Report of Independent Accountant on Applying the Enterprise Zone.doc

Report of Independent Accountant on Applying the Enterprise ZoneReal Property Investment Grant Agreed-Upon ProceduresInsert zone investor name and the Virginia Department of Housing and Community DevelopmentWe have performed the procedures enumerated below which were agreed by insert zone investor name and the Virginia Department of Housing and Community Development, to assist you in evaluating the Virginia Enterprise Zone Real Property Investment Grant Qualification Form (EZ-RPIG) and the additional required information of insert zone investor name prepared in accordance with the Real Property Investment Grant Instruction Manual for the 2009 grant year cycle. The management of insert zone investor name is responsible for accuracy of the Enterprise Zone Real Property Investment Grant Qualification Form (EZ-RPIG) and additional required information. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Our procedures, and the results of those procedures, follow this report.We were not engaged to, and did not, conduct an examination or review of the Virginia Enterprise Zone Real Property Investment Grant Qualification Form and additional required information, the objective of which would be the expression of an opinion. Accordingly, we do not express such an opinion.  If we had performed additional procedures, other matters may have come to our attention that would have been reported to you.This report is intended for the use of insert zone investor name and the Virginia Department of Housing and Community Development, and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes.Signature _City, StateDateReal Property Investment Grant Agreed Upon Procedures And FindingsProcedure 1: Attestation of Completed Application The CPA will attest that the Real Property Investment Grant Form EZ-RPIG and all required attachments have been prepared in the prescribed format and Form EZ-RPIG contains the signed declaration. Required documentation is as follows:1. Completed and signed Form EZ-RPIG2. Completed W-93. Copy of final CO or final building inspection or in cases where no permits are required, a letter from the building official on the localitys letterhead stating such in addition to a copy of the third party inspection report indicating the work was complete4. Completed, signed, and notarized supplemental form for owners of space in building (if applicable)5. Completed, signed, and notarized supplemental form for a tenant in a building (if applicable)6. Completed, signed and seal/notarized supplemental form for a mixed-use building (if applicable).Findings:Insert Procedure 1 FindingsProcedure 2: Attestation of Qualified Real Property InvestmentsA. The CPA will attest that the schedule of qualified real property investments (Part III of Form EZ-RPIG) includes those cost categories qualifying for the Enterprise Zone “qualified real property investments” per 59.1-548A of the Code of Virginia which are defined as “the amount properly chargeable to a capital account for improvements to rehabilitate, expand or construct depreciable real property placed in service during the calendar year within an enterprise zone provided that the total amount of such improvements equals or exceeds (i) $100,000 with respect to a single building or a facility in the case of rehabilitation or expansion or (ii) $500,000 with respect to a single building or a facility in the case of new construction. Qualified real property investments include expenditures associated with (a) any exterior, interior, structural, mechanical or electrical improvements necessary to construct, expand or rehabilitate a building for commercial, industrial or mixed use; (b) excavations; (c) grading and paving; (d) installing driveways; and (e) landscaping or land improvements. Qualified real property investments shall include, but not be limited to, costs associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, fire suppression systems, roofing, flashing, exterior repair, cleaning and cleanup.” In the case of cost categories listed on the schedule that include more than one type of work (such as drywall and demolition), the CPA will obtain a break down of the work included in such category and verify that all cost categories qualify as qualified real property investments. The CPA will note any items he or she is uncertain if such items qualify as real property investments, with the corresponding dollar amount, in this report.Findings:Insert Procedure 2A FindingsB. The CPA will attest that the items and costs listed on the schedule were properly charged to the capital (asset) account. Any investments/items that have been expensed cannot be included on the schedule of qualified real property investment. The CPA will review the schedule for any items that are not charged to the capital account. In cases where not all qualified real property investments under the final CO charged to the capital account have been paid for, in order to count those qualified real property investments, a charge to a capital account with a corresponding recorded entry to a liability account and proof of subsequent payment thereof within 60 days of the calendar year end is satisfactory proof of a properly recorded charge to a capital account at year end. Findings:Insert Procedure 2B FindingsC. The CPA will review 100 percent of the invoices/receipts that correspond to the dollar value of the items listed on the schedule to attest that they were properly chargeable to the capital (asset) account under generally accepted accounting principles or another recognized basis of accounting. Findings: Insert Procedure 2C FindingsProcedure 3: Attestation of Placed in Service DocumentationFor All Types of Placed in Service DocumentationA. The CPA will ensure that the placed in service document was final and no other documentation was issued or is pending (for example, a final building inspection issued before a CO) by verifying with the localitys Building Code Office the final documentation issued for the rehabilitation/expansion/new construction project for which a grant is being sought. Findings: Insert Procedure 3A FindingsB. In cases in which the final placed in service documentation issued was only for a portion of the building/facility (for example, a CO for the first floor in a four story building), the CPA will attest that the qualified real property investment amount listed on Part IV, Line 3.A. of Form EZ-RPIG only includes work completed to the portion of the building/facility.Findings: Insert Procedure 3B FindingsWhen Placed in Service Documentation is a Final COA. The CPA will review the final Certificate of Occupancy (CO) for the building to attest that the physical address on the final CO is the same physical address as listed on the EZ-RPIG application.Findings: Insert Procedure 3A FindingsB. The CPA will review the final CO to attest that the date of issuance is within the grant year 