GROVE VILLAGE LIMITED PARTNERSHIP

 

FINANCIAL STATEMENTS

 

Year Ended December 31, 2008

  

PAILET, MEUNIER and LeBLANC, L.L.P.

 

   

TABLE OF CONTENTS

 

		PAGE
INDEPENDENT AUDITOR’S REPORT		3
FINANCIAL STATEMENTS:
Balance Sheets		4-5
Statements of Income		6
Statements of Changes in Partners' Equity		7
Statements of Cash Flows		8-9
Notes to Financial Statements		10-14
INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION		16
Balance Sheet Data		17-18
Statement of Income Data		19-22
Statement of Changes in Partners' Equity Data		23
Statement of Cash Flows Data		24-25
Supplementary Data Required by HUD		26-28
INDEPENDENT AUDITOR'S REPORT ON THE INTERNAL CONTROL		29-30
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS		31
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION		32
CERTIFICATION OF PARTNERS		33
MANAGEMENT AGENT'S CERTIFICATION		34
AUDITOR INFORMATION		35

  

 

 

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

  

INDEPENDENT AUDITOR'S REPORT

 

To the Partners

Grove Village Limited Partnership

Portland, Oregon

 

We have audited the accompanying balance sheets of Grove Village Limited Partnership, owner of Grove Village Apartments, HUD Section 8 Contract Nos. TX16L00024 and TX16M000311, as of December 31, 2008, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) 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 Grove Village Limited Partnership as of December 31, 2008 and the results of its operations, changes in partners' equity, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated May 7, 2009, on our consideration of Grove Village Limited Partnership's internal control, and reports dated May 7, 2009, 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/ PAILET, MEUNIER and LeBLANC, L.L.P.
Metairie, Louisiana
May 7, 2009

  

   

GROVE VILLAGE LIMITED PARTNERSHIP

 

BALANCE SHEET

 

DECEMBER 31, 2008

  

ASSETS
Rental property and equipment, at cost:
Buildings, furnishings and equipment		$	9,729,480
Accumulated depreciation			(1,043,949	)
			8,685,531
Land			876,846
			9,562,377
Restricted deposits:
Replacement reserves			14,720
Other reserves			122,486
Tenant trust - security deposits			19,237
			156,443
Other assets:
Cash			58,147
Accounts receivable			4,837
Prepaid expenses			24,350
Intangible assets, net of amortization of $33,793			319,700
			407,034
TOTAL ASSETS		$	10,125,854

 

The accompanying notes are an integral part of these financial statements.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

BALANCE SHEET

 

DECEMBER 31, 2008

  

LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage note payable		$	6,119,975
Developer fee payable			1,487,120
Notes payable - affiliate			2,065,969
Accounts payable			397,418
Accrued interest payable			446,002
Rents received in advance			10,820
Tenant security deposits payable			18,559
			10,545,863
Partners' equity			(420,009	)
TOTAL LIABILITIES AND EQUITY		$	10,125,854

 

The accompanying notes are an integral part of these financial statements.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF OPERATIONS

 

FOR THE YEAR ENDED DECEMBER 31, 2008

  

Revenue:
Rent, net		$	1,518,444
Other			29,229
Total Income			1,547,673
Expenses:
Administrative			495,412
Utilities			464,832
Operating and maintenance			269,966
Taxes and insurance			138,351
Interest			445,109
Other financial			65,695
Depreciation			606,331
Amortization			24,921
Total expenses			2,510,617
Operating income (loss) before partnership revenue (expenses)			(962,944	)
Partnership revenue			52
Other expenses			(140,313	)
Net income (loss)		$	(1,103,205	)

 

The accompanying notes are an integral part of these financial statements.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CHANGES IN PARTNERS' EQUITY

 

FOR THE YEAR ENDED DECEMBER 31, 2008

  

		Total				General Partner				Limited Partner
Balance - January 1, 2008		$	9,302			$	(1,321,330	)		$	1,330,632
Contributions			673,894				217,455				456,439
Net income (loss)			(1,103,205	)			(110	)			(1,103,095	)
Balance - December 31, 2008		$	(420,009	)		$	(1,103,985	)		$	683,976

 

The accompanying notes are an integral part of these financial statements.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CASH FLOWS

 

FOR THE YEAR ENDED DECEMBER 31, 2008

  

Cash flows from operating activities:
Net Income (Loss)		$	(1,103,205	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization expense			631,252
Changes in certain assets and liabilities:
Accounts receivable			181,479
Prepaid expenses			(13,235	)
Accounts payable			249,216
Accrued interest payable			202,136
Rent received in advance			4,860
Entity/construction liability accounts			7,500
Tenant security deposits			(678	)
Net cash provided (used) by operating activities			159,325
Cash flow from investing activities:
Additions to fixed assets			(104,884	)
Deposits to reserve accounts			(135,451	)
Net cash provided (used) by investing activities			(240,335	)
Cash flow from financing activities:
Proceeds from notes payable			(60,025	)
Contributions			643,440
Payment of construction payable			(467,000	)
Net cash provided (used) by financing activities			116,415
Net increase (decrease) in cash and equivalents			35,405
Cash and equivalents, beginning of year			22,742
Cash and equivalents, end of year		$	58,147

  

The accompanying notes are an integral part of these financial statements.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CASH FLOWS

 

FOR THE YEAR ENDED DECEMBER 31, 2008

  

Supplemental disclosure of cash flow information:
Cash paid for interest		$	61,976
Supplemental schedule of non-cash investing and financing activities:
Additions to fixed assets from reclassification of:
Construction-in-progress		$	2,388

  

The accompanying notes are an integral part of these financial statements.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2008

 

NOTE 1 - NATURE OF BUSINESS

 

Grove Village Limited Partnership (the Partnership) is an Oregon limited partnership which was formed in 2004 to own and operate a 232-unit apartment project (the Project) in Dallas, Texas. The Project was rehabilitated in conformity with the provisions of Section 42 of the Internal Revenue Code, including, but not limited to, complying with tenant eligibility and rent restrictions.

