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HOUSING FINANCE AUTHORITY

OF BROWARD COUNTY

2009 FINANCIAL REPORTS

VOLUME I

HOUSING FINANCE AUTHORITY OF BROWARD COUNTY 2009 FINANCIAL REPORTS

VOLUME I

INDEX

SINGLE FAMILY ISSUES

1980 SERIES A

1985 SERIES B

1991 SERIES C & D

1999 SERIES A & B

2000 SERIES A & B

2001 SERIES A, B, & C

2006 SERIES A, B, & C

2007 SERIES A, B, C, & D

2007 SERIES E & F

HOUSING FINANCE AUTHORITY OF

BROWARD COUNTY, FLORIDA

1980 SERIES A HOME MORTGAGE REVENUE

BOND PROGRAM FUNDS

AUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

HOUSING FINANCE AUTHORITY OF BROWARD COUNTY, FLORIDA

1980 SERIES A HOME MORTGAGE REVENUE BOND

PROGRAM FUNDS

SEPTEMBER 30, 2009

TABLE OF CONTENTS

PAGElS)

Independent Accountants' Report , .............. .......... ..... ....... ............................................ 1

Financial Statements

Balance Sheet ...... .............................................................................................. ,2

Statement of Revenue, Expenses and Changes in Retained Earnings ................ 3

Statement of Cash Flows ................................................... ... ................................ 4

Notes to Financial Statements .........................................................................5-8

Report on Internal Control over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed

in Accordance with Government Auditing Standards ...............................................9-10

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Independent Accountants' Report

To the Board of Directors of the Housing Finam.:e Authority of Broward County, Florida

We have audited the accompanying balance sheet of the Housing Finance Authority of 8rcMtard County, FJoOOa ("the Authotityj 1980 Series A Home Mortgage Revenue Bond Program Funds as of September 30, 2009, and the related statemoot 01 revenue, e~ses. retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Authority's management. Our responsibility is to express at1 opiNon on these financial statements based on our aud~.

We conducted OU" audit in accordance v.ill1 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Al.lditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the aud~ to obtain reasonable aS5unmoe about whether the financial slatemoots are free of material misstatement. An al.ld~ includes consideration of the internal control over: Iinardal reporting as a basis for designing aOOd procedures that are appropriate in the drcumstances, but not for the purpose of expresSing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we express no such opinion . )I,n aud~ also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. AA aud~ also includes assessing the accounting principles used and significant estimates maoe by managemern, as wcl as evaluating the overall financial statement presentation. We believe that our alldit provides a reasonable basis for OU" opinion.

In our opinion, the financial statements referred to above present fairly, in aD material respects, the financial position of the Housing Fnance Authority of Brcmard County, Florida 1980 Series A Home Mortgage Reveflue Bood Program Funds as of $eplember 30. 2009, and the results of its operations, and its cash fIooNs for the year then ended in conformity v.ith accounting principles generally aooepled in the Un~ed States of America.

In accordance v.ith Government Auditing Standards, we have also issued our report dated Apn 20, 2010, 00 OU" consideration of the Housing FnanceAuthority of Broward County, Florida, 1980 Series A Home Mortgage Reveflue Bond Program Funds' internal control over financial reporting and our test of its compliance v.ith certain provisions of Iav.'s, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over fioardal reporting and com~ and the results of that testing, and not to provide an opiniOn of the internal control over financial reporting or 011 compliance. ThaI report is an integral part of an audrt performed in accordance v.ith Government Auditing Standards and should be oonsiclefed in assessing

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1980 SERIES A HOME MORTGAGE REVENUE BOND PROGRAM FUNDS

BALANCE SHEET

SEPTEMBER 30, 2009

Assets Cash and cash equi va~nts , 11,153 hterest receivab~ 70 long-Ierm inYestments 6,160 Deferred financing costs 10

Total Assets $ 17,393

Liabilities and Retained Earnings Liabilities :

Accrued bond interest payable $ 215

Bonds payable 14,447 TotalliabiHties 14,662

Retained earnings 2,731 Total liabilities and Retained Earnings $ 17,393

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

2

HOUSING FINANCE AUTHORITY OF BROWARD COONTY, FLORIDA

1980 SERIES A HOME MORTGAGE REVENUE BONO PROGRAM FUNDS

STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS

FOR THE YEAR ENDED SEPTEMBER 30, 2009

Revenue m.estmenl income

Tolal Revenue

$ 1,725 1,725

Expenses nteresl on bonds payable General and administrative

Total ElCpenses

2 ,725 1,719 4,444

Excess of expenses over revenue (2,719)

Relained eamirgs - begimirg of year 5,450

Retained earnirgs endirg of year $ 2,731

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

3



STATEMENT OF CASH FLOWS


Cash flows from operating activities: Excess of eJq)enses over revenues $ (2,719)

Adjustments to reconcile to net cash provided by operating activities: Bond interest expense 2,725 Amortization of deferred financing costs 57 Decrease in interest receivable

Net cash provided by operating activities

Cash flows from investing activities: Proceeds from principal reduction of long-term investments 37.645

Net cash provided by investing activities 37,645

Cash flows from non-eapital and related financing activities: ~erest payments on bonds payable (3,288) Principal payments on bonds payable (42 ,549)

Net cash used in non-capital and related financing activities (4 5.837)

Decrease in cash and cash eqlivalents (7,605)

Cash and cash equivalents, beginning of year 18.158

Cash and cash equivalents, end of year $ 111153

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

4



NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

Note 1 - Organization and Purpose

The Housing Finance Authority of Broward County (the "Authoritf) was established in 1979 by the Board of County Commissioners for the purpose of encouraging the investment of private capital and stimulating Ihe construction of residential housing for low and moderate income families through the use of public financing. The housing programs of the Authority are organized, as separate accounting entities which are accounted for as enterprise funds (the "Bond Program Fundsj. The Authority is authorized to issue bonds to fulfill its corporate purpose in principal amounts specifically authorized by the County Commissioners. Amounts issued by the Authority shall not be deemed to constitute a debt of the County, the State of Florida, or any political subdivision thereof.

The 1980 Series A Home Mortgage Revenue Bonds (the "1980 A Bonds") were issued 10 finance the acquisition of $42,545,000 of mortgage loans on owner-occupied housing units in Broward County, Florida. In May 1989, the 1980 Series A Home Mortgage portfolio was sold in connection with the issuance of the 1989 Series A Municipal Refunding Conaleral Mortgage Obligations (the "1989 CMO Bonds"). Proceeds from the sale were used for the acquisition of fully.modified Government National Mortgage Association Certificates ("GNMA Certificates"). Under the lerms of the Supplemental Trust Indenture dated April 1 , 1989, these GNMA Certificates are pledged to provide for debt sefVice on the 1980 A Bonds.

Note 2 - Summary of Significant Accounting Policies

The 1980 Series A Home Mortgage Revenue Bond Program Funds (the "Bond Program Funds") were created by the 1980 Series A Bond Resolution adopted by the Authority to account for the proceeds from the sale of the Bonds, the debt sefVice requirements of the Bond indebtedness, and the mortgage loans on eligible single family residential housing purchased with Bond proceeds.

Bal is of accounting

The Bond Program Funds use the accrual basis of accounting. The Bond Program Funds have adopted Governmental Accounting Standards Board ("GASB") Statement No. 20 by electing 10 apply all of the GASB pronouncements as well as the pronouncements of the Financial Accounting Standards Board dated priof 10 November 30, 1989.

Accounting estimates

The preparation of financial statements In conformity with accounting principles generally accepted in the United States of America requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclowre of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

5




SEPTEMBER 3D, 2009

Note 2 Summary of Significant Accounting Polic ies (Conl'd)

Cash and cash equivalents

For purposes of the statement of cash flows, the Authority considers all highly liquid debt instruments with an original maturity of three months or less at the time of purchase to be cash and cash equivalents.

