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St. Martha's Senior Housing Corporation d/b/a TheVillage of St. Martha's

(a not-for-profit corporation)

HUD Project No. 044-EE104

Financial Report

with Supplemental Information

June 30, 2018

St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's


Certificate of Officers

We certify that we have examined the attached financial statements and supplemental information of HUD ProjectNo. 044-EE104, St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's, and to the best of ourknowledge and belief, the same is a true statement of the financial condition as of June 30, 2018.

Duane LewisTreasurer

September 13, 2018Date

Artelia GriggsSecretary


ID# 20-8088875Employer Identification Number



Management Agent's Certification

We certify that we have examined the attached financial statements and supplemental information of HUD ProjectNo. 044-EE104, St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's, and to the best of ourknowledge and belief, the same is a true statement of the financial condition as of June 30, 2018.

Cheryl Carney Management Agent Representative


(248) 281-2020Telephone Number

ID# 38-1387145Management Company Employer IdentificationNumber

Andrea FeliceProperty Manager



Contents

Independent Auditor's Report 1-2

Financial Statements

Balance Sheet 3-4

Statement of Activities 5-6

Statement of Changes in Deficiency in Net Assets 7

Statement of Cash Flows 8-9

Notes to Financial Statements 10-12

Supplemental Information 13

Independent Auditor's Report on Supplemental Information 14

Balance Sheet Data 15-16

Statement of Activities Data 17-19

Statement of Changes in Deficiency in Net Assets Data 20

Statement of Cash Flows Data 21-22

Supplemental Information 23-24

Schedule of Changes in Fixed Asset Accounts 25-26

Schedule of Expenditures of Federal Awards 27

Computation of Surplus Cash 28

Report on Internal Control Over Financial Reporting and on Compliance and OtherMatters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 29-31

Report on Compliance for Each Major Federal Program and Report on Internal ControlOver Compliance 32-34

Schedule of Findings and Questioned Costs 35-37

Independent Auditor's Report

To the Board of DirectorsSt. Martha's Senior Housing Corporation

d/b/a The Village of St. Martha's

Report on the Financial Statements

We have audited the accompanying financial statements of St. Martha's Senior Housing Corporation d/b/a TheVillage of St. Martha's (the "Organization"), which comprise the balance sheet as of June 30, 2018 and 2017 andthe related statements of activities, changes in deficiency in net assets, and cash flows for the years then ended,and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith accounting principles generally accepted in the United States of America; this includes the design,implementation, and maintenance of internal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted ouraudits in accordance with auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express nosuch opinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's as of June 30, 2018 and2017 and the results of its changes in deficiency in net assets and its cash flows for the years then ended inaccordance with accounting principles generally accepted in the United States of America.

1

Carol.Rendak

New Stamp

Carol.Rendak

New Stamp



Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated September 13, 2018on our consideration of St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's' internal controlover financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts,grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internalcontrol over financial reporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering St. Martha's Senior Housing Corporation d/b/aThe Village of St. Martha's' internal control over financial reporting and compliance.

September 13, 2018

By: Yvonne McNulty, CPA

Engagement Partner27400 Northwestern Highway

Southfield, MI 48034

Federal ID Number: 38-1357951

Phone Number: (248) 352-2500

2



Balance SheetJune 30, 2018 and 2017

2018 2017

Assets

Current AssetsCash - Operations $ 279 $ 7,829Tenant accounts receivable 68 -Accounts receivable - HUD 1,506 1,604Prepaid expenses 8,595 6,809

Total current assets 10,448 16,242

Deposits - Held in TrustTenant deposits held in trust 14,540 16,275

Deposits - FundedEscrow deposits 2,210 2,209Replacement reserve 216,240 205,576

Residual receipts reserve 43,031 43,022

Total deposits - Funded 261,481 250,807

Fixed AssetsLand and land improvements 166,635 156,885Buildings and building improvements 5,257,193 5,252,486Office furniture and equipment 82,725 78,332Maintenance equipment 19,074 14,042Miscellaneous fixed assets 60,664 58,384

Total fixed assets 5,586,291 5,560,129

Accumulated depreciation (1,242,985) (1,094,488)

Net fixed assets 4,343,306 4,465,641

Total assets $ 4,629,775 $ 4,748,965

See notes to financial statements. 3



Balance Sheet (Continued)June 30, 2018 and 2017

2018 2017

Liabilities and Deficiency in Net Assets

Current LiabilitiesAccounts payable - Operations (Note 4) $ 27,335 $ 16,477Accrued wages payable 6,634 4,407Accrued payroll taxes payable 1,126 1,270Residual receipts liability 43,031 43,022Prepaid revenue 67 43

