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HomeMy WebLinkAbout1981-05-19; Housing & Redevelopment Commission; N/A; Audit Of HUD Ending June 30, 1981MEETING OF: May 19, 1981 DOCKET NO: TITLE: Audit of HUD Section 8 Low Income Housing Operations-36 Month Period Ending June 30, 1981. INITIATED BY: The Treasurer of the Housing and Redevelopment Commission BACKGROUF!O: The Department of Housing and Urban Development guidelines in the operation of Public Housing Agenciez require that agencies contract with independent Public Accountants to Audit guide for the low-income housing programs. audit the accounts of record of the Public Housing Agency in accordance with the HUD Pursuant to this requirement, requests for proposals for auditing services for a three year period of July 1, 1978, through June 30, 1981, were sent to three independent public accountants. Auditing proposals were received as follows: Price Watekhouse and C0.- No bid; Diehl, Evans, and Co. - $7,500. George Peterson and Company - $10,400. and Company be accepted at this time. It is recommended that the proposal for auditing services submitted by George Peterson Peterson and Company has been previously engaged by the Carlsbad Housing Authority for the review of records and preparation of reports required under the City's Section 23 and Section 8 programs and has an excellent working knowledge of the requirements of the HUD audit IJrogram. to the fact that the number of hours and amount of effort identified in the proposal In addition, they are recommended over the low bid offered by Diehl Evans, and Co., due Housing and Urban Development. appears insufficient to accomplish an audit of the depth required by the Department of HUD concurs with our recommendation to accept the auditing services of George Peterson and Company for the specified three year period. ATTACIICD: Resolution Ordinance Agreements "" P1 at " Proposal from George Peterson and Company. FII!,V!CIF,L STi\TCliENT: The total cost of the audit service for the period of July 1, 1978, to June 30. 1981. is a maximum of $10.400. Funds are budgeted in the Fiscal 1980-81 REiO~i~-llEIIllATION: .~. ~ instruct the staff to begin work on the three year audit. By minute motion 'accept the proposal of George Peterson and Company and ACTION: 5-19-81 Ex Comnission adopted Resolution No. 8, approving agreanent with George Peterson h Company. GEORGE A.PETERSON 6. Co. CERTIFIED PUBLIC ACCOUNTANTS LA JOLLA, CALIFORNIA 92037 TELEPHONE (7141 454.6176 7816 IVANHOE AVENUe April 1, 1981 Mr. James F. Elliott Treasurer Carlsbad Housing and Redevelopment 1200 Elm Avenue Carlsbad, California 92008 Dear Mr. Elliott: In accordance with your request, we have prepared a proposal for the audit of HUD Section 23 and Section 8 Low income housing operations for the thirty-six (36) month period ending June 30, 1981. George A. Peterson & Co. is well qualified to provide the the firm, George A. Peterson & Co. has acquired extensive ex- services that you require. During the thirty years history of perience in conducting audit engagements and in providing solu- has previously audited Section 8 and Section 23 leased housing tions to complex and management consulting problems. The firm programs operated by the Housing Authority of the City of San Diego. George A. Peterson & Co. has also previously been engaged by the Carlsbad Housing Authority for the review of records and preparation of reports required under the City's Section 23 and Section 8 programs. Our examination will be made in accordance with generally ac- cepted auditing standards and the audit requirements set forth in the Department of Housing and Urban Development (HUD) "Audit Guide for Audits of Public Housing Agencies by Independent Pub- lic Accountants". In addition to the required financial data, our final audit report will include comments and appropriate recommendations on compliance with HUD contract provisions, HUD regulations and procedures regarding the Low-Income Housing Pro- management and governing board, and on the adequacy and effective- gram, financial regulations and procedures of the Commission ness of administrative internal control over the accounting for development Commission. and use of funds made available to the Carlsbad Housing and Re- Commission Mr. James Elliott April 1, 1981 ........ Page 2 In order to estimate our fees, we have visited your offices and have had discussions with you regarding your audit and accounting requirements. Our estimates are predicated on your personnel preparing certain schedules and providing us with necessary documentation and assistance. Our fees are based on hours worked which in turn are based on the experience level of the individ- by George A. Peterson & Co. personnel at standard hourly rates, uals assigned. We estimate that the audit and preparation of financial statements would require 320 to 380 man hours and that our fees would range between $9,500 and 10,400. Every effort will be made to keep our service to the minimum-consistent with the requirements of the engagement. Should our charges be less than the estimates, you will, of course, be billed the lesser amount. Should we en- counter problems which would cause our fees to exceed the amount discussed above, we will bring this to your attention immediately for proper resolution. We appreciate the opportunity to present our firm for your con- sideration, and would be pleased to furnish additional information or to meet further with you to discuss the contents of this pro- posal. Very truly yours, GEORGE A. PETERSON & CO. WTL ichard E. Evans, Partner REE/mrk . THIS AGRFE?fdNT, entered int0,ar: .Of the December ll.day Of 1980, by and between the CarlsbaJ Housing and Redevelopment. Ccmission, State of California, (hereinaftcr refcrrd to as the Pub1.i~ llousing Agency), and rn independent 'Public Account of . 