Long-term investments

Effective October 1, 1997, the Authority adopted GASB Statement No. 31 , Accounting and Financial Reporting for Certain Investments and for Extemal Investment Pools. GASB Statement No. 31 requires that all investments held by governmental entities, including external investment pools, be reported at fair value with the gains and losses included in the statement of revenue, expenses and changes in retained earnings. Investments of the Bond Program Funds with readily determinable fair values are recorded at fair value based on quoted maIXet prices. Investment income, including changes in the fair value of investments, is recorded as revenue in the statement of revenue, expenses and changes in retained eamings.

Deferred financing costs

Issuance costs on the Bonds were deferred and are amortized using the interest method over the life of the Bonds.

Retained earnings

Upon redemption of the Bonds, any remaining assets will be refunded as provided by the Trusllndenture.

Note 3 Investments and Cash and Cash Equivalents

Investments permitted by the Bond Program Funds are govemed by certain provisions of the Trust Indenture. Investments include direct obligations and mortgage--backed securities guaranteed by the U.S. Govemment or certain of its agencies and deposits and guaranteed contracts with banks and financial institutions which meel standards for deposits as stipUlated in agreements with the Authority for the benefrt of the Bond Program Funds.

Deposits

Publk: deposits in the State of Florida are collateralized under the provisions of Chapter 280, Florida Statutes. Losses to public depositors are covered by the sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. Deposits are included in cash and cash equivalents which are deemed insured and therefore, not subject to Cfedit risk.

6




SEPTEMBER 3D, 2009

Note 3 Investments and Cash and Cash Equivalents (Confd)

Long-term Investments

Long-term investments represent GNMA Certificates bearing interest at g%. Timely payment of principal and interest is guaranteed by the GNMA Certificates. The contractual maturity of the GNMA Certificates at September 30, 2009 is November 2010. Actual maturities may differ from contractual maturities due to borrowers having the right to prepay obligations without prepayment penalties.

Deposit and investment risk

Governmental Accounting Standards Board (GASB) No. 40, Deposit and Investment Risk Disclosures, an amendment of GASB Statement No. 3, is effective for financial statements periods beginning after June 15, 2004. This Statement establishes and modifies disclosure requirements related to investment risks including credit and custodial risk, concentration of credit risk, interest rate risk, and forefgn currency risk.

The 1980 Series A Home Mortgage Revenue Bond Program Funds has adopted the provisions of GASB No. 40. The Bond Program Funds investment policy pursuant to the Trust Indenture includes language that limits credit and custodial risk, concentration of credit risk, interest rate risk and foreign currency risk by requiring investments of the Bond Program Funds to be in GNMA Certificates. The GNMA Certificates are collateralized and insured and are not subject to credit and custodial risk, concentration of credit risk, interest rate risk or foreign currency risk as defined in GASB 40.

The fair value of long-term investments at September 30, 2009 are as follows:

Investment Tvpe Fair Value Maturities

Govemment National MortgageAssociation (GNMA) Pool $ 6,1 60 November 2010

Note 4 - Bonds Payable

The 1980 A Bollds were issued for the purpose of providin9 the Authority with funds to acquire newty originated mortgage loans on one and two family residences owned by eligible families in Broward County, Florida. The total 1980 A Bonds issued was $42,545.000 with a fixed interest rate of 8.75%. The balance of 1980 A Bonds outstanding at September 30, 2009 was $1 4,447. The 1980 A Bonds mature June IS, 2011 .

The 1980 A Bonds are subject to mandatory redemption at par, in 'NIlole or in part, monthly through May 2011 , in the amounts based on principal pay downs on the GNMA Certificates and on certain Bond proceeds not applied to acquire GNMA Certificates. The 1980 A Bonds are also subject to redemption, in whole or in part, at various dates, at 101% of par value.

7


1980 SERIES A HOME MORTGAGE REVENUE BONO PROGRAM FUNDS


SEPTEMBER 30, 2009

Note 4 - Bonds Pavable (cont'd)

All assets and revenues of the 1980 Series A Home Mortgage Revenue Bond Program Funds are pledged as collateral for payment of principal and interest on the 198DA Bonds.

The Supplemental Trust Indenture (see Note 1) calls for quarterly irrevocable distributions to the 1989 CMO Bond Program Fund of any GNMA principal and interest payments received in excess of amounts due and payable on the 1980 A Bonds. There were no such distributions during fiscal year 2009.

The maturing prindpal and interest of the outstanding 1980 A Bonds is shown below:

Year Endng September 30, Principal Interest Total

2010 $ 14,447 $ 1,264 $ 15,711

2011 Total $ 14447 , 893 2 157 , 893 16694

Changes in long-term liabilities

Lon9-term liability activity for the year ended September 30, 2009, was as follows:

Beginning Ending Due Within Balance Additions Reductions Balance One Year

Bonds Payable S 56 996 1' _ _ _ $ (42549) $ 14447 $ 14,447

8

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Report on Intarnal Control over Financial Reportlng and on

Compliance and Other Matter. Baled on an Audit of Financia' Statements

Performed In Accordance with Government Auditing Standard,

To the Board of Directors of the Housing Finance Authority of Bfow8rd County. Florida

We have audited the financial.tatementl of the Housing Finance Authority of Btoward County. Florida, 1980 Series A Home Mortgage Revenue Bond Program Funds as of and for the year ended September 30, 2009. and have Issued our report thereon dated April 20, 2010. We conducted our audit in accordance with avelning standards generally accepted in the United Stales of America and the standards applicable to financial audits contained- in Government Aud'foo Standards. issued by the Comptroller General 01 the United States.

Internal Control Over Financial Reporting In planning and perfonning our audit, we considered the Housing Finance Authority of Sroward County, Florida 1980 Series A Home Mortgage Revenue Bond Program Funds' Internal control Oller financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion 00 the financial statements, but not for the purpose of expressing an opinion 00 the effectiveness of the Housing Finance Authority of Browilrd County, Florida 1980 SaliM A Home Mortgage Revenue Bond Program Funds' internal control OIIet Milnciil] reporting.

A control deficiency exists when the design or operatioo 01 a control does not allow management or employees. in the nonnal COI.Irse of performing their assigned functions, 10 prevent or detect misstatements on a timety basis. A significant deficiency is 01 control deficiency, or combination of control deficiencies, that adversely i1f1eets the organization's abllrty to inrtlate, authorize, record, process, or report financial data reliably In accordance with generally i1ccepted accounting principles. such that there is more than a remote likelihood that a misstatement of the organization's financial statements that is more than Inconsequential will not be prevented or detected by the organization's ifllemal contfol.

A material weakness is 01 signifiCiint deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements wiU not be prevented or detected by the Dfganizalioo's internal control.

Our consideration of internal control Oller financial reporting was fOf the limited purpose described in the first paragraph of this section and would not necessarily identity all defiCiencies in internal control that might be signifiCilni deficiencies or malerial weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses as defined above.

9

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Housing Finance Authority of Broward County, Florida, 1980 Series A Home Mortgage Revenue Bond Program Funds' financial statements are free of material 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 effecI on the determination of financia l statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our aud~ and accordingly, we do not express such an opinion. The results of our lests disclosed no instances of noncompliance or other matters that are required to be reported under Government Audifng Standards.

This report is intended solely for the information and use of the Board of Oirectors and management of the Housing Finance Authority of Broward County, Florida and the Board of County Commissioners of Broward County Florida, and is not intended to be and should not be used by anyone other than these specified parties.

