Audit Notes

Please refer to the Year End Reporting deadlines to ensure each Partnership meets its reporting deadlines for all Audits and required supporting documentation. All submissions should be uploaded via the NEF CPA Portal (preferred) or via email to yereporting@nefinc.org.

ENGAGEMENT LETTER*

For certain Partnerships, a copy of the executed Engagement Letter is required to be submitted to NEF by the Year End Reporting Deadline. In addition to the Partnerships listed on the referenced spreadsheet, if a Partnership engaged a new CPA for the current year-end reporting, please submit a copy of the executed Engagement Letter to NEF.

COMPONENT AUDITOR LETTER AND PEER REVIEW REPORT

NEF’s Fund Auditors (Novogradac & Company LLP and CohnReznick LLP) require Component Auditor Letters for certain partnerships in accordance with AU-C Section 600. The signed letter, current Peer Review Report & related Acceptance Letter should be returned directly to the respective Fund Auditor in accordance with the instructions noted in the Component Auditor Letter by the Year End Reporting Deadline.

Please note that our Fund Auditors rely on the partnership, as audits based on the Peer Review Reports for each CPA firm. In certain situations listed below, our Fund Auditors may be required to perform additional procedures over the individual Partnership’s current year activity. The impact of this additional work is two-fold. First, it will delay NEF’s reporting to its investors. Second, the additional costs incurred by the Fund Auditors to perform such work will be the responsibility of the respective Partnership.

The situations in which the additional procedures may be warranted include the following.

• A current Peer Review Report and Acceptance Letter with a Pass rating are not received
• The current Peer Review Report has a Pass with Deficiency(ies) rating, if the deficiencies are deemed to be significant
• The current Peer Review Report has a Fail rating

If one of the situations above occurs, a representative from the NEF Financial Analysis Department will contact you.

General Audit Notes

• NEF requires comparative audited financial statements, when possible.
• NEF requires a detailed comparative Schedule of Operating Income and Expenses to accompany the audit. The schedule should include the following.
• Revenues: break-down between Tenant, Subsidy and Commercial Rent as well as Vacancy Loss
• Expenses: break-down within each operating expense category
• Please utilize NEF’s preferred presentation for the financial statements (inset link to Forms & Resources/Financial Statement Template) and footnotes (insert link to Forms & Resources/Audit Report Template). Highlights of those include the following:
• Deferred developer fee is clearly listed on the Balance Sheet with the terms of the payment detailed in the Footnotes
• Classification of syndication costs and capital contributions receivable from the LP as Equity line items
• Statement of Equity/Capital to include capital account by each partner, capital contributions receivable from the LP and syndication costs in separate and distinct columns
• Footnote addressing the review of the Investment in Real Estate for Impairment in Value (FASB ASC Topic 360)

If you need further information or wish to discuss any of the matters set forth herein, please contact Evelina Goehring, NEF's VP, Financial Analysis, by email or by phone.

* Tax Return only for Partnerships with Preliminary Audit Waiver Approval or Partnerships that have elected the mini-audit in lieu of full financial audit option.