 

The Partnership was initially formed by and among the General Partner, Walker Guardian LLC, an Oregon limited liability company, and the Limited Partner, Walker Bridge L.L.C. The Partnership shall continue until January 1, 2050 unless terminated as provided by the Agreement of Limited Partnership. During 2006 a new limited partner WNC Housing Tax Credit Fund VI Series 13, L.P was admitted and Walker Bridge L.L.C. withdrew as the limited partner.

 

The Partnership has assumed existing contracts with the US. Department of Housing and Urban Development ("HUD") under the Section 8 Housing Assistance Payment Program, which covers 143 of the 232 housing units in the Project. The project receives a rent subsidy provided by HUD. During the year rental revenue from HUD totaled $969,904, representing 63 percent of total revenue. The rent subsidy contracts with HUD expire August 31, 2009 and September 30, 2009.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Method of Accounting

The accrual method of accounting is used for financial statement purposes.

 

Depreciation

Depreciation is computed for financial statement purposes using the straight-line method over the estimated useful lives of the related assets.

 

Amortization

Amortization is computed on a straight-line basis. Financing costs are amortized over 5 years.

 

Income Taxes

No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the respective partners on their income tax returns.

 

Cash Equivalents

For purposes of the statement of cash flows, the Partnership considers all investment instruments purchased with a maturity of three months or less to be cash equivalents. At December 31, 2008, there were no cash equivalents.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2008

  

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

 

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 certain reported amounts and disclosures.

 

Concentration of Credit

The Partnership maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Partnership has not experienced any losses in such accounts. Management believes the Partnership is not exposed to any significant credit risk on cash and cash equivalents.

 

Accounts Receivable

Accounts receivable are reported at the amount management expects to collect on balances outstanding at December 31, 2008. Management closely monitors outstanding balances and writes off all balances deemed uncollectible.

 

Going Concern

The partnership has been evaluated as to its ability to continue to operate as a going concern. The willingness and ability of management to continue to fund operating deficits for the partnership mitigates concerns related to the lack of cash flow. As a result the partnership is expected to continue as a going concern.

 

NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD

 

Developer fee payable

Developer fees are owed to an affiliate of the general partner for services rendered during the rehabilitation of the project . There is no interest charged on the note. There were no payments made during the year. As of December 31, 2008 developer fee payable totaled $1,487,120 all of which was earned.

 

Property Management Fee

Management of the Project has been performed by an affiliate of the general partner. During the year ended December 31, 2008, management fees charged by the related entity totaled $107,174. Payments totaling $173,741 were made during 2008.

 

Asset Management Fee

The operating agreement provides for the limited partner to be paid an annual asset management fee beginning in 2008 in the amount of $7,500 with annual increases of 3%. The fee is cumulative. As of December 31, 2008, $7,500 was charged and payable.

  

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2008

  

NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD - (CONTINUED)

 

Other fees

Tenant and employment background screening services of the Project has been performed by an affiliate of the general partner. During the year ended December 31, 2008, screening fees totaling $11,298 were earned by and paid to the related entity.

 

Land Acquisition Fee

The partnership agreement provides for the general partner to be paid a land acquisition fee in the amount of $15,000 for services in locating, negotiating and closing on the purchase of the real property. As of December 31, 2008 land acquisition fee payable totaled $15,000.

 

Guardian Management Loan

A loan payable to an affiliate of the General Partner totaled $737,156 for 2008. The amounts relate to operating costs of the Project, financing costs and capital improvements to the Project. Under the terms of the Agreement of Limited Partnership, the loan bears interest at 9.5% per annum over a 40 year period. The note is not secured by the property and payments shall be made solely from Net Operating Income, sale or refinancing proceeds. No payments were made during 2008. As of December 31, 2008, interest charged and payable totaled $163,403.

 

Walker Bridge Loan

Under the terms of the Agreement of Limited Partnership, amounts advanced by Walker Bridge LLC bear interest at 9.5% per annum. No payments were made during 2008. Principal due on the note totaled $1,078,154 for 2008. The note is not secured by the property and payments shall be made solely from Net Operating Income, sale or refinancing proceeds. As of December 31, 2008, interest charged and payable totaled $114,008 and $250,949, respectively.

 

Notes Payable

The partnership has a Note Payable to Apartment Acquisition LLC in the face amount of $633,400 with an initial discount of $451,726. The note is in connection with the purchase of the Project, for which Apartment Acquisitions LLC assigned the right to purchase the Project to the Partnership in exchange for a non-interest bearing note which has been discounted at 7.75%. The cumulative accretion of the discount totaled $68,985 at December 31, 2008. The accretion of the discount for 2008 is $18,635. The note is due in annual payments equal to Net Cash Flow. The note matures December 2020. The note is not secured by the property.

 

NOTE 4 - MORTGAGE PAYABLE

 

The partnership has a note payable to U.S. National Bank Association (the "Bank") in the amount of $6,180,000 for the acquisition and operations of the project. The Bank is also the trustee for the Bonds. Monthly payments of $37,384 are due beginning March, 2008 and the note is secured by the property. The note matures February 2023.

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2008

  

NOTE 4 - MORTGAGE PAYABLE - (CONTINUED)

 

Affiliates of the general partner have personally guaranteed the Note Payable. The following schedule outlines principal amounts due on the note:

 

Year		Amount
2009		$	71,352
2010			76,896
2011			81,704
2012			86,819
2013			91,934
2014 and thereafter			5,711,270
		$	6,119,975

 

NOTE 5 - DISTRIBUTIONS/RESIDUAL RECEIPTS

 

Distributions payable to partners from funds provided by rental operations are permitted by the regulatory agreement, provided: 1) surplus cash, as defined by HUD, is available for such purposes; 2) the Project is in compliance with all outstanding notices of requirements for proper maintenance; and, 3) there is no default under the regulatory agreement. As of December 31, 2008, there was no surplus cash available for distribution.