. I'.,



1985 SERIES B HOME MORTGAGE REVENUE

BOND PROGRAM FUNDS


SEPTEMBER 30, 2009

HOUSING FINANCE AUTHORITY OF BROWARD COUNTY, FLORJDA

1985 SERIES B HOME MORTGAGE REVENUE BOND PROGRAM FUNDS

SEPTEMBER 30, 2009

TABLE OF CONTENTS

PAGElS)

Independent Accountants' Report ................................................................................... 1

Financ ial Statements

Balance Sheet .. . ....... ........................... .. ....................................................... 2

Statement of Revenue, Expenses and Changes in Accumulated Deficit ............ 3

Statement of Cash Flows ... .................... .......................... .. ........................ ......... 4

Notes to Financial Statements ..................... .............. .......................................5-9

Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................. 10-11

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BALANCE SHEET

SEPTEMBER 30, 2009

Assets Cash ard cash equivalents tlIerest receivable Mortgage loans receivable Deferred financing costs

Total Assets

$

$

809,385 38,256 49,695 10,577

907,913

Liabilities and Accumulated Deficit

Liabilities: Accrued bord interest payable Other accrued liabilities Deferred fee income Bords payable

Total liabilities

$ 21 ,108 4,396

16,543 1,311 ,567 1,353,61 4

Accumulated deficit (445,701 )

TotalUabilities ard Acclnlulated Deficit $ 907,913


2



STATEMENT OF REVENUE, EXPENSES AND

CHANGES IN ACCUMULATED DEFICIT


Revenue ,nvestment income 2,283 Fee income 1,504 Werest income on mortgage loans receivable 77.667

Total Reverue 81,454

Expenses

~erest on bonds payable Amortization of deferred financing cost General and administrative

Total Expenses

Excess of e:ocpenses over revenue (52 ,843)

AcclSl1u1ated deficit - beginning of year (392,858)

AcclSl1iJated deficit - ending of year $ 1445,7011


3

HOUSING FINANCE AUTHORITY OF BROWAROCOUNTY, FLORIDA




Cash flows from operating activities: Excess of e>cpenses over revenoe $ (52 ,843)

Adjustments to reconcile to net cash provided by operating activities: Bond interest e>cpense Amortization of deferred financing costs Accretion of capital appreciation bonds Decrease in interest receivable Decrease in other accrued liabilities Decrease in deferred fees

Net cash provided by operating ac~vities

44,237 3,954

80,575 3,262 (201 )

(1,504) 77.480

Cash flows from investing activities: Principal collected on mortgage loans receivable

Net cash provided by investing activities

2,493 2,493

Cash flows from non-capltat and related financing activities: hlerest payments on bonds payable (48,278) Principal payments on bonds payable

Net cash used in non-capital and related financing activities

Decrease in cash and cash equivalents (58,305)

Cash and cash equivalents, begiming of year 867,690

Cash and cash equivalents, end of year $ 809,385


4

HOUSING FINANCE AUTHORITY OF BROWARD COUNTY, FLORIDA 1985 SERIES B HOME MORTGAGE REVENUE BOND PROGRAM FUNDS


SEPTEMBER 30, 2009

Note 1 Organization and Purpose

The Housing Finance Authority of Sreward County (the "Authority") was established in 1979 by the Board of County Commissioners for the purpose of encouraging the investment of private capital and stimulating the construction of residential housing for low and moderate income families through the use of public financing. The Authority is authorized to issue bonds to fulfill its corporate purpose in principal amounts specifically authorized by the County Commissioners. Amounts issued by the Authority shall not be deemed to constitute a debt of the County, the State of Florida. or any political subdivision thereof.

The 1985 Series B Home Mortgage Revenue Sonds (the "Bonds' ) were originally issued to finance the acquisition of $18,070,000 of mortgage loans on owner-occupied single-family housing units in Breward County, Florida.

Note 2 Summary of Significant Accounting Policies

The 1985 Series B Home Mortgage Revenue Bond Program Funds (the "Sond Program Funds") were created by the 1985 Series B Bond Resolution adopted by the Authority to account for the proceeds from the sale of the Bonds, the debt service requirements 01 the Bond indebtedness, and the mortgage loans on eligible single-family residential housing purchased with Bond proceeds.

Basis of accounting

The Bond Program Funds use the accrual basis of accounting. The Bond Program Funds have adopted Governmental Accounting Standards Board ('GASS' ) Statement No. 20 by electing to apply all of the GASB pronouncements as well as the pronouncements of the Financial Accounting Standards Board dated prior to November 30. 1989.


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

5



SEPTEMBER 30, 2009

Note 2 Summary of Significant Accounting Policies (cont'd)


For purposes of the statement of cash flows, the Authority considers all highly liquid debt instruments with an original maturity of three months or less at the time of purchase to be cash and cash equivalents.



Deferred fee income

Commitment fees collected from participating mortgage lenders were deferred and are recognized as income over the life of the mortgage loans using the straight-line method.

Retained earnings/accumulated deficit

Upon redemption of the Bonds, any remaining assets will be refunded to the Authority for use in future issues. The Authority has a surety agreement with the Financial Guarantee Insurance Corporation (FGIC). The FGIC agreement requires that upon redemption of the 1985 Series B bonds if assets are insufficient to make interest and principal payments required under the Trust Indenture, the deficit will be funded by the FGIC.

Note 3 - Investments and Cash and Cash Equivalents

Investments permitted by the Bond Program Funds are governed by certain provisions of the Trust Indenture. Investments include direct obligations of and mortgage-backed securities guaranteed by the U.S. Government or certain of its agencies and deposits and guaranteed contracts with banks and financial institutions which meet standards for deposits as stipulated in agreements with the Authority for benefit of the Bond Program Funds' name. These investments, which are included in cash and cash equivalents at September 30, 2009, represent the Authority's ownership interests in investment agreements for the benefit of the Bond Program Funds and money mar1c.et accounts held by The Bank of New Yor1c. Trust Company (the "Trustee").

6

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SEPTEMBER 30, 2009

Note 3 - Investments and Cash and Cash Equivalents (cont'd)

Deposits

Public deposits in the State of Florida are collateralized under the provisions of Chapter 280, Florida Statutes. Losses to public depositors are covered by the sa~ of securities pledged as collateral and , if necessary, assessments against other qualified public depositories of the same type as the depository in default. Included in cash and cash equivalents are deposits which are deemed insured and, therefore, not subject to credit risk.

Investment agreement

The Authority and the Trustee have entered into an investment agreement (the "Agreement") with Citibank, NA ("Citibankj whereby substantially all monies held in the Bond Program Funds accounts are deposited with Citibank. The Agreement provides for the establishment of fixed rates of return on amounts invested with Citibank. Citibank pays interest on the investment amounts credited to the following accounts on deposit with Citibank at the rates of (a) 9.5% per annum on amounts credited to the Mortgage Reserve Account and the Program Reserve Account, and (b) 7.25% per annum on amounts credited to the Revenue Account, the Principal Account. the Interest Account, and the Expense Account. The Agreement matures October 1, 2016 and provides that the Trustee must give Citibank at least fifteen business days' notice for the withdrawal of funds invested with Citibank. II is the obligation of Citibank to repay the amounts invested with interest at the specified rates. As of September 30, 2009, the amounts on deposit under the Agreement with Citibank totaled 5867,250 and are included in cash and cash equivalents.

Note 4 Mortgage Loans Receivable

Mortgage loans are evidenced by notes and collateralized by first liens on the related properties. The loans are required to bear interest at 9.99% and provide for a 3D-year fixed rate amortization. Each mortgage loan is insured by a qualified private mortgage insurer for a percentage of the principal amount rangin9 from 12% to 35%.

7



SEPTEMBER 30, 2009

Note 5 Bonds Payable

In October 1985, the Authority issued 520,000,000 of the 1985 Series B Bonds for the purpose of providing the Authority with funds to acquire newly originated mortgage loans on family residences owned by eligible families in Broward County, Florida.

