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Home My WebLink AboutPEAT, MARWICK, MITCHELL AND COMPANY - 1976-06-21 z G 41 } a S. .x AGREEMENT FOR CHARTER AUDIT OF THE CITY OF HUNTINGTON BEACH i14,.: THIS AGREEMENT made and entered into as of wh'is 7 day of—a , 19$l, between One CITY OF � HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, here- A inafter referred to as "CITY", and PEAT, MARWICK, M7TCHELL & 4 ,y CO. , Certified Public Accountants, hereinafter referred to as "AUDI:TORS" WHEREAS, it i 3 the iritention of` CITY to provide for - the examination of its financial si;atements, and a , AUDITORS are Cex,tified Public Accounts, duly authorized to practice and licensed c,s such by the Califc.rnia State Board of Accountancy. NOW MHEFORF, in consideration of the mutual covenants, o( iti.oas and premises hereinafter contained, the parties agree as follows I. TERM This agreement small, provide for the audit of the financial books and records as required by the City's charter ,r the f'iwswal, year beginning Daly 1 , ...980 and ending June 30, 1981. All audit work vili be performed at such time or, times as are selected by AUDITOR, provided,, however, that the audit will be completed aaA ),eport thereof delivered to CITY as provided for herein belobt. `SA:b 3 , C e t K 2 SCOPE_ OP WORK" r AUDITORS agree to examine the fin.anc'xl statemOnts c . of Pxl funds a''cd account group:, of CITY it aricordance with the following statement of worn. .� a) Format - All financial stateaents shall he completed by CITY in a format which cos, lies wil' ^ generally accepted accounting princip-es. � b) Lxaminatious - AUDITORS' examinations shall be made in accordance with generally accepted auditing standards, # and accordingly shall include such tests of the accounting records and such other auditing procedures as AUDITORS consider necessary in the circumstances its order to allow, for the e�pression of an opinion on the financial statements of all funds and account groups of CITY. The following examinations shall be performed: Examination and Issuance of a report on the City 0.0 Runtington Beach for all funds and accourt groups; the Barking Authority. R-antington Beach Public Va.cilities Gorporretion; Redevelopment .Agency; Compliance of the Redevelopment Agency; Huntington; Beach Community Developfa,ent Block Programs for all Fr r years Iri which there are grants open; =, d Compliance With the }fix Revenue Sharing acts and re xiations as required by the Office of Revenue Sharing U: S. Dt:par'tme n.t of,Treasury, all for the •—ear ended J=e 30, 1981 0) .Recommendations o,. Internal Control - AUDITORS still observe the adegquacy of the system or internal, control and will make appropriate recommendations. AUDITORS' :comments will 2. x .Y be included in a separate letter to be issued as soon as pr•ac-�- ,r Y. ticable after °,.e conclusion of their examination, ' u) Opinion of Auditors - The amdit report shall .yet forth the opinion of AUDITORS on: 1. The fairness of presentation of the financial. statements. 2. The propriety of accounting principles 7 followed by CIT ; e ; Copies _ AUDITOR agrees to exert every = � .»ry effort toward t- n-leting the examination and furnishing Fifty { 50) copies o their audit report �.o Clf) by September 30, or the year sudi ::Pi. ""ests and Sari,les - The AUDITOR will base its examination on testes and samples of the accounting reeore s and transaction sufficient to satisfy AUDITORS of the accuracy and fairness of the presentati-n of the financial statements of CITY and will. not perforn a detailed examination of all trans- actions. 3. FEE: y AUDITOR will receive art all-inclusive fee fo the work to be perfomo4 in the f :45eal year '8C-'81 Charter audit of thirty--tbrfie thousand ( 33,000) dollars. 4.. OPTION TO EXTEND CITY at its sole option 'may elect to extend this agreement for et., additional fiscal year or years audit. The parties agree to negotiate in good faith to establish a fee for 3• ,xt i 5 any such extension or extensions and may agree to expand or restrict `he scope of work. If the tart es are unable to mutually agree linor ;,he terms or fee for any :such extension *0; prior to December 31, of any year, then this agreement shall. terminate. 4.. 5. WORKERS' '13OMPENSATION INSU?j,xtCE - HOLD IxARIVI ,ESS: AUDITOR will furnish to CITY a Certificate of Insurance V` on CITY'S form a%ridencing compliance witI, the wcsrkers' compen- sation acts, the CITY'S general liability require,_ nts and wV l exeoute CITY'S hold harmless agreement contained thereon. It is expressly agreed and understood that all farms and evidences of AnEurance offered to the CITY are subject to approval as to form by the City Attorney, A copy of CITY'S resolution is attached hereto as Exhibit "A" and Incorporated herein by reference. 6. EXTRAORDINAR: SERVICES it is contemplated that frori time to time CITY may require AUDITORS to perform accounting and auditing services in addition to those which are usual and oustomary in "Iaaeing an examination of the fi nanciq.l. statements of CITY. In s�ich event AUDITORS shall b campet'zs2.ted for any such extra.ordi.ntry servitee K actually performed which are val-idly authorized in advance 4UDT.TORS and CITY agree to negotiate separate rates and estimate fees for any extraordinary work contemplated, it Is expressly understood and agreed that no such extra work shall be undertaken nor shall the CITZ be liable for any such extra ,:.irk except upon 4, r or- kx.,1,r'S3`�"3� �f1�'6,� yaa'.tiss� .. . { r , the express written direction of the City Administrator. {� AUDITOR understands and is aware that the Charter of the City of Huntington Beach provides that all contractual arrangements with CITY must be in writing, approved by the City Council and F executed by those officers designated by the Charter. ; 7. INDEPENDENT CONTRACTOR: The AUDITOR in performance hereof acts as an Independent s Contractor. r' IN WITNESS WHEREOF, the parties hereto cave signed agreement as of the day and year herein first above written. #<. .. ATTEST: CITY OF HUNTINGTON BEACH, a f� municipal corporation (CITY) Cky Clem By l� or L i PE s RA*TicK:, M TCHELL & CO (AUDITORS) A Jr ��RTNEP: f AP PRO I S TO CONTENT s SUPPLEMENTAL AGREEMENT NO. $ AUDIT OF REDEVELOPMENT AGENCY FUNDS v OF THE CITY OF HUNTINGTOtr BEACH THIS SUPPLEMENTAL AGREEMENT NO. $ to the Agreement dated June 22, 1976 (herein as "Basic Agreement"), between the7. CITY OF HUNTINGTON BEACH, a municipal corporation (herein as CITY), and PEAT, MARWICK, MITCHEELL AND COMPANY, Certified Public Accountants (herein as AUDITORS) , is entered into onk` this JO day of 1980. W I T N E a S E T H: WHEREAS, the Basic Agreement between the parties now provides that CITY, by and through its City Administrator, may request AUDITORS to perform designed extraordinary services in addj.tion to those which are usual and customary in making an exam:.nation of the financial statements of CITY; and C' "'Y has heretofore determined that certain addi- tional services should be performed by AUDITORS, and , AUMTO have agreed to perform such extraordinary y sere o,vs at are additional coast to CITY and as a task separate � '[ and apart from tr se which are usually and customarily per- formed in malting an ¢xaminaticn of the financial statements of CITY; and CITY has agreed to pay an additional sum for provi- sto-n oV .such services; and The parties now wish to revise the scope of 'work to IN 3 expand upon those extraordinary services to be performed and t a Im—rease the cost thereof,, NOW, THEREFORE, the parties agree as follows: �s 1. .AMI OR will prepare on behalf of the CITY an audit report of the Redevelopment Agency of i.s of Hunt- -be s ingt4n Beach "or GitG year enQ'»d .TLIife 3ta, L k1ant to Ifealth and Safety 00de P380.1, et serf. ' t 2. Reimbursements to AUDITORS by CITY pursuant to yt( 0- l this .Supplemental Agreement No. will not exceed the sz. , of One Thousand Five Hundred Dollars ($1,500), including out-cf'w pocket expenues 3. Billings chall be submitted as work progresses, bur, not more frequently than monthly. All requested reimburse- mer,zs ursi,ant to ' riis Redevelopment Agency Funds Audit shall be billed separately from roimb4rsements billed for other ser- vices pug:scant to the Easl r, Agreement and other Supplemental Agreements. IN WITNESS MEREOP, the parties have executed this Supplemental Agreement No. 8 e,fective the day, month and year first above written, f CITE" OF HUNTINGmI)N BEACH, a muticil al corporation 4 mayor AkxPHt3 fB AS�L�FUHM:�k y Atttart�ey mom :REVIEWED AND APPROVED: Ci A mir. straVor 4 PEAT, MARWICK, MITCHELL AND COMPANY, CerUifled Public Accountants u X a By f Par n t,. t � N w rig t f" SUPPLEMENTAL AGREEMFIT NO. 6 THIS SUPPLEMENTAL z'GRFEMENT NO, 5 to the Agreement between a the CITY OF HUNTINGTON BEACH, a maniespal corporat±on (herein as "CITY") and: PEAT, MARWICK, MITCHEbL AND COMPANY, Certified � Public AcaoQntantm (herein as "AUDITORS"), entered into on 22iid June. 1976, for the provipion of audit services (herein ar "Basic A;reement") WITNESSEI' Hc.;; WHEREAS, the Basin ngreementt now proviu^-.,� tnat the total �rc compensation art,{ hourly rates to be paid Auditor shall be nego- tiated between the parties ,*or f:t.acal years 1979 and 1980; and City and Auditor now to mutually agree to increase Auditor's total, compensat.i,on In each such ;year but not to in- crease or decrease the hourly rate schedule in either such year, and The parties desire to renumber- certain of the Supplemental Agreements to pl6ee such agreements in proper chronological.- numerleal order for ease in Identification,, 9011f, TY.En-FORE, the parties a&eee as follows Auditor's total compensation for Fisea;l Year 1979 and 1� , 1980 Is increased by T.11a Thousand 'Five 11tindred Dollars 42,500); In each such year, bringing the Auditor's total oompensatiotl. from Tyrenty--onrie `Sf�y"a �ousand�ryy.l!,Y,`i.v��eL HunOred Dolla.r� (.$21,500) to Twenty-Moat �y4 ousana . n ;� the following Supplemental Agreements are rede,,i.g nated name ically� All otber Supplemental Agreements remain. P.ar, r� P .r with their original numbers Supplements renumbe-a:d are: ' {a) Old "I" dated 4-A April 1977 is new "2,, p � (b) gild 1121' dated 24 October 1978 is new 11411 (c) Old 114" dated 16 April 197c. ;s new "5" M 3. The Auditor', hourly rates for Fiscal Years 1979 and 1980 shall be those rates as shown In the Basic Agreement. ;nix IN WITNESS WHEREOF, the parties have executed. this Supple- mental Agreement No. 6 effective as of the � � day of , CITY Or HUNTINGTON BEA.H ATTEST: May o.r City Clerk APPROVED AS TO CONTYNT; APPROVED AS TO FORM C;tt Admin1�.trator ws p Cite Attorney 114I`.i 14TED SAND APP?iOVLD' TEAT, MARWICK, MITCHELL & CO. SUPPLEMENTAL AGREEMENT NO. AUDIT OF COMPREHENSIVE EMPLOY11 ENT AND TRAINING .ACT FUNDS OF CITY OF HUNTINGTON BEACH THIS SUPPLEMENTAL AGREEMENT IIO. b to the Agreement ' (herein as "basic Agreement) between the CITY OF HUNTINGTON BEACH, a municipal corporation (herein as "CITY") and PEAT, MARWICK, 14ITCHELL AND COMPANY, Certified Public Accountants is (herein as "AUDITORS") , is entered into on d i p i s 1979 W ITNESSETH: WHEREAS, the Basic Agreement 'between the parties :now provides ti-it CITY, bar and through its CiDy Admi.nistrz.tor, may request AUDITORS to 'perform designed extraordinary services i,n addition to those which are usual and customary in making an examination of the financial statements of CITY; and CITY has heretofor} determined :.hat those certain services more €x.,,Jly described ir" Exhibit A, attached. to Supplezen.tal Agreement No. 3 snould be performed by AUDITOR; and AUDITOR has agreed: to perform such extraordinary serv.Lces ✓ at an additional coat to CITY and as a tas . separate and ap. .,t from tl4oee which are usuall;4 and customarily performed in, making .: an exazi.rxation of the financial statements Of CITY; aI-id CITY has agreed to pay an add" ,nal sum for provision of auah soX°'4`icez; and r �A*�h 4f The parties now wish to revise the scope of work to expand upon those extraordinary ser,rices to be performed and , , to increase E,ae cast thereof, ' NOW, THEREFORE', the Parties agree as follows: x 1. Exhibit A of Supplemental. Agreement No. 3 is de- leted and Exhibit A, Revision 1, attached hereto and incorporated by .reference herein, is substituted therefor as of the effec- tive date of Supplemental Agreement No. 3. 