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HomeMy WebLinkAbout1981-06-16; City Council; Resolution 6591tb ? ., 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESr3LUTION NO. 6591 0 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ACCEPTING THE PROPOSAL OF CONRAD AND ASSOCIATES FOR THE AUDIT OF THE CONSTRUCTION COSTS OF THE LAKE CALAVERA HILLS SECJAGE TREATMENT PLANT AND APPROPRIATING FUNDS. WHEREAS, Conrad and Associates has been selected as the city's audit firm for this fiscal year, and WHEREAS, the city desires to perform an audit of the construction costs of the Lake Calavera Hills Sewage-Treatment .Plant, and WHEREAS, the scope of said audit is described in the attached proposal from Conrad and Associates, and WHEREAS, the cost of this audit can and shall be funded by an appropriation from the fund balance of the sewer construction fund. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Carlsbad does hereby accept the proposal of Conrad and Associates for the audit of the construction costs of the Lake Calavera Hills Sewage Treatment Plant which is Exhibit A attached hereto, and the City Council does hereby appropriate the sum of $4,800.00 from the fund balance of the sewer construction fund for the cost of this audit. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 16th day of June , 1981, by the following vote to wit: AYES: Council Mers Packard, Casler, hear, Lewis and Kulchin NOES: None ABSENT:Nme RONALD C. PACKARD, MAYOR , Deputy City Clerk (SEAL) Attachment A ’ 0. CERTIFIED PUBLIC ACCOUNTANTS FOURTEEN CORPORATE PLAZA DRIVE NEWPORT BEACH, CALIFORNIA 92660 71 4/759-0511 June 11, 1981 Mr. Frank Aleshire City Manager City of Carlsbad . Carlsbad, Ca. 92008 * 1200 Elm Avenue, . .. Dear Mr. Aleshire: This letter is to confirm the arrangements for our services to conduct an audit examination of the actual costs for construc- tion (as described below) of a 1;2 million gallon capacity sew- age treatment facility by Lake Calavera Hills Associates under an agreement between the City of Carlsbad and Lake Calavera Kills Associates, dated December 26, 1979. The following para-‘ graphs present .our understanding of the engagement (including the objectives and scope of our work), timing and staffing of the engagement; expected format of report and estimated time and expense of the examination. Our Understanding of the Engagement Our understanding of the engagement is based upon my discussion with you and meetings with the representatives of Lake Calavera Hills Associates on June 8, 1981. Our examination will be con- ducted in accordance with generally accepted auditing standards and will include tests of the accounting records and other audit- ing procedures we consider necessary in the”circumstances. We will evaluate internal accounting controls, particularly in the area of purchasing and bidding practices, disbursements to con- tractors and vendors and payroll and other fringe benefits charged to the project. Our auditing.procedures will include, but not be limited to, analysis of the contract, site observa- tions of the project, examination of supporting documentation of expenditures, confirmation with contractors where considered -. -, necessary, procedures and inquires re*lating to the existence of related parties, injury claims, disputed items, etc. The specific costs of the project which you have asked us to examine will include.the design, land costs, plant construction , ' I!: 4 a J Mr. Frank Aleshire Page Two costs, cost of the reversable force main from the plant to El Camino Real, cost of the effluent direct line from the plant to E1 Camino Real, cost of the tie-in to the Daon line and con-. struction period interest, We understand that you are not re- questing us to examine the estimates of the cost of the efflu- ent direct line from Tamarack to Palomar Airport Road nor es- timates relating to reclamation. Timins 'and Staff incx Richard Freese, CPA and a partner in our firm, will be respon- sible for the engigement, in public accounting and in chief financial officer positions in private industry. I will act as a liason to city. Should it be appropriate, one of our professional staff on the City of Carlsbad audit engagement may be used to assist Mr. Freese in this examination. Mr. Freese will commence the examination .on June 29, 1981. Our committment to the city is that our re- port will be presented in final-form as soon as possible and not later than July 31, 1981. Dick has sixteen years experience * .. Expected Format of Report We expect to render an opinion on the statement of Costs In- curred, Accepted and Questioned for the period December 29, 1979 to June 30, 1981. Costs which we might question will >e questioned due to definitions as set forth in the contract of December 29, 1979 (Pg.16-17) or due to lack of proper docu- mentation. The details of questioned costs will be set forth in the final report. Our report will be qualified subject to the effects of the ultimate resolution of the questionable ex- penditures. The ultimate resolution of those costs will be made by negotiation between the City Councilofthe City of Carlsbad and the General Partner of Lake Calaveras Hills As- sociates, Estimate Time and Expense We estimate that the engagement will-entail approximately 110-125 hours based upon the level of assistance and audit trail to be provided by the Lake Calaveras Hills Associates controller, Mr. Konecny. The billing. rates for our services are in our May 5, 1981 proposal to the city. The principal portion of time will be spent by Mr.'Freese. We estimate the . fee, including travel expense, to be between $4,500 and $4,800, - .. Mr. Frank Aleshire Page Three If the above is acceptable, please sign and return the enclosed ,copy to our office. 1 .. . Accepted: Very truly yours, CONRAD & ASSOCIATES Date Title Michael A. Harrison, CPA Partner MAfI : mw - ..