financial statements - Tidewater Plantation

HARBOR LOFT
HOMEOWNERS' ASSOCIATION. INC.
NORTH tvfYRTLE BEACH. SOUTH CAROLINA
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 3I. 2OI4
TIARBOR LOFT
HOMEOWNERS' ASSOCIATION. INC.
NORTH MYRTLE BEACH. SOUTH CAROLINA
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT
t-2
FINANCIAL STATEMENTS
Balance Sheet
Statement of Revenues, Expenses and Changes in Fund Balances
Statement ofCash Flows
Notes to Financial Statements
J
4-5
6
7-E
Foehrkolb & Trich
Batbara Foetukolb, CPA
I
Courtney Trich, CPA
Mailinq Address: 4016 Riwt Oo*s Dt. PMB 103, ttyttle Beach, SC 29579
Addftst 4999 Caroliru Forest Blvd-, S te 228, Myr e Beach, SC 29579
Tele.: (813) 903-33311Fu: (81j) 903-3335 Ernail: Ja,rdtcpas{agrccotzs..net
Street
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Members of
Harbor tnft Homeowners' Association, Inc.
We have audited the accompanying financial statements of Harbor Loft Homeowners' Association, Inc.,
which comprise the balance sheet as of December 31,2014, and the related statements of revenues,
expens€s, and changes in fund balances and cash flows for the year then ende4 and the related notes to
the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair pres€ntation
of these hnancial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of intemal control r€levant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
erTor.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment ofthe risks of material misstatement ofthe financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers intemal control relevant to the entity's preparation
and fair presentation ofthe financial statements in order to design audit procedures that arc appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Harbor Loft Homeowners' Association, Inc. as of December 3t, 2014, and the
results of its operations and its cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
Omission of Required Supplementary Informstion about Future Major Repairs and Replacements
Management has omitted the information on future major repairs and replacements that accounting
principles generally accepted in the United States of America require to be presented to supplement the
basic financial statements. Such missing information, although not a part of the basic financial
statements, is required by the Financial Accounting Standards Board, who considers it to be an essential
part of the financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. Our opinion on the basic financial statements is not affected by the
missing information.
&////
* li./a/z$zzc
Myrtle Beach, South Carolina
August 25,2015
HARBORLOFT
HOMEOWNERS' ASSOCIATION. INC.
NORTH MYRTLE BEACH. SOUTHCAROLINA
BALANCE SHEET
DECEMBER 3I.20I4
Operating
Replacement
Fund
Fund
Total
ASSETS
Cash
24,157
Member Assessments Receivable
288,892
3
13,049
75
75
Prepaid Insurance
672
672
Utility Deposits
300
300
TOTAL ASSETS
25,204
288.892
$
314,096
$
231
LIABILITIES AND FTTND BALANCES
Liabilities
$
Accounts Payable
Prepaid Member Assessments
Income Taxes Payable
Total Liabilities
Fund Balances
23r
7,337
7,337
106
106
7,674
7,674
288,892
17,53 0
TOTAL LIABILITIES AND
FUND BALANCES
_!____2s!91_
See accompanying notes to
Page 3
financial statements.
$
288,892
306,422
s
314,096
HARBORLOFT
HOMEOWNERS' ASSOCIATION. INC.
NORTH IVTYRTLE BEACH. SOUTH CAROLINA
STATEMENT OF REVENUES. EXPENSES. AND CHANGES IN FLIND BALANCES
YEAR ENDED DECEMBER 3I. 2OI4
Operating
Fund
REVENUES
Member Assessments
Fines And Late Charges
60,912
Replacement
Fund
$
l13,400
75
Interest Income
23
Insured Loss Proceeds
TOTAL REVENUES
6l
010
Total
$
174,312
75
594
617
2,725
2,725
tt6,7 t9
177,729
EXPENSES
Repairs And Maintenance
Landscape Maintenance Contract
Landscape Maintenance And Supplies
Irrigation Maintenance
General Building Maintenance
Termite Treatment And Bond
Total Repairs And Maintenance
33,917
33,917
5,900
5,900
613
613
890
890
2,600
43,920
2,600
43,920
Accounting Services
Administrative And Meeting Expenses
1,100
1,100
47
47
Insurance
2,062
4,536
2,062
4,536
467
467
8,212
8,212
General And Administrative
Management Contract
Office Supplies, Printing, And Postage
Total General And Administrative
Major Repairs And Replacements
Bulkhead
Painting
Paving
Rock Sill Bidding, Monitoring, And
Construction
Dock Repair
Total Major Repairs And Replacements
See accompanying notes to hnancial statements.
Page 4
1,425
t,425
95,200
95,200
t2,763
12,763
15,833
15,833
4,019
4,019
129,240
r29,240
TIARBORLOFT
HOMEOWNERS' ASSOCIATION. INC,
NORTH MYRTLE BEACH. SOUTH CAROLINA
STATEMENT OF REVENUES. EXPENSES. AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 3I.2OI4
Operating
Fund
Replacement
Fund
Total
EXPENSES (Continued)
Utilities
Electricity
Total Utilities
515
515
515
515
106
106
284
284
Other Expenses
Income Taxes
Licenses
Ald
Property Taxes
Total Other Expenses
390
s3,037
TOTAL EXPENSES
129,240
Excess (Deficit) Of Revenues Over Expenses
7,973
(t2,521)
Fund Balances - Beginning Of Year
9,557
301,413
17,530
288,892
$
Fund Balances - End Of Year
See accompanying notes to
Page 5
financial statements.
