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HomeMy WebLinkAbout1980-01-02; City Council; 6119; Federal revenue sharing compliance auditI .. FEIERAL REVENUE SHARING COMPLIANCE AU.DIT Federal regulations require the recipients of'Federal Revenue Sharing funds to perform a compliance audit.of Federal Revenue Sharing funds 'received since January 1, 1977. This audit must be submitted to the Department of the Treasury by March 1, 1980. The City's audit firm, Ge.0rge.A. Peterson has been contacted and has submitted the attached.proposa1. indicating a cost of up to $l;SOO for the required audit. Since no funds are presently budgeted for this audit a transfer of f.unds would be necessary to cover the antici9ated costs. .. .. .. u. -. Exhib?ts - ' .. Memo to City Manager, dated July 16, 1979. ~. Memo. to City Manager, da$ed.December. 20, i979. Proposal from George A. Peterson..' 6 Cornpiny, dated. 'December 18 , 1_979. - .. .. .. ' Resolution # b~3Y . .. .. .. .. Recomme'ndations Adopt Resolution .# 03 accepti-g the George A. Peterson 6 Company proposal for the Fe era1 Revenue Sharing audit and.approving the transfer of funds. .. Council Action: 1-2-80 .* Counci 1 adopted Resol utton '6038 accepting. the George A. Peterson & Company proposal for the Federal Revenue Sharing audit and + approving the transfer of funds. .I .* .. MEMORANDUM _-. DATE : December 20, 1979 TO: CITY MANAGER FROM: FINANCE DIRECTOR SUBJECT: COMPLIANCE AUDIT OF FEDERAL REVENUE SHARING FUNDS In July of this year, the City Manager and I had several discussions concerning the audit of Federal Revenue Sharing funds and the City's audit process. At that time the Manager indicated that I should contact the City's auditors and request a proposal for the compliance audit required by the Federal Government in order to get the process underway. George A. Peterson and Company was contacted and the attached proposal has been received. As you can see the total "not to exceed" cost is $1,800. Funding for this audit has not been included in the 1979-80 budget, so a transfer of funds would be necessary to cover these costs. Since the Federal Revenue Sharing fund has provided the funding for other administrative functions in the past and the fund has a relatively strong fund balance position estimated for June 30, 1980 ($484,042), I feel this would be a primary source of funds for this project. I have prepared the attached agenda bill for council consideration on January 2, 1980 recommending acceptance of the George A. Peterson and Company proposal and authorizing the transfer of funds to cover the cost of the audit. JAMES F. ELLIOTT Finance Director / JFE : lw Attach. MEMORANDUM I DATE : July 16, 1979 TO : CITY MANAGER FROM: ACTING FINANCE DIRECTOR SUBJECT: COMPLIANCE AUDIT OF FEDERAL REVENUE SHARING FUNDS 1977 THROUGH 1979 According to federal regulations, revenue sharing recipients must have a complete compliance audit of federal revenue sharing transactions at least every three years. These rsgiilations went inta effect January 1, 1977 and cover all funds rsceived or spent after that date, It is my understanding that the regular annual city audit satisfies only a portion of the requirements set out in the federal audit guide. To properly comply with the revenue sharing rules, the city should arrange for a compliance audit covering the period January 1, 1977 through June 30, 1979 and submit the results of this audit to the Audit Division of the Treasurer’s Office prior to March 1, 1980, (Funds for this audit have not been requested in the 1979-80 budget request.) This date has been established by the Office of Revenue Sharing as the deadline for submkssion of audits covering this period. If no audit report is received, funds may be withheld until compliance can be determined. If it is acceptable to the Manager, I will arranage to request proposals in September 1979, from various audit firms for the performance of this compliance audit. Acting Finance Director JFE: Iw Y 2 REF: 5521-A It is not uriusual €or a goverment's initial ailocation to differ from the estimated allocation even'if the data for that government have not changed. Because of the nature of the revenue sharing formula, one government's allocation may be affected by adjustments made to correct another government's data. Please do not call or write us for this information prior to receiving your SOAll form because it will not be available. Independent' Audits of Recipient, Governments Required The amended'Act and regulations require every recipient government !.::7; r.11 -rec.&i-i~r, $?5,0CO cr more' of shared revenues during ezch of its of all of its financiai statemznts, coi..ducted for the. purgzs? of d?t*r- mining compliance with the Act as amended, in accordance xizh generally accepted'auditing standards at least once every three years zfrer thar date. In other words, even if your government has used izs -2vzRue sharing funds only for programs and activities of a sing12 .<t?zrtment, all accounts and funds of your government must have a fii.,z.-cial audit in accordance with these standards. There also should be 2 zcmpliance audit of revenue sharing and antirecession fiscal assistarLcs funds. The Congress felt that only in such a manner would the audit'reqxirement be meaningful. Governments receiving less than $25,000 in any ,323, fiscal year may be required to have an audit by State or local lax which woulp continue to apply to them. The revenue sharing audit requireinents do not apply to any government which has received less than $25,000 for one or more of its fiscal periods after January 1, 1977. <, I.! f:.':(a!iL:i?!! , L!L..S .I;;:':'.- J.l;i'.l,lr;' 2) < _. 277 , e;! - L--.--- - -. . 