2. CITY agrees to reimburse AUDITOR and an addi llional sure of Four Thousand Seven Hundred Fifty Dollars ($4,750) for the work to be performed pursuant to Exhibit A, Revision 1 which exceeds the scope of Exhibit A, making the total amount available for reimbursement to CETA Funds Audit Eight Thousand Seven Hundred Fifty " Tars ($8,750) . Reimbursement for costs and expenses shall be in accordance with the terms and conditions of the Basic Agreement and with the schedule of estimated casts, reiiabursement included in Exhibit A, Revision �. 3. Billings shall be submitted as work progresses but not more than monthly. All requested reimbursements pur auant to the CETA Funds Audit shall be segregated from. retmourse- ments billed pursuant to the Bess x ee:ment and relating to the ordinary audit,; and cor, i:n,,l1ng of reimbursements between the work to be performed pursuant to Supplemental Agreements Nos,. 3 and 4 and the Basic Agreement sha, .l not be permitted, IN WITNESS WHEREOF the pax-ties .have xecuted this 2 i t : Supplemental Agreement :No. effective on the day, month .and y � year first above written. •, CITY OF HUNTINGTON BEACH By ''. Mayor ATTEST: APPROVED AS TO FORM: : " k t?ram � . tm ity Clem; foxy City Attorney APPROVED AS TO CONTENT City. Administrator PEAT, MARWICK MITCHELL AND COMPANY B • f MIBIT A - Revision 1 id OBJECTIVES, SCOPE AND APPROACH ; Our understanding of the work we propose is based on information acquired " through discsssions 'with officials from the office of the City Administrator, the City Director of Finance and the CETA Program Director. In developing our audit approach, we have relied on our experience as the City's auditors ;. for the past three years. 'Using this knowledge, we believe that we have : adequately considered the effect of the City's employee turnover in develop- ing our revised estimates of professional fees. BACKGROUND The Cit-.- has received funds from the United States Department of Labor (DOL) Y: to be used for the operation of a comprehensive manpower training program designed to provide training and employment for unemployed people. As a requirement for receiving such funds, the City must provide for periodic audits in accordance with audit guidelines formulated by DOL. The City has determined that the objectives of its audit effoit can best be fulfilled by the engagement of an independent accounting firm experiences in the examina- tion of CETA programs. ". In August, 1978, the Assistant Director of Finance resigned his position. with the Gi.ty. As commented upon in our prior year's letter to management, this individual performed most of th,e City's grant accounting work and was fi responsible for preparing and filing a majority of the periodic financial reports ,required by the various grantor agencies.. We believe that his resignation will contribute significantly to the additional time required to perform our e Lamination. OBJECTIVES AND SCOPE Our examination will be conducted in accordance with generally accepted auditing standards .and contemplates the full use of the CETA Audit Guide, as .amended and supplemented. Accordingly, our examination will comply with the financial and compliance objectives outlined in the CETA Audit Guide and our report for the period Julys 1, 1976 through Maren 31, 1979 will comply in all material respect, with the report formats generally prescribed by DOL. APPROACH Because of the size and diversity of our Firm, we are able to provide sufficient staff to effedti 'ely and efficiently, complete the examination. In this regard, we originally anticipated conducting our examination of the City's CETA funds concurrently with our annual examination of the City and its related entities. Unt'zrtunately, the circumstances described above precluded achievement of this objective. However, we believe that our in-debth knowledge of the City's operations, its people, and our experience in governmental grant auditing will minimize. the disruption of the. Cicy'n normal recordkeepin,-; operations. 1n addition, our familiarity with City operations will facilitate the issuance of progress reports that may be considered necessax-y to Inform management of the status of our examination and of any potentially adverse audit findings that " may be noted. As explained more .fully+ below, we are prepared to commence our audit work immediately upon acceptance of this proposal, k 5 1 k P,.A MING MEETING TJ,e engagement partner, engagement manage; and in-charge accountant will meet w:th appropriate City officials to discuss the overall scope and objectives f�} of our examination. The specific requirements for the audit of the CETA , pr,)gram will be discussed in detail at that meeting. u' Following 'the initial planning mae:ting, the audit team will meet to begin tailoring of our audit program and to determine the manner In which our evaluation of the City's system of J.nternal control., as it relates to the CETA program, will be completed. To assist in this process, we have developed basic audit programs for audits of governmental grants and have extracted applicable sections of the CETA guidelines for use by our staff in completing ' k the examination. AUDIT FZELMORK Following the initial planning me,ating we will commence our audit fieldwork, beginning with an update evaluation of the Czty's systems of internal accounting <�.t control and emphasizing how such systems rel-te ;.o the CETA program. Our evaluation will, of course, include an assessmr-nt of the systems of internal Control. of the City' e e t s various sub-grantees, ar, considered n s. ssary. Our ` evaluation will be accomplished through the use of questionnaires, observation of internal operating procedures, inquiries of appropriate personnel and, to the extent practicable, the development of system flowcharts. The purpose of our evaluation is to identify strengths and/or weaknesses in the systems of internal accounting control, of the City and its CETA funded sub-grantees. Thus,, specific strengths upon which we may rely will be identified and appropriate audit tests developed. The continual tailoring process of the audit program will be reviewed by the engagement partner and engagement manager. As part of our audit fieldwork, we will focus our attention on the compliance aspects of the grant agreement with DOL. Our review of the compliance aspects of the C:ity's overall CETA program will be performed in accordance with the provisions ou` lined in. the CETA Audit Guide, as promulgated by DOL. The final portion of our audit: effort will be primarily concerned with exemining the nimbers that will appear in the financial report to DOL. Through- the fieldwo-k, the engagement manager will monitor and review the progress of the field auditors. At the conclusion of fieldwork, the working papers suppo,t;ing the critical audit areas will be reviewed by the engagement partner. ; At this time, the engagement manager and partner will determine whether the objectives of our examinar on, as previously discussed, have been :met, EXIT Cfi' ERENCE Prior to signing the ace ntants' reports, a final meeting will be held between P*Ti&C'o. personnel and at ropriate City officials. PMtt&Co. policy dictates the conduct of a post-audit meeting with our clients to discuss the final drafts of the financial report aLi supplementary data. t Y Y k 3 _ t , QUALIFICATIONS Pk24&Co'. is a large and diversified certified public accounting .firm providing � Fk ., professional services to clients in virtually every governmental .and commercial x field. Our services to public sector organizations represent one of t?:w largest and most rapidly growing segments of our total practice. Oix public sector practice has achieved its size and recognition through the reputation we have crated with our clients based upon the quality of our people and their 7 ability to meet client needs. Our Los Angeles/Newport Beach practice unit serves as the center of our public sector practice in the western United States and draws from a professional staff based in the Greater Los Angeles area. Our management and staff are charged with a responsibility to maintain active 4�t . involvement in professional organizations relevent to the industries they serve. This involvement keeps our people up to date on current' developments and permits us to actively participate in the development of new financial accoun~. ng and reporting practices. Since the inception of Federal grant programs, our Los Angeles office has been called upon to render professional services in the areas of accounting, auditing and consultation to establish aceountins, and recordkeeping systems 'Ahich c)mply k wi.tb Federal requirements. On a national level, we have been •erga to perform examinations of Federal programs, including CETA grants, in virtua.L-y all. of our cperating offices. In addition, we have worked closely with Federal, state, and local government officials t�_ develop audit guidelines and reporting formats. ORG&NIZATION AND STAFFING The personnel assigned to the audit of the City's CETA prograia will be drawn from those auditors experienced in governmental grant auditing, municipality auditing and the City"s operations in general. You can be assured that sufficient staff has been assembled to complete all required audits in a timely and efficient manner. Each individual assigned to the exavdnati:on will have a thorough, understanding of DOL/CE.TA grant requirements and special auditing procedures, ACCESS TO WORKING PAPERS a} we understated; that representatives of the Orange County Manpower Comakiss on have req,rested that they be allowed to approve our tailored audit programs and reviow our working papers and report drafts. We will, of course, be pleased to make such docuzents ava3Uable to Itanpowcr Commission designees and ,will be available at any time to discuss our approach. In addition, we will retain our vorkiug papers for such time as may be required by, the City, DOS, or the Manpower Commission. x - 4 FTEES ' .. F; In our prior proposal, we emphasized the prospective nature of our estimate of lees. We have since had the advantage of examining the general financial ,;„; records of the City as of June 30, 1978 and have developed an understanding ,'•^ of the condition of the City's accounting records through the period for which we are to examine the City's CETA operations. We believe that the following estimate of man-hours, percentage of time and billing rates adequately considers the factors to be considered in requesting a revision to our prior audit agreement. a. Percentage Rate Classification fan-hours of Time Per Hour Total Fee Partner 12 4% $60.00 $ 720.00 Xanager 40 12% $35.00 1,400.00 }Y: In-charge Accountant 140 42% $23.00 3,220.00 Staff Accountants 140 42% $20.00 2,800.00 Jut-of-pocket Expenses* 610.00 Total. 332 1007. $8,750.00 Including report paceaaration and printing Accordingly, we propose to undertake the described examination of the City's CETA funds, including those of the City's sub-grantees, for the period July 1, 1976 through March 31, 1979 for a fee, including reimbursement for out-of-pocket expenses, not to exceed $8,750. ti G {, x. 4 r SUPPLEMENTAL. AGREEMENT NO.. 3 mot; AUDIT OF COMPREHENSIVE EMPLOYMENT AND TRAINING ACT FUNDS OF CITY OF HUNTINGTON BEACH THIS SUPPLEMENTAL AGREEMENT NO. 3 to the Agreement between the CITY OF HUNTINGTON BEACH, a municipal corporation (herein as "CITY") and PEAT; MARWICK, MITCHELL AND COMPANY, Certified Public Accountants (herein as "AUDITORS"), e /,ntered, into an eptember, l978, far the provision of d r. audit services (herein as ''Basic Agreement"). W l T N E 5 S E T ll WHEREAS, the basic agreement between the parties now provides that the, CITY uy and through its City Administrator may request AUDITOR to perform designated extraordinary services in addition to those which are usual and customary in snaking or. e%xominatjon of the financia! statements of the CITY; and CITY has determined that those certain services more fully described in Exhibit "All attached hereto should be performed by AUDITOR; and 7 .AUDITOR agrees to perform such extraordinary services at an additional cost to the CITY and as a task separate and apart from those ,which are usually and customarily perft mit-d in making an examination of the financial statements of the r. CITY NOW, THEREFORI, the hearties agree as follows; I AUDITOR will perform on behalf of CITY the services more fully µ describl in "All- attached hereto. 