The following is a summary of the outstanding 1985 Series B Bonds at September 30, 2009:

$2,255,000, 9.125% Term Bonds, with interest payable semi-annually; maturing October I , 2009, subject to mandatory redemption in part, semi-annually beginning April I , 2007. $ 25,000

$10,000,000, 8.80% Term BofIds, with interest payable semi-annually; maturing October I , 2011 , subject to mandatory redemption in part, semi-annually beginning April " 1999. 170,000

$2,855,000, 9.25% Term Bonds, with interest payable semi-annually; maturing April " 2013, subject to mandatory redemption in part, semiannually beginning October I , 2011. 270.000

$357,306, Capital Appreciation Term Bonds (CABS) accreted value, priced to yield 10.256% at the maturity value of $1,705,000 on October I , 2016, subject to mandatory redemption in part, semi-annually beginning October I , 2013. 846,567

Total bonds 5 1 3" 567

The maturing principal and interest of the outstanding 1985 Series B Bonds is shown below:

Year Ending Seetember 30, Princieal Interest Total

2010 S 45,000 $ 61,271 $ 126.271

2011 36,175 36.175

2012 150.000 31 ,575 161.575 2013 270,000 24 ,975 294,975

2014 2015-2019 IM,567 858,433 l,705,gOQ

Total $ 1,311567 S 1 034 429 Ii ',34~,li! li! !ii

8



SEPTEMBER 30, 2009

Note 5 - Bonds Payable (cont'd)

Changes in Long-term Liabilities

Long-term liability activity for the year ended September 30. 2009, was as follows:

Beginning Ending Due Within Bahmce Additions Reductions Balance One Year

Bonds Payable S 1 320992 $ 80 575 $ (9000Q) $ 1311567 $ 45009

The 1985 Series B Bonds are subject to mandatory redemption, in whole or in part, in amounts based on excess revenues, prepayments of principal on the mortgage loans and on certain Bond proceeds not applied to acquire mortgage loans. The 1985 Series B Bonds maturing after October 1, 1995, except the Capital Appreciation Bonds, are also subject to optional redemption beginning October 1, 1995, in whole or in part, at various dates, at prices ranging from 100% to 103% of par value. The 1985 Series B Bonds are insured by the Financial Guaranty Insurance Company (FGIC) for the benefit of the Bondholders for any portion of the principal and interest which shall become due for payment. but shall be unpaid by the issuer.

All assets and revenues of the Bond Program Funds are pledged as coliateral for the payment of principal and interest on the Bonds.

The 1985 Series B Home Mortgage Revenue Bond Trust Indenture established certain accounts and determined the order in which Bond proceeds and program revenues are to be deposited in these accounts. which are mana9ed by the Trustee. The Indenture specifies that a minimum of $1 ,009.000 must be invested in the Program Reserve account to provide for any shortfall in principal or interest payments.

Note 6 - Contingency

Unless circumstances or actions occur to generate future excess of revenue over expenses to eliminate the accumulated deficit, funds may not be sufficient to redeem the 1985 Series B Bonds when due. If funds are not sufficient when the Bonds are due, then , as discussed in Note 2, any accumulated deficit will be funded by FGIC.

9

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Comptiance and Other Matters

As part of obtaining reasonable aSS l.lrance about whether the Housing Finance Authority of Broward Counly, Florida 1985 Series B Home Mortgage Revenue Bond Program Funds' financial statements are free of material misstatemenl, we performed tests of rts compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance wrth those provisions was not an objective of our audit and accordirlgly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Govemment Audting Standards.

This report is '~~i~~~~:~~I~'~:~fO:'~E~~'~ information and use of the Board of Directors and management of t Authority of Broward County. Florida and the Board of County Commissioners Florida, and is not intended to be and should not be used by anyone other than

April 20, 2010

11

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1991 SERIES C AND 0 GNMA COLLATERALIZED

HOME MORTGAGE REVENUE

BOND PROGRAM FUNDS


SEPTEMBER 30, 2009


1991 SERIES C AND D GNMA COLLATERALIZED

HOME MORTGAGE REVENUE BOND PROGRAM FUNDS

SEPTEMBER 30, 2009

TABLE OF CONTENTS

PAGEfS)

Independent Accountants' Report .................................................................................... 1


Balance Sheel ......................................................................................................2


Statement of Cash Flows ..............................................................................4

Notes to Financial Statements ..........................................................................5-9

Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditin9 Standards .. ........... ... ........................... 10-11

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. " " Independent Aceountants' Report

To the Board of Oireetort of the Housing Finance Authority of Broward County, Florida

~ have audHed the accompanying balance sheet of the t-\ous(1g Finance Authority of Brow\v'd Coooty, Fbrida ("the Authority") 1991 Series C and 0 GNMACoIIateralized Home Mortgage Revenue Bond Program Fonds al of September 30, 2009, and the related statemenl of revenue, expenses. retaned ea"jllll5 and cash flows lor the year then eOOed. These mandai statements," the responsibility d the Authority's managemett. Os tBSpOnSiliIiIy is to express an op;.liOh on these Iioanc:ial stateI,ents based on OU'" audit.

of America and the standards appftcable to . I

We



HOME MORTGAGE REVENUE BONO PROGRAM FUNDS

BALANCE SHEET

SEPTEMBER 30, 2009

Assets Restricted cash ard cash equivalents $ 41 ,739 nterest receivable 1,296 Long-term investments 94,325

Total Assets $ 137.362

Liabilities and Retained Earnings Liabilities: ,Accrued bord interest payable 1,198

Other accrued liabilities 585 Bords payable

Totalliabllities

Retained earnings: Contributed capital 65,374 Retained earnings 5,205

Total retained earnings 70,579

Total Liabilities aOO Retained Earnings $ 137,362

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

2



HOME MORTGAGE REVENUE BOND PROGRAM FUNDS

STATEMENT OF REVENUE, EXPENSES AND RETAINED EARNINGS


Revenue

hvestment income

Net decrease in fair value of long-term investments

Total Revenue

$ 6,311 (157)

6,154

Expenses

Bond interest

General and administrative Amortization of deferred financing cosl

Total E"llenses

7,397 2,126

386 9,909


Retained earnings - beginning of year 6,960

Retained earnings - ending of year S 5,205


3

HOUSING FINANCE AUTHORITY OF BROWARD COUNTY, FLORIDA 1991 SERIES C AND D GNMA COLLATERALIZED

HOME MORTGAGE REVENUE BOND PROGRAM FUNDS STATEMENT OF CASH FLOWS


Cash flows from operating activities : Excess of expenses owr rewroe $ (1,755)

Adjustments to reconcile to net cash provided (used) by operating activities: Bond interest expense Amortization of deferred financing costs Net increase in the fair vaiLe of long-leon investments Decrease in accrued interest receivable Decrease in other accrued liabilities

Net cash provided by operating activities

7,397 2,126

157 700

(15) 8,610

Cash flows from investing activities: Proceeds from prioopal redldion of long-term investrnellts


41 ,948 41 ,948

Cash flows from non-capital and related financing activities: I'1terest payments on bonds payable (6,429)

Principal payments on bonds payable Net cash used in non-capital and relaled financing activities

ncrease in cash and cash eqlivalents 4,129

Cash and cash equivalellts, beginning of year 37,610

Cash and cash equivalellts, end of year S 41,739


4


1991 SERIES C AND 0 GNMA COLLATERALIZED HOME MORTGAGE

REVENUE BONO PROGRAM FUNDS


SEPTEMBER 30, 2009


The Housing Finance Authority of Broward County (Authority) was established in 1979 by the Board of County Commissioners for the purpose of encouraging the investment of private capital and stimulating the construction of residential housing for low and moderate income families through the use of public financing. The Authority is authorized to issue bonds to fulfill its corporate purpose in principal amounts specifically authorized by the County Commissioners. Amounts issued by the Authority shall not be deemed to constitute a debt of the County. the State of Florida. or any political subdivision thereof.

The 1991 Series C arM:! D GNMA Collateralized Home Mortgage Revenue Bonds (Bond or Bonds) were issued to refurM:! $7.730,000 of outstanding home mortgage revenue bonds in order to provide funds to finance the purchase of certain mortgage loans on single family residences located within Broward County, Florida. through the acquisition of fully-modified Government National Mortgage Association (GNMA) Certificates (GNMA Certificates).

Not! 2 - Summary of Significant Accounting Policies

The 1991 Series C and D GNMA Collateralized Home Mortgage Revenue Bond Program Funds (Bond Funds) were created by the Bond Resolution adopted by the Authority to account for the proceeds from the sale of the Bonds. the Bood debt sel"lioe requirements and the mortgage loans on eligible single family residential housing purchased with Bond proceeds.