Total current liabilities 78,193 65,219

Deposits - Held in Trust (Contra)Tenant deposits held in trust (contra) 12,102 11,943

Long-term LiabilitiesCapital advance (Note 3) 5,175,900 5,175,900

Total liabilities 5,266,195 5,253,062

Deficiency in Net Assets

Deficiency in unrestricted net assets (636,420) (504,097)

Total deficiency in net assets (636,420) (504,097)

Total liabilities and deficiency in net assets $ 4,629,775 $ 4,748,965




Statement of ActivitiesYears Ended June 30, 2018 and 2017

2018 2017

Rent RevenueRent revenue - Gross potential $ 139,136 $ 140,361Tenant assistance payments 274,816 273,591

Total rent revenue (potential at 100% occupancy) 413,952 413,952

VacanciesApartments (10,316) (4,742)

Residual receipts adjustment (9) (8)

Total vacancies (10,325) (4,750)

Net rent revenue (rent revenue less vacancies) 403,627 409,202

Financial RevenueProject operations 2 2Investments - Residual receipts 9 9

Investments - Replacement reserve 211 197

Total financial revenue 222 208

Other RevenueLaundry and vending revenue 2,368 2,486Tenant charges 1,714 -Gifts (Note 4) - 8,019

Miscellaneous revenue 11,545 11,937

Total other revenue 15,627 22,442

Total revenue 419,476 431,852

Administrative ExpensesConventions and meetings 1,469 107Management consultants 23,106 22,892Advertising and marketing - 401Other renting expenses 341 90Office salaries 20,234 18,356Office expenses 23,085 24,855Management fee (Note 4) 24,288 24,288Manager or superintendent salaries 56,772 57,527Legal expenses 1,595 93Auditing expenses 6,700 6,700Bookkeeping fees/Accounting services (Note 4) 5,520 5,520Bad debts 900 104Miscellaneous administrative expenses 4,973 2,766

Total administrative expenses 168,983 163,699




Statement of Activities (Continued)Years Ended June 30, 2018 and 2017

2018 2017

Utilities ExpensesElectricity $ 24,757 $ 26,599Water 6,595 5,003Gas 6,200 9,594

Sewer 9,969 8,921

Total utilities expenses 47,521 50,117

Operating and Maintenance ExpensesPayroll 20,639 32,865Supplies 7,360 8,566Contracts 50,857 46,355Garbage and trash removal 1,741 2,043Security payroll/Contract 49,515 46,531Heating/Cooling repairs and maintenance 720 2,804Snow removal 10,824 4,250

Miscellaneous operating and maintenance expenses 7,333 4,972

Total operating and maintenance expenses 148,989 148,386

Taxes and InsurancePayroll taxes (FICA) 6,637 7,402Property and liability insurance (hazard) 19,424 17,411

Health insurance and other employee benefits 11,696 14,539

Total taxes and insurance 37,757 39,352

Financial Expenses

Miscellaneous financial expenses 52 37

Total financial expenses 52 37

Total costs of operations before depreciation 403,302 401,591

Change in Net Assets before Depreciation 16,174 30,261

Depreciation Expense 148,497 149,346

Change in Total Net Assets $ (132,323) $ (119,085)




Statement of Changes in Deficiency in Net AssetsYears Ended June 30, 2018 and 2017

Deficiency in Net Assets - July 1, 2016 $ (385,012)

Increase in deficiency in net assets (119,085)

Deficiency in Net Assets - June 30, 2017 (504,097)

Increase in deficiency in net assets (132,323)

Deficiency in Net Assets - June 30, 2018 $ (636,420)




Statement of Cash FlowsYears Ended June 30, 2018 and 2017

2018 2017

Cash Flows from Operating ActivitiesReceipts:

Rental $ 402,790 $ 407,816Interest 222 208Gifts - 8,019Other cash receipts 15,627 14,423

Total receipts 418,639 430,466

Disbursements:Administrative (60,217) (44,151)Management fee (24,288) (24,288)Utilities (46,204) (50,026)Salaries and wages (97,645) (108,748)Operating and maintenance (124,338) (131,074)Property insurance (18,889) (16,999)Miscellaneous taxes and insurance (19,614) (20,987)Tenant security deposits 1,894 (1,228)Miscellaneous financial (52) (37)

Total disbursements (389,353) (397,538)

Net cash provided by operating activities 29,286 32,928

Cash Flows from Investing ActivitiesNet deposit to the mortgage escrow account (1) -Net deposit to the reserve for replacement account (10,664) (19,370)Net deposit to the residual receipts account (9) (8)Net purchase of fixed assets (26,162) (14,014)