2. Reimbursement to AUDITOR by CITY pursuant to this Supplemental Agreement No. 3 will rent exceed Four Thousand Dollars ( ,0 ). c` SEEM- F u r o 3. Upon receipt of AUDITOR'S invoice, CITY will reimburse AUDITOR for services rendered pursuant to this Supplemental Agreement No. 3 at the hourly a t rates and conditions for reimbursement of expenses set forth in the basic agreement and shall be submitted as work progresses but not more often than Y. monthly. All requested reimbursements pursuant to this Supplemental Agreement y No. 3 shall be segregated from reimbursements billed pursuant to ,,e basic agreement and reiating to the ordinary audit. N > commingling of reimbursements t='. w. between the Mork to be performed pursuant to this Supplementa. Agreement No. 3 and that performed pursuant to the basic p pu agreement shall be permitted. IN WITNESS WHEREOF, the parties have executed this Supplemental Agree-ment .Y 4 No. 3 effective as of the clay of S'aptember, 1978. ''IT ' OF HUNTINGTON BEACH ATTESTS Mayor fiR ._ .. City Clerk APPROVED AS TO CONTENT: APPROVED AS TO FORM: ity derainlsfrotor City Attorney 1 APPROVED VITIATING DF2ARTMENT; PEAT, .t+!IARWiCK, MITCHELL AND COMPANY By 4&ki XX' , 4ortnP,; 17N Y>. CITY OF HUNTINGTON BEACH FEDERALLY FUNDED COMPREHENSIVE EMPLOYMENT AND TRAINING ACT FUNDS r ;f PROPOSA , FOR PROFESSIONAL SERVICES t i t n iMN { t PEAT, MARW'ICK. MI`FCHE%L CO. x CERT17iED FL-ILIC ACCOUNTANTS I n {!( 5dt% 'SOUTH FLOWEL STREE;C LOS ANOR.LES.CALIFORNIA. 90071 -* ( august 15,, 1M fi 1'R%Ya.T£ r , Mr. Floyd G. Selsito City _kdministrator City of Eiunti�gton Beach E 2000 Main. Street Huntington Beach, California 92648 Dear Mr. Belssto: Peat, Marwick, Kitchell & �o. is pleased to preseot this proposal to perform an examination of funds received by the City of Huntington Beach (City) under the Comprehensive Employment and Training Act (CETA), administered by the L. S. Department of Labor (DOL). The scope of our examination contemplates reviews of "sub-grantee;," conducting various vocational training programs that are funded through CZTA grant funds received from the City. economical professional au�`ieing services CAs ap need for efficient and PMM&Co. is uniquely uali°ied to serve th ` As appointed auditors for the City gor the past two ~years, we have developed�a tLorough understanding of the City's operations from both the fiscal and the admi.nist. ,k_ive points of view. Based on our assessment of the scope of CET?, funded operations of the City* and our � novledge and experience in grant programs administered by the Department of Labor (DOL) in general, and CETA grants in particular, we )-alieve that PtM.M&Co.. can best serve your needs for the services of a qualified firm of independent public accountants. wee have set forth in the remainder of this letter, t'ie objectives, scope and audit approach .of the examination,as we perceive it, plus other 'infcrmation that demonstrates our qualifications to serve as auditors for The. City. ,. In this 'regard, we have performed numerous engagements of IDOL sponsored pro- grams. A partial list of local CET.A grant projects for which PM.M&Co, r esently provides services follov,s; City of La Habra State of California, Department of Education Orange Couacy Manpower Commission "he scope of ?P.46Co.`s local practice provides us with the exper,�ence and per- sonnel needea to meet the current audit needs of the City. In addition, M4&co. t ,a k' 9.J .�Ir. Floyd G. Helsite i 1 Aupmt 15, 1978 � F has maintained a 10dership position it provid=g services to local governmental organizations through its comprthcusive involvement with Federal agencies and ' .fi techgical organizations where changes and/or npvr concepts in govuearmental fi { nanc.ial :accoanzting and ad=taistration most frequently originate. Through these actigities, PMH&Co. is prepared to meet our clients' neads as naw requirements ' arise. W4 believe our people and their ability to perform the soon: you need pragi.e you with the gteatest assurance Chat the sarvices required will be pro- vided � lin a professional manner and on a timely basis. Thankj,.you for pfpvidiftg us the oppoxtunity to present this proposal. We 3pok forwPrd to* working, with you and your staff. We would be Teased to provide any �adational.'information`br;answer any questions you may have regarding this proposal. 'fiery truly yours, a PEAT, MARWTCK, MITGHELL & CO. Thomas W. Snow, Manager THIS. 1SK Y NN : a- r Y OBJECTIVES, SCOPE AND APPROACH W4 Our understanding of the work we propose is based on the infornation we received fro& diacussions with Messrs. Erich Matthews, 'Frank B. Arguello, Robert Cunningham and members of his .4taff. We have also drawn from our prior experience in per- forming similar work for other clients and from our past association with the City. We believe that our in-depth experience in au,?iting Federally Assisted Programs 4 provides us with a knowled3e of the scc:pe of the C;ity's operations that is neces- sary to perform the rewired exam-,T-ration in an efficient manner with minimal t disruption of normal operations. BACKGROUND.- The City has received from DOL, funds for the operation of a comprehensive man- } . power program designed to implement and provide training and employment for unemployed people. As a requirement for receiving such funds, the recipient (the City) must provide for periodic audits in accordance with audit guidelines M formulated by DOT.. The City has determined that the objectives of its audit F. effort can best be fulfilled by the engagement of an independent accounting firm experienced in the examination of CETA programs. OBJECTIVES AND SCOPE Our examination will be conducted in accordance with generally accepted auditing standards and contemplates the full use of the CETA Audit Guide as amended and supplemented. Accordingly, our exam°,nation will comply with the financial. P compliance objectives as outlined in the CETA Audit Guide and our report fo> e period ended June 30, 1977 will comply in all material respects with the report a formats generally prescribed by DOL. APPROACH Because of our site and diversity, we are able to provide sufficient staff to effectively and efficiently com:)Iete the examination,. In this regard, we antici- pate conducting our examination of the City' CETA funds cencvyrrently with our annual examination of the City .and its related entities. In this manner we will. mioimize disrisption of the City's normal :record keeping operation, and at the Same time, increase the timeliness of any progress reports that may be considered necessary to properly inform management of the status of our examination and of any potentially adverse audit findings that may be noted. t ' * Piptini'ng 1dgeting' The engagement partners manager and in--charge accountant will feet with appropriate City officials to discuss the overall scope and objectives of our examination. The specific rekVirements for the audit of the CETA program will be discussed in detail. �t field. Our services to public sector organizations represent one of the largest k � and most rapidly growing segments of our total practice. The public sector work has achieved its size and recognition through the reputation we have created with our clients based upon the quality of our people and their ability to meet client needs Our Southern California governmental practice is the center of our Western public sector practice, and draws frpm a professional staff based in the Los Angeles area. Our management and staff are charged with a responsibility to be active in the industry and professional organizations that they serve. This involvement keeps `# our people up to date on current developments .and permits us to actively partici- pate in the development of new financial accounting and reporting practices. t Since the inception of Federal grant programs, our Firm has been called upon to ' .:. render professional services in the areas of accounting, auditing, and consultation to establish accounting and record-keeping systems which comply with Federal require- ments. On a national level, we hive been engaged to perform examinations of housing programs in virtually all of our operating offices. In addition, we have corked closely with governmental officials to develop audit guidelines and re- porting formatse ORGANIZATION AND STAFFING Personnel assigned to the audit of the City's CETA program will be drawn from those auditors assigned to the examination of the financial statements of the City and it related entities. You can be assured that sufficient staff has been assembled to complete all required audits in a timely and efficient maan_r. Such personnel will have adequate training and professional background to enable them to perform the examination of the financial statements and compliance aspects of the City's CETA program in a proper manner. TIRING Upon notification of selection as auditors, we will promptly commence our audit effort by z-h:eduling the initial client planning meeting. Based, upon our under- standing of the requirements of DOL and the City and prior experience in auditing CETA pragz,_M ,, we foresee no obstacle in delivering our reports well in advance of the requiTed report delivery dates established by DOL. As mentioned previously, we are prepared to commence actual: fieldwork concurrently with our annual examination of the City's financial statements. Accordingly, we plan to schedule our audit effort to coincide with the delivery of the City's audited financial statements (with accountants' report thereon). Such financial statements are presently scheduledfor delivery by September 30, 1978. We esti� mate an elapsed time from date of commencement of actual fieldwork to report deliver date of approximately six weeks. ;FEES t,bi.le it is difficult to exactly determine, out time in advance, based upon our ` understanding of the City's scope of CETA funded operations and system of internal y1 II Following the initial meeting, the audir team will meet to begin tailoring our audit program and will determine the manner in which our evaluation of the City's = R , system of internal accounting contxal,, as it relates to the CETA programs, willL be completed: To aid in this process, we have previously developed basic audit programs for audits of governmental grants. In addition, we have extracted ap- ; plicab?e sections of the CETA guidelines for use by our staff in completing our examinations. Audit Fieldwork Our audit fieldwork will commence concurrently with the examination of the fi- nancial statements of the City and its related entities and will commence with ` 4 an evaluation of the systems of internal accounting control as. it relates to �,�Aq the CETA program in general. our evaluation will, of course, include an assess_ went of the systems of internal control of the City's various sub-grantees to the extecit considered necessary. Our evaluation will be accomplished through the use of questionnaires, observation of internal operating procedures, inquiries of appropriate personnel and, to the extent practicable, the development of system flowcharts, The purpose of our evaluations will be to identify strengths and/or weaknesses in the systems of internal accounting control: of the City and its CETA funded sub-grantees. Specific strengths upon which we may rely will be identified and appropriate: audit tests will be developed. The continual tailoring, process of the audit program will be reviewed by the engagement manager and partner. During our audit fieldwork, we will also focus attention on the compliance aspects of the grant agreement with DOL. Our review of the compliance aspects of the City's overall CETA program gill be performed in accordance with the provisions ourlined in the WtA Audit Guide as promulgated by DOL. The final portion of our audit effort will be mainly concerned with examining the numbers that will appear in the financial report to DOL. Throughout the fieldwork, the engagement manager will, monitor and review the progress of the field auditors. At the conclusion of fieldwork, the working papers supporting the critical audit Arias will be reviewed by the engagement partner. At this time, the engagement manager and partner will determine whether the objectives of our examination, as previously discussed, have been met. Exit Conference Prior to signing the accountants' repoYts, a final meeting will be held between PFR*Co. personnel and appropriate representati-ves from the City. As a matter oe: policy, 1'2•i 6Co,,ka.'