2009. Findings: Insert Procedure 3B FindingsC. The CPA will review the final CO to attest that it was final not temporary or pending. Findings: Insert Procedure 3C FindingsD. In the case of a shell CO, the CPA will review EZ-RPIG Part I, Line 2 to attest that the zone investor is not a tenant of the building, unless they have signed a capital lease agreement and have coordinated with the building owner. Findings: Insert Procedure 3D Findings E. The CPA will review the final CO to attest that the name listed on the final CO matches the name of the qualified zone investor on EZ-RPIG Part I Line 1. If a different entity or individual is listed on the final CO, the CPA will attest that the qualified zone investor has prepared and signed a cover letter explaining their relationship with the entity listed on the placed in service documentation. Findings: Insert Procedure 3E Findings When Placed in Service Documentation is a Final Building InspectionA. In cases where the building was in continual service during the rehab/expansion work, or there was no change in use or final CO required, the CPA will review the final building inspection to attest that the physical address on the final building inspection is the same physical address as listed on the EZ-RPIG application. Findings: Insert Procedure 3A FindingsB. The CPA will review the final building inspection to attest that the date of issuance is within the grant year 2009. Findings: Insert Procedure 3B FindingsC. The CPA will review this final building inspection report document to attest that the final building inspection was approved/passed and not pending or temporary. In the cases in which localities issue multiple inspections for a project (building, electrical, mechanical, etc.), the CPA will review all the final inspection documents to attest that all the inspections were fully approved/passed in order for all the corresponding dollar amounts under each inspection to be included in the total qualified real property investment amount. Findings: Insert Procedure 3C FindingsD. The CPA will review the final building inspection to attest that the name listed on the final inspection matches the name of the qualified zone investor on EZ-RPIG Part I Line 1. If a different entity or individual is listed on the final inspection, the CPA will attest that the qualified zone investor has prepared and signed a cover letter explaining their relationship with the entity listed on the placed in service documentation. Findings: Insert Procedure 3D FindingsWhen Placed in Service Documentation is a 3rd Party Licensed Inspectors ReportA. In cases where the locality did not require any building permits or other permits for ANY of the qualified real property investments listed on the schedule in Part III of the Form EZ-RPIG, the CPA will review an official letter from the building code official to attest that it references the physical address and states that such permits are not required for the work. Findings: Insert Procedure 3A FindingsB. The CPA will review the licensed third party inspectors report to attest that the physical address on the report is the same physical address as listed on the EZ-RPIG.Findings: Insert Procedure 3B FindingsC. The CPA will review the third party inspection report to attest that the date the report was issued was within the grant year 2009.Findings: Insert Procedure 3C FindingsD. The CPA will review this report document to attest that all the work was complete in grant year 2009 with no outstanding or failed items reported. Findings: Insert Procedure 3D FindingsE. The CPA will review the licensed third party inspectors report to attest that the name listed on the report matches the name of the qualified zone investor on EZ-RPIG Part I Line 1. If a different entity or individual is listed on the report, the CPA will attest that the qualified zone investor has prepared and signed a cover letter explaining their relationship with the entity listed on the placed in service documentation. Findings: Insert Procedure 3E FindingsProcedure 4: Attestation of Square Footage for Mixed Used BuildingsA. The CPA will attest that if the applicant has indicated in Part I of Form EZ-RPIG on Line 5 “Mixed Use” that the applicant has provided the CPA with the supplemental form EZ-RPIG Mixed Use where Part II of EZ-RPIG Mixed Use has been “completed by the preparer (or the representative of the preparer) of the measured drawings/plans submitted to the locality” and that it contains the professional seal (AIA) or notarized signature of the preparer (or representative of the preparer) of the drawings, if not an architect. In the case where no formal drawings were required by the locality or the zone investor prepared the measured drawings, the CPA will attest that a licensed third party architect, contractor, etc., has signed and sealed the form certifying that at least 30 percent of the useable floor space in the building is devoted to commercial, industrial, or office use. Findings: Insert Procedure 4A FindingsB. The CPA will attest that Part II Line 4 of the Form EZ-RPIG Mixed Use is mathematically correct based on information on Part II Lines 2a, 2b, and 3 and is at least 30 percent. Findings: Insert Procedure 4B FindingsProcedure 5: Attestation of Owners of Space in BuildingA. The CPA will attest that if the applicant has indicated in Part I of the EZ-RPIG Block 2 “owns space in a building (i.e. office condo)” that a supplemental EZ-RPIG Multiple-Owner Form has been completed and signed by the applicant and the applicant has provided the CPA with documentation (deed of trust or other closing documents) validating the accuracy of Part II Lines 1 and 2 of the supplemental Multiple-Owner Form. Findings: Insert Procedure 5A FindingsB. The CPA will attest that Part II Line 3 of the supplemental form is mathematically correct. Findings: Insert Procedure 5B FindingsC. The CPA will attest that information in Part III of the supplemental form agrees with the grant requested by the zone investor on EZ-RPIG Part IV Line 3.B. indicating that either the grant request is being prorated or has been coordinated with all other owners of space in the building. In the case of coordination, the CPA will attest that all the building/facilitys square footage has been accounted for by the other owners notarized signatures such that the sum of the square feet listed in Part III Block C and the square footage listed in Part II Line 1 equals Part II Line 2 (buildings total square footage). Findings: Insert Procedure 5C FindingsProcedure 6: Attestation of Tenant(s) in BuildingA. The CPA will attest that if the applicant has indicated in Part I of the EZ-RPIG Block 2 “tenant in building” that a supplemental EZ-RPIG Tenant Owner Consent form has been completed and signed by the applicant and the applicant has provided the CPA with documentation (valid lease) validating the accuracy of Part III Lines 1 and 2 of the supplemental Tenant Owner Consent Form. Findings: I