Basis of accounting

The Bond Funds use the accrual basis of accounting. The Bond Funds have adopted Govemmental Accounting Standard Board (GASS) Statement No. 20 by electing to apply all of the GASS pronouncements as well as the pronouncements of the Financial Accounting Standards Board dated prior to November 30. 1989.


The preparation of financial statements in conformity with accounting principles generally accepted in the United Slates of America requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and ~abilities at the date of the financial statements. and the reported amounts of revenues and expenses during the reporting periods. Actual resuns could differ from those estimates.

5

HOUSING FINANCE AUTHORITY OF BROWARO COUNTY, FLORIDA

1991 SERIES C AND D GNMA COLLATERALIZED HOME MORTGAGE



SEPTEMBER 30, 2009



For purposes of the Statement of Cash Flows, the Authority considers all highly liquid debt instruments with an original maturity of three months or less at the Ume of purchase to be cash and cash equivalents.

Longtenn investments

Effective October 1, 1997, the Authority adopted GASe Statement No. 31 (GASe 31), Accounting and Financial Reporling for Certain Investments and for Ex/emellnvestment Pools. GASe 31 requires that all investments held by governmental entities, including external investment pools, be reported at fair value with the gains and losses included in the Statement of Revenue, Expenses and Changes in Retained Earnings.

Investments of the Bond Funds with readily determinable fair values are recorded at fair value based on quoted market prices. Investment income, including changes in the fair value of investments, is recorded as revenue in the Statement of Revenue, Expenses and Changes in Retained Earnings.

Retained earnings

Upon redemption of the Bonds, any remaining assets will be refunded as provided by the Bond Trust Indenture (Indenture).


Investments permitted by the Bond Funds are governed by certain provisions of the Indenture. Investments include direct obligaUons of and mortgagebacked securities guaranteed by the U.S. Government or certain of its agencies and deposits and guaranteed contracts with banks and financial institutions which meet standards for deposits as stipUlated in agreements with the Authority for the benefit of the Bond Funds.

Deposits

Public deposits in the State of Florida are collateralized under the provisions of Chapter 280, Florida Statutes. Losses to public depositors are covered by the sale of securities pledged as collateral and , if necessary, assessments against other qualified public depositories of the same type as the depository in default. Included in cash and cash equivalents which are deemed insured and therefore, not subject to credit risk.

6



REVENUE BOND PROGRAM FUNDS


SEPTEMBER 30, 2009

Noto 3 Investments and Cash and Cash Equivalents Icont'dl


The Authority, the Bank of New YorK Trust Company (Trustee) and BerXshire Hathaway, Inc. (Corporation) entered into an investment agreement (Agreement) whereby substantially all monies held in the Revenue, Bond, Expense and Rebate Funds (collectively, Float Fund) accounts are deposited with the Corporation. The Agreement provides for the establishment of fixed rates of return on amounts deposited in the Float Fund accounts at 5.7%. The Agreement matures June 1, 2021 , and provides that the Trustee must give the Corporation at least two business days' notice for the withdrawal of funds invested with the Corporation and that the Trustee shall not make withdrawals for reasons other than those specified in the Indenture. The obligation of the Corporation to repay the amounts invested with interest at the specified rate shall be an absolute and unconditional obligation of the Corporation. As of September 30, 2009, the amounts on deposit under the Agreement totaled $40,510 and are included in cash and cash equivalents on the Balance Sheet.


long-term investments consist of GNMA Certificates. Each GNMA Certificate is backed by a pool of mortgage loans originated by the designated Mortgage Lenders for the Bond. GNMA Certificates bear interest al 0.05% less that the interest rate on mortgage loans, which bear interest at 7.3%. Payment of principal and interest is guaranteed by the GNMA.

The contractual maturities of the GNMA Certificates at September 30, 2009 are greater than 10 years. Actual maturities may differ from contractual maturities due to borrowers having the right to prepay obligations without prepayment penalties.

Deposit and investment r isk

GASB Statement No. 40 (GASB 40), Deposit and Investment Risk Disclosures, an Amendment of GA5B Statement No. 3, is effective for financial statement periods beginning after June 15, 2004. GASB 40 establishes and modifies disclosure requirements related to investment risks including credit and custodial risk, concentration of Cfedit risk, interest rate risk and foreign currency risk.

The Bond Funds have adopted the provisions of GASB 40. The Bond Funds investment policy pursuant to the Indenture includes language that limits credit and custodial risk, concentration of credit risk, interest rate risk and foreign currency risk by requiring investments of the Bond Funds to be in GNMA Certificates. The GNMA Certificates are collateralized and insured and are not subject to credit and custodial risk, concentration of credit risk, interest rate risk or foreign currency risk as defined in GASB 40.

7


1991 SERIES C AND D GNMA COLLATERALIZED HOME MORTGAGE

REVENUE BOND PROGRAM FUNDS


SEPTEMBER 30, 2009

Note 3 Investments and Cash and Cash Equivalents (cont'd)

The fair value of long-term investments at September 30, 2009, are as follows:

Investment Type Fair Value Maturity

Govemment National Mortgage Association (GNMA) Pool $ 94,325 December 20, 2020

Note 4 - Bonds Payable

In December 1991, the Authority issued $7,730,000 of the Bonds for the purpose of providing the Authority with funds to acquire newly originated mortgage loans on family residences owned by eligible families in Broward County, Florida.

The following is a summary of the Bonds outstanding at September 30 , 2009;

$5,185,000 Term Bonds bearing interest at 7.375% per annum, payable semi-annually; maturing June I , 2021, with mandatory redemption in ,varying installments beginning December 1, 2009. 65000 The maturing principal and interest of the Bonds outstanding are as follows:

Year Ending September 30, 20 10

Principal, Interest $ 4,794 Total $ 4,794 2011 4,794 4,794 2012 4,794 4,794 2013 4,794 4,794 2014 4,794 4,794

2015-2019 28,763 2B,763 2020-2021 65,OQQ 4.794

Tolal $ 65000 $ 57 525

8





SEPTEMBER 30, 2009

Note 4 - Bonds Payable (cont'd)

Changes in longtenn liabilities

Longterm liability activity for the year ended September 30, 2009, was as follows:

Beginning Ending Due Within Balance Additions Reductions Balance One Year

Bonds Payable $ ' 05,000 s $ /40 0001 S 65 000 lli....___

The Bonds are subject to special mandatory redemption, in whole or in part, in the amounts based on excess revenues, prepayments of prlncipal on the mortgage loans and from certain Bond proceeds not applied to acquire mortgage loans. The Bonds are also subject to optional redemption at the option of the Authorlty, in whole or in part, at various dates, at prices ranging from 100% to 102% of par value.

All assets and revenues of the Bond Funds are pledged as collateral for the payment of principal and interest on the Bonds except for monies and securities held in the Rebate Fund.

The Indenture established certain accounts and determined the order in which Bond proceeds and program revenues are to be deposited in Ihese accounts, which are managed by the Trustee.

Note 5 Contributed Capital

On the issuance date of the Bonds, the Authority contributed $70,000 to the Bond Funds to pay certain bond issuance costs. As of September 30, 2009, the remaining contribution due to the Authority was $65,374. Such contribution will be refunded to the Authority from residual funds upon maturity of the Bonds to the extent thai there are residual funds.

9

SI I. \1{: 'TO. llRL . "S{)~ & CU\1 \, y P \.

C 'I' ted Pub C ... o:eo m 15 Rwolo 55 C _ul I

Report on Internal Control over Financial Reportlng and on

Compllam::e and Other Matters Based on an Audit of Financl.1 Statements

Performed in Accordance with Government Auditing SUlIOdard,

To the Board of Directors of the Housing Finance Authority of Browarel County. Florida

We have aud~ed the financial statements of the Housing Finance Authority of Broward County, Florida, 1991 Series C and D GNMA Collateralized Home Mortgage Revenue Bond Program Funds as of and fOf the year ended September 30, 2009, and have issued our report thereon dated April 20. 2010. We conducted our audit In accordance w~h auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Goyernment Mdijlog Standards issued by the ComptrOller General of the United Stales.