.sways conducts a postaudit meeting with our clients. How- ever, a formal exit conference is specifically required by the City. The purpose of this exi: conference will be to discuss the final drafts of the financial report and supplementary data.. QUALIFICATIONS "i fM4Co, is ii large and diversified certified public accounting firm providing Professional eeavites 'to clients ixz virtually every governmental and commerr ;al (e' accounting control as it relates to the CETA program, we believe the following " man-hours, percentage of time and billing rates are required for the proposed . examinatiod of the Agency. 4 Han-hours Percentage per hour te TFeei ' „ClassificationP Partner 6 4% $60.00 $ 360.00 ;tanager 20 i; 35.00 7.00.00 t In-charge accountant 64 42 23.00 1,472.00 Staff. accountants 70 42 20.00 1,400.00 Out-of-pocket expenses _ 68.00 Total 160_ 100% $4 000.00 Arcordingly, ;we propose to undertake the described examination of the City's 5 4" CETA funds including those of the City's sub-grantees for the period ended fix . June 30, 1978, for a fee including reimbursement of out-of-pocket expenses, t not to exceed $4,000. As you can appreciate, the completeness and quality of supporting accounting' records can significantly impact the time required tr perform the engagement. ' This is especially true of the financial records of the City's slab-grantees. Based on our discussion With members of the City's staff, we bFlieve that our estimate of fees and time required to complete the engagement adequately con- siders the current state of the City's accounting records as they relate to the CETA program. Should the condition of the accounting records be less t..an #, complete, we will immedi-ately inform appropriate personnel so that the situ- J Ation may be corrected. We would also discuss additional fees, if any, that 11 may be mutually agreed upon in order to complete the examination. Should the amount of time expended for services rendered be less than anticipated, such reduction will, of course, be reflected in our final billing. S S SUPPLEMENTAL AGREEMENT NO. AUDIT OF COMMUNITY REDEVELOPMENT AGENCY OF CITY OF HUNTINGTON BEACH THIS SUPPLEMENTAL AGREEMENT NO. 2 to the agreement between the CITY OF HUNTINGTON BEACH, a municipal corporation (herein as "CITY") artier PEAT, MARWICK, MITCHELL AND COMPANY, Certified Public Accountants tiW 2y Oci`' (herein as ''AUDITORS"), entered into on Sep , r, 1976, for the provision of i audit services (herein as "Basic Agreement"). WITNESSETH ; WHEREAS, the basic agreement between the parftes now provides that the CITE' by and through its City Administroto may request AUDITOR to perform designated extraordinary services in addition to those which are usual and customary in making an exaininatlon of the financial statements of the CITY; and CITY has, determined that those certain services more fyliy described in Exhibit "Ana attached hereto should be performed by AUDITOR; and AUDITOR agrees to perform such extraordinary services at an additional cost tor the CITY and as a task separate and apart from tlxose which are lisually and customarily performed in making on examination of the ;Financial statements of the CITY, NOW, THEREF-7DRE, the parties agree as follows. I. AJDJTQR will perform on behalf of CITY the services more fully described in �Ex"nibit 0A" attached 'hereto. 2, Reimbursements to AUDITOR by ! IT( pursuant to this Supplemental Aqral2merit No. 2: will prat exctmd Or* Thous�-�4nd, Two Hundred Fifty;. Dollars 1 4, 3. Upon receipt of AUDITOR'S invoice, CITY will reimburse AUDITOR for services rendered pursuant to this Supplemental Agreement No. 2 at the hourly ,�... rates and conditions for reimbursement of expenses set forth in the basic agreerrwrit and shall be submitted as work progresses but not more often than r a; monthly. All requested reimbursements pursuant to this Supplemental Agreement No. 2 shall be segregated from reimbursements billed pursuant to the basic agreement and relating to the ordinary audit. No commingling of reimbursements Y between -the work to be performed pursuant to this Supplemental Agreement No. 2 �,j and that performer) pursuant to the basic agreement shall be permitted. IN WITNESS WHEREOF, the parti,,s have executed this Supplemental Agreement # No. 2 effective as of the ey of =bw, 1978. :< 4a nri I CITY OF HUNTINGTON BEACH r ATTEST: �y Mayor 'No`l em gore. City Clerk Y APPROVED AS TO CONTENT: APPROVED AS TO FORM:. S Cit Administrator City Attorney ; APPROVED, INITIATING DEPAR T MENTs � PEAT, MARWICK, MITCHELL AND COMPANY By (l?artner� - SUPPLEMENTAL AGREEMENT NO. -_" Z . ` THIS SUPPLEMENTAL AGREEMENT NO 1 is entered into by the 4k parries hereto and is effective on ;he '41A day of 1977. .k WHEREAS, the CITY OF HUNTING'TON BEACH, CALIFORNIA. herein as t°CITY" and the certified public act;ot-at ng firm of PEAT, 14ARIIICK AND MI`"CHELT , herein as "AUDITOR"- have heretofore and 1 on the 22nd day of June. 1976, entered into an agreement for the provision of certain charter mandated and otherwise desirable and necessary auditing services by AUDITOR to CITY; and CITY and AUDITOR mutually desire to contract for aiaditing services for ;fiscal gears 1977, 1978, 1979 and 1980. The parties desire to amend the agreemen'Y dated 22 June 1976 by this Supplemental :'agreement No. I NOW, THEREFORE, the parties covenant and agree .as follows: 1. The existing agreement between the parties and all o its covenants and agreements, excepting as expressly modified herein shall retain In full :force and effect. 2 For years subsequent to June 30, 1976, copies of audit reports to be furnished by AUDITOR to CITY shall be in the same type and quantity as those to be furnished for the fiscal year ending on that date aild shall tie furnished as soon as practicable fr ; after, the .end o each such year. 3o For services performed relating exclusively to the f= audit tar the t1scal year ending June 30, 1977, AUDITOR will be compensated at the hourly rates listed below; provided, howevor, the total cbmpenoatloli for such services shall not xdeed ' ty--+one Thousand Fi 11undred Dollars ( 2'1, 00). e ;r HOURLY RATES Partners $60 per hour Managers 35 per hour. Supervisors $30 per hour Senior Accountants $22 per hour Assistant Accountants $IS per hour Clem-l;al (Deleted) 4. Hourly rates and total compensation "or fiscal years ending subsequent to Tune 30, 1977" shall, be subject to the mutual agreement of tb, parties, In the event the panties are unable in good faith to so agree then this agreement shall. tei-minate on or before April 30 for the first year so affected. IN WITNESS WHEREOF, the parties hereto have signed this agreement as of the clay and year herein first above writ-en. CITY OF HUNTINGTON BEACH, a municipal corporation (CITY) ATTEST; Alicia m Wentworth City Clerk 1)eputy City C' er C REVIEWED AND APPROVED: APPROVED AS sty FORM: c 13 C:L6 k lt3..L 6i,4 G`.'4r+ ' j ei� ,1*il At 1141T,IATZD AND APPROVED AS TO Ft�RTi; 41 PEAT, 14ARWICX AND NIT01M AND V,�M'ANY (AUDITORS) r# - LM REQUE6T FOR CITY COUNCIL YACTION 7a-3 e o 1144 � Floyd G. Belsito Administrc:tion Submitted icy ' Department Date Prepared August. 29, 19 7 8 Backup Material Attached Yes No z` Subject Audit of Comprehensive Employment F TrainiD Act Fundsr - a.w t City Administrator's Comments " Approve as recommended Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions. Statement of Issue: The U.S. Department of .Labor requires that an annual audit of Comprehensive Employment and Training Act Funds be conducted. Recommendation: Autborite the preparation, of an amendment to the contract w1th Peat, Marwick, Mitchell and Company to ,include the CETA audit at a cost not to exceed $4,000. Analysis, The federal Department of Labor requires that n annual audit must be pre- pared The purpose of the audit will be (1) to determine the strengths and 'weaknesses of the City program as well as its CETA funded sub-grantees; (2) to audit the compliance spects of the grant agreement with the Department of Labor; and (;) to examine zhe numbers in the THnancial report. Peat, Marwick, Mitchell, and Company will be able to conduct the exami,nati,oa Of the City's CETA funds concurrently with their annual examination of the city. Alternative: Request proposa:s from other audit companies Vunding Source: CETA funds. J j SUPPLEMENTAL AGREEMENT NO. ? 3, THIS SUPPLEMENTAL AGREEMENT NO. 1 to the Agreement between the CITY OF HUNTINGTON BEACH, a municipal corporation (herein as "CITY") and PEAT, MAR7WICK, MITCHELL AND COMPANY, Certified Public Accountants (herein as "AUDITORS"), entered into on June, 19176, for the provision of audit services (herein as "Basic Agreeme-V) t' W I T N E S S E T H WHEREAS, the basic agreement between the parties now provides � . that the CITY by and through its City Administrator may request AUDITOR to perform designated extraordinary services in addition to those which are usual and customary in making an examination of the financial statements of the CITY; and CITY has determined that those .,erta n services more fully described in Exhibit "A"" attached hereto should be performed by AUDITOR; and AUDITOR agrees to perform such extraordinary services at an additional cost to the CITY and as a task separate and apart ,.t from those which are usually and customarily performed rfarmed in making an examination of the financial statements of the CITY, NOW, THEREFORE, the parties agree as follows 1. AUDITOR will perform on behalf of CITY the services more fully described in Exhibit "A"" attached hereto. 2. Reimbursements to AUDITOR by CITY pursuant to this Supplemental Agreement :40. 1 will not exceed Three Thousand Dollars ('.ta3,000), ; SA �r 1. e w. ur leg.•. to '` 3. Upon receipt of AUDITOR'S invoice, CITY will re- imburse AUDITOR for services rendered pursuant to this Supplemental r Agreement No. 1 at the hourly rates and conditions for relmbu.rse 'r ment of expenses set forth in the basic agreement and shall be submitted aF. work progresses but not more often than mont-bly., Y All requested reimbursements pursuant to this Supplemental Agreement No. 1 shall be segregated from reimbursements billed { pursuant to the basic agreement and relating to the ordinary 'audit. , 4 . No commingling of reimbursements between the work to be performed ' pursuant to this Supplemental Agreement No. 1 and that performed y pursuant to the basic agreement shall be permitted. IN WITNESS WHEREOF, tie parties have executed this Supplemental 4 .Agreement No. l effective as of the �'� day of September, 1976. CITY OR HUNTINGTON BEACH ATTEST; r^_ o a t .7 Mayor s r._ City Clerk APPROVED ;AS TO CONTENT. APPROVED AS TO FORM strator City At arn- r ,. � W APPROVED, INITIATING DEPARTMENT: PEAT, MARWICK, MITCHELL AND COMPANY gar �' Y F PEAT, ti rer . 'KTTCHELL �c CO. My oE1rrTr1zrs PUBLIC, ACCOUNTANTS 1 bO :NMII ORT CENTRU 'DRIVE 1K1'n.'�>c�2YC }3L'.iC7Z,C,'.iLt,PORh_A 02030 h August 25, 1975 �r PRIVATE � • Mr.Floyd C.Belsito r City Administrator 4 City of Huntington Beach 2011JO Main Street ,t' Huntington Beach,California 92648 � Dear,heir..'B elsico; :a- Peat, Mar;kiels, Mitchell. & Co. is pleased to present this proposal to assist the City* m its investigation into the accounting and administrative procedures for reimbursement ag eemenr.s relating to drainage,sewer and water.improvements.The purpose of this letter:is to outline the ' scope and objectives of our assistance and to provide an estimate of our professional fees« BACKGROUND The City*has entered into reimbursement agreements with developers for purposes of defraying the cost of its planned drainage, selvage and water facilities. Suei agreements have been entered inter since approximately 1957, but reached a high point during the City's accelerated growth period in the 1960's.The reimbursement x�recmcnts generally provide that the City may, a cont�acror constructirw a drainage, sewage or water facility. Such i reimbursement may be a portion or the entire amount originally expanded, :Money .for reimbursement is to arise :from assessments made by the City to subsequent developers "tying into"the existing facility, Tile City* has recognized that accounting and administrative procedures regarding reimbursement agreements have been deficient in the past.Concern for proper accounting and administrative procedures .has arisen because of current litigation, recent requests for rei. burserrient or offset air the part of the contractors,and other developments'. There are numerous concerts which have been brought to l:�ht,among theirs the following; Bxper:ditures may have 'be--n made reducing a contractor's gross Contingent Iiability ;improperly*. Such expenditures ntay have been made for the ,a tXHXSIT "All .