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HomeMy WebLinkAbout1980-05-06; City Council; 6244; Approving Agreement G.A. Peterson & Co.i % & (I) * FSENDA BILL NO. hoa54 CITY OF CARLSBAD - DATE : , ~av 6.! 1980 DEPARTMENT: Housing and Redevelopment C. Mgr. 2 Subject; A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE'. CITY OF CARLSBAD AND GEORGE A. PETERSON, AND CO. Statement of the Matter The Department of Housing and Urban Development recently completed field review of the Section 8 Housing program. Although the writte review has not been received, the reviewer has provided staff with work papers. The conclusion of the review is that the program's fi and management systems are in need of significant revision. (See ex, 1 and 2 ) Staff has contacted several Housing Authorities for recommendations firms providing financial, as well as management consulting service Federal Section 8 program. The only relatively local firm recommenc in both areas was George A. Peterson and Co., of San Diego. (This j also provides City audit services.) The firm has provided a proposal for provision of needed services at cost not to exceed 260 man hours or $7,000. ( See exhibit 3 ) Since the necessary revisions are outside of the normal H.U.D. audit requirements, Federal funding is not available to underwrite associa costs. This necessitates seeking City funds for this purpose. EXHIBIT "_ 1. Memo from Housing and Redevelopment Director 2. Memo from Finance Director 3. Proposal from George A. Peterson, and Co. 4. City Council Resolution NO. (ojyqwith agreement RECOMMENDATION Approve Resolution No. &/ 7"j. Council Action: 5-6-80 Council adopted Resolution 61 74, authorizing execution of an agreement with George A. Peterson and Co. for assistance in improving the financial and management systems of the Carlsbad Housing Authority. 0 e ?JE!lORAM!lUY DATE: April 29, 1980 T?: City Fanager; Frank Aleshire FROV: Jack E. Henthorn; Director 7 Housi n? and Redevelopment SUBJ : REQUEST FOR P,F?TTDIAL ASSISTANCE- HOUSTNG PR35RP,F? XANA5D?EPIT SYSTE”\?S The department of Housing and Urban 5evelopment conducts audit activities on a biennial basis. resulted in several deficiencies being noted which required cprrective measures. Initially it appeared as though these vere priqarily accountiny inadequacies, requiring only slight adjustment to management systems, revealed that while accounting deficiencies were present, many of them were the result of a marginal SectTon 8 manacernent program wherein cash needs were no1 being forecasted, as required, and Section 8 management guidelines we not bei ng i ngl emented. Subsequent Field Review by HUD, Los Angeles, staff, (4/80) confirmed the initial findings made during my work with the Finance I)irector, noted i nadeqUatlCi eS in budge% preparation and control , i ncl udi ns weaknesses i n payment voucher processing and tenant l’ncomelel igihil ity verification. Several piecemeal changes have been implemented over the past few months in anticipation of the field review. These cbanaes were undertaken as stop-gap measures and are based on existing financial systems, Therefore, it appears prudent to upgrade the financial - and management systems at the same time to ensure that all deficiencies are removed in time *or the next required audit (6-30-80, for the period 7-1-78 through 6-30-88). HUD officials have stressed the need to upgrade our program in a tbely manner to ensure continued receipt of funding. This means that upon our receipt of the HUD written findings (next week) we will have 00 days to correct tee deficiencies noted here and in the Finance Di rectofs correspondence of Apri 1 28, 1980. ( attached ) COMCLUSION 1 concur with the Fi nance Dl rec tor “s recommendation for ?resentation to Counci 1 at its meeting of ?lay 6, 1989. The last audit, which covered 1976-77, and 1977-78, Further investigation HUD specificall) JEH:al / I e a TO: HOUSING & REDEVELOPMENT DIRECTOR DATE: APRIL 28, FROM: FINANCE DIRECTOR SUBJECT; REQUEST FOR REMEDIAL ASSISTANCE - HOUSING AUTHORITY FINANCIAL SYSTEMS. During the past few months the Housing and Urban Development Staff has pointed out in no uncertain terms that the Management and accounting for the Carlsbad Housing Authority needs improvement. In particular, the Audit findings relating to the June 30, 1978 Audit report make it very clear that the financial systems used in connection with the housing authority are deficient and must be improved. The completion of a HSBD Field review in the past few weeks has in- dicated that, although the accounting practices in effect in April 1980 may be an improvement over past years, the practices in effect during 1978-79 and most of 1979-80 are no better than in previous fiscal years. In other words, unless decisive action is taken at this tiin@ to improve the financial systems for 1978-79 and 1979-80, the Audit findings for the two yearperiods 78-79 and 79-80 will be very similar to the previous report. This is of importance for two reasons. First, the City offically took over the accounting for the Carlsbad Housing Authority in October 1979. Prior