 

NOTE 6 - PARTNERS' CAPITAL

 

Since the formation of Partnership, total capital contributions of $ -0-, $304, and $2,130,351 have been received from the General Partner, the Special Limited Partner and the Limited Partner, respectively. The Limited Partner is required to make additional capital contributions of $456,438. No additional capital contributions are required by the General Partner and the Special Limited Partner.

 

NOTE 7 -CONSTRUCTION COSTS PAYABLE

 

The Partnership has entered into a construction contract for the rehabilitation of the project that provides for total construction costs of $4,676,052 all of which has been billed. During 2008, the construction payable was paid in full.

 

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2008

  

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Operating Deficit Guaranty

Under the terms of the partnership agreement, the general partner is obligated to pay all expenses of operating and maintaining the Project in excess of gross collections to the extent necessary to maintain break-even operations, as defined in the agreement. Such payments are required through the break-even date and the ensuing period of approximately six years and are limited to $2,105,000. Any payments made by the general partner would be treated as non-interest bearing loans to the Partnership, to be repaid based on a priority set forth in the partnership agreement.

 

Tax Credit Guaranty

Affiliates of the general partner (the Guarantors) have entered into a tax credit guaranty agreement. The guarantors are obligated to insure that the property will be constructed and operated in accordance with terms and conditions set forth in the various agreements in order to be eligible for the maximum annual tax credits, as defined in the tax credit guaranty agreement.

 

Incentive Management Fee

Commencing in 2008, the Partnership shall pay to the general partner, through the compliance period, an annual Incentive Management Fee equal to 40% of Net Operating Income. The Incentive Management Fee shall be payable from Net Operating Income in the manner and priority set forth in the Partnership Agreement. If the Incentive Management Fee is not paid in any year, it shall not accrue for payment in subsequent years.

 

Tax Credit Compliance Fee

Commencing in 2006, the Partnership shall pay to the general partner, through the compliance period, an annual tax credit compliance fee equal to 40% of Net Operating Income. The tax credit compliance fee shall be payable from Net Operating Income in the manner and priority set forth in the Partnership Agreement. If the tax credit compliance fee is not paid in any year, it shall not accrue for payment in subsequent years.

 

Developer Fee Guaranty

Affiliates of the general partner have entered into a guaranty agreement which guarantees the full and prompt payment of the developer fees when due.

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

FINANCIAL STATEMENTS

 

Year Ended December 31, 2009

 

 

TABLE OF CONTENTS

 

	PAGE
INDEPENDENT AUDITOR’S REPORT	3
FINANCIAL STATEMENTS:
Balance Sheets	4-5
Statements of Income	6
Statements of Changes in Partners’ Equity	7
Statements of Cash Flows	8
Notes to Financial Statements	9-14
INDEPENDENT AUDITOR’S REPORT ON SUPPLEMENTARY INFORMATION	16
Balance Sheet Data	17-18
Statement of Income Data	19-22
Statement of Changes in Partners’ Equity Data	23
Statement of Cash Flows Data	24-25
Supplementary Data Required by HUD	26-27
INDEPENDENT AUDITORS REPORT ON THE INTERNAL CONTROL	28-29
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS	30
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION	31
CERTIFICATION OF PARTNERS	32
MANAGEMENT AGENT’S CERTIFICATION	33
AUDITOR INFORMATION	34

  

 

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

  

INDEPENDENT AUDITOR’S REPORT

 

To the Partners

Grove Village Limited Partnership

Portland, Oregon

 

We have audited the accompanying balance sheets of Grove Village Limited Partnership, owner of Grove Village Apartments, HUD Section 8 Contract Nos. TX16L00024 and TX16M000311, as of December 31, 2009, and the related statements of operations, changes in partners’ equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) 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 Grove Village Limited Partnership as of December 31, 2009 and the results of its operations, changes in partners’ equity, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated March 30, 2010, on our consideration of Grove Village Limited Partnership’s internal control, and reports dated March 30, 2010, 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/ PAILET, MEUNIER and LeBLANC, L.L.P.

Metairie, Louisiana

March 30, 2010

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

BALANCE SHEET

 

DECEMBER 31, 2009

 

ASSETS
Rental property and equipment, at cost:
Buildings, furnishings and equipment		$	9,741,760
Accumulated depreciation			(1,640,759	)
			8,101,001
Land			876.846
			8,977,847
Restricted deposits:
Replacement reserves			29,391
Other reserves			127,264
Tenant trust - security deposits			16,618
			173,273
Other assets:
Cash			92,929
Accounts receivable			31,027
Prepaid expenses			18,720
Intangible assets, net of amortization of $58,713			294,780
			437.456
TOTAL ASSETS		$	9.588.570

  

See accountant’s report and accompanying notes.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

BALANCE SHEET

 

DECEMBER 31, 2009

  

LIABILITIES AND PARTNERS’ EQUITY
Liabilities:
Mortgage note payable		$	6,041,441
Developer fee payable			1,487,120
Notes payable - affiliates			2,086,100
Accounts payable			638,986
Accrued interest payable			606,749
Rent received in advance			11,280
Tenant security deposits payable			16,593
Total Liabilities			10,888,268
Partners’ Equity			(1,299,692	)
TOTAL LIABILITIES AND EQUITY		$	9.588.576

 

See accountant’s report and accompanying notes.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF OPERATIONS

 

FOR THE YEAR ENDED DECEMBER 31, 2009

  

Revenue:
Rent, net		$	1,531,449
Other			50,544
Total Income			1,581,993
Expenses:
Administrative			391,351
Utilities			399,593
Operating and maintenance			252,259
Taxes and insurance			188,528
Interest			406,221
Other financial			22,986
Depreciation			596,810
Amortization			24,921
Total Expenses			2,282,669
Operating income (loss) before partnership revenue (expenses)			(700,676	)
Other expenses			(189,007	)
Net Income (Loss)		$	(889,683	)

  

See accountant’s report and accompanying notes.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CHANGES IN PARTNERS’ EQUITY

 

FOR THE YEAR ENDED DECEMBER 31, 2009

  

		Total				General Partner				Limited Partner
Balance - January 1, 2009		$	(420,009	)		$	(1,103,985	)		$683,976
Contributions			10,000				10,000
Net income (loss)			(889,583	)			(89	)		(889,594	)
Balance - December 31, 2009		$	(1,299,692	)		$	(1,094,074	)		$(205,618	)

  

See accountant’s report and accompanying notes.

