing for New Hope, Inc.'s internal control over financial
reporting. Accordingly, we do not express an opinion on the effectiveness of the
Organization's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect and correct misstatements on a timely basis. A material
weakness is a deficiency or combination of significant deficiencies, in internal control,
such that there is a reasonable possibility that a material misstatement of the entity's
financial statements will not be prevented or detected and corrected on a timely basis.
Our consideration of the internal control over financial reporting was for the limited
purpose described In the first paragraph of this section and was not designed to identify
Memberships: all deficiencies in the internal control over financial reporting that might be deficiencies,
significant deficiencies, or material weaknesses. We did not identify any deficiencies in
North Carolina internal control over financial reporting that we consider to be material weaknesses, as
Association of defined above.
Certified Public
Accountants Compliance and Other Matters
As part of obtaining reasonable assurance about whether Housing for New Hope, Inc.'s
American institute financial statements are free of material misstatement, we performed tests of its
of Certified Public compliance with certain provisions of laws, regulations, contracts and grant agreements,
Accountants noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an
Medical Group opinion. The results of our tests disclosed no instances of noncompliance or other
Management matters that are required to be reported under Goverment Auditing Standards.
Association
This report is intended solely for the information and use of the Board of Directors,
management, others within the organization, and federal and State awarding agencies
and is not intended to be and should not be used by anyone other than these specified
parties.
��
PETWA MILLS&PEARSON, PA
Certified Public Accountants
Zebulon, North Carolina
December 12, 2011
21
i
Independent Auditors'Report on Compliance with Requirements That Could Have a Direct
and Material Effect on a Federal Program and on Internal Control Over Compliance In
PETWAY Accordance With OMB Circular A-133
MILLS &
PEARSON, PA To the Board of Directors
CDt77F&DPUBl1CACCOUNIANn Housing for New Hope, Inc.
Durham, North Carolina
C.Briggs Petway,Jr.
Roger G.Mills
Phyllis M.Pearson COMPLIANCE
We have audited Housing for New Hope, Inc.'s compliance with the types of compliance
Zebulon Office requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
P.O.Box 1036 Compliance Supplement that could have a direct and material effect on each of its major federal
1014 N.Arendell Ave. programs for the year ended August 31, 2011. Housing for New Hope, Inc.'s major federal
Zebulon,NC 27597 programs are identified in the summary of auditor's results section of the accompanying schedule
919.269.7405 of findings and questioned costs. Compliance with the requirements of laws, regulations,
919269.8728 Fax contracts and grants applicable to its major federal programs is the responsibility of Housing for
New Hope, Inc.'s management. Our responsibility is to express an opinion on Housing for New
Raleigh office
5116 Bur Oak Cr. Hope, Inc.'s compliance based on our audit.
Raleigh,NC 27612 We conducted our audit of compliance in accordance with auditing standards generally accepted
919.781.1047 in the United States of America; the standards applicable to financial audits contained in
919.781.1052 Fax PP
Government Auditing Standards, issued by the Comptroller General of the United States; and
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those
standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above could have a direct and material effect on a major federal program occurred.
An audit includes examining, on a test basis, evidence about Housing for New Hope, Inc.'s
compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination on Housing for New Hope, Inc.'s
compliance with those requirements.
In our opinion, Housing for New Hope, Inc. complied, in all material respects, with the
Memberships: requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended August 31, 2011.
North Carolina
Association of INTERNAL CONTROL OVER COMPLIANCE
Certified Public
Accountants The management of Housing for New Hope, Inc. is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts and
grants applicable to federal programs. In planning and performing our audit, we considered
American institute Housing for New Hope, Inc.'s internal control over compliance with requirements that could have
of Certified Public a direct and material effect on a major federal program in order to determine our auditing
Accountants procedures for the purpose of expressing our opinion on compliance and to test and report on
internal control over compliance in accordance with OMB Circular A-133, but not for the purpose
of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,
Medical Group we do not express an opinion on the effectiveness of Housing for New Hope, Inc.'s internal
Management
Association control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis.