7816 Ivanhoe Aie., La Jolla', CAVilIh Offices at -same- , (herein- after referred to as to "Contractor"), Wl'NESSlXII: \?HEREAS the Public Housing Agency has entered into a contract ' (contracts) with the United States of America icting through the Department of Housing and Urban Development (hereinafter referred to . as the "Government") for financial assistance for I.or~-income public. housing pursuant to the United States llo~lsing Act of 1937, as amended, 42 'Jnited States Code section 1437 et sq.; and \.JHE?aS, pursuant to said contract (contracts), the Government and the Comptroller General of the United States of his duly authorized representatives have the right to audit the books and records of the Public Housing Agency pertinent to its operations with respect to such financial assistance; and ' \filEREAS, the Government has authorized the Public Housing Rgeucy to procure such an audit by an Independent Public .Accountant in lieu of audit by the Government, subject to Government approval of the specific c.ontract for audit entered into between the Public Kousing Agency and the Independent Public Accountant; and WIWJkAS, the Public llousing Agency desires the Contractor to conduct and perform such an audit; ._ .. NOW, TLIEREFORE, the Public Uousing Agency and the Coiitrnctor do . mutually agree as follows: 1. The Contractor slmll audit the accouhts and rccords of tl~a Public llousing Agency for the tweniy-four (24) month period ending. June 20, 1360, in accordance with generally acccpted auditing standards and tlrc aud it.ing aud reporting provi.sions of tl!? applicable IIUD At~dit Cu.ide Tor the l.ou-Xncor.!r. 1louci.ng Prozram for use by T.ndependent I'ublic Accountants, bercin referrcd tu 35 Audit Cuide. The ;u;dit pcrEorn1cd s11nl.l. be sufficicnt in scope to enable the Contractor to espre- ='s an opinion in the audit repart on rhc financial statement's of the Public Nousing Agency. 2. The books of account and financial records to he audited are maintained and are located at the Public Ilousing Agency's off.ice at 3096 Harding Street; Carlsbad, Ch. 92008. These books and records bill be made available to the Contractor by the . Executive Director of the Public Housing Agency at the Contract.or's request for the Contractor's use at the Public Housing Agency's office during norma'l business hours. .. 3. If the Contractor ascertains that the Public Housing Agency's books and records. are not in a sufficiently 'satisfactory ,condition for performing an audit, the Contractor shall disclose this ddiciency to the Public Ilousinq Agency. If the Public Ilousing Agency cannot get its books ready for an audit within 15 days, then the IPA should notify the Government. Notification to the Government shall be by written communication addressed to the Re.+onnl Inspector General for Audit, Regional Office, Department of Housing and Urban Developent, 51 Embarcadero Center 15th Floor, San Francisco, CA. 94111 (Address of IQional Office) with a copy to the Director, Fi.eld Office, Department of Housing and Urban Development, 2500 I.li.lshire Doulcvard, Los Angcles, CA. 90057 .' (Address of Field Office). The Contractor sllall. await further instructions from thc Regional Inspector General for Audit before cont-inul.ng the audit. 4. Upon completion of the audit,, and Audit Report co'nsisting of those elements described in the Audit Guide shall be simul.tnneously subcdtted to the Regional Inspcctor General for Autlit (20 copics) oucl Puhlic Housing Agency (1 copy for each Commissioner and required copics for the Executive Director) as joint ncldrcsses. ~ .' 5. The Atfclit Report shall be suhmitted witllin 120 days after the close oE thc Public Housing Agency's fiscal. ycar unless a shorter period is requircd by State Law. 6. The Public Housing Agency may, bcfore or during the conduct . . of the audit, request chmges in the. scope of the scrviccs of the Contractor to be perrormfd undcr this cont.ract. Such cllauges, including any increase or decrease 5.x the amount of the Contractor's compensation and any 'change in the time limitation for suhmisri.on of the Contractor's report, which DIC mutually 'agreed upon by and between the Public Kousing Agency and the Contractor, shall be incorporated into written amendments to this contract and shall be subject to the Government's approval. 7. The Public Housing Agency agree% to pay the Contractor as compensation for the services and' report mentioned hercin, a luq-sum fee cf $ 10,400 ' . inclusive of all costs and expenses. The fee is hased on the following: 2. b. C. e. ,. d . e. Partner (Principal) : '$ acr hour; estimated roan+1ys2. si 1,000 Senior (fianager) :$ %per hour; estimated man-days u$m Semi-Senior $&per hour; estimated man-days 15.0$ 2.400 Junior $%per hour; estimated can-days 4.400 Other (describe) - Total . .