  

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CASH FLOWS

 

FOR THE YEAR ENDED DECEMBER 31, 2009

 

Cash flow from operating activities:
Net Income (Loss)		$	(889,683	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization expense			621,730
Changes in certain assets and liabilities.
Accounts receivable			(26,191	)
Prepaid expenses			5,630
Accounts payable			241,567
Accrued interest payable			160,748
Rent received in advance			460
Tenant security deposits			653
Net cash provided (used) by operating activities			114,914
Cash flow from investing activities:
Additions to fixed assets			(12,279	)
Deposits to reserve accounts			(14,671	)
Other lender reserves			(4,778	)
Net cash provided (used) by investing activities			(31,728	)
Cash flow from financing activities
Proceeds from notes payable			(58,404	)
Contributions			10,000
Net cash provided (used) by financing activities			(48,404	)
Net increase (decrease) in cash and equivalents			34,782
Cash and equivalents, beginning of year			58,147
Cash and equivalents, end of year		$	92,928
Supplemental disclosure of cash flow information:
Cash paid for interest		$	370,073

 

See accountant’s report and accompanying notes.

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2009

 

NOTE 1 - NATURE OF BUSINESS

 

Grove Village Limited Partnership (the Partnership) is an Oregon limited partnership which was formed in 2004 to own and operate a 232-unit apartment project (the Project) in Dallas. Texas. The Project was rehabilitated in conformity with the provisions of Section 42 of the Internal Revenue Code, including, but not limited to, complying with tenant eligibility and rent restrictions.

 

The Partnership was initially formed by and among the General Partner, Walker Guardian LLC, an Oregon limited liability company, and the Limited Partner, Walker Bridge L.L.C. The Partnership shall continue until January 1, 2050 unless terminated as provided by the Agreement of Limited Partnership. During 2006, a new limited partner, WNC Housing Tax Credit Fund VI Series 13, L.P., was admitted and Walker Bridge L.L.C. withdrew as the limited partner.

 

The Partnership has assumed existing contracts with the US. Department of Housing and Urban Development (“HUD”) under the Section 8 Housing Assistance Payment Program, which covers 143 of the 232 housing units in the Project. The project receives a rent subsidy provided by HUD. During the year rental revenue from HUD totaled $1,025,284, representing 65 percent of total revenue. The rent subsidy contracts with HUD expire April 30, 2013 and August 31, 2013.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Method of Accounting

The accrual method of accounting is used for financial statement purposes.

 

Depreciation

Depreciation is computed for financial statement purposes using the straight-line method over the estimated useful lives of the related assets.

 

Amortization

Amortization is computed on a straight-line basis. Financing costs are amortized over 5 years.

 

Income Taxes

No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the respective partners on their income tax returns.

 

Cash Equivalents

For purposes of the statement of cash flows, the Partnership considers all investment instruments purchased with a maturity of three months or less to be cash equivalents. At December 31, 2009, there were no cash equivalents.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2009

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

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 certain reported amounts and disclosures.

 

Concentration of Credit

The Partnership maintains its cash in bark deposit accounts, which, at times, may exceed federally insured limits. The Partnership has not experienced any losses in such accounts. Management believes the Partnership is not exposed to any significant credit risk on cash and cash equivalents.

 

Accounts Receivable

Accounts receivable are reported at the amount management expects to collect on balances outstanding at December 31, 2009. Management closely monitors outstanding balances and writes off all balances deemed uncollectible.

 

Going Concern

The partnership has been evaluated as to its ability to continue to operate as a going concern. The willingness and ability of management to continue to fund operating deficits for the partnership mitigates concerns related to the lack of cash flow. As a result the partnership is expected to continue as a going concern.

 

Subsequent Events

Management of the Company has evaluated events and transactions occurring after December 31, 2009 thru March 30, 2010, the date the financial statements were available for issuance, for recognition or disclosure in the financial statements. There were no events and transactions that required recognition and disclosures in the financial statements.

 

NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD

 

Developer fee payable

Developer fees are owed to an affiliate of the general partner for services rendered during the rehabilitation of the project There is no interest charged on the note. There were no payments made during the year. As of December 31, 2009 developer fee payable totaled $1,487,120.

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2009

  

NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD (CONTINUED)

 

Property Management Fee

Management of the Project has been performed by an affiliate of the general partner. During the year ended December 31, 2009, management fees charged by the related entity totaled $97,102. Payments totaling $6,646 were made during 2009.

 

Asset Management Fee

The operating agreement provides for the limited partner to be paid an annual asset management fee beginning in 2008 in the amount of $7,500 with annual increases of 3%. The fee is cumulative. As of December 31, 2009, an asset management fee of $7,225 was earned and $15,225 was payable.

 

Other fees

Tenant and employment background screening services of the Project has been performed by an affiliate of the general partner. During the year ended December 31, 2009, screening fees totaling $7,164 were earned by and $6,460 paid to the related entity.

 

Land Acquisition Fee

The partnership agreement provides for the general partner to be paid a land acquisition fee in the amount of $15,000 for services in locating, negotiating and closing on the purchase of the real property. As of December 31, 2009 land acquisition fee payable totaled $15,000.

 

Guardian Management Loan

A loan payable to an affiliate of the General Partner totaled $737,156 for 2009. The amounts relate to operating costs of the Project, financing costs and capital improvements to the Project. Under the terms of the Agreement of Limited Partnership, the loan bears interest at 9.5% per annum over a 40 year period. The note is not secured by the property and payments shall be made solely from Net Operating Income, sale or refinancing proceeds. No payments were made during 2009. As of December 31, 2009, interest charged and interest payable totaled $70,030 and $233,433, respectively.