Intern,' Control Over Flnanel .. ' Reporting In planning and performing our eudH, we considered the Housing Fincmce Authority of Broward County, Florida 1991 Series C arid 0 GNMA Collateralized Home Mortgage Revenue Bond Program Funds' internal control over finandal reporting as a basis for designing our auditing procedures fOf the purpose of expressing our opiniOn on the financial statements, but not fOf the purpose of expressing an opinion on the effectiveness of the Housing Finance Authority of Broward County, Florida 1991 Series C and 0 GNMA Collatera~ed Home Mortgage Revenue Bond Program Funds' internal control over financial reporting.

A control deficiency exists when the design Of operation of a control does not allow management or employees, in the normal cou~e of performing their assigned functions, to prevent or detect misstatements on a timely basis, A significant deficiency is a controt deficiency, or combination of control deficiencies, lt1at adVersely affects the organization's ability to InHlate, authorize, record, process, or report financia l data reliably In accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the organization's financial statements that is more than Inconsequential will not be prevented or detected by the organization 's internal control ,

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote tikeUhood that a material misstatement of the financial slatements will not be prevented or detected by the orgarMtation 's internal control.

Our consideration of internal control over financial reporting was for the ~mited PIJI'POSe described in the first paragraph of this section and would not necessarily identify an deficiencieS in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal conlrol over financial reporting that we consider to be material weaknesses as defined above.

10

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Housing Finance Authority 01 Broward County, Florida 1991 Series C and D GNMA Collateralized Home Mortgage Revenue Bond Program Funds' financ1al statements are free of material misstatement, we performed tests 01 its compliance with certain provisions 01 laws, reg\Jlations, contracts and grant agreements, noncompliance with which could have a direct and material ellect on the determination of financ1al statement amo\Jnts. However, providing an opinion on compliance with those provisions was not an objective of our a\Jdit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Aud~ing Standards.

This report is intended solely for the information and use of the Board of Directors and management of the Housing Finance Authority of Broward County, Florida and the Board of County Commissioners of Sroward County Florida, and is not intended to be and should not be used by anyone other than these specified parties.

11


BROWARO COUNTY, FLORIDA

1999 SERIES A AND B SINGLE FAMILY MORTGAGE

REVENUE REFUNDING BONO PROGRAM FUNDS


SEPTEMBER 30, 2009



REVENUE REFUNDING BOND PROGRAM FUNDS

SEPTEMBER 30, 2009

TABLE OF CONTENTS

PAGE(S)

Independent Accountants' Report ................................ .................................................. 1


Balance Sheet ..................................................................................................... 2


Statement of Cash Flows .................................................................................... 4

Notes to Financial Statements .......................................................................5-7

Report on Internal Control over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed

in Accordance with Government Auditing Standards ................................................8-9

testing. That report is an . Wviarrlc and

oSl AJ{PTO

Independent Accountana' ReP'Ort

To the Board of Directors of the Housing Finance Authority of Sroward County, Florida

we haW audited the accompanying balance sheet of the ~ Fnarw;:e Auttw;:nty of BrQW3ltl Cotxrty, Florida ("the AuIhority") 1999 Series A and B Si'IgIe Fa~ Mortgage ~ Refooding Bond Program Funds as of September 30, 2009, and the related statement of revenue, expeo ses, retained eamings and cash !lows IOf the year then ended. These financial statements are the responsibility of the Autttority's management Our respoosibility is to express an opinion on these financial statements based on OU'" audit.

We concluded our audit In accordance ...mn auditing standards generally accepted in the United Slales of America and the standards applicable to financial audit!; contained In GoyemmeolAuditing

~'is~';""'~ by the Comptroller General 01 the United States. Those standards require that_ ~ the audrt to obtain reasonable assurance about whether the financial statements

are free 01 matenaJ misstatement An audit includes (X)Ilsir;leratiOn of the Intemal control over filWlc:ial reporti lSI as a basis /Of clesigning audit procedures that atfI appropriate In the citrumstances, but not foe" the ptXpOSe of expressing an opinion on the etrectiYeness of the Authority's internal control Oef financ:ial,epo(iio III. Accordingly, we express no auc11 opiIlioIl. An au.:il also includes examining, on a test basis, eo




BALANCE SHEET

SEPTEMBER 30, 2009

Assets ,Total Assets Liabilities and Program Equity

Liabilities: Total liabilities

Program equity

Total program equity

Total liabilities and Program Equity $


2




STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS


Revenue GNMAlFNMA interest in::ome Gain on sale of imoeslments Fee income

Tota l Reverue

Expenses ~erest on bonds payable Amortization of deferred financing cost Genera l and administrative

Total E)IJlenses

$ 115,71 4 134 ,875

14 ,078 264,667

122,656 38,453


Retained earnings - begirning of year 398,323

Retained earnings - ending of year $

The accompanying notes are an integ ral part of these financial statements.

3






Cash flows from operating activities:

Excess of expense over revenue $

Adjustments to reconcile to net cash provided by operating activities : Bond interest expense Amortization of deferred financing costs Amortization of deferred fee income Decrease in interest receivable Decrease in other accrued liabilities

(398,323)

122,656 38,453

(14,078) 34,103 (9,1 57)

Net cash used by operating activities (226,346)

Cash flows from investing activities : Principal paydowns on long-term investments 3,891 ,372


Cash flows from non-capitat and retated financing activities: tlterest payments on bonds payable Principal payments on bonds payable Capital contribution returned to issuer

Net cash used in non-capital and related financing activi~es

Decrease in cash and cash eqlivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year $

3,89 1,372

(218,454) (3,895,000)

(113,333) (4,226,787)

(561,761)

561.761


4





SEPTEMBER 30, 2009


The Housing Finance Authority of Broward County (the "Authority') was established in 1979 by the Board of County Commissioners for the purpose of encouragin9 the investment of private capital and stimulating the construction of residential housing for low and moderate income families through the use of public financing. The Authority is authorized, under Section 159 of Florida Statutes. to issue bonds to fulfill its corporate purpose in principal amounts specifically authorized by the County Commissioners. Amounts issued by the Authority shall not be deemed to constitute a debt of the County, the State of Florida, or any political subdivision thereof.

The 1999 Series A and B Single Family Mortgage Revenue Refunding Bonds, (the ' Bonds') along with certain commitment fees and certain other available monies, were issued to refund obligations of the Authority pursuant to a Une of Credit Agreement dated as of March I, 1999 between the Authority and First Union National Bank and to (a) finance mortgage loans on single family residences in Broward County, Florida through the acquisition of fully-modified Government National Mortgage Association Certificates ("GNMA Certificates' ) and single pool Federal National Mortgage Association Securities ("FNMA Securities' ), (b) under certain circumstances, pay interest on the Bonds and pay program expenses, and (c) pay a portion of the costs of issuance relating to the Bonds.

Note 2 Summary of Significant Accounting Policies

The 1999 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds (the "Bond Program Funds') were created by the 1999 Series Bond Resolution adopted by the Authority to account for the proceeds from the sale of the Bonds, the debt service requirements of the Bond indebtedness, and the mortgage loans on eligible single family residential housing purchased with Bond proceeds.

Basis of accounting

The Bond Program Funds use the accrual basis of accounting. The Bond Program Funds have adopted Governmental Accounting Standards Board ("GASB') Statement No. 20 by e!ecting to apply all of the GASB pronouncements as well as the pronouncements of the Financial Accounting Standards Board dated prior to November 30, 1989.

5





SEPTEMBER 30, 2009



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and cash equivatents

For purposes of the statement of cash nows, the Authority considers all highly liquid debt instruments with an original maturity of three months or less at the time of purchase to be cash and cash equivalents.