�f v f' M. M. & CO. �4 ' Mr.Floyd G.Belsita City Administrator August 25, 1976 2 uy improvement or systems other than those for which the money was received, and may be open to legal action by other contractors as to the propriety of expenditures. f Monies in the Drainage Fund cash account have come from sources other x x than reimbursement receipts from contractors "tying into" existing systems. A Certain cash has been received from the proceeds of land and equipment sales t and from a long-standing loan from the Sewage Fund.The cash balance in the E Drainage Fundd has pre-zously been regarded .as a measure of nvailabla funds ' for contractor reimbursement. The presence of nonreimbursement proceeds in the cash account indicates that at least a portion of total cash may not be avala;.tile for developer reimbursement or facility improvement. .t. Amounts properly due contractors have been "offset" against a contingent liability to the contractor.Such,practice raises certain questions regarding- - The City's right to offset a proper receivable against a contingent liability -- The rights of prior contractors,o receive,as reimbursement, funds which may have been previously offset -T The City's cash management policy. , APPROACH The concerns rained in the foregoing section indicate problems of considcrable complexity. Comments and observations made by members of the City's management teals and prior independent accountants provide insight into the nature of the accounting and administrative , t problems regarding reitnbursemant agreements. However, no overall review of the problems r regarding reimbursement agreements inexistent, r Based upon t review of the problems encountered, we feel that the most economical and cast-effective course of action for the City would involve a two-}phase approach to the problem, Thie first phise would be.-L Diagnostic Review of the accounting and administrative procedures rogara--gig reimbursement controm" Such review .r,ould not involve M detailed analysis of prior s transactions involvingreintbursentcnt agreements.Rather,the review would serve to: r , provi._it a b.ue to .expand the project into a detail analysis of prior ~ trans.-tctioris(if indeed such an anal),is iseasiblel. f S Mr.,Floyd G.Belsit0 Ciev Administrator August 25, 1976 IdentifjF and isolate problems with reimbursement agreements. " r z . Y Provide the Cum, with recommendations for improving the system of accounting and administrative control over reimbursement agreements. : x , Develop recommendations for a course of action to take with respect to prior ! ` and future reimbursement agreement transactions. G The second phase of the examination would focus on a detailed analysis of past transactis:•ns. � �} Using information developed in the Diagnostic Review, the feasibility of a detailedd analysis would be assessed. Because of the long-term nature of the problems encountered, a detailed 7 analysis of past transactions may prove to be infeasible due to insufficient records in the earlier years of the reimbursement agreements, Commencement of the detailed analysis phase of the examination would be contingent upon the findings of the Diagnostic Review. Accordingly, the scope of work involved in connection vAth Phase 11 is not contemplated in this proposal. Our approach to accomplishing the objectives o>• the Diagnostic Review would be to work closely with the City's management and staff in completing the tasks undertaken.Our efforts would be directed primarily toward interpreting the present accounting and administrative controls applied, directing, developing and participating in detailed task assignments; conducting inter%zews with City personnel, and monitoring progress of the engagement throughout the review period. We anticipate that City personnel; would participate heavily in identifying sources of information, analyzing operating procedures and reimbursement agreements, assigning ongoing responsibilities and actually monitoring the future system.This approach of integrating task respow Ibilities will meet your objectives in the shortest possible time while assuring ongoing systems,�. pabilities. 1 TIMING i The elapsed time required for the Diagnostic Review will depend upon the complexity of the problems encountered, we estimate that the Diagnostic Review phase of the engagement will require a.minimum of two weeks. In making this estimate, we understand that the City will, provide the full-time assistance of W.Mark Ambrozich and Mr.Arnold Ross, Internal Auditor, to aid our personnel in completing the review, After completion of the Di Q.,os—ic Review, the two individuals a assigned lry, the City should provide the City with the ability to monitor future transactions invol%ing reimbursement agreements as well as to provide valuable assistance to our personnel a in cosmpletixic_�e review. x . . P M. M. Ek CO. � W.Floyd G.Belsito City Administrator :s j' August r 25, 1976 4 i r' x f � FEES As mentioned in our propcs J of services to th,. City dated May 7,1,976,our hourly rates for sere-ices rendered by our personnel in the conduct of the Diagnostic Review would be consistent with those of the annual audit. Fees for the review would be based upon the time a actually required to complete the work at the hourly rates indicated below. . Classification Hourlvrate �, Partner $ 60 Manager 30 Senior 22 Based on our experience with engagements of a similar nature, :anticipated assistance from selected City personnel and our understanding of the current circumstances surrounding the .' City's reimbursement agreements, we estimate that our fees, including reimbursement for out-of-pocket expenses,will not exceed $3 000. It is understood that the scope of this review would constitute special work as mentioned in our original proposal for services.. Accordingly, such work cannot be considered as part of the basic audit as outlined in our prior proposdt. ; r` arc t K We appreciate die opportunity of providing continuing assistance to the City and look forward to working with you on this project: ' R f Very truly}Fours, f PEAT, MARWICK.,MITCr3ELL&CO. ,yr Donald R.Rager,partner DRR,:LGG r t t AGREEMENT THIS AGREEMENT made and entered into as of this Jay of June 1976, between the CITY OF HUNTINGTON BEACH, iTY 'v ORANGE, STATE OF CALIFORNIA, hereinafter referred to � . at CITY," and PEAT, MARWICK, MITCHELL & CO. , Certified Public K Accountants, hereinafter referred to as "AUDITORS." PARTIES WHEREAS, it is the intention of CITY to provide for s the examination of its financial statements, and AUDITORS are Certified Public Accountants, duly authorized to practice and licensed as such by the California State Board of Accountancy . AUDIT" PROCED JRES AND SCOPE VOW, THEREFORE, in consideration of the mutual cove- nants, conditions an:� premises hereinafter contained, CITY hereby engages AUDITORS, and AUDITORS hereby agree to examine the financial statements of all funds and account groups of CITY. It is understood that the services performed by AUDITORS are in the capacity of an independent contractor and not as an officer,, agent or employee of CITY. The financial statements stall be completed by CITY } .3.:i. a ,format which 'complies with generally accepted accounting principles. The examination shall. 'be Made in accordance with WSA tb a 1. j a generally aecr ved auditing standards, and accordingly shall include such tests of the accounting records and such other auditing procedures as AUDITORS consider necessary in the , circumstances in order to allow for the expression of an opinion " 4 on the financial statements of all funds and account groups of CITY. It is understood that such procedures are not designed primarily to disclose defalcations or other irregularities. RECOMMENDATIONS ON INTERNAL CONTROL ':' AUDITORS shall observe the adequacy of the system of internal control and, if weaknesses are noted, make appropriate recommendations. AUDITORS' comments shall be included in a separate letter to be issued as soon as possible after the con- clusion of their examination, PERIOD COVERED BY AGREEMENT This agreement shall provide for the audit, of the financial books and records as required by Charte., for the fiscal year beginning July 1, 1975 and ending June 30, 1976. The actual audit work wi,' 'be performed at such time or times as are selected by AUDITOR, provided however, that -the audit will be completed and report thereof delivered to CITY as pro- v%ded for herein below. COMPLETION OF AUDIT REPORT AUDITOR agrees to -exert every effort toward complet- ing the examination and furnishing Fifty, (50) cop:es of their audit report to CITY 'by September 30, 1976. The audit report shall set forth the 2, i. 4{ opinion of AUDITORS on; "" 1. The fairness of presentation of the financial ?` a statements: s r, 2. The )..:opr ety of accounting principles followed '. by CITY. It is understood that said examination will be based �Ya . upon tests and samples of the accounting records and trans- actions sufficient to satisfy AUDITORS of the accuracy and fairness of the presentation of the financial statements of CITY and will not comprise a detailed examination of all trans- actions. It is recognized that, owing to the test character of the examination, reliance must be placed upon the adequacy of the system: of internal control, but, as aforesaid, comments and recommendations for improving accounting pzucedures and the system of internal control will be made to the extent indicated by said examination. CONSIDERATION Said auditing services will be performed by qualified persons having experience suitable to the grades specified below. Such services, shall be rei^pursed based upon the following hourly rates-, ; . Partners $60 per hour A4anagers $ 0 per hour Supervisors $28 per hour Senior Accountants $21 per hour Assistant Accountants $18 per hour- 3. AZI clerical $ 8 per hour k plus automobile mileage, postage and other incidental 4 expenses, all subject to the limitations provided herein. ` >. The total sum payable to AUDITORS for services and expenses contemplated by the agreement shall not exceed Eighteen, Thousand Dollars ($18,000) . Fees for services rendered may be billed as the work progresses, but not more often than once per month. such fees shall be paid promptly by CITY. The maxim-..:.