1 I I . ... .. . I lihen to Have An Audit I An indep2ndent audit in conformance with these requirements should - have been conducted for your fiscal year ending in calendar year 1977, 1578 or 1979. Your audit report should be submitted to the appropriate reviewing agency (see below) as soon as possible and not later than - &larch 1, 19SO. If your government cannot subrnii an acceptable audit report by that date, you should so advise the Manager, Audit Division, at. the letterhead address now and explain the arrangements you have made to obtain such an audlt. Recipient governments which have not suhnitted an acceptable report or advised us of t52 arrangements that have been made to obtain such an audit by March 1: 1980, will be suhjecz to a determination of noncon?liance which c2-1 lead to a withholtizg of payments. Where to Send Them Recipient goveEzics wiirL have had an audit performed pursuant to these reGuirements 57 z? icdqendent public accountant (not the State Auditor) and whLr,k a:? r.3: =?quire6 to submit a copy to a State audit agency should ser.2 :i?ir aulLt reports now for review to the i c .. GEORGE A. PETERS0N.C. P. A RICHARD E. EVANS,C. P. A. THOMAS J. BRAOY, C. P. A. GEORGE A.PETERSON & Co. CERTIFIED PUBLIC ACCOUNTANTS 7816 IVANHOE AVENUE LA JOLLA, CALIFORNIA 92037 TELEPHONE (714) 454-6176 MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS December 18, 1979 Mrl James F. Elliott Finance Director City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Dear Mr. Elliott: In accordance with your request for a proposal to perform an audit of Revenue Sharing Fund and Antirecession Fiscal Assistance Fund for the year ended June 30, 1379, we submit the following information. We are "Independent Public Accountants" as defined in Section 11, Part A.1.b. of the Department of the Treasury "Audit Guide and Standards for Revenue Sharing and Antirecession Fiscal Assistance Recipients. 'I Our examination will be made in accordance with generally accepted auditing standards and will include such tests of the accounting records and such other procedures as consider necessary to express an opinion on the financial statements. We will comply with guide- lines in the Department of the Treasury "Audit Guide and Standards for Revenue Sharing and Antirecession Fiscal Assistance Recipients." Our fees are based on hours worked by George A. Peterson & Co. per- sonnel at standard hourly rates which in turn are based on the expe- rience level of the individuals assigned. We estimate that the audit would require the following man hours and fees: Rate Per Hour Hours costs Partner $45 J 4 $ 180 Manager 25 y 12 300 Senior 22 J 60 1,320 $1,800 76 - - - Every effort will be made to keep our services to the minimum con- sistent with the requirements of the engagement. be less than the estimates, you will, of course, be billed the lesser amount. Should we encounter problems which would cause our fees to exceed the amount discussed above, we will bring this to your atten- tion immediately for proper resolution. Should our charges .. ’+ . Mr. James F. Elliott December 18, 1979 ....... Page 2 Our fee estimate is based on the assumption that your personnel will prepare certain schedules and analyses for us and will make available to us invoices and other documents for our examination when requested. We estimate that the audit will begin on or about January 2, 1980 and our report will be delivered by March 1, 1380. of our examination, it becomes apparent that we will not meet this deadline, you will be promptly notified. If during the course We agree that all the working papers prepared in connection with this audit shall be retained for a period of three years and that these working papers will be made available for examination, if requested, by duly authorized representatives of the Department of Treasury, Office of the Revenue Sharing. We assure you we have the organization and expertise to perform these services in a creative, constructive, economical and timely manner. We would be most happy to continue to be of service to the City of Carlsbad. If you have any questions concerning this proposal, please do not hesitate to contact us. Very truly yours, GEOJjGE A. PETERSON & CO. dichard E. Evans, Partner If the terms of this engagement, as set forth, in this letter are acceptable to you, you may so indicate by signing in the appropriate place designated below. Accepted : January 9, 1980 Date RONALD C. PACKARD, Mayor ..- .. 1200 ELM AVENUE CARLSBAD, CALIFORNIA 92008 January 22, 1980 George A. Peterson & Co. 7816 Ivanhoe Avenue La Jolla, CA 92037 Attention: Fil Renoso TELEPHONE: (714) 729-1181 Per your request, enclosed please find a copy of your letter of December 18, 1979 regarding your audit proposal to the City of Carlsbad. Said proposal has been accepted by Mayor Packard on behalf of the City, and signed as des i gna ted by your company. .. If you have any questions regarding this matter, please do not hesitate to contact this office. ALETHA L. RAUTENKRANZ City Clerk ALR: krs Enclosure cc: Finance Director ___--- ” .,I__.I_“ __I_______.__... . .. . ... . . . ..~. , . . ... .-”.. . 1 2 3 4 5 E 7 e 9 1c 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6038 -- RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ACCEPTING THE PROPOSAL OF GECRGE A. PETERSON AND COMPANY TO PERFORM A FEDERAL REVENUE SHARING COMPILANCE AUDIT AND TRANSFER FUNDS FOR THIS PURPOSE. WHEREAS, the City of Carlsbad is required by Federal regu- lations to perform an audit of Federal Revenue Sharing transactions at least every three years; and ' WHEREAS, the 1978-79 fiscal year represents the third year since the enactment of the Federal Revenue Sharing audit require- ment; and WHEREAS, no Federal Revenue Sharing audit has been performed between January 1, 1977 and June 30, 1979; and WHEREAS; funds for this project are available from the Federal Revenue Sharing fund balance, account No. 22-000-0900: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. 2. That the proposal of George A. Peterson and Company to perform a Federal Revenue Sharing compliance audit is hereby accepted and the Mayor is authorized to enter into an zgreement for these services. 3. That the transfer of $1,800.00 from the Federal Revenue -. Sharing fund balance to the audit account is hereby approved. PASSED, APPROVED AND ADOPTED, by the City Council of the City of Carlsbad at a regular meeting- of the City Council held on 2nd day of January, 1980, by the following vote, to wit: xxx xxx I .- .. ._ c 1 2 3 4 5 6 7 8 9 10 . 11 3.2 13 14 15 16 17 1E 19 2c ' 21 25 22 24 25 26 27 28 ATE S : NOES : ABSENT : Councilmen Packard, Skotnick., Anear, Lewis an( None None Councilwoman Casler (SEAL) -2-.