Effective October 1, 1997, the Authority adopted GASB Statement No. 31 , Accounting and Financial Reporting for Certain Inves/menls and for External Inveslments Pools. GASB Statement No. 31 requires that all investments held by governmental entities, including external investment pools, be reported at fair value with the gains and losses included in the statement of revenue, eKpenses and changes in retained earnings.

Investments of the Bond Program Funds with readily determinable fair values are recorded at fair value based on quoted market prices. Investment income, including changes in the fair value of investments, is recorded as revenue in the statement of revenue, eKpenses, and changes in retained earnings.


Issuance costs on the Bonds were deferred and are amortized using the inlerest method over the life of the Bonds.

Deferred fee income

Commitment fees collected from participating mortgage lenders were deferred and are recognized as income over the estimated life of the mortgage loans using the interest method.

6





SEPTEMBER 30, 2009

Note 3 Bonds Pavable

Bonds retired

The Bonds were retired in full on June 5, 2009. All excess funds were remitted to the Authority prior to September 30, 2009.

Changes in longtenn liabil ities

Long-term liability activity through the retiremenl date of June 5, 2009 was as follows:

Beginning Ending Balance Additions Reductions Balance

Bonds Payable S 3 895 000 , s S 3895 000

7

IlHl :-\So. '" (O\II'\:-\Y I! \. d f>ub {" 1\0'0 Iflnll S. Busln .. C' fUIU::".CM:::..:---- ,------,C.:-:,,;c;:,7

Report on Internal Control over Financial Reporting and on

Compliance and Other Mattera Based on an Audit of Financial Statem ents

Performed in Accordance with Government Auditing St.llndard.

To the Board of Oirecton; of the Housing Finance Authority of Broward County, Florida

We have audited the financial statements of the Housing Finance Authority 01 Broward County, Florida, 1999 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds as of and for the year ended September 30, 2009, and have issued our report thereon dated April 20, 2010, We conducted our audit in accordance with aud~ing standards generally accepted In the United States of America and the standards applicable to financial audits contained In Government Auditing Standards. issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting In planning and performing our audit, we coosidered !he Housing FlI'\anca Authority of Broward County, Florida 1999 Series A and B Single Famjy Mortgage Revenue Refunding Bond Program Func!s' n lemal control over ManeiaI reporti'Ig as a basis for designing 0I.f auclimg procedures for the PlWPOM of expressing 0I.f opiIlion on the financial statements, but not for the pI.I'pOSe 01 expressing an opinion on the affectiveness of the Housrlg Fnance Authority of Brcwan::I County, Florida 1999 Series A and B Single Fa~ Mort9age Revenue Refunding Bond Program Foods' ntemal control over manc:iaI ~.

A control deficiency exists v.nen the design Of ope. atiel, of a control does not alow rT\I1niIgemIInI Of emplo~ e e 5. n the normal CQU"Se of pet10ImIlg thei" assigned functions, 10 prevent Of detect misstalements on a tmely basls. A significant deficiency is a control deficiency, Of combination of control deficiencies, thai adYerseIy affects the organization's ability 10 miale, authorize, record, process, Of report financial data reliably in accordance wiItl generally ac:oepted accounting principles, such thai Ihere is more than a remote (j(eItIood thaI a misstatement 01 the orgaraation's finaociaI staietnel,ts \hat is more than inconsequential 'Nil not be prevented Of detected by the otganization's ntemaI control.

A material weakness is a significant deficiency, 0( combination 01 significant deIic:iencies, thai results n more than a remote ikeIihood that a material misstatement of the filanciaI 5talements ... not be po'~'ntecl or detected by the organization's intemal c:cntroI.

o.s oonsidefation 01 i1temaI control over fi1anc:iaI,eportiIlg was for the lmIed ~ des :,ibod i'I the first partlgraph of Ihs seaion and woUd not nec:essariy identify al deficiencies n i1IemaI controIlhat might be significant deficiencies Of material ~.We cD:! not identify any delk:ieo des i'I i1IemaI control over financial reporting that we consider 10 be material weaknesses as defined above.

B

http:fUIU::".CM

County Commissiooefs of used by anyone other than

April 20, 2011) ,

parties.

Complianca and Other Matters

M part of obtaining reasonable assurance about whether the Housing Finance Authority of Bfoward County, Florida 1999 Series A and B Single Family Mortga~ Revenue Refunding Bond Program Funds' financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of lam;. regulations. contracts and grant agreements. noncompliance with which could have a direct and material effect on the detennination of fin ancial statement amounts. However. providing an opinion on compliance with those provisions was not an objective of our audit and accordingly. we do no\ e~press such en opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Audting Standard$:.

for the information and use of the Board 01 OirectllB and This report is .",,'"

management Authority of Broward County, Florida and the Soard of

Florida, and is not intended to be and 5hou1d not be

9

. P ..~






SEPTEMBER 30, 2009




SEPTEMBER 30, 2009

TABLE OF CONTENTS

PAGE(S)

Independent Accountants' Report .................................................................... .............. 1


Balance Sheet ............................................................ ................................... 2

Statement of Re ....enue, Expenses and Retained Earnings ................................ 3

Statement of Cash Flows ................. ............ .. .................................. ................. 4

Notes to Financial Statements .......................... ... ..... ................................... 5-1 0

Report on Internal Control Over Financial Reporting and on Compliance

and Other Mailers Based on an Audit of Financial Statements Performed

in Accordance with Government Auditing Standards ................................................. 11

'~t Sllr\I{PTO BRl ,\;SO, , & (0\11'.\:\).1',\,

- ~ Ct'T1lflt'cll'uhIK .\.t .um, illS .. BlL'II".... (' .nslIllil.flIS

Independent Accountants' Report

To the Board of Oirectoo;. of the Housing Flnance Authority of Sroward County, Florida

We have audiled the aCCQmpanying balance sheet of the Housing Finance Authority of Broward County, Florida (the Authority"). 2000 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds as of September 30, 2009, and the related statements of revenue, expenses and changes in reta ined earnings and cash flows fOf the year then ended. These financial statements are the responsibility of the Authority'. management. Our responsibility Is to express an opinion on these financial statements based on our audit.

We conducted our aud~ in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Au!!rt'ng Standards, issued by the ComplToHer General of the Un~ed States. Those standards require that we plan and perlomJ the audit 10 obtain reasonable aSSOOln08 about whethef the financial statements are free 01 material misstatement. All audit includes consiclefation of the i"ltemal control over financial reporti"Ig as a basis foc desigrWlg auO~ proc:edlres that are appropriate i"I the drcumstances, but not foc the purpose 01 expreSSing an opnlon on the effectiveneM of !he Authority's internal control over financial reporting. Accordingly, we e~press no such opinion. M aud~ also looudes examining, on a test basis, evidence supporting the ilmounts and disciosurM in the financial statements. M audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall manc:ial statement presentatiorI. We believe that our audit provides a reasonable basis foc our opinion.