Net cash used in investing activities (36,836) (33,392)

Net Decrease in Cash (7,550) (464)

Cash - Beginning of year 7,829 8,293

Cash - End of year $ 279 $ 7,829




Statement of Cash Flows (Continued)Years Ended June 30, 2018 and 2017

2018 2017

Reconciliation of Change in Deficiency in Net Assets to Net CashProvided by Operating Activities

Change in deficiency in net assets $ (132,323) $ (119,085)Adjustments to reconcile change in deficiency in net assets to net cash

from operating activities:Depreciation 148,497 149,346(Increase) decrease in assets:

Tenant accounts receivable (968) -Accounts receivable - Other 98 (1,325)Prepaid expenses (1,786) 434Cash restricted for tenant security deposits 1,735 (1,565)

Increase (decrease) in liabilities:Accounts payable - Operations 10,858 7,236Accrued liabilities 2,083 (2,389)Tenant security deposits held in trust 159 337Prepaid revenue 24 (69)

Other changes to reconcile change in deficiency in net assets to netcash provided by operating activities 909 8

Net cash provided by operating activities $ 29,286 $ 32,928




Notes to Financial StatementsJune 30, 2018 and 2017

Note 1 - Nature of Business

St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's (the “Organization”) is a not-for-profit corporation that owns and operates a 46-unit affordable housing rental project for elderly persons(the "Project"). The Project is located in Detroit, Michigan, is operating under HUD Section 202 of theNational Housing Act, and is regulated by the U.S. Department of Housing and Urban Development(HUD) with respect to rental charges and operating methods.

The Organization is sponsored by Presbyterian Villages of Michigan (PVM). PVM is a comprehensive,diverse, and faith-based organization serving seniors in multiple settings since 1945. Its mission, guidedby its Christian heritage, is to serve seniors of all faiths and to create new possibilities for quality living.PVM's tradition of social accountability and servant leadership is further reflected in its statement ofbeliefs and values and its various operational philosophies and practices. Canterbury Healthcare, Inc.d/b/a Canterbury on the Lake is a member of the organization.

Note 2 - Significant Accounting Policies

Basis of Accounting

The Organization maintains its accounting records and prepares its financial statements on an accrualbasis, which is in accordance with accounting principles generally accepted in the United States ofAmerica.

The accompanying schedule of expenditures of federal awards includes the federal grant activity of St.Martha's Senior Housing Corporation d/b/a The Village of St. Martha's and is presented on the samebasis of accounting as the financial statements. The information in this schedule is presented inaccordance with the requirements of Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (the "Uniform Guidance"). Therefore, some amounts presented in thisschedule may differ from amounts presented in, or used in the preparation of, the financial statements.

Deposits Funded

The funds controlled by the Organization represent restricted funds for a replacement reserve, a residualreceipts reserve, and an insurance escrow. The insurance escrow consists of deposits by theOrganization to offset insurance expenses. The replacement reserve consists of deposits by theOrganization to offset specific expenses and to replace structural elements and mechanical equipmentupon consent of HUD. Future monthly commitments for the funding of the replacement reserve accounttotal $1,900. The residual receipts reserve consists of surplus funds calculated based on a HUD-prescribed formula and can be disbursed only at HUD's discretion. Excess residual receipts are requiredto be remitted to HUD upon termination of the PRAC contract. Excess residual receipts that are deemedprobable to be paid to or recaptured by HUD are recorded as a liability. The excess residual receiptsreserve was $43,031 and $43,022 at June 30, 2018 and 2017, respectively, and is included in currentliabilities on the balance sheet. Each year, the liability is adjusted to reflect current year activity to theresidual receipts, including required deposits, earned interest, approved withdrawals, and anyadjustments to the amounts deemed probable to be paid to or recaptured by HUD.

Deposits Held in Trust

In accordance with the Regulatory Agreement with HUD, the Organization is required to maintain a tenantsecurity deposit trust account. The amount must at all times be equal to or exceed the aggregate of alloutstanding obligations to tenants for refundable security deposits. The tenant security deposits fundconsists of cash.

10




Note 2 - Significant Accounting Policies (Continued)

Regulatory Agreement

A Regulatory Agreement with HUD was signed in connection with the capital advance. No violations ofthis agreement were noted for the years ended June 30, 2018 and 2017.

Classification of Net Assets

Deficiencies in net assets of the Organization are classified as permanently restricted, temporarilyrestricted, or unrestricted depending on the presence and characteristics of donor-imposed restrictionslimiting the Organization's ability to use or dispose of contributed assets or the economic benefitsembodied in those assets. All net assets of the Organization at June 30, 2018 and 2017 are consideredunrestricted.