182,277
(4,s48)
310,970
$
306,422
HARBOR LOFT
HOMEOWNERS' ASSOCTATION. INC.
NORTH MYRTLE BEACH. SOUTH CAROLINA
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 3I. 2OI4
Operating
Replacement
Fund
CASH FLOWS FROM OPERATING
ACTTVITIES
Excess (Deficit) OfRevenues Over Expenses
Adjustments To Reconcile Excess (Deficit)
Of Revenues Over Exprenses To Net Cash
Provided By Operating Activities:
(Increase) Decrease In:
Accounts Receivable
Interfund Receivables
$
Fund
Total
7,973 $ (r2,s21) $
3lt
3ll
616
62
Prepaid Expenses
Increase (Decrease) In:
(4,s48)
616
62
t7t
Accounts Payable
Advanced Member Assessments
(
Income Taxes Payable
Interfund Payables
Net Cash Provided (Used) By Operating
Activities
Net Increase (Decrease) ln Cash
t7l
l,e0s)
(
106
(616)
(616)
6,t02
(11,905)
(s,803)
6,102
(1l,e0s)
(s,E03)
18,055 300,797
Cash - Beginning Of Year
$ 24,157 S
Cash - End Of Year
1,90s)
106
288,E92
S
318,8s2
313,049
Supplemental Disclosure:
Income Taxes Paid
224
-
See accompanying notes to
Page 6
financial statements.
HARBOR LOFT
HOMEOWNERS' ASSOCIATION. INC.
NORTH MYRTLE BEACH. SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
NOTE I _NATURE OF ORGANIZATION
toft Homeowners' Association, Inc. is a statutory association incorporated and existing under the
laws of the State of South Carolina. The Association is responsible for maintaining and preserving
common property, enforcing rules for mutual benefit, and providing other common services to
Association members. The Association is a subordinate regime of the Tidewater Plantation Community
Association, which is the master association for Tidewater Plantation, a residential and golf course
community located in North Myrtle Beach, South Carolina. Harbor lnft is a condominium development
consisting of fifty-four (54) residential units. The Association incorporated on September 9, 1996.
Harbor
NOTE 2 _ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fund Accounting: The Association's governing documents provide certain guidelines for goveming its
financial activities. To ensure observance of limitations and restrictions on the use of financial resources,
the Association maintains its accounts using fund accounting. Financial resources are classified for
accounting and reporting purposes in the following funds established according to their nature and
purpose:
Operating Fund - This fund is used to account for financial resources available for the general
operations of the Association.
Replacement Fund - This fund is used to accumulate financial resources designated for future
major repairs and replacements.
Member Assessments: Association members are subject to monthly assessments to provide funds for the
Association's operating expenses, future capital acquisitions and major repairs and replacements.
Accounts receivable at the balance sheet date represent fees due from unit owners. The Association's
policy is to retain legal counsel and place liens on the units of members whose assessments become
delinquent. No allowance for doubtful accounts has been provided in the financial statements as of
December 31,2014, as management has deemed all member accounts to be collectible. Any excess
assessments at year-end are retained by the Association for use in the succeeding year.
Propertv. Eouipment and Accumulated Deoreciation: Real property and common areas acquired from the
developer and related improvements to such property are not recorded in the Association's financial
statements because those properties are owned by the individual unit owners in common and not by the
Association. Common property elements not recognized as assets in the financial statements consist
primarily of roadways, parking areas and a community dock. The Association will capitalize personal
property to which it has title at cost and depreciation will be calculated by an accelerated method for both
income tax and financial reporting over their estimated useful lives.
Estimates: The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from those estimates.
Date of Manaeement's Review: In preparing the financial statements, the Association has evaluated
events and transactions for potential recognition or disclosure though August 25, 2015, the date the
financial statements were available to be issued.
Page 7
HARBORLOFT
HOMEOWNERS' ASSOCIATION. INC.
NORTH MYRTLE BEACH. SOUTH CAROLINA
NOTES TO FTNANCIAL STATEMENTS
NOTE 3 _CASH
Cash consists of balances on deposit, including interest bearing deposits, with financial institutions. The
Federal Deposit Insurance Corporation (FDIC) insures the balance on deposit at each financial institution
up to $250,000. There were uninsured balances in excess of FDIC limits at December 31,2014.
NOTE4_INCOMETAXES
Homeowners' associations may be taxed either as homeowners' associations or as regular corporations.
For the year ending December 31,2014, the Association elected to file as a homeowners' association in
accordance with lntemal Revenue Section 528. Under that section, the Association excludes from
taxation exempt function income, which generally consists of revenue from uniform assessments to
owners,
The Association's tax filings are subject to audit by various taxing authorities. The Association's federal
and state tax retums for 2013, 2012, and 201I remain open to examination.
In
evaluating the
Association's tax provisions and accruals, the Association believes that its estimates are appropriate based
on current facts and circumstances.
NOTE 5 _ FUTT]RE MAJOR REPAIRS AND REPLACEMENTS
The Association's goveming documents provide that the Association accumulate funds for future major
repairs and replacements. As of December 31,2014, the Association had accumulated reserve cash of
S2EE,892. Reserve funds are held in separate accounts and are generally not available for operating
purpos€s.
The Association's management and board of directors have not conducted a study to estimate the
remaining useful lives and the replacement costs of the components of common property. Because actual
expenditures may vary from estimated future amounts, and the variations may be material, amounts
designated for future major repairs and replacements may not be adequate to meet all future needs. If
additional funds are needed, the Association has the right, subject to appropriate approval, to increase
regular assessments, pass special assessments, or delay major repairs and replacements until funds are
available.
Page 8