 

Walker Bridge Loan

Under the terms of the Agreement of Limited Partnership, amounts advanced by Walker Bridge LLC bear interest at 9.5% per annum. No payments were made during 2009. Principal due on the note totaled $1,078,154 for 2009. The note is not secured by the property and payments shall be made solely from Net Operating Income, sale or refinancing proceeds. As of December 31, 2009, interest charged and interest payable totaled $91,121 and $342,070, respectively

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2009

  

NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD (CONTINUED)

 

Apartment Acquisition Note

The partnership has a Note Payable to Apartment Acquisition LLC in the face amount of $633,400 with an initial discount of $451,726. The note is in connection with the purchase of the Project, for which Apartment Acquisitions LLC assigned the right to purchase the Project to the Partnership in exchange for a non-interest bearing note which has been discounted at 7.75%. The cumulative accretion of the discount totaled $89,116 at December 31, 2009. The accretion of the discount for 2009 is $20,131. The note is due in annual payments equal to Net Cash Flow. The note matures December 2020. The note is not secured by the property.

 

NOTE 4 - MORTGAGE PAYABLE

 

The partnership has a note payable to U.S. National Bank Association (the ’‘Bank”) in the original amount of $6,180,000 for the acquisition and operations of the project. The Bank is also the trustee for the Bonds. Monthly payments of $37,384 began in March, 2008 and the note is secured by the property. The note bears interest at 6% over a 15 year period. The note matures February 2023. The mortgage note payable was financed by proceeds of tax-exempt bonds issued by Texas Department of Housing Community Services.

 

Affiliates of the general partner have personally guaranteed the Note Payable. Aggregate maturities of long-term debt for the next five years are as follows:

 

December 31, 2010		$	83,448
2011			88,668
2012			93,187
2013			100,045
2014			106,303
and Thereafter			5,569,790
Totals		$	6,041,441

 

As of December 31, 2009, it is not practicable to make a reasonable estimate of fair value for the mortgage notes payable.

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2009

  

NOTE 5 - DISTRIBUTIONS/RESIDUAL RECEIPTS

 

Distributions payable to partners from funds provided by rental operations are permitted by the regulatory agreement, provided: 1) surplus cash, as defined by HUD, is available for such purposes; 2) the Project is in compliance with all outstanding notices of requirements for proper maintenance; and, 3) there is no default under the regulatory agreement. As of December 31, 2009, there was no surplus cash available for distribution.

 

NOTE 6 - PARTNERS’ CAPITAL

 

Since the formation of Partnership, total capital contributions of $227455, $304, and $2,586,790 have been received from the General Partner, the Special Limited Partner and the Limited Partner, respectively. The Limited Partner is required to make additional capital contributions of $456,438. No additional capital contributions are required by the General Partner and the Special Limited Partner.

 

The Partnership has entered into a construction contract for the rehabilitation of the project that provides for total construction costs of $4,676,052 all of which has been billed. During 20D8, the construction payable was paid in full.

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Operating Deficit Guaranty

Under the terms of the partnership agreement, the general partner is obligated to pay all expenses of operating and maintaining the Project in excess of gross collections to the extent necessary to maintain break-even operations, as defined in the agreement. Payments made prior to 3 consecutive months of break-even operations will not be repayable, shall not change the Interest of an Partner, and shall be considered a guaranteed payment. After break-even is achieved and for the balance of the Operating Deficit Guarantee Period, the general partner will immediately provide Operating Loans to pay Operating Deficits. Beginning in the sixth year of the Operating Deficit Guarantee Period the aggregate maximum amount of the Operating Loans the general partner will be obligated to lend will be $1,905,800, if audited financials for the preceding three calendar years show achievement of a Debt Service Coverage of 1.15. Any payments made by the general partner would be treated as non-interest bearing loans to the Partnership, to be repaid based on a priority set forth in the partnership agreement.

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2009

  

NOTE 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

 

Tax Credit Guaranty

Affiliates of the general partner (the Guarantors) have entered into a tax credit guaranty agreement. The guarantors are obligated to insure that the property will be constructed and operated in accordance with terms and conditions set forth in the various agreements in order to be eligible for the maximum annual tax credits, as defined in the tax credit guaranty agreement.

 

Incentive Management Fee

Commencing in 2008, the Partnership shall pay to the general partner, through the compliance period, an annual Incentive Management Fee equal to 40% of Net Operating Income. The Incentive Management Fee shall be payable from Net Operating Income in the manner and priority set forth in the Partnership Agreement. If the Incentive Management Fee is not paid in any year. it shall not accrue for payment in subsequent years.

 

Tax Credit Compliance Fee

Commencing in 2006, the Partnership shall pay to the general partner, through the compliance period, an annual tax credit compliance fee equal to 40% of Net Operating Income. The tax credit compliance fee shall be payable from Net Operating Income in the manner and priority set forth in the Partnership Agreement. If the tax credit compliance fee is not paid in any year. it shall not accrue for payment in subsequent years.

 

Developer Fee Guaranty

Affiliates of the general partner have entered into a guaranty agreement which guarantees the full and prompt payment of the developer fees when due.

 

 

 

 

 

SUPPLEMENTAL INFORMATION

 

 

 

 

 

  

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

  

INDEPENDENT AUDITOR’S REPORT

ON SUPPLEMENTARY INFORMATION

 

To the Partners

Grove Village Limited Partnership

Portland, Oregon

 

Our report on our audit of the basic financial statements of Grove Village Limited Partnership, HUD Section 8 Contract Nos. TX16L00024 and TX16M000311, for December 31, 2009, appears on page 3. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information on pages 17-34 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Grove Village Limited Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

/s/ PAILET, MEUNIER and LeBLANC, L.L.P.