In our opinion, the financial statements referred to above present fa irly, In all material respects. the financial pos~ion of the Housing Finance Authority of Broward County, Florida 2000 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds as of September 30, 2009, and the results of its operalions, and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In acc::ordanoe with Government Ao!!iting StilndilrdS, we have also issued our report dated April 20, 2010 on our considefation of the Housing Finance Authority of Broward County, Florida, 2000 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds' internal control over financial reporting and our test of its compliance with certain provisions of laws, regulations, contracts and grants. Thai report Is an integral part of an audit performed In accordance wilh Government Auditing Standards and should be read in conjunction with this report in cooaidering the resuHs of our audit.

f /f,

-




BALANCE SHEET

SEPTEMBER 30, 2009

Assets Cash ard cash equivalents $ 255,375 ~rest receivable 7,280 Deferred Financi~ costs 6,705 Lo~-term iT1YE!stments

Total Assets

L iabilities and Retained Eamings Liabilities :

Accrued bard interest payable Other accrued liabilities Otherliabi~ties

Bords payable Total liabilities

$ 18,469 1,563

57,660 717.012 794,704

Program equity: Contributed capital Retained eamirgs

Total program eqLity

77,940 713,608 791,548

Total Liabilities ard Program Equity $ 1,586,252


2




STATEMENT OF REVENUE, EXPENSES AND RETAINED EARNINGS


Revenue

t'ilerest income , 79,489 Net increase in fair value of long-term il1\lestments 49,535 Fee income 12,000

Total Revef'U! 141,024

Expenses

nterest on bonds payable 47,103 Amortization of deferred financing cost 283 General and administrative 1,355

Total Expenses 48,741

Excess of revenue over expenses 92,283

Retained earnings - beginning of~ar 621 ,325

Retained earnings - end of ~ar , 713,608


3


2000 SERIES A AND 8 SINGLE FAMILY MORTGAGE




Cash flows from operating activities: Excess of revenue over expenses $ 92,283

Adjustments to reconcile to net cash provided (used) by operating activities:

80rd interest expense Accretion on capital appreciation bords Amortization of deferred financing costs Amortization of deferred fee income Net decrease in the fair value of Iong~term investments ncrease in interest receivable ncrease in other receivables ncrease in accrued ~abllities

Net cash pro'oided by operating activities

47,103 8,947

223 (12,000) (49,535)

6 ,768 2,635

90 96,51 4

Cash flows from investing activities: Principal receipts on long-term investments

Net cash provided by investing activities 83,585 83,585

Cash flows from non-capital and related financing activities: nterest payments on bords payable Principal pa~nts on bords payable

Net cash used in non-capital ard related financing activities

(49,559) {89,932)

{139,491 )

Excess of revenue over expenses 40,608

Cash and cash equivalents, beginning of year 214,767

Cash and cash equivalents, erd of year S 2551375


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SEPTEMBER 30, 2009


The Housing Finance Aulhority of Broward County (the "Authority' ) was established in 1979 by the Board of County Commissioners for the purpose of encouraging the investment of private capital and stimulating the construction of residential housing for low and moderate income families through the use of public financing . The Authority is authorized to issue bonds to fulfill its corporate purpose in principal amounts specifically authorized by the County Commissioners. Amounts issued by the Authority shall not be deemed to constitute a debt of the County, the State of Florida, or any political subdivision thereof.

The 2000 Series A and B Single Family Mortgage Revenue Refunding Bonds (the ' 2000 Bonds'), along with certain commitment fees and certain other available monies, were issued in the amount of $23,190,000 to (a) refund obligations of the Authority pursuant to a Une of Credit Agreement dated March 1, 1999 between the Authority and First Union National Bank, (b) finance mortgage loans on single family residences in Broward County, Florida thrOU9h the acquisition of fully-modified Government National Mortgage Association Certificates ("GNMA Certificates") and single pool Federal National Mortgage Association Securities ("FNMA Securities' ), (c) under certain circumstances, pay interest on the Bonds and pay program expenses, (d) pay a portion of the costs of issuance relating to the Bonds, and (e) defease the outstanding 1990 Series A Bonds and portions of the 1998 Series A and B Bonds.

Note 2 Summary of Significant Accounfng Policies

The 2000 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds (the "Bond Program Funds j were created by the Bond Resolution adopted by the Authority to account for the proceeds from the sale of the 2000 Bonds, the debt service requirements of the Bond indebtedness, and the mortgage loans on eligible single family residential housing purchased with Bond proceeds.

Basis of accounting

The Bond Program Funds use the accrual basis of accounting. The Bond Program Funds have adopted Govemmental Accounting Standards Board ("GASB' ) Statement No. 20 by electing to apply all of the GASB pronouncements as well as the pronouncements of the Financial Accounting Standards Board dated prior to November 30, 1989.

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SEPTEMBER 30, 2009

Note 2 Summary of Significant Accounting Policies fcont'd l


The preparation of financial stalements in conformity with accounting principles generally accepted in the United States of America requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.


For purposes of the statement of cash news, the Authority considers all highly liquid debt instruments with an original maturity of three months or less at the time of purchase to be cash and cash equivalents.


Effective October 1, 1997, the Authority adopted GASS Statement No. 31 . "Accounting and Financial Reporting for Certain Investments and for External Investment Pools." GASS Statement No. 31 requires that all investments held by governmental entities, including external investment pools, be reported at fair value with the gains and losses included in the statement of revenue, expenses and changes in retained earnings.

Investments of the Bond Program Funds with readily determinable fair values are recorded at fair value based on quoted mafilet prices. Investment income, including changes in the fair value of investments, is recorded as revenue in the statement of revenue, expenses and changes in retained earnings.

Deferred financ ing costs


Deferred fee income

Commitment fees collected from participating mortgage lenders were deferred and are recognized as income over the estimated life of the mortgage loans using the interest method.

Retained earnings

Upon redemption of the Bonds. any remaining assets will be refunded as provided by the Trust Indenture.

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SEPTEMBER 30, 2009


Investments permitted by the Bond Program Funds are governed by certain provisions of the Trust Indenture. Investments include deposits and guaranteed contracts with banks and financial institutions which meet standards for deposits as stipulated in agreements with the Authority for benefit of the Bond Program Funds.

Depos its

Public deposits in the State of Florida are collateralized under the provisions of Chapter 280, Florida Statutes. Losses to public depositors are covered by the sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. Included in cash and cash equivalents are deposits which are deemed insured and, therefore, not subject to credd risk.


The Authority, the Trustee, and CDC Funding Corporation (' CDCFC' ) entered into an investment agreement whereby substantially all monies held in the Bond Fund, General Fund, Program Expense Fund, and Rebate Fund (collectively, the ' Float Fund' ) were deposited with CDCFC. The investment agreement provides for the establishment of fixed rates of return on amounts deposited in the Float Fund accounts which are invested with CDCFC at 6.40%. The investment agreement for the Float Fund matures September 30, 2031, and provides that the Trustee must give CDCFC at least one business day's notice for the withdrawal of funds invested with CDCFC, and the Trustee shall not make withdrawals for reasons other than those specified in the Bond Indenture. The obligation of CDCFC to repay the amounts invested with interest at the specified rate shall be an absolute and unconditional obligation of CDCFC. As of September 30,2009, the amounts on deposit under this investment agreement totaled $134 ,049 and are included in cash and cash equivalents on the balance sheet.

Longterm investments

Long-term investments COIlsist of GNMA Certificates and FNMA Securities. Each GNMA Certificate and FNMA Security is backed by a pool of mortgage loans originated by the designated Mortgage Lenders for the 2000 Series A and B Bond issue. GNMA Certificates and FNMA Securities bear interest at 0.50% less than the interest rate on mortgage loans, which bear interest at 6.99%. Timely payment of principal and interest is guaranteed by the Government National Mortgage Association and Federal Natiooal Mortgage Association.

The contractual maturities of the GNMA Certificates and FNMA Securities at September 30, 2009 are greater than 10 years. Actual maturities may differ from contractual maturities due to borrowers having the right to prepay obligations without prepayment penaHies.

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SEPTEMBER 30, 2009

Note 3 Investments and Cash and Cash Equivalents (cont'd)

Deposit and investment risk

Governmental Accounting Standards Board (GASB) No. 40, Deposit and Investment Risk Disclosures, an amendment of GASB Statement No.3, is effective for financial statements periods beginning after June 15, 2004. This Statement establishes and modifies disclosure requirements related to investment risks including credit and custodial risk, concentration of credit risk, interest rate risk, and foreign currency risk.

The 2000 Series A and B Single Family Mortgage Revenue Refunding Bond Program Funds has adopted the provisions of GASB No. 40. The Bond Program Funds investment policy pursuant to the Trust Indenture includes language that limits credit and custodial risk, concentration of credit risk, interest rate risk, and foreign currency risk by requiring investments of the Bond Program Funds to be in Federal National Mortgage Association (FNMA) Securities and GNMA Certificates. The FNMA Securities and GNMA Certificates are collateralized and insured and are not subject to credit and custodial risk, concentration of credit risk, interest rate risk or foreign currency risk as defined in

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