Our consideration of internal control over compliance-was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control
over compliance that might be deficiencies or significant deficiencies or material weaknesses.We
did not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
This report is intended solely for the information and use of management, others within the
organization, members of the Board of Directors, and federal and State awarding agencies and
pass-through entities and is not intended to be and should not be used by anyone other than
these specified parties.
PETWAY MILLS&PEARSON, PA
Certified Public Accountants
Zebulon, North Carolina
December 12,2011
23
I
HOUSING FOR NEW HOPE, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED AUGUST 31,2011
SECTION I.—SUMMARY OF AUDITORS'RESULTS
Financial Statements
Type of auditors'report issued: Unqualified.
Internal control over financial reporting:
Material weakness(es)identified? yes X no
Significant deficiencies identified
that are not considered to be
material weaknesses? yes X none reported
Noncompliance material to financial
statements noted yes X no
Federal Awards
Internal control over major federal programs:
Material weakness(es)identified? yes X no
Significant deficiencies identified
that are not considered to be
material weaknesses? yes X none reported
Type of auditors' report issued on compliance for major federal programs: Unqualified.
Any audit findings disclosed that are required
to be reported in accordance with Section 510(a)
of Circular A-133? yes X no
Identification of major federal programs:
Program Name
CFDA Number
U.S. Department of Housing and Urban Development
Neighborhood Stabilization Program 14.256
U.S. Department of Housing and Urban Development
Homelessness Prevention and Rapid Re-housing Program-ARRA 14.257
Dollar threshold used to distinguish between
Type A and Type B Programs $ 300,000
Auditee qualified as low-risk auditee? yes X no
24
I
' r
HOUSING FOR NEW HOPE,INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED AUGUST 31,2011
SECTION II.-- FINANCIAL STATEMENT FINDINGS
None.
SECTION III. --FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
None.
25
HOUSING FOR NEW HOPE, INC.
CORRECTIVE ACTION PLAN
FOR THE YEAR ENDED AUGUST 31, 2011
SECTION II. --FINANCIAL STATEMENT FINDINGS
None.
SECTION III. -- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
None.
26
HOUSING FOR NEW HOPE,INC.
SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS
FOR THE YEAR ENDED AUGUST 31,2011
There were no prior year audit findings.
27
HOUSING FOR NEW HOPE,INC.
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS
FOR THE YEAR ENDED AUGUST 31,2011
Federal
Federal or State Grantor/Pass-Through CFDA Federal State
Grantor/Program or Cluster Title Number Expenditures Expenditures Total
US Department of Housing and Urban Development
Pass-through North Carolina
Department of Human Resources
Emergency Shelter Grant Program 14.231 $ 31,406 $ - $ 31,406
Direct Program
Supportive Housing Program for Persons
with Disabilities 14.181 216,662 - 216,662
Pass-through City of Durham
Neighborhood Stabilization Program 14.256 315,953 - 315,953
Pass-through City of Durham
Community Development Block Grant 14.219 14,663 - 14,863
Homelessness Prevention and Rapid
Re-housing Program-ARRA
Pass-through North Carolina Office of
Economic Recovery and Investment 14.257 263,122 - 263,122
Pass-through Orange County
Department of Social Services 14.257 30,726 - 30,726
Pass-through Durham County
Department of Social Services 14,257 47,250 - 47,250
Total Homelessness Prevention and Rapid
Re-housing Program-ARRA 341,098 - 341,098
North Carolina Department of Health and Human Services
Pass-through Durham County - 260,154 260,154
Pass-through Orange County - 64,410 64,410
Total North Carolina Department of - 324,564 324,564
Health and Human Services
Total Federal and State Expenditures $ 919,982 $ 324,564 $ 1,244,546
Basis of Presentation
The foregoing Schedule of Expenditures of federal and State Awards includes the federal and State grant activity
of Housing for New Hope, Inc, and is presented on the accrual basis of accounting. The information in this
schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ
from amounts presented In, or used in,the preparation of the basic financial statements.
28