Metairie, Louisiana

March 30, 2010

 

   

GROVE VILLAGE LIMITED PARTNERSHIP

 

BALANCE SHEET DATA

 

DECEMBER 31, 2009

  

			ASSETS
CURRENT ASSETS
	1120		Cash - operating		$	92,929
	1130		Tenant accounts receivable			45,725
	1131		Allowance for Doubtful Accounts			(25,578	)
	1130N		Net tenant accounts receivable			20,147
	1135		Accounts receivable - HUD			10,749
	1145		Accounts and notes receivable - receivable from GP			132
	1200		Prepaid expenses			18,720
			1100T   Total current assets			142,677
DEPOSITS HELD IN TRUST- FUNDED
	1191		Tenant deposits held in trust			16,618
RESTRICTED DEPOSITS AND FUNDED RESERVES
	1320		Replacement reserves			29,391
	1330		Other reserves			127,264
			1300T   Total restricted deposits and funded reserves			156,655
FIXED ASSETS
	1410		Land			876,846
	1420		Buildings			8,259,139
	1460		Furnishings			1,470,342
	1465		Miscellaneous fixed assets			12,279
			1400T   Total Fixed assets			10,618,606
			1495   Less: accumulated depreciation			(1,640,759	)
			1400N   Net fixed assets			8,977,847
OTHER ASSETS
	1520		Intangible assets, net			294,780
			1500T   Total other assets			294,780
			1000T   TOTAL ASSETS		$	9,588,576

 

   

GROVE VILLAGE LIMITED PARTNERSHIP

 

BALANCE SHEET DATA

 

DECEMBER 31, 2009

 

LIABILITIES AND EQUITY
CURRENT LIABILITIES
	2110		Accounts payable - operations		$	543,301
	2113		Accounts payable - entity			30,225
	2131		Accrued interest payable - first mortgage (or bonds)			31,246
	2134		Accrued interest payable - other loans and notes			575,503
	2150		Accrued property taxes			61,389
	2160		Notes payable (short-term)			4,072
	2210		Prepaid revenue			11,280
			2122T   Total current liabilities			1,257,015
DEPOSIT AND PREPAYMENT LIABILITIES
	2191		Tenant deposits held in trust			16,593
LONG-TERM LIABILITIES
	2320		Mortgage note payable - first			6,041,441
	2323		Other loans and notes payable - surplus cash			3,573,220
			2300T   Total long-term liabilities			9,614,661
			2000T   Total liabilities			10,888,268
PARTNERS’ EQUITY
	3130		Partners’ equity			(1,299,692	)
			2033T   TOTAL LIABILITIES AND EQUITY		$	9,588,576

  

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF OPERATIONS DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

  

RENTAL INCOME
	5120		Rent revenue - gross potential		$	848,053
	5121		Tenant assistance payments			1,089,830
			5100T   Total rent revenue			1,937,883
VACANCIES
	5220		Apartments			(394,381	)
	5250		Rental concessions			(12,053	)
			5200T   Total vacancies			(406,434	)
			5152N   Net rental revenue			1,531,449
FINANCIAL REVENUE
	5410		Earned Interest			13
	5490		Revenue from investments - Miscellaneous			39
			5400T   Total Financial Revenue			52
OTHER REVENUE
	5910		Launch/ and vending			469
	5920		Tenant charges			49,477
	5990		Miscellaneous revenue			546
			5900T   Total other revenue			50,492
			5000T   Total revenue		$	1,581,993

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF OPERATIONS DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

 

ADMINISTRATIVE EXPENSES
	6210		Advertising and marketing		$	10,004
	6250		Other renting expenses			7,615
	6310		Office salaries			56,766
	6311		Office expenses			18,058
	6312		Office or model apartment rent			24
	6320		Management fee			97,102
	6330		Manager or superintendent salaries			59,441
	6370		Bad debts			125,683
	6390		Miscellaneous administrative expenses			16,658

 

Detail - Miscellaneous administrative expenses:

 

			Description						Amount
	6390-010		Alarm monthly service			6390-020			$	902
	6390-010		Mileage			6390-020				7,136
	6390-010		HAP - Other professional fees			6390-020				732
	6390-010		Resident service coordinator			6390-020				400
	6390-010		Training			6390-020				2,158
	6390-010		Shopper survey			6390-020				450
	6390-010		Bank service charges			6390-020				704
	6390-010		Organization costs			6390-020				186
	6390-010		Other Administrative Expenses			6390-020				3,991

 

			6263T   Total administrative expenses			391,351
UTILITIES EXPENSE
	6450		Electricity			222,018
	6451		Water			55,129
	6452		Gas			68,544
	6453		Sewer			53,902
			6400T   Total utilities expense			399,593
OPERATING AND MAINTENANCE EXPENSE
	6510		Payroll			70,975
	6515		Supplies			20,853
	6520		Contracts			115,426
	6525		Garbage and trash removal			22,564
	6530		Security payroll/contract			17,292
	6546		Heating/cooling repairs and maintenance			5,148
			6500T   Total operating and maintenance expenses		$	252,259

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF OPERATIONS DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

 

TAXES AND INSURANCE
	6710		Real estate taxes		$	61,389
	6711		Payroll taxes			25,600
	6720		Property and liability insurance			63,376
	6722		Workmen’s compensation			11,891
	6723		Health insurance and other employee benefits			16,036
	6790		Misc taxes, licenses, permits and insurance			10,236
			6700T   Total taxes and insurance			188,528
FINANCIAL EXPENSES
	6820		Interest on mortgage payable			369,669
	6840		Interest on notes payable (short-term)			36,552
	6890		Miscellaneous financial expenses			22,086
			6800T   Total financial expenses			429,207
			6000T   Total cost of operations before depreciation			1,660,938
			5060T   Profit (loss) before depreciation			(78,945	)
	6600		Depreciation			(596,810	)
	6610		Amortization			(24,921	)
			5060N   Operating profit (loss)			(700,676	)
CORPORATE OR MORTGAGOR REVENUE AND EXPENSES
	7141		Interest or notes payable			(181,282	)
	7190		Other expense			(7,725	)
			7100T   Net entity revenue (expense)			(189,007	)
			Net income (loss)		$	(889,683	)