$ 10,400 It is estimated that 47 ..5 man-days will be required to . perform the avdit. *Such lump-sum fee shall be payable after submission of the Audit llcport to thc Pub1.i~ Hawing Agency and aft.cr . , . subadssion of copies of tltc rcport to the Government as prov&dcd in paragraph 4 abovc and the Government's rcvicw and approval of thc report. The PilA may pay up to 50 percent: .. -3- . ,. ' of the fee upon subm'ission of tllc hdit Report and copies tllercof and. the bill from the Contractor vitllrrot Ll~c Government's authorization'. .. 8. The Contractor must be either a Ccrti.fied Public Accom1tant, or l'icenscd or registered public ac.couatant Licenscd on or before December 31, 1970, by a re~ulatory authority 0.f a state or other political subdivisioa of the United States and meet any legal requirements concerning registration in wlliclz the Public Ilnusing Azency is loc,?t,cd. In addition, those pfiblic accountants licensed after December 31, 1.970, but prior to December 31, 1975, who performed a FIIA audit prior to .Decetnber 31, 1975, will be eligible to continue to perform PITA - audits. A statement by the state identifying such registration or license shall be attached to this Contract. 9. The Contractor certifies that its principal officer (s) or member (s) do not now have and have not had during nuy period covered by this audit any iterest, direct or.indirect, in the PI^ or any of its members or officials incluhing the following: a. Family relationship with any Ptlh menber or official; b. Empl.oyment by or service as a member or officiai or a P€Lk during the period covered by the audit. 10. The Contractor certifks that it has not provided accounting or bookkeeping services for the PIA during the period covered by the aud-it expect as follows: SEE EXHIBIT A - " 11. No- menlbcr, officer or employee of the Public llousing Agency, no member of the governing body of the locality in &ich any of the Pub.lic IIousing Agency's projects ire situated, no member of the guvcmiug body of the locality in which the Pub1i.c llnusing hgency'was activated, and no other puhlic official of such 1ocal.ir.y or 1.ocalities v11o cxcrciscs any responsil).i.l.l ties or funct:iorls with respect .to the Public Housing Agency's projects, durinf, his/lwr tenure or for onc. year .thcrcnft.cr, sllall Imve any intcrcst, cljrcct okj.wircct, in this contract or tllc proccrdo. tllercof . 13. The Contractoc warrants that he/she has not cmpS.oycd any person to solicit or secure this contract upon any agreement- for a commission, percentage, broderage, or contingent fee- Breach of this warranty shall give tllc Public Housing klgency the right to terminate this contract, or, in i.ts discretion, to geduct from the Contractor's fee the amount oi such commissio:?, percentage, brokerage, or contingent fee. ,. . I 14. The Contractor shall not assign or tausEer any hteyest in this contract except that claims for monies due or to become due from the Public Housing Agency under the contract may be assigned to a bank, trust company, or other financial fnstitution. If the Contractor is a partnership, this contract shall inure to the benefit of the surviving or rehaining members of such partnerhsip. .. 15. The Contractor shall not discrlminate against any'ernployee or applicant for employment because of race, color, religion, sex, age, or national origin. The Contractor shall take affirmative action to ensurc that applicants are employed, and employees are treated during employment, without rcgarcl to race, calor, religion, sex, age, or national origin. Such action shall include, but not be limited to, the following: employmment, upgrading, demotion, or transfer; recruitment or recruitment advcrtising; layoff or tcrmination, rate3 of pay or othcr forms of compensation; and selection for training, includi.ng apprenticeship. -. 16. For a period of .folir years from the date of the Audit Report, tlie Contractor shall make its workpapers, records, and 'other evidence of audit available to tl~c Government and to r.he Controllcr General of the United Stat.cs or his clt~ly.autlto,rized L 17;. Except for disclosure to rhe Governnent, the Comptroller General and the Public Rousing Agency, the Audit Report and t.he workpapers, ' records, and other evidencs of eudit, including - .inforutation and data prepared ox assembled by the Contractor under this contract, shall be held confidential by the Contractor and shall not be made availab1.e or otherwise disclosed to any person without the prior written approval of the Government. 18. The Government's approval of this cdntract shall be evidenced by the signature of the Field Office Director at the end thereof. IN WITNESS WHEREOF, the Public Housing Agency and the Contractor have executed this agreement the day and year first 'above written. CARLSBAD HOU.SING AND GEORGE A. PETERSON & COMPANY REDEVELOPMENT COMMISSION (&me cf Independent Public Accountant) (Name of Public Housing Agency) Concurred: Department of Housing and Urban Developadnt ., ny (Name otField Office) (Name) (Datc) Approved : EXHIBIT A George A. Peterson & Co. was engaged by the Carlsbad Housing Authority to assist the City personnel as follows: 1) To review financial records.and prepare the necessary closing adjustments for the Section 23 Program for the year ended June 30, 1979. 2) To assist in preparing revised annual HUD financial report forms as necessary for the year ended June 30, 1979. 3) To assist in preparing annual HUD financial report forms for the year ended June 30, 1980.