to this date, the Housing Authority received little or no real support from the finance department. I believe that if the finance staff is to be responsible for financial report of Housing Authority operations, the systems used must be in complit with HUD guidelines. The inadequate information that exists on the City's records at this time make it ivpossible to create a useable t accounting system. To properly establish the recommended HUD syster the financial transactions for 1978-79 and most of 1979-80 must be reconstructed. Once a good accounting base exists, the proper pro- cedures can ,be implemented. Second, to guarantee continued funding of the Housing program in Carlsbad, the HuD field review findings must be properly answered. I is important that we respond quickly and constructively to the HUD findings. I believe that it will be in the City's interest to take a positive step toward eliminating all inadequacies noted in the rev It is my recommendation that the City contract with George A. Peters and Co., the City's audit firm, to perform the necessary financial and management reviews called for in the audit findings. I recomrnen Peterson due to their experience with the City of San Diego Housing Authority and their familiariaty with the City of Carlsbad books. T have proposed an audit program that will not exceed 260 hours or $7, I also recommend that the City Council approve the appropriation of from the general fund balance to account 1-114-2450, Audit, to fund con tract. - )., * i - 1' - r(1.f T,1 r- WT /&I , +J pJkjiuLJ I /\\ J b..J ?')'I L 1, L ,p 0 0 GEORGE A.PETERSON 6 Co. CERTlFl ED PUBLIC ACCOUNTANTS 7816 IVANHOE AVENUE MEMBERS GEORGE A PETERSON, C P A RICHARD E EVANS,C P A THOMAS J ERADY,A P C C P A GENE R KONRAD,C P A AMERtCAN INSTITUTE t CERTIFIED PUBLIC ACCOUN CALI FOR N IA SOCIETY < CERTIFIED PUBLIC ACCOUN LA JOLLA, CALIFORNIA 92037 TELEPHONE (714) 454-6176 April 29, 1980 Mr. Jim Elliott Finance Director City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Dear Mr. Elliott: AS YOU requested, this letter is written to give you an estimate ( our fees for conducting a review of the financial records and ope1 ations of the City of Carlsbad Housing Authority for the period July 1, 1978 to March 31, 1980. Our services would include a revi of the records maintained and of claims and reports submitted to t Department of Housing and Urban Development pursuant to the Sectic 23 and Section 8 housing programs operated by, or on behalf of, tl- City of Carlsbad since July 1, 1978. In addition, we will review the cost allocation and close-out of the Section 23 program. We will make recommendations with respect to any adjustments, correc- tions, or revisions considered necessary in the circumstances and the accounting procedures followed by the ongoing Section 8 progra 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 experience level of the individuals assigned. We estimate that o services would require between 230 and 270 man hours and that our fees would range between $6,000 and $7,000. Every effort will be made to keep our services to the minimum consistent with the requi rnents of the engagement. Should our charges be less than the esti mates, you will, of course, be billed the lesser amount. Should we encounter problems which would cause our fees to exceed the am0 discussed above, we will bring this to your attention immediately for proper resolution. We assure you we have the organization and expertise to perform these services in a creative, constructive, economical and timely manner, We appreciate the opportunity to present our firm for your consideration, and would be pleased to furnish additional in- formation or to meet further with you to discuss the contents of this proposal. Very truly yours, GEO E A. PETERS0 & CO. @&- ichard E. Evans, Partner e 1 2 3 4 5 6 7 8 9 10 11 12 e 0 RESOLUTION NO. 6174 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSRAD, CALIFORNIA, AUTI-IORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF CARLSBAD AND GEORGE A. PETERSON, AND CO., C.P.A., FOR ASSISTANCE IN IMPROVING THE FINANCIAL AND RIANAGENENT SYSTEMS OF THE CARLSBAD HOUSING AUTIIORITY. WHEREAS, a proposal has been received from George A. Pe and Co. for the performance of certain functions related to rebuilding and improvement of the Carlsbad Housing Authority financial and management data and systems; and WHEREAS, the scope of this work is defined in the afore ;mentioned proposal; and 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, the execution of this agreement will allow the to establish proper financial and management systems as desc by the Department of Housing and Urban Development; and WHEREAS, funds for the contract are available in accour; number 01-000-0900, the General Fund Balance Account; NOW, THEREFORE, BE IT RESOLVED by the City Council of t City of Carlsbad, California, as follows: 1. That the proposal of George A. Peterson and Co., is hereby accepted, and the Mayor and City Mlerk are hereby authorized to execute a contract therefore. 