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF OPERATIONS DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

  

Part II

 

	S1000-010		Total mortgage principal payments required during the audit year (12 monthly payments). This applies to all direct loans and HUD-held and fully insured mortgages		$	78,535
	S1000-020		Total of 12 monthly deposits in the audit year into the Replacement Reserve account, as required by the Regulatory Agreement even if payments may be temporarily suspended or reduced		$	81,204
	S1000-030		Replacement Reserves, or Residual Receipts and Releases which are included as expense items on this Statement of Operations		$	66,537
	S1000-040		Project Improvement Reserve releases under the Flexible Subsidy Program that are included as expense items on this Statement of Operations		$	-

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CHANGES IN PARTNERS’ EQUITY DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

 

	S1100-010		Beginning of year balance		$	(420,009	)
	3250		Net income (loss)			(889,683	)
	S1200-430		Contributions			10,000
	3130		End of Year Balance		$	(1,299,692	)

  

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CASH FLOWS DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

 

Cash flow from operating activities:
	S1200-010		Rental receipts		$	1,505,850
	S1200-020		Interest receipts			52
	S1200-030		Other operating receipts			50,491
			S1200-040    Total Receipts			1,556,393
	S1200-050		Administrative			(194,815	)
	S1200-070		Management Fees			(6,646	)
	S1200-090		Utilities			(389,243	)
	S1200-100		Salaries and Wages			(29,315	)
	S1200-110		Operating and Maintenance			(275,258	)
	S1200-120		Real Estate Taxes			(58,726	)
	S1200-140		Property Insurance			(52,665	)
	S1200-150		Miscellaneous Taxes and Insurance			(18,686	)
	S1200-160		Tenant Security Deposits			(180	)
	S1200-180		Interest on Mortgages			(370,073	)
	S1200-190		Interest on notes payable			(20,131	)
	S1200-225		Miscellaneous financial			(25,741	)
			S1200-230   Total Disbursements			(1,441,479	)
			S1200-240   Net cash provided (used) by operating activities			114,914
Cash flow from investing activities:
	S1200-250		Net deposits to the replacement reserve			(14,672	)
	S1200-255		Net Deposits to other reserves			(4,778	)
	S1200-330		Purchase of fixed assets			(12,279	)
			S1200-350   Net cash provided (used) by investing activities			(31,729	)
Cash flow from financing activities:
	S1200-360		Principal payments on mortgages payable			(58,404	)
	S1200-430		Contributions			10,000
			S1200-455   Net cash provided (used) by financing activities			(48,404	)
	S1200-470		Net increase (decrease) in cash and equivalents			34,781
	S1200-480		Cash and equivalents, beginning of year			58,147
	S1200T		Cash and equivalents, end of year		$	92,929

  

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

STATEMENT OF CASH FLOWS DATA

 

FOR THE YEAR ENDED DECEMBER 31, 2009

 

Reconciliation of net income to net cash provided by operating activities
Net Income (Loss)					$	(889,683	)
Adjustments to reconcile net income to net cash provided by operating activities7
	6600		Depreciation expense			596,810
	6610		Amortization expense			24,921
	S1200-490		(Increase) decrease in tenant accounts receivable			(26,059	)
	S1200-500		(Increase) decrease in accounts receivable - other			(132	)
	S1200-520		(Increase) decrease in prepaid expense			5,630
	S1200-530		(Increase) decrease in tenant security deposits			2,619
	S1200-540		Increase (decrease) in accounts payable			233,841
	S1200-560		Increase (decrease) in accrued liabilities			160,748
	S1200-570		Increase (decrease) in accrued interest payable			-
	S1200-580		Increase (decrease) in tenant security deposits held			(1,966	)
	S1200-590		Increase (decrease) in prepaid revenue			460
	S1200-605		Increase in entity/construction liability accounts			7,725
			Total adjustments			1,004,597
	S1200-610		Net cash provided (used) by operating activities		$	114,914

  

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

SUPPLEMENTARY DATA REQUIRED BY HUD

 

DECEMBER 31, 2009

 

Schedule of Replacement Reserve
1320P			Balance - beginning of year		$	14,720
1320DT			Total monthly deposits			81,204
1320INT			Interest on replacement reserve accounts			4
1320VVT			Approved withdrawals			(66,537	)
1320			Balance - end of year			29,391
Schedule of Surplus Cash
	S1300-100		Cash		$	109,547
	1135		Accounts receivable - HUD			10,749
	S1300-040		Total Cash			120,296
Current Obligations:
	S1300-050		Accrued mortgage interest payable			31,246
	S1300-075		Accounts Payable			543,300
	2210		Prepaid revenue			11,280
	2191		Tenant security deposits liability			16,593
	S1300-140		Total current obligations			602,419
	S1300-150		Surplus cash (deficiency)		$	(482,123	)

  

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

SUPPLEMENTARY DATA REQUIRED BY HUD

 

DECEMBER 31, 2009

 

Schedule of Changes in Fixed Assets

 

						Balance					Additions /								Balance
						Jan. 1, 2009					Deductions								Dec. 31, 2009
Buildings			1420P			$	8,259 139		1420AT		$	-				1420			$	8,259,139
Furnishings			1460P				1,470,342		1460AT			-				1480				1,470,342
Miscellaneous			1490P				-		1490DT			12,279				1490				12,279
							9,729,481					12,279								9,741,760
Land			1410P				876,846		1410AT			-				1410				876,846
		1400PT				$	10.606.327		1400AT		$	12.279				1400T			$	10,618,606

 

Accumulated Depreciation

 

Beginning Balance			1495P			$	1,043,949
Additions			6600				596,810
Ending Balance			1495				1,640,759
Total Net Book Value			1400N			$	8,977,847

  

  

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

 

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL

 

To the Partners

Grove Village Limited Partnership

Portland, Oregon

 

We have audited the financial statements of Grove Village Limited Partnership, as of and for the year ended December 31, 2009, and have issued our report thereon dated March 30, 2010. We have also audited the Project’s compliance with requirements applicable to major U.S. Department of Housing and Urban Development (HUD)-assisted programs for the year ended December 31, 200g, and have issued our reports thereon, dated March 30, 2010.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the ‘Guide”), issued by the HUD Office of the Inspector General. Those standards and the Guide require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether the Project complied with laws and regulations, noncompliance with which would be material to a major HUD-assisted program.