Income Taxes

No provision for income taxes has been included in the financial statements since the Organization isexempt from such taxes under Section 501(c)(3) of the Internal Revenue Code.

Tenant Accounts Receivable

Accounts receivable represent amounts due from tenants and are stated at net rent amounts. Tenantaccounts generally are collectible as long as the tenant is occupying the unit. When the tenant vacatesthe unit, any unpaid balance remaining after application of the security deposit is charged to bad debtexpense. There was no allowance for bad debts at June 30, 2018 and 2017.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principlesrequires management to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the financial statements and thereported amounts of revenue and expenses during the reporting period. Actual results could differ fromthose estimates.

Fixed Assets

Land, buildings, equipment, furnishings, and furniture are recorded at cost when purchased or appraisedvalue if donated. Depreciation is computed principally on a straight-line basis over the estimated usefullives of the assets, which range from 5 to 40 years.

Maintenance, repairs, and renewals that do not involve any substantial betterments are charged toexpense when incurred. Expenditures that increase the useful life of the property are capitalized.

Rental Income

Units that are designated for occupancy by eligible low-income tenants under a Section 202 project rentalassistance contract require tenants to contribute a portion of the contract rent based on formulasprescribed by the U.S. Department of Housing and Urban Development. Housing assistance paymentsare received for the balance of contract rent from HUD. The current contract expires on August 31, 2019.It is management's intent to renew the contract prior to the expiration date.

Impairment or Disposal of Long-lived Assets

The Organization recognizes impairment of long-lived assets used in operations when indicators ofimpairment are present and the undiscounted cash flows estimated to be generated by those assets areless than the assets' carrying amount. No impairment of the Organization's rental property has occurred.

11




Note 2 - Significant Accounting Policies (Continued)

Subsequent Events

The financial statements and related disclosures include evaluation of events up through and includingSeptember 13, 2018, which is the date the financial statements were available to be issued.

Note 3 - Capital Advance

The Organization obtained a capital advance from HUD which was used to assist in financing theconstruction of the Project in accordance with the provisions of Section 202 of the Housing Act of 1959.The capital advance at June 30, 2018 and 2017 is $5,175,900, bears no interest, and is not required tobe repaid as long as the housing remains available to very low-income households and the aged and/orhandicapped for a period of 40 years, ending in March 2048. In addition, the Organization is subject tothe additional requirements of the HUD Section 202 program. If default occurs, then HUD, at its option,may accelerate the entire principal balance and charge interest. It is the Organization's intent to complywith the time requirement and Section 202. Based on the time and provision requirements, the advance isrecorded as long-term liability. The capital advance is collateralized by the land and building of theOrganization.

Note 4 - Related Party Transactions

Director appointments are approved by Presbyterian Villages of Michigan (PVM) and CanterburyHealthcare, Inc. d/b/a Canterbury on the Lake. PVM is a related not-for-profit organization that is also theHUD-approved management agent.

As of June 30, 2018 and 2017, $165 and $514, respectively, is due to PVM for payment of expendituresand is included in accounts payable.

In addition, during 2018 and 2017, the PVM Foundation provided the Organization with $0 and $8,019,respectively, in contribution support through the allocation of funds raised by the Organization andmatching grants from the PVM Foundation.

The property management agreement provides that a management fee in the amount of 6.18 percent ofgross rents collected be paid to PVM, limited to $44 per unit per month. In addition, the Organization paysaccounting service fees to PVM, which are included in the annual budget. The Organization incurredmanagement fees of $24,288 for the years ended June 30, 2018 and 2017. In addition, accountingservice fees of $5,520 were incurred to PVM for the years ended June 30, 2018 and 2017.

Note 5 - Current Vulnerability Due to Certain Concentrations

The Organization's sole asset is St. Martha's Senior Housing Corporation d/b/a The Village of St.Martha's (the "Project"). The Project’s operations are concentrated in the senior housing market. Inaddition, the Project operates in a heavily regulated environment. The operations of the Project aresubject to the administrative directives, rules, and regulations of federal, state, and local regulatoryagencies, including, but not limited to, HUD. Such administrative directives, rules, and regulations aresubject to change by an Act of Congress or an administrative change mandated by HUD. Such changesmay occur with little notice or inadequate funding to pay for the related cost, including additionaladministrative burden, to comply with a change.