2. That fund transfer No. 83 transfering funds, from 1 General Fund Balance 1-100-0900 to Audit Account 1-114-2450 the amount of $7,000, is hereby approved. I. -”. -I_.> ., (//I/ //// -A FYMflRlT 4 a e' PASSED, APPROVED AND ADOPTED, by the City Council of tl eld on the 6th day of May, AYES: NOES: None ABSENT: Mane Councilmen Packard, Anear, Lewis, Councilwoman Casler an( EALE g2L Ronald C. Packard, Mayor 15 16 17 18 19 20 21 22 23 24 > 25 26 27 28 0 e c” AGREEMENT THIS AGREEMENT is made the day of 3 -1‘ between the CITY OF CARLSBAD, a municipal corporation of the State California, herein after referred to as CITY and GEORGE A. PETERSON CO. hereinafter referred to as PETERSON, REC I TAL S WHEREAS, the City has determined that it is in the public inte. to improve and establish proper accounting and management systems fi the Carlsbad Housing Authority; and WHEREAS, Peterson, by virtue of past experience with the Offici Housing and Urban Development and the accounting and management sys described by this agency, is qualified to supply the city with assi in establishing these systems; and WHEREAS, Peterson has submitted a proposal to accomplish the t outlined in this agreement; NOW, THEREFORE, in consideration of their mutual covenants and conditions, the parties hereto agree as follows : 1. DUTIES OF GEORGE A. PETERSON 6 CO. George A. Peterson 6 Co.. agrees to provide the services as li in the attached proposal. These services shall include, but n - be limited to the following: [a) Where necessary, reconstruct financial data from July 1, to present time in accordance with HUD specified guidelin 0 -2- a '[b) Assist the City in resubmitting necessary financial and management reports to the HUD offices for fiscal 1978-79 and 1979-80 to date. (c) Assist the city reporting to HUD the closeout of the Section 23 Program operated by the Carlsbad Housing Authority. Recommend appropriate accounting procedures where adjustm to existing procedures are necessary. (a) [e) Propose appropriate management policy and procedures for the operation of the ongoing Section 8 Program. 2. DUTIES OF THE CITY (a) The City will make payment to Peterson as provided in thir agreement. (b) The City will make available to Peterson any records, manuals, or other information in its possession related to the proposed project. (c) The City will assist Peterson in arranging meetings necessary to conduct the services herein. [a) The City will examine documents submitted by Peterson, render decisions, and advise Peterson as promptly as possible to avoid unreasonable delay in the progress of Peterson's work. 3, TERMINATION OF AGREEMENT 'I ... The City may terminate this agreement at any time by giving written fiotice to Peterson of such termination and specifying L e -3- e .. the effective date thereof, at least fifteen days before the effective date of such termination. In that event, all finish or unfinished documents and other materials prepared pursuant this agreement shall, at the option of the City, become its property. 4. * RELEASE OF INFORMATION BY PETERSON Any reports, information or other data, prepared or assembled by Peterson under this agreement shall not be made available to any individual or organization by Peterson without the prior written approval of the City. 9 5. PAYMENT Peterson will be paid a maximum of $7,000 for all work necessa to carry out the requirements of this agreement. Payment shal be made within fifteen days of receipt by the City of Peterson invoice in proper form. Invoices shall be in duplicate and shall include itemization clearly showing the individual amoun of each item of service. 6. TIME COMPLETION Peterson shall agree to schedule completion of the services provided in this agreement within sixty (60) days after execution of this agreement. 7. LIMITS OF THE OBLIGATION The limits of the obligation of the City under this agreement is in the sum of $7,000.00 which amount is estimated to be sufficient to compensate Peterson for all services performed hereunder during the terms of this agreement. In the event (I, -4- e at any time it appears to Peterson that said sum may not be sufficient, he shall immediately so notify the City Manager a He will not perform any work or incur any obligation beyond said sum of $7,000.00 without appropriate amendment to this agreement. 8, ' ASSIGNMENT OF CONTRACT Peterson shall not assign this contract or any part thereof or any monies due or to become due thereunder without the prior written consent of the City. 9. VERBAL AGREEMENT OR CONVERSATION No verbal agreement or conversation with any officer, agent or employee of the City, either before, during or after the executing of this contract, shall affect or modify any of the terms or obligations herein contained, nor such verbal agreement or conversation entitle Peterson to any additional payment whatsoever under the terms of this contract. IN WITNESS WHEREOF, the parties hereto have executed this agrc on the day and year first above written. CITY OF CARLSBAD GEORGE A. PETERSON 6 CO. BY p d 6PZR d("C/,& /7J --p RONALD C. PACKARD, Mayor ATTEST : BY ABPROVED AS TO FORM: l&?LB!& 2 fl&/Uh ALETHA L. RAUTENKRANZ, City Cle&