 

Management of the Project is responsible for establishing and maintaining effective internal control over financial reporting and internal control over compliance. In planning and performing our audits of the financial statements and compliance, we considered the Project’s internal control over financial reporting and its internal control over compliance with requirements that could have a direct and material effect on a major HUD-assisted program as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements and compliance but not for the purpose of expressing an opinion on the effectiveness of the Project’s internal control over financial reporting and internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Project’s internal control over financial reporting and internal control over compliance.

 

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 (1) misstatements of the entity’s financial statements or (2) noncompliance with applicable requirements of a HUD-assisted program on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control such that there is a reasonable possibility that (1) a material misstatement of the entity’s financial statements or (2) material noncompliance with applicable requirements of a HUD-assisted program will not be prevented or detected and corrected on a timely basis.

  

  

Our consideration of the internal control over financial reporting and internal control over compliance was for the limited purpose described in the third paragraph of this report and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control that we consider to be material weaknesses as defined above.

 

This report is intended solely for the information and use of the audit committee, management, and the U. S. Department of Housing and Urban Development (HUD) and is not intended to be and should not be used by anyone other than these specified parties.

  

/s/ PAILET, MEUNIER and LeBLANC, L.L.P.

Metairie, Louisiana

March 30, 2010

 

  

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

  

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH

SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS

 

To the Partners

Grove Village Limited Partnership

 

We have audited the financial statements of Grove Village Limited Partnership, as of and for the year ended December 31, 2009, and have issued our report thereon dated March 30, 2010.

 

We have also audited the Partnership’s compliance with the specific program requirements governing federal financial reports, mortgage status, the replacement reserve, tenant security deposits, cash receipts and disbursements, distributions to owners, tenant application, tenant eligibility, tenant recertification, management functions, management, maintenance, and reexamination of tenants, that are applicable to each of its major HUD-assisted programs, for the years ended December 31, 2009. The management of the Partnership is responsible for compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

 

We conducted our audit of compliance with those requirements in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the “Guide”), issued by the U. S. Department of Housing and Urban Development, Office of Inspector General. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Partnership’s compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the Partnership complied, in all material respects, with the requirements described above that are applicable to its major HUD-assisted program for the year ended December 31, 2009.

 

This report is intended for the information of the audit committee, management, and the Department of Housing and Urban Development. However, this report is a matter of public record, and its distribution is not limited.

  

/s/ PAILET, MEUNIER and LeBLANC, L.L.P.

Metairie, Louisiana

March 30, 2010

 

  

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

 

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH SPECIFIC

REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION

  

To the Partners

Grove Village Limited Partnership

 

We have audited the financial statements of Grove Village Limited Partnership, as of and for the year ended December 31, 2009, and have issued our report thereon dated March 30, 2010.

 

We have also applied procedures to test the Partnership’s compliance with the Fair Housing and Non-Discrimination requirements applicable to its HUD-assisted programs for the year ended December 31, 2009.

 

Our procedures were limited to the applicable compliance requirement described in the Consolidated Audit Guide for Audits of HUD Programs (the “Guide”), issued by the Li. S. Department of Housing and Urban Development, Office of Inspector General. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Partnership’s compliance with the Fair Housing and Non-Discrimination requirements. Accordingly, we do not express such an opinion.

 

The results of our tests disclosed no instances of non-compliance that are required to be reported herein under the Guide.

 

This report is intended for the information of the audit committee, management, and the Department of Housing and Urban Development and is not intended to be and should not be used by anyone other than those specified parties.

  

/s/ PAILET, MEUNIER and LeBLANC, L.L.P.

Metairie, Louisiana

March 30, 2010

 

  

GROVE VILLAGE LIMITED PARTNERSHIP

 

December 31, 2009

  

OWNER’S CERTIFICATION

  

I hereby certify that I have read the foregoing financial statements and supplemental information of Grove Village Limited Partnership, and, to the best of my knowledge and belief, they are complete and accurate.

		Date _____________________
Thomas Brenneke, Member of Walker Guardian, LLC (52900-020) General Partner
Telephone No.	(503) 802-3600	(52900-040)
Date of Certification		(52900-050)
Partnership Employer Identification Number:		20-1609403

 

 

GROVE VILLAGE LIMITED PARTNERSHIP

 

December 31, 2009

  

MANAGEMENT AGENT’S CERTIFICATION

  

I hereby certify that I have read the foregoing financial statements and supplemental information of Grove Village Limited Partnership, and to the best of my knowledge and belief, they are complete and accurate.

  

		Date _____________________
Thomas Brenneke (53000-020) Managing Member General Partner

  

Identification of responsible party -

 

Company:	Guardian Management, LLC (S3000-030)
Federal I.D. No.:	93-1325326 (S3000-040)
Individual:	Thomas Brenneke (S3000-050)

 

   

GROVE VILLAGE LIMITED PARTNERSHIP

 

December 31, 2009

  

AUDITOR INFORMATION

  

Lead Auditor:	S3200-010	Pailet, Meunier & LeBlanc, L.L.P.
	S3200-020	Rodney
	33200-030	P.
	S3200-040	LeBlanc
	53200-050	3421 N. Causeway Boulevard
	53200-060	Suite 701
	S3200-070	Metairie
	S3200-080	LA
	S3200-090	70002
	83200-100	3733
	83200-110	(504) 837-0770
Federal I.D. Number:	S3200-120	72-0757201
Date of Auditor’s Report	63200-130	March 30, 2010