-i annual fee stipulated above contemplates that conditions satisfactory to the normal progress and com- pletion of the examination will be encountered. EXTRAORDINARY SERVICES It is contemplated that from time to time CITY may wash AUDITORS to perform accounting and auditing services in addition to those which are usual and customary in making an examination of the financial statements of CITY. If so, AUDITORS shall be compensated for any such services performed which are validly authorized at the hourly rates in effect under this agreement. However, if such; additional services require the expertise of consultants, AUDITORS and CITY may negotiate separate rates and estimated fees for the work contemplated, provided, however, that it is expressly understood and agreed that no such extra work shall be undertaken nor shall. the CITY be liable for any :such extra work except upon the express written direction of the City Administrator. AUDITOR under- stmds and is aware that the Charter of the City of Runt.:ington 4. t y l Beach provides that all contractual arrangements with CITY F must be in wr ti_ng, approved by the City Council and executed by those officers designated by the Charter. t ;s IN WITNESS WHEREOF, the parties hereto have signed this agreement as of the dad* and year herein first above written. . -Wti ATTEST: CITY OF HUNTINGTON BEACH, a municipal corporation (CITY) City Clerk Mayor ;`s RAPROv'ED AS TO CORM: T At to 3F PE i111rcK y MITCRElz & CO. (AUDITDRS APP'R,O D AS TO CONTENT: .Act. n� ity administrator PAR ER �f 5. jj +� 1p y n . v:� , ro we 0.y. ' 4 j Y yS �. yP �. A �„y�; -�� -1P- #• 'AIM,` � �.. '�:. pW �y RIMS 000 rl a: � x„f - i Y �s-a �,. i�1► SIP � •1* - � i1/�1�� '�� . �. LIN v y Ly< fi St x� f C i �w PB;T, MS RVY-T'CK, NITCHRLt & CO. 14 CF-UT17TED 3'VBLIC &CCOU 'T8 5*5 sOVTU JILOW$rt STREET41 LOS A-XGZL$s,CAL1FORX1A 90071 x` January 17, 1977 '`` CONFIDENTIAL ,4 The Honorable City Council . City of I Ifuntington Beach Huntington Beach,California 92648 .E Attention: Mr,Floyd G.Belsito City Administrator Members of the City Council: We have examined the,financial statements of the various funds and.account groups of the City of Huntington Beach, California (City), the Parking Authority- of the City of`HunrfiVon Beacli (Parking Authority) and the Huntington Beach Public Facilities Corporation (PFC)for the year ended June 30, 1976 and have issued our opinions there-an dated September 30, 1976. As a part of our examinations, we reviewed and. tested the systems of internal zccc=tLig control of the City, Parking Authority and FFC to the extent.. we considered necratsary to evaluate the systems as.regc',ed by generally atceptad auditing standards. Under those standards,the purpose of.such evaluations is to establish a basis for reliance thereon in determining the nature, timing and extent of other audio,-tg procedures that are necessary to express an opinion on the financial statements. The objective of internal accounting control is to provide, reasonable, but not absolute, assurance as to the safeguarding of assets against loss from unauthorized use or disposition,and the Teliability of financial records for preparing financial statements and maintaining: aoaountability+ for assets. The concept ofreasonable :xasurance recognizes that the cost of a �t system of internal accounting control should not exceed tht. benefits derived and also recognizes that the evaluation of these factors necessarily requires estimates and judgments by management. Thy we inherent limimriorss thax should.. be recognized in considering the potential effectiveness of any system of internal accounthig control.Tn the performance of most control proo4dures errors-rays restili from misunderstanding of instructions, mistakes of judgment, 'eless est, or other personal factors,Control procedures whose effectiveness depends upon s, arion of duties,can be circtatnwated by collusion. Similarly, control procedures can be cirrurrcvercted intentionally by m;ut gernent with#expect either to the execution and recording of tmns;cz one rr with respect to the estimates and judgments mq utd.in the preparation of f The Honorable City Council City of.Huntington Beach January x7, 1977 r"`�' >%y ASSIGNMENT OF .RESPONSIBILITY The City and its ass•.)ciated entities are both vertically and horizontally integrated, and aurhority and responsibility lines appear to cross the functional and organizational aspects of municipal government. In such an organizational structure, the proper delegation of responsibility is difficult.back of proper communication and other personnel-related factors also tend to make the delegation of responsibility for the timely completion of tasks difficult. '` Fadure to firmly fix responsibility for the accomplishment of tasks often results in a crisis approach to the solution of problems. We understand that senior management is aware of this problem and has taken steps to correct the situation.We commend the efforts of management in this regard. We would like to take this opportunity, however,to point out certain matters that we feel warrant management's consideration as they relate to the organizational environment wi0tin the City's accounting function. We therefore offer the following suggestions. Management, should undertake an in-depth review of the authority, responsibility and reporting,lines within the organization. Mann,*ment should conduct a review of job descriptions, functions and qualifr-ftions of accounting personnel as they relate to the jobs in existence or to be developed in the future. Management should develop firm areas of responsibility and standard reporting lines which clearly.indicate the authority and responsibility of each person within the organization. Such polity should be available to all ereployees. we take this opportunity to acknowledge the cooperation and assistance that we received from the officials and personnel of the City of Huntington Beach during the course of our examination. Should you have any questions concerning any of the comments or recommendations presented.hercio,we wvill be pleased to discuss them with you at your convenience, Very tzvly yours, tF� it t CITY OF HUNTINC:TON BEACH. FEDERALLY FUNDED COME'Rc`Ei�i5IVE MPLOYMM AND TRAINING ACT FUNDS PROPOSAL, FOR PROFESSIONAL SERVICES �w t. PEAT, MAR-WICK,MITCHELL & (70. CZ0T1;r1ZD PuMac wccauNTANrs 060 N&WPORT CgNTER DNIY% ,NEWPORT `j$.AC",CALtY0)R F1A 02000 The 1lanorable )e%rd of Directors HuriOngton <Beach Public Facilities Corporation Huntington Beach, Caiifor. lie have examined thi combined balance sheet of she Huntington Beach Public Facilities Corporation as of June 30, 1976 and the related statements of earnings and accumulated deficit and changes in cash position for the yrar then ended. Our examination was made in acLordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in ;he circumstances, In our opinion, the aforementioned financial statements present fairly the financial position of the Huntington Beach Piblic Facilities Corporation at June 30 1976 anj the results of its operations for the year then ende In conformity with generally accepted accounting principles applied on a basis consistent with that of the pre- ceding year. The current year's supplementary data included in Schedules i and 2 have been sub,jPcted to the same auditing procedures and in our opinion are stated fairly in all material respects when considered in can- junction with the basic financial statements taken as a whole. September 30, 1976 / Ito WIN -. CrRTYPLET> PUBLIC ACCt)V9TANT':S 60.0 NPWPOnT C3 XTEti DRtVr NEWPORT riEACN,t`A.tFTGRP dw f�,tC18Q The Honorable Members of the Parkinq Authority City of Huntington Beach Huntington Beach, California We have examined the combined balance sheet of the Parking Authority of the City of Huntington Beach as of June 30* 1976 and the related statements of earnings and retained earnings and changes in financial position for the year then ended. Our examination was made in accordance wth generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we con- sldered necessary in the circumstances. In our opinion, the aforementioned financial statemnts present fairly the financial position of the Parking Authority of the City of Huntington Beach at June 30. 1976 and the results of its operations for the year then ended in conformity with generally accepted accounting principiz�s applied on a basis consistent with that of the preceding year, The current year's supplementary dat^ incZoded in Schedules i and 2 have been subjected to the sate auditing procedures and in our opinion are stated 1'a rly in all material respects when considered In conjunction with the basic financial statements taken as a whole. September 30, 1976 -ct�° `; r j f.� s. ff# r l S CITY OF HUNTINGTON BEACH 1976 LETTER TO MANAGEMENT w. CITY OF MMINOTON BEACH OHIO, of the pity clergy P. 0. Box 190 moon Soh# atlf, 928 _ f PB.T.. MITCHELL & Co. GE$TIP'SEI) 2�Y.''S3LIC a,CCOi.:v'T.A�t'tS w, . 355 SOXYM FLONrza S-rnzXZ ' LOS .3NOELES. 00071 $ „ August za, 1975 fx;[ Xr. :?oyd G. 3ek5 r.v City o! Rum:ing -�4 Be 1.:,2 ! 2000 "pia Stra,•�& � ,> auntizaizror i cct, Ga' }a: za 9:1648 ' Dear X-. Belst zo. h' ?eat, Xar-tck, etcher:. a Cc. is pleased to praseat this pr000sai to perwo= an e ar nayzon of fun" tece#ved by the Cicy o untzxgto,� 3eaci2 Ci>.`) Lns�e= :he Com?rehensive -Er.ploymezt and Traiaiag Act CC LA) , ads .-is tered by he U. 5. Depa.rtmersr of Labor (DOL). he ,scope or our examination coucenp�aties raviews of "sub-,�_antees" conducts..g various vocal arsaI cra=niag pragramr. that, are ended zhzoug4 C!'U gra-it -G:nds received =rots the City. ?!1MCo. is urt qualy cua if ad to serve the City's need for effJcient and e.eouoa&ca,1 professional- auditing services. ;,s appointed audicors for the for the past two years, we have daveloped a c'aarough uaaerstandLng or the Ci-y's operations :rosy both the Eiscal and the adm:nistra. :,ve ,rota of xriew. 9ased of our assasszeat of the scope of CSTA funded oaeracions of the Cis.? aad our edge and a.ti�er once iz gr-v:nt programs admi..caisrered by the Department Of Labor (DOS,) is gwieral, .and `TA grar_ts 4.n. particular, «p behave czar P-"- &Co. can: best serve you, -aeeds for 6.a sezvi aes of a qual-1 ed fit c--- zadependenc public adco=tants, toe have set fort: :n the ramainde-r of this `_,acte'r, the ob jettives, scope and at:d-.t approach of the examinacion as we perceive it, plus other irzfo `4z:Lca hsat demonst ate; cur t$ualI,.`.ications to se,-7e as aL'ditors for the Cii.Ly In this regard, we have perfo ed nuweroas an-gagements of -QL sponsored pro- grams. ti partial ?is; Of 40cal gr=c projecttss' for :hick Pi-mca.. present?y proVides services follows r State of Ca iforalla, Daazw^mast of sducas Q Orange touat~I 'anpoz:er Co=4—qs-on e:' scope of ;? Ca 's local practice part des us vz"*4 he experience and per saznel needed, to zeal the curreat aud-t nee s of zha City, Zn e,dait; aom; ?-*0MCo. P. M. M. & CO. { Auggst 15, 1978 has maintaized a ieadersz p raositioa in. providiag services to local governmenral argaaxi-ati.ons through its camprehensitie iavol.veaeat with Federal agencies and technical orga.>xit,ations ;-sere changes and/or ae-w- concepts is govearmental .i- aaanc;:.al. accounting and ads aist:arion nos< fre ueatly orig%aate. Ma rough C-hese activities, is prepared to meat our cliarxzsT needs as new recuiramencs ar-t a. :.1'e believe out people aac their mail _? 4o aarrorm the core, you need .J OVL--e Lou t;tth the greatest assu aaaa that zlie services regi4i:ed vill be pro- vided, is a :rofessioaal =anner ani on a -i=e 7 oasis. l;�a�aic you for providing us the oppartuszi.c; to preseat this proposal. 'pie look formate to !orkir,g with {oe arse your staff. rre *would be pleased to provide any ` add ticaal ia>orza:^woo,or answer any questions yoL may have regarding this �=,t 'ye--7 truiv yours, horas W. Snow, Manager WS.ass y{ c4 j CITY OF HUNTINGTON BEACH CO20it ITY REDEVELOP' ENT AGENCY r MOPOSA FOR. EROPI;SSIONAL SERVICES L Cizit'rt2'1xt) 4*rC2iLiC ,►C<'42ttY'I':4:;T.5 ±t wPr7RT 9L'Ai:$,i:.tLL=C'C38:�X..4 02660 �..•. August 15, 1978 Mr Frank B. Arguello � Director of Finance City of Huntington Uach 0. 0. Box 190 3untirtgtoa Beach, CA 92648 r- Dear :fir. Arquellos In response to your request, Feat, :Barwick, Kitchell & Co. (PMM&Co.) is pleased to submit our proposal to provide auditing services to the a Community Redevelopment Agency of the City of Huntington Beach (Agency) f,>r an examination :>f the finanrl:al statements of the Agency for the t years ended June 30, 1978.. This proposal contains our understanding of the scope of services,to be rendered together with our estimated: fee: for performing such services. SE?"TCES TO BE RENDERED Eecerrt changes in the state laws governing redevelopment agencies and their related projects rewire direct involvement by independent public accountants. As auditors for the City for the last two years, we are ' well prepared to provide the Agency with the audit services required. The scope of our proposed examination involves performing sufficient audit ,,,or'k co enable has to perform an examinat,on of the Agency's financial statements since inception as of, and for the: years ended June 30, 1978, The objective of our examination of the Agencyts financial statements is to render an opinion thereon. You can be assured that the proposed scope of our examination is directed towards meeting the financial reporti}g needs of the Agency as discussed ,above. In this regard, our examination will: he performed in accordance with generalriy accepted auditing standards, and accordingly, will include such test% of the accounting records and such other auditing procedures as we consider necessary in the circumstances. Inasmw h as the primary purpose of our examination is to enable us to express an opinion as to the financial position and neat to perform a detail, check of the day-to-day transactions, you. can appreciate that: reliance must be placed on adequate seystons of internal accounting controls as your principal safeguard against irregularities that may not be disclosed in m test e caminati�sn. s F: PEAR M A RLti I( to \T rrc FI 1.i.l. CO V'r.