12

Supplemental Information

13

Independent Auditor's Report on Supplemental Information



We have audited the financial statements of St. Martha's Senior Housing Corporation d/b/a The Village of St.Martha's as of and for the year ended June 30, 2018 and have issued our report thereon dated September 13,2018, which contained an unmodified opinion on those financial statements. Our audit was performed for thepurpose of forming an opinion on the financial statements as a whole. The accompanying supplementalinformation, including the schedule of expenditures of federal awards, is presented for the purpose of additionalanalysis, as required by HUD and the Uniform Guidance, and is not a required part of the financial statements.For the purpose of electronic submission to the U.S. Department of Housing and Urban Development, RealEstate Assessment Center (REAC), the supplemental information is also deemed to include the financial datatemplate information as presented in the balance sheet and the statements of activities, changes in deficiency innet assets, and cash flows. Such information is the responsibility of management and was derived from, andrelates directly to, the underlying accounting and other records used to prepare the financial statements. Theinformation has been subjected to the auditing procedures applied in the audit of the financial statements andcertain additional procedures, including comparing and reconciling such information directly to the underlyingaccounting and other records used to prepare the financial statements or to the financial statements themselves,and other additional procedures in accordance with auditing standards generally accepted in the United States ofAmerica. In our opinion, the information is fairly stated in all material respects in relation to the financialstatements as a whole.

September 13, 2018

14

Carol.Rendak

New Stamp

Carol.Rendak

New Stamp



Balance Sheet DataJune 30, 2018

Assets

Current Assets1120 Cash - Operations $ 2791130 Tenant accounts receivable 681135 Accounts receivable - HUD 1,5061200 Prepaid expenses 8,595

1100T Total current assets 10,448

Deposits - Held in Trust1191 Tenant deposits held in trust 14,540

Deposits - Funded1310 Escrow deposits 2,2101320 Replacement reserve 216,240

1340 Residual receipts reserve 43,031

1300T Total deposits - Funded 261,481

Fixed Assets1410 Land and land improvements 166,6351420 Buildings and building improvements 5,257,1931465 Office furniture and equipment 82,7251470 Maintenance equipment 19,0741490 Miscellaneous fixed assets 60,664

1400T Total fixed assets 5,586,291

1495 Accumulated depreciation (1,242,985)

1400N Net fixed assets 4,343,306

1000T Total assets $ 4,629,775

15



Balance Sheet Data (Continued)June 30, 2018

Liabilities and Deficiency in Net Assets

Current Liabilities2110 Accounts payable - Operations $ 27,3352120 Accrued wages payable 6,6342121 Accrued payroll taxes payable 1,1262190 Residual receipts liability 43,0312210 Prepaid revenue 67

2122T Total current liabilities 78,193

Deposits - Held in Trust (Contra)2191 Tenant deposits held in trust (contra) 12,102

Long-term Liabilities2310 Capital advance 5,175,900

2000T Total liabilities 5,266,195

Deficiency in Net Assets

3131 Deficiency in unrestricted net assets (636,420)

3130 Total deficiency in net assets (636,420)

2033T Total liabilities and deficiency in net assets $ 4,629,775

16



Statement of Activities DataYear Ended June 30, 2018

Rent Revenue5120 Rent revenue - Gross potential $ 139,136

5121 Tenant assistance payments 274,816

5100T Total rent revenue (potential at 100% occupancy) 413,952

Vacancies5220 Apartments (10,316)

5290 Miscellaneous (9)

5200T Total vacancies (10,325)

5152N Net rent revenue (rent revenue less vacancies) 403,627

Financial Revenue5410 Project operations 25430 Investments - Residual receipts 9

5440 Investments - Replacement reserve 211

5400T Total financial revenue 222

Other Revenue5910 Laundry and vending revenue 2,3685920 Tenant charges 1,714

5990 Miscellaneous revenue 11,545

5900T Total other revenue 15,627

5000T Total revenue 419,476

Administrative Expenses6203 Conventions and meetings 1,4696204 Management consultants 23,1066250 Other renting expenses 3416310 Office salaries 20,2346311 Office expenses 23,0856320 Management fee 24,2886330 Manager or superintendent salaries 56,7726340 Legal expenses 1,5956350 Auditing expenses 6,7006351 Bookkeeping fees/Accounting services 5,5206370 Bad debts 900

6390 Miscellaneous administrative expenses 4,973

6263T Total administrative expenses 168,983

Utilities Expenses6450 Electricity 24,7576451 Water 6,5956452 Gas 6,200

6453 Sewer 9,969

6400T Total utilities expenses 47,521

17



Statement of Activities Data (Continued)Year Ended June 30, 2018

Operating and Maintenance Expenses6510 Payroll $ 20,6396515 Supplies 7,3606520 Contracts 50,8576525 Garbage and trash removal 1,7416530 Security payroll/Contract 49,5156546 Heating/Cooling repairs and maintenance 7206548 Snow removal 10,824