%NI s r rS.HQ �C'+"Pf,I MT t:6YTf[R l,N!'4 M`; r ,c k August 15, 1978 ' ,Ar. cranK 3. .Arquellu Director of finance ,<'Ity of Huntington Beach x7< 0. Box 190 V iiuntington beach, ('A '42648 , "{ t Sear xr. A�rquello: .'. in re-,ponse t+y Stour request, Peat, Marwick, Mitchell Co, (PM. &Cp.) i, A!eased to iubmtt our ,broposal to provide auditing services to the I� 3 6)inmitnity Redevelopment Agency of the City of Huntington Beach (Agency) +� r in examination ar rhe `financial statements of the agency for the ;ears ended ;une 3.3, 1978. This proposal contains our understanding of the icope of services to be rendered together with our estimated fee for .:ecfctrning such services, SERVICES TO BE RENDERED a ,r -onc h.ingeq in trig tale laws governing redevelopment agencies and «~, tier rte .ttiyd prxale.'ts�require direct involvement by independent public t t,ntane x. .i.s auditors for the bity for the last two years, we are t x:.: rem red to pr,witte the Agency with the aul t services required. x,tipe of .`ur prsp;}ac>d examination involves performing sufficient i:t t;or% t � enat)LY :is to perform in ex,aminat.4in of the .gentry's -financial ,t tcz,nencs itn::e inveption as of... and for the years ended June 30, 1978. "it- :)bjecti". of xaur examination of the Agency';i ftnancr al nta+tements is k t render an ,apioton thereon. r, cAft 'be .i stvrad that the proposeu icaloe or our examination is directed t+=ir&i meettng, the financial repfarti:ig needs it the Agency as discussed i 100IM'. In this regt,ra, =)ur examination will be performed in accordance WWI At'ntralIv accerted .auditing sttndards, and accordingly, will include cent;; x?f tht, .acz unting records .and such Esther auditing proredures a -: «t, •:onal:der necesiary in the Lircutnstances. Inasmuch as the pritnary ,,ivit se of our exami:iiti,on: :is to enable us to express an opinion as to the iinan<tal positiin and not to perform a detail check of the day-to--day *r ati4iactions., voix ::an appreciate that reliance mtAst be placed on a.lequate . t i �)f wnternil ia.t'iiunting controls as Your principal safeguard against itgnlari,tie�* t.;,,it may net be di;;closed in a to*,t examination, 1 � z i• r: M. M. a CO. �3 Mr. Frank B. A,rquello � City at Huntington Beach August 15, 1978 4� FEES r=; As is rue of other professional firms, our fees are based on the time we spend on an K.nga,gement. We believe that our approach is realistic and i coacrolled through effective engagement administration and utilization or staff assigned to the engagement who are knowledgeable of redevelopment and public sector accounting. ti We believe our fees for our examination of the :inancial statements for W,f4. the years ended June 30, 1978 will be $1,.250. The fees we propose above are expressed on a "not to exceed" basis and include any out-of-pocket expenses we incur. Should our actual time etpenaed ors the engagement, be less than anticipated, the Agency will only w be biked for the time incurred and not the stated maximum fee discussed above. { in making our estimate of fees, we anticipate that the Agency's accounting records will be completed in a satisfactory fashion and that appropriate supporting retord:� will be available for our inspection, We also anticipate that ire will receive assistance from Agency personnel in tbp. preparation of needed workpapers.. The degree of such workpaper preparation will, of course, y..` he mutually agreed upon in advance. ADDITIONAL_M ERS We understand that the Agency has not decided as to how it will respond to sections 330M1 of the California Herlth and Safety Cc le. This new section of law governi;rag redevelopment agencies has posed; problems fcr almost all C'al:rfovnia redevelopment agencies. We «ould be happy to discuss the new financial rtpor"tiag requirements imposed by section 33080.1 as we understand them with the Agency at their convenience. Additional work, if Any, arising from the Agency's decision to respond to suth new requirements would be performed at hourly rates commensurate frith fees used to develop our estimate of work set forth sho-ve. We would, of course;, provide the Agency a full writter, proposal for such additional work. The fee for such additional work would also be expressed on_a "noc to exceed" basis, 9 a, r P. M. M. a cO. 4 r of runc:..kg_an 3aac 4- Shouid ,rou have- an;r quesciins regarding ,sur %inderscanding o the eagag menc, we ,il_ �e pleased ,o discuss Chem 1th you ac your convenience:, .f our � understanding of the requirements of the proposed engagement _s acceptable cc you and the Agency, pease acknowledge your approval by sign ng and �< returning the actached aopv of ch.i3 laccer ',e 1cok forward to again -workzng -with you and your s ar'>. Very truly yours, : E: Thomas +T, Snow, Manager z c8 'Enc Jsu r,2 t S k 4 FRBR S Amr=s&:cep itG or 1'ENNSY:.VA"A Public Ledger Building,Philadelp5id.PA 19106 215 9284600 Telex 04414 � Alicia 14. Ventworth City Clem City O'f Hunt:�ngton Beach 2000 Main Street' Hu:�tington Beach CA. 92648 elo sod find insi=ance pnl4-c j ..v for accela t a Ge=n. s. Auto. Uce*ss ��sec1 >n ce rtif1oate of Liab. Workers' Comp. izssztxanae for aoao=t of Peat, Xarwit%, Mitchitil & Company Emlosed find Si�c�xr x Vice Pres den .WHcG/rc t;~iswwo oraMm Since 4e ` t �. CITY OF HUNTINGTON BEACH 2 MAIN STREET CALIFORNIA 92"S b x OFFICE Of THE CITY CLERK t August 26, 1981 Fred S. James & Co., Inc. Public hedger Bldg .r Phtladel'phia, PA 19106 � t, z RE: Peat, Marwick, Mitchell b Co. Insurance Certificate `.. We are returning the Certificate of Insurance for neat, Marwick, Mitchel'! and Co. The City Attorney's Office will not approve the insurance without the Additional Insured Endorsement and a 30 day, rather than 10 day cancellation clause, We have enclosed the City's C rtii"icate of Insurance fomi for your use. Alicia M. 'Wentworth City Clerk r' AMW:C4 s Y v �riClDsUre cc; Peat, Marwick, Mitchell & Co, 345 Park .Avenue New York 4 N. Y. 1002E u u s t fCITY OF HUNTINGTON �{ 2000 MAIN STREET CALIFORNIA 92648 OFFICE QF'i MF.CITY CLERK v Fred S. ')times $ Co., Inc. Public Ledger Build+ig Philadelphia, PA 91Gyd RE: Feat, .arwick, Aitchell Co., Insurance Certificate Attention. Mr. 41acwr.. V. McC:ee Vice President August 26, 1981 we i-eturned the Certificate of insurance 'qr Peat, Marwick, Mitchel and Company, to your company. Ve stilt have not receivod the Additional Insured Endorsement and a thirty day, father thin ten day cancel- lation clause. Yet Aricia M. ntt —vi 'ity Clerk Ati :C3aes Enclosure cc: Peat,, Barwick, Mitchell t tc—npany yy9 5 yP}-ark Av."tue 0M ��,. { 6' k Y ! 1 �1 - t r CU MP'AMES A9FORDING COVERAGE; FREED. S. JME3 6 COW-MY, INC. OF PA GENERAL ACCIDENT FARE � LIFE ` PU0LJC LEDGER BUILDING "fit . _ PHILAaELPHTA, PA 19106 CdarANy ,..........� - tf.lERati't�l��b_'",3.f15.wL..hi Y t�ti23iizAa�r .�JaO�!& tlrNE sr.is AC•nwH SS CYis •ar;eeRrr— — '... ca.Pfmr f"' � PEAT, 1WHICX, MITCHELL A COMPANY NSTLYAU 4Vi: 345_Park Avenue COMPANY New York, New York 10022 ,.(rTtrl ��,r " • Cam , 1 Wit" This t}18 o_nify trot potkels of insurance Wood bola.tune Gees issued to itw msuVi named above and ar-r tares at tfus time No"Ahstar+dml any repu cement.wm or co„d,V, of any cc:•rrct or ot'twr docunierii-tth riWKt to Yrhkh!Ms celfihc6te may be issw,d a may pertain,the tnsurancn atterdnd try the oolvoes descnbFQ herein is subl•'-ct to al}it" twir:s.aa. Oons end conclaions of such policies: T " . - L m Rs o a if�y n twuran t . " �_. TrPjCAIT PfRKYHW.,BYR04AA ,rki CIA'( acI ERAc LiABiIrTY tQOr,IllyY}Af,IAGt C: r 1ttri0804 AN(,tltt"mr j. :w,yTAK,f�}t,.E ,,A1.R(T SMF 2s1282 7 1/83 nw,Ytftitr afe R{rff4OA NS t ).AJ R +AIAP[} Npfrt YmtuRr allo �.,weA,.,rt►t extrwaA+st r'P^„e`ERTv DAu,AGE - it 000 t t Nlow ww*aw t�w,'uK•rek. •'!}ug;NE., q AVA.:t 19I ry,.bw xy +ti. -.4-a f°'tR1. IN AIR, 4,000 . �.�.,. Pt rKd,wAt Ai17QfMfJflltf tlAfilLYTYir,salrtwn�RY s 500 M Y„a`i rri,xYx ins nta�ittr 4,000 t A BAP-273996 7/1,83 iru 0 y'a'ill y,, wt Tr lY N^tiRY fNt' w..w..r. tL a.`.t' iQlYragFi tilwl Yi WN=Nit EXCESS 1,1AfflClTy e }fit #1•i�Lir»'ANt1 ;VT ut+Nw a ,=154 x.A>.,: •F{,w., t10,f300 10,000 3 " ULP 5849734 7j /913 WQ r ..: k6R fFtS COMPENSATION y+� l t �. ,An,i U. .Bd1.20`0 711183. ` - t"1Aftitt*Yf,l. 1,9ltfft tLY � .SUQ.. C WkIrkeE s' Lofnpen 19 905750 1 J1/83 Statutory 500 ea. occ. i h A Lill �'�,� City of Huntington DeAch in n as Additional Inazred. Cxneelfalfan `final I,inn of the ,hove deSrttb d poifrte,,be ranrelled before the expfe ation date thereof,the issuing r;om- 4 It'll "V41 mfelvor to 01,1 t IV days wtitio-n notice to the below mimed certificate bolder,but failure tp f wra;l.1 le„t+nottca�01311 ttt9mse"A nlsitgMinn or lvlhilriy of any hind upon the company. s I AUP- naTt :xSUED CC) � hltcta M, Wentwotth Clty :Clem of Klroto]fL1`�f�.i i`tt w o*1 11mit ttipt-11 tTt*sit di r st 'f.ate, oft rt T`t ly:.... �.<11 ( 1{i;Ya:l tie,I,Mt t1 ttIlly tit att„su n, tiw g t,Y t s+ 9 }t±t sill,>`�r w:taa�loYt erf n Flow Ill" C` x , MEOS4—AMEUM C.QF M-NN1SYLVi R Public Lzdger Building,Phil-slelphia.PA 19106 215 926-46QO Telex 83-4414 Sgpt :zr 25, "9R2 Alicia K. Wentworth city mez)� "K City of Huntington Beach 400 m3iln Sty s FStx AlIcia: { 1 for MCCO t a 3aa P tiemificmte of o CC isi>sit + Peat, MrW ick, Mitehell 4 C b, Vic]ael f ------- ASS istant > agGr,F. pecia -sk Cag M Peat, yAzdC Ritoxil Co J ,.rrtt�l k�c�&ih��r'#8a8: r tt<: a` i CITY OF HUNT NGTON BEACF! � Waite City Attorney ne 'Fej�fl REQUEST FOR LEGAL SERVICES canary city clerk Fink CM,Adm9nistrator Galde»rod OepartmantO PfY7i�7k1JG70N eEAC2i -•,�� , Cate Raqunt Made R y 7npartmani 8/26/81 City Clerk's Office City 'Clerk ' INST,RUCTIONS:Fife request in the City Anornay s Office as soon as possible.Print or type facts necessary for ety Attorney.Out !ire briefly reasons for the request.Attach a11,information and exhib�;=pertinent to the subject k� Type of Lf,-J Sert ce Requested: [ 1 Ordinance [A Insurance L 1 Other [ 1 Retoiutiun [ 1 Bonds i� i 1 O:ontractiAyreement I 1 Opinion All rrxhibits,must be attached,or this request will be returned to you. Exhiblu Attzched Please approved ch i s insurance and return to the City Cl orI's Offi ce. This is for an agreement approved 417/81 .i ik �u is RECEIVED CITY ATTORNEY ni'+"1r fyF Lfi j1d'�l�lf:T{j��w�r?s+ „. A G 2' 1981 AM FM' If,fin`c*uai4 AcdGo If net for i ouncLC e w i£dnairad complaix��date SignaGve, coweif MOWN p'lCl'9alYSi F 'M+ ! Z;"n h. �fS a - I .i. i •'TR'2'C""'Y�* ;v .. yZ ,z K rsn,...zian.,.r k �t •a e V t •• a:`-r 4 FRED S. .7MES & COt PPP, INC, COMPANIES AFFORDING COVERAGES PUBLIC LEDGER BUILDINGPdr}, PENNSYLVANIA GENERAL INSURANCE CO. F ,< _ IMIADELPHIA, PA 19105 F1>phr GENERAL ACCIDENT FIRE £c Xk•,x L1rE ASSURANCE CJMPATw ttdFJf ,:lr't..i.ftNF•,' .; t',.•i„r« £EA7, SARiTICK, itITCHEI;L & COMPANY `.tY'_h•�_ u a`A3`,ERICAN EXCESS INSURANCE COI3PANY 345 PARR: AVExtII; NEW YOEIK, NEW YORK 1002"; I&XV Jfy C ;fP`(R ky U ttrix�sfpcee2..ytp?atpeSt4ewct}nsurarxetsl4vltxic'++havehere>Ssnc X•a ,e4nsurrtSnnmr �wxea,dnreaYForce'aitt:�t4me�d{rtw,f tand;n snit +a�rrtrntnl.4e.marranQ,4r •F y't CK itay contrart 0 OmLr dMumpri With restvc:to%Outh tfes ctrjltc$te trtay be issued a may pe.ta+n,the prtsurance 0;tiled tsy!hQ wicseS 9str wd herear•s svbr'eat to aft terms„e*dusiom a}ti1 condAiom of such;ihciex r�dc n'kW �� `""-'�� Ltr»its ut triabiltty irw Thousat s'�(�� *�xY nt 7;t;r rrr,•un�;. • -.. ,. ,at r'FC' a ,. tt F F• t1; w - GEiYERAL !.t 18iL1TY EEEEf _ i�. •�•••••.•y t1 } Sri 251282 7/1/83 } ,nr•rrv-*+r;. r. ,�xn*.;t t„_,s-irr!•,r}d,.,# s 1,000, s �flt1,r x°,r<v C V 4,if'. tnN�gWtCF [� a e"Nif x�r•gaq�:,. .•�}gym' $0;wz-"0h7At %'ix,:.� (t t ._� I,000 ki)FG eloki LIABILITY k X�te alt lr'X:}I'',S f-x:i{ * 1 i T y }� r1 ,...k t • 1.000 B BAP 217791 7/1182 • .F 5C0 , ♦ } tir i }> t' 9 .lY i" '• (t °dfifro Ntd µ[ xarrrfX,x X i:li r ULP 5518676 7/1'82 } z F}s, rr;nMr,:.L w,clOO '1 10,00r t• r.>*rttR9}XAXX t4t?X:t$ aA "Nti ttF is 3t4ird WORKER",COMPENSATION A and V 688'572 f'l 82 thYca��• rsrtlrY 500 OFNt;R }g7} 2113 OEM Ill lit— O>i!if irfrtat)k ri#f3i:(ftd t}ttNrt?f3t a r�'rr-'SFEhK t X`. q. CarlCellation; shat;14 Ins r" U10 c7 0vt Yrj(-k i{�iseft polities t}r r..jvi�olleri Ei4 orr lf"o op pe-.�3tiorl datt? (her ol,t°VE*XGr,i}en p ;s'114 f pay +S•lt ett"Iv%t int.:W ttmnit...�.,,-....tbys'WrttWo 1102(v to the tiF-l• r+,' ed cerliticate }Voldr-r,but ?rX M111 r,ucb nottue ShMI Impose r:" 17ligalion of 11.)tmIfty of mrt• -ti utnri the tnn ooy 4etRAPt ck'.Y+ i'1'St-sf p,�}:9 xY t,'r�XX;y,7 nsa.. f ik .'