6590 Miscellaneous operating and maintenance expenses 7,333

6500T Total operating and maintenance expenses 148,989

Taxes and Insurance6711 Payroll taxes (FICA) 6,6376720 Property and liability insurance (hazard) 19,424

6723 Health insurance and other employee benefits 11,696

6700T Total taxes and insurance 37,757

Financial Expenses6890 Miscellaneous financial expenses 52

6800T Total financial expenses 52

6000T Total costs of operations before depreciation 403,302

5060T Change in Net Assets before Depreciation 16,174

6600 Depreciation Expense 148,497

3250 Change in Total Net Assets $ (132,323)

18



Statement of Activities Data (Continued)Supplemental InformationYear Ended June 30, 2018

S1000-010 1 Total principal required under the mortgage, even if payments under aworkout agreement are less or more than those required under themortgage $ 0

S1000-020 2 Replacement reserve deposits required by the Regulatory Agreement oramendments thereto, even if payments may be temporarily suspended orwaived 22,795

S1000-030 3 Replacement reserve or residual receipt releases that are included asexpense items on this profit and loss statement 0

S1000-040 4 Project improvement reserve releases under the flexible subsidy programthat are included as expense items on this profit and loss statement 0

19



Statement of Changes in Deficiency in Net Assets DataYear Ended June 30, 2018

S1100-050 Deficiency in Net Assets - July 1, 2017 $ (504,097)

3250 Increase in deficiency in net assets (132,323)

3130 Deficiency in Net Assets - June 30, 2018 $ (636,420)

20



Statement of Cash Flows DataYear Ended June 30, 2018

Cash Flows from Operating ActivitiesReceipts:

S1200-010 Rental $ 402,790S1200-020 Interest 222S1200-030 Other cash receipts 15,627

S1200-040 Total receipts 418,639

Disbursements:S1200-050 Administrative (60,217)S1200-070 Management fee (24,288)S1200-090 Utilities (46,204)S1200-100 Salaries and wages (97,645)S1200-110 Operating and maintenance (124,338)S1200-140 Property insurance (18,889)S1200-150 Miscellaneous taxes and insurance (19,614)S1200-160 Tenant security deposits 1,894S1200-220 Miscellaneous financial (52)

S1200-230 Total disbursements (389,353)

S1200-240 Net cash provided by operating activities 29,286

Cash Flows from Investing ActivitiesS1200-245 Net deposit to the mortgage escrow account (1)S1200-250 Net deposit to the reserve for replacement account (10,664)S1200-260 Net deposit to the residual receipts account (9)S1200-330 Net purchase of fixed assets (26,162)

S1200-350 Net cash used in investing activities (36,836)

S1200-470 Net Decrease in Cash (7,550)

S1200-480 Cash - Beginning of year 7,829

S1200T Cash - End of year $ 279

21



Statement of Cash Flows Data (Continued)Year Ended June 30, 2018

Reconciliation of Change in Deficiency in Net Assets to Net CashProvided by Operating Activities

3250 Change in deficiency in net assets $ (132,323)Adjustments to reconcile change in deficiency in net assets to net cash

from operating activities:6600 Depreciation 148,497

(Increase) decrease in assets:S1200-490 Tenant accounts receivable (968)S1200-500 Accounts receivable - Other 98S1200-520 Prepaid expenses (1,786)S1200-530 Cash restricted for tenant security deposits 1,735

Increase in liabilities:S1200-540 Accounts payable - Operations 10,858S1200-560 Accrued liabilities 2,083S1200-580 Tenant security deposits held in trust 159S1200-590 Prepaid revenue 24S1200-600 Other changes to reconcile change in deficiency in net assets to net

cash provided by operating activities 909

S1200-610 Net cash provided by operating activities $ 29,286

22



Supplemental InformationYear Ended June 30, 2018

1. Schedule of Reserve for Replacements

In accordance with the provisions of the Regulatory Agreement, restricted cash is held by Huntington Bank to beused for replacement of property with the approval of HUD as follows:

1320P Balance - July 1, 2017 $ 205,576

1320DT Monthly deposits ($1,899.58 x 12) 22,795

1320INT Interest 211

1320WT Approved withdrawals (12,237)

1320OWT Other withdrawals - Bank service charges (105)

1320 Balance - June 30, 2018 $ 216,240

2. Schedule of Residual Receipts

In accordance with the provisions of the Regulatory Agreement, surplus cash is calculated per the HUD formulaand deposited into the residual receipts account. Restricted cash is held by Huntington Bank to be used for anyproject purpose with the approval of HUD as follows:

1340P Balance - July 1, 2017 $ 43,022

1340INT Interest 9

1340 Balance - June 30, 2018 $ 43,031

3. Computation of Surplus Cash - Form HUD 93486 - See attached

4. Schedule of Changes in Fixed Asset Accounts - See attached

5. Schedule of 5300 Accounts - N/A

6. Schedule of 6900 Accounts - N/A

7. Nursing Home Data - N/A

8. Detail of Accounts:

2190 Residual receipts liability $ 43,031

5990 Cable/Satellite TV $ 11,095Miscellaneous revenue 450

Total $ 11,545

6890 Interest on security deposits $ 52

1320OWT Bank charges $ (105)

23



Supplemental Information (Continued)Year Ended June 30, 2018

8. Detail of Accounts (Continued):

5290 Residual receipts liability adjustment $ (9)

S1200-600 Residual receipts liability adjustment $ 9Bad debt expense 900

Total $ 909

24



Schedule of Changes in Fixed Asset AccountsYear Ended June 30, 2018

Assets Accumulated Depreciation

BalanceJuly 1, 2017 Additions Deductions

BalanceJune 30,

2018Balance

July 1, 2017Current

Provision Deductions

BalanceJune 30,

2018

Net BookValue June

30, 2018

1410 Land and landimprovements $ 156,885 $ 9,750 $ - $ 166,635 $ 408 $ 1,305 $ - $ 1,713 $ 164,922

1420 Buildings and buildingimprovements 5,252,486 4,707 - 5,257,193 984,429 131,873 - 1,116,302 4,140,891

1465 Office furniture andequipment 78,332 4,393 - 82,725 52,799 8,053 - 60,852 21,873

1470 Maintenanceequipment 14,042 5,032 - 19,074 7,902 1,656 - 9,558 9,516

1490 Miscellaneous fixedassets 58,384 2,280 - 60,664 48,950 5,610 - 54,560 6,104

Total $ 5,560,129 $ 26,162 $ - $ 5,586,291 $ 1,094,488 $ 148,497 $ - $ 1,242,985 $ 4,343,306

25



Schedule of Changes in Fixed Asset Accounts (Continued)Year Ended June 30, 2018

Fixed Asset Addition Detail:

Land and land improvements -Concrete $ 9,750

Buildings and buildingimprovements - Flooring 4,707

Office furniture and equipment -Stacking chairs 4,393

Maintenance equipment:Boiler valves 3,850Heater exchange 1,182

Total maintenance equipment 5,032

Miscellaneous fixed assets - Entryand exit gates upgrade 2,280

Total $ 26,162

26



Schedule of Expenditures of Federal AwardsYear Ended June 30, 2018

Federal Agency/Pass-through Agency/Program Title CFDA NumberFederal

Expenditures

U.S. Department of Housing and Urban Development - Supportive Housingfor the Elderly:

Capital Advance 14.157 $ 5,175,900Project Rental Assistance Contract 14.157 274,816

Total federal awards $ 5,450,716

27



Computation of Surplus CashJune 30, 2018

S1300-010 Cash $ 14,819

1135 Accounts receivable - HUD 1,506

S1300-040 Total cash 16,325

Current ObligationsS1300-075 Accounts payable - 30 days 27,335S1300-100 Accrued expenses (not escrowed) 7,760

2210 Prepaid revenue 67

2191 Tenant/Patient deposits held in trust (contra) 12,102

S1300-140 Total current obligations 47,264

S1300-150 Surplus cash (deficiency) $ (30,939)

S1300-210 Deposit due residual receipts $ -

28

Report on Internal Control Over FinancialReporting and on Compliance and Other Matters

Based on an Audit of Financial StatementsPerformed in Accordance with Government

Auditing Standards

29

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit ofFinancial Statements Performed in Accordance with Government Auditing Standards


To Management and the Board of DirectorsSt. Martha's Senior Housing Corporation


We have audited, in accordance with auditing standards generally accepted in the United States of America andthe standards applicable to financial audits contained in Government Auditing Standards issued by theComptroller General of the United States, the financial statements of St. Martha's Senior Housing Corporationd/b/a The Village of St. Martha's (the "Organization"), which comprise the balance sheet as of June 30, 2018 andthe related statements of activities, changes in deficiency in net assets, and cash flows for the year then ended,and the related notes to the financial statements and have issued our report thereon dated September 13, 2018.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Organization's internal controlover financial reporting (internal control) to determine the audit procedures that are appropriate in thecircumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not expressan opinion on the effectiveness of the Organization's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management oremployees, 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 a combination of deficiencies, in internalcontrol such that there is a reasonable possibility that a material misstatement of the Organization's financialstatements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is adeficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this sectionand was not designed to identify all deficiencies in internal control that might be material weaknesses orsignificant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internalcontrol that we consider to be material weaknesses. However, material weaknesses may exist that have not beenidentified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Organization's financial statements are free frommaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements, noncompliance with which could have a direct and material effect on thedetermination of financial statement amounts. However, providing an opinion on compliance with those provisionswas not an objective of our audit and, accordingly, we do not express such an opinion. The results of our testsdisclosed no instances of noncompliance or other matters that are required to be reported under GovernmentAuditing Standards.

30

Carol.Rendak

New Stamp

Carol.Rendak

New Stamp

To Management and the Board of DirectorsSt. Martha's Senior Housing Corporation


Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and theresults of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control oron compliance. This report is an integral part of an audit performed in accordance with Government AuditingStandards in considering the Organization's internal control and compliance. Accordingly, this communication isnot suitable for any other purpose.

September 13, 2018

31

Report on Compliance for Each Major FederalProgram and Report on Internal Control Over

Compliance

32

Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance




Report on Compliance for Each Major Federal Program

We have audited St. Martha's Senior Housing Corporation d/b/a The Village of St. Martha's' (the "Organization")compliance with the types of compliance requirements described in the U.S. Office of Management and Budget(OMB) Compliance Supplement that could have a direct and material effect on the Organization's major federalprogram for the year ended June 30, 2018. The Organization's major federal program is identified in the summaryof auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of itsfederal awards applicable to its federal program.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of the Organization's major federal programsbased on our audit of the types of compliance requirements referred to above.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements forFederal Awards (the "Uniform Guidance"). Those standards and the Uniform Guidance require that we plan andperform the audit to obtain reasonable assurance about whether noncompliance with the types of compliancerequirements referred to above that could have a direct and material effect on a major federal program occurred.An audit includes examining, on a test basis, evidence about the Organization's compliance with thoserequirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federalprogram. However, our audit does not provide a legal determination of the Organization's compliance.

Opinion on Each Major Federal Program

In our opinion, the Organization complied, in all material respects, with the types of compliance requirementsreferred to above that could have a direct and material effect on its major federal program for the year endedJune 30, 2018.

Report on Internal Control Over Compliance

Management of the Organization is responsible for establishing and maintaining effective internal control overcompliance with the types of compliance requirements referred to above. In planning and performing our audit ofcompliance, we considered the Organization's internal control over compliance with the types of requirementsthat could have a direct and material effect on each major federal program to determine the auditing proceduresthat are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each majorfederal program and to test and report on internal control over compliance in accordance with the UniformGuidance, but not for the purpose of expressing an opinion on the effectiveness of internal control overcompliance. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal controlover compliance.

33

Carol.Rendak

New Stamp

Carol.Rendak

New Stamp



A deficiency in internal control over compliance exists when the design or operation of a control over compliancedoes not allow management or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on atimely basis. A material weakness in internal control over compliance is a deficiency, or a combination ofdeficiencies, in internal control over compliance such that there is a reasonable possibility that materialnoncompliance with a type of compliance requirement of a federal program will not be prevented, or detected andcorrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or acombination of deficiencies, in internal control over compliance with a type of compliance requirement of a federalprogram that is less severe than a material weakness in internal control over compliance, yet important enough tomerit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraphof this section and was not designed to identify all deficiencies in internal control over compliance that might bematerial weaknesses or significant deficiencies. We did not identify any deficiencies in internal control overcompliance that we consider to be material weaknesses. However, material weaknesses may exist that have notbeen identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing ofinternal control over compliance and the results of that testing based on the requirements of the UniformGuidance. Accordingly, this report is not suitable for any other purpose.

September 13, 2018

34

Schedule of Findings and Questioned Costs

35



Schedule of Findings and Questioned CostsYear Ended June 30, 2018

Section I - Summary of Auditor's Results

Financial Statements

Type of auditor's report issued: Unmodified

Internal control over financial reporting:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified that arenot considered to be material weaknesses? Yes X None reported

Noncompliance material to financial statements noted? Yes X None reported

Federal Awards

Internal control over major programs:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified that arenot considered to be material weaknesses? Yes X None reported

Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516(a)? Yes X No

Identification of major programs:

CFDA Number Name of Federal Program or Cluster Opinion

14.157 Supportive Housing for the Elderly - Project Rental Assistance Contractand Capital Advance Unmodified

Dollar threshold used to distinguish between type A and type B programs: $750,000

Auditee qualified as low-risk auditee? X Yes No

36



Schedule of Findings and Questioned Costs (Continued)Year Ended June 30, 2018

Section II - Financial Statement Audit Findings

ReferenceNumber Finding

QuestionedCosts

Current Year None

Section III - Federal Program Audit Findings

ReferenceNumber Finding

QuestionedCosts

Current Year None

37

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