. .;....IR..FY>;. WtfrtEii }rXtt 4> •Y A Est: .1._3, 19$1.. �. :...:.. C1ty Clerk Cie OfHunt`iogton - each 2t�OttWTI Street %n u:,_, , flunting oA Beath, CA. 92648 A1t4t,,tztX7+ "PIJ tMAllO 4 S s °i r i 1 Page #13 Council Minutes - 5/211179 G F AUDIT FEE INCREASE PEAT, MARWICK, MITCHELL & CO APPROVED V The Clerk presented: a transmittal from the City Administrator of a communication " from Peat, Marwick, Mitchell & Company requesting a cost of living increase of $3500 over the base fey of $21,500 that is provided for under the current agreement. The � r City Administrator recommended Council approve x $2500 increase for audit service fee for fiscal year 1978 bringing the irtal fee to $24,000. motion was made by `coder, seconded by Ma }dic, to approve a '$2500 increase in Peat, Marwick, Mitchell & Company audit service_fee for fiscal year 1978. Councilwoman Bailey stated reasons why she opposed the motion. The motion carried by the following roll call vote: '" AYES Pattinson, Thomas, Mandic, MacAllister, Yoder, Finley NOES: Bailey ABSENT None UNIFORM HEARING & APPEAL PROCEDURE - FAiL-O The Clerk, presented a communication from the City Attorney requesting approval to draft a uniform hearing and appeal procudure and draft modifications of all existing ordinances which provide for hearings or appeals to correspond to the uniform procedure ordinance The, City Utorney pointed out that the ,ecommendation had been forwarded by the Police Department as they were concerned with the type of hearings that prove embarrassing to Council and the audience such as masseuse business license revocations. Sire clarified the appeals and options available to Council under a Unifoirm Hearing and Appeal Procedure. She assured Council the procedure would not remove public access %.o Colnuil. Cewatilwoman Finley asked if hearings and appeals involving Division g - Planning Code hatters would YA included in the proposal„ The City Attorney stated matter pertai'riTl to 81v lion 9 would nots as the Subdivision Act is State mandated. Councilman Pat inson spoke in favor of the motion. Council man :Bail-v spoko- ira opposition to the scatter. She believed the procedure would circumvent Pi Mc ;:.cess to Council. Councilman ThGmas stated he was in complete agreement with Councilwoman Bailed and was not in favor of the procedure. A motiai- was made :by Pattinson, second MacAllister to approve the drafting of a uniform Nari�,q and. appeal procedure and draft modifications of all eXisting ordinances whid. prOvide-:for hearings or ,appezis to correspond to the uniform procedure ordinance. The City Attorney clarified the pocedures involved and the options available to Council to hold hearings; she emphasized that each item will still' come before ' pp '. Council and L,,ey raii decide whether or not to hear the matter. n i tG F x Page a 5 Council Minutes - 5/21/79 Mayor MacAllister stoke in favor of the motion. The motion failed by the following vote; AYES; Pattinson, MacAllister, 'coder NOES: Thomas, Mandic, Bailey, Finley g . ABSENT: None PLANTING COMMISSION RESIGNATION - FINLEY � M Mayor MacAllister accepted the resignation of Councilwoman Ruth Finley from her position as Chcirperson of the Planning Camission. PLANNING CCAMISSION VACANCIES Mayor MacAllister directed the Council liaison conrai ttee to the Planning Cowi ss ion .' to start reviewing applicants to fill vacancies on the Planning Commission. He stated that as of the first of July there would be three vacant seats -to be filled. ' ' COUNCIL LIAISON POSITIONS FIMI',:EY Mayor MacAllister informed Council he had met with Councilwoman Finley and ass grted her to the fallowing liaison positions: Housing and Community Development, Local - Coastal program - Citizen Advisory Committee, Allied Arts Board, Ewironmental Board, Special Events Board, Personnel Board and Housing Commission. SANTIAGO LIURAIY SYSTEM COW41TTEE -u APPOINTMENT - BAUER - APPROVE() �w The City Clerk presented a communication From the Library Director regarding an ap oint.ient to the Santiago Library System. He stated to comply with; State regulations ,. a ay board must be appointed from the communities that make up the Su<tam. He recorm¢mmended Charlene Bauer be appointed to serve in that capacity, On motion by Mac; .lister, second Finley, Council approved the appointment of Charlene Bauer to the Santiago Library System Coiminittee. The Ynotion caret iQd unanimously. COUNCIL LIAISON 4 SANTA ANA RIVER FLOOD .PROTECTION AGENCY YO�^NDIC - APPROVED d F On motion t y MacAllister, second Finley, Council approved the appointment of Councilman Yoder as :alternate to Councilman Mandic on the Santa Ana River Flood protectior Agency. Time motion carried unanimously. JULY 4 RAFuIt�E -. MkYOVS INVITATTOti t4yor :"4011 ister reported that he had received excellent reports as to the progress Of the 4th of July Parade planning. He described Counc:il`s role regarding the 4th of July parade. He stated he is providing coffee and donats for the dignitaries ,partici- €atinq in the parade and invited Council and staff to join him at his home to celebrate the 4th of July,. M,r Milli t;w, i d .GHQ Ada ' ITV OF HUU d 7€ COUNCIL ADMINISTRATOR COMMUNICATION To The Honorable Mayor and From Floyd G. Belsi.to City Council Members City Administrator Subjs~fi AUr-IT OF REIMBURSEMENT Gate September l., 4976 n AGREENENT PROCEDURES E I have requested Peat., Marwick, Mitchell & Cumpar to submit a proposal -_,,, ,. to assist. the City in a review of the accounting assd administrative z procedures for re:,mbursement agreements relating to drainage, and sewer u and water improvements. The annual audit perfarzaed last year by Coopers to Lybrand recommended such action, snd the Arthur '9Coang Mauag .went Audit also recommended a review. The att:ao'7ed proposal from 'Peat, Ka::ride, Mitchell & Company describes the scope of work to be performed. Also, I have directed Arnold Ross, Internal Auditor, and Mark Armbroz cn„ of the Finance De'j�arttment., to assist, in review. The -,y atract between the City and .Peat, t.arwick, Pit, ne ll &: Company allows for a supplf=ental agreement oZ additional services subs ect to City Council approval. REWMNDATIOX Approve aupplemimtr, l cozitract botwoeZ the City and Beat., Marwick, Mi.':che l & Company tiot to ouceed $3,000. $ufficient funds are. in Account No. 101355, Contractual Services-Auditing. Respectfully submitted, Floyd Selsito City :_dIQStatOr F08 r bb r x„ REQUEST FOR CITY COUNCIL ACTION t Frank B. Arguello Administrative Services 4 Submitted by Deprrtment Dare Prepared March 27, , 19 81 Backup Material Attached El Yet No M Subject INDBPpNDENT ANNUAL AUDIT OD _ALL_CUY A-COU TS. City Administrator's Comments fi �.#rpROYED 13Y C Approve as. Recommended Statement of Issue, recommendation,Analysis, Funding Source,Alternative Actions. STATEMENT OF ISSUE.; w.....�.. The City Charier requires the City Council. to provide for an independent annual audit of all City accounts. The agreement with peat, Marwick and. Mitchell and Company (PNIt M) for the examination of City financial statements for various City funds has expired. !here is an immediate n^ed to hire a Certified Public .Accouttti.ng (CPA) firm to provide an examination of the financiai statements of City funds for fiscal year 1980-81 in order to comply with the City Charter. 12.IGCO��It�I}A'I I r3N approve a one year agreement between the City and PMiM to provide art eta-.i- nation of financial statements of Ciy fonds for fiscal year 1980-81., for a fee of $33,000. Following the 1.980-81 audit the City Couricil could, at its opt4on, (1.) go out to lain for succeeding years, or (2) extend. the agreement after negotia-Lion. .,. THe'City has contracted, with PM�M for the purpose of examining the City's financial: statements since June 1976. With the completion of the pM4M examination of the City's financial statemAnt for the year ending June 30, 1980, , the contract~ between the City and PMAM has expired. A City Couaci7 Committee was appointed `,.o dete,rmine the various options available to the City regarding the hiring of a CPA firm to examine the City's financial statements. The ,Council Committee concluded that bccau* t of the lateness in the fiscal year and the familiarity that. PM M has developed with. the City's accounting ,system, a one year contract with them, would be recommended to the full Cou,acil ,r for a foo of $33,0011, PM4M would then be given an option in the agreement to negotiate vit:h the City for a longer period of time. however, if after the negotia.tions, 'the City Council for any reason believed that the City's interest Viould be Wiest served by putting the audit wit to 'bid, then a request ei .� a T T 3 t for proposal world be drawn and sent to -various CPA firms for their consideration and response. � FUNDING SOURCE: The un ing source would be the contingency fund. ALTBRNATIIr.c ACTION: Direct staff to prepare a Tequest for proposal at this time and solicit bids from CPA fi.r"s r Co, Y. y r i CIS OF HUNTING TON BEACH INTER-DEPARTMENT COMMUNICATION :: 'Fl4dvtiA.'4GT.QN BFACH. , r" to Charles W. Thompson From F. B. Arguello City Administrator Ch+ef of Administrative Services Stbj*t independent Annual Audit of Al) Date Fiarch 27, 1981 V�rr,'. City Accounts �. FIR 81-�,1 ' i'n response to the request of the Administrative Services Department, I am hereby s bmitc.t nD a Financial Impact Report relative to funding for the City Charter Fequirwd {, independent- anna�_] audit of all. City accounts, including Revenue Sharing ana. the De deveftpment Agency.. Should the City Council be desirous o" w4arding this project to Peat, 14arwick, Mi tuhel l & Co`. without resorting to a request for proposals from other firms, funds are available in the contingency fund. An appropriation in the amount of $33,000 will be required. F. B. Arguello ?- Chief of Administrative Services POVAR/cg 61' MUM F. CITY OF HUNTINGTON BEACH FINANCIAL IMPACT REPORT the s+ Project Name Independent Annual Audit of All City Accounts °J:scrlptlon To request funding for the City Charter required independent_ annual audit of all City accounts, including Revenue Sharing and the Redevelopment Agency, 1. DIRECT PROJECT COSTS 1.1 One-Time Costs ,Acquisition Construction ties} Fqui anent. Other Total Cost $ 33,000 4 $ 3 .000 1.2 Recurring Annual Casts Addxttonal Materials 6 utside P ° roll Personnel Su lies Services Revenues Total Cost -a- 1.3. Re.placemept/kenewal Casts N/A 2. INDIAEU COS Use of staff time to assist she external a, sitars, ,,µ Willi I Ill all K � } Financial Impact Repor _ Page Z 3. RON-DOLLAR COSTS N/ `e a a. i } BENEFITS TO BE DERIVED FROM THE PROJECT ' d l i f i h i il Famiarity with City financial structure an personnel sha0 d expedite. the 'G �,.._..o.. �'to effort required and minimize the use of staff than would otherwise be the case with a new firm. 'PROJECT USAGE R/ 6, EXPENDITURE, TIMING Prelimina work would commence soon after City Council approval . Part-a] e is are distributed during the course of the audit, with the finil payment withheld Il the management letter, signifying the end of the engagement, has been received and reviewed by :the City, tOIT OF NOT IRPLE14ENTING THE PROJECT l Clty would be required to seek proposals frr , gather CPA ftrrAs for this engagement ; to confom 'to the City harts v, r d f 4 City of Huntington Bead OFFICE OF THE CITY CLERK tldlne 4, 1980 f r a, Peat, Maraoick, Mitcbell & Company ` 660 Newport Center Drive Newport Beach, CA92 660 A Attn. made F. Hampton, Partner The City Council of the City of Huntington Beach,, sitting as the Redevelopment Agency, approved Supplemental Agreewnt No. 8 for financial and compliance audit for the Redevelopinent Agency on ` may 19, 1980 On May 21, 1980 we forwarded the original agreement to your office for signature and return to this office, To date we have not received the agreemn't. We would appreciate it if you would return the agreement as soon as possible. If you have any questions, please call this office . 536-5405. Alicia M. Wentworth City Clerk em. 7 o Ar Ity of r1untingtonc CALIFORNIA � t -� P.O. Box ate, OFFICE OF THE CITY CLERX may 21, 1980 %k Peat, .Marwick, Mitchell Company � 660 Newport Center Drive Newport Beach, CA 92660 3; Attn: Made F. Happton., Partner The City Council of the City of Huntington Beach. sitting as the Redevelopment Agency approved Supplawntal Agreement No. 8 for financial and compliance audit for the Redevelopment Agency. We have enclosed the please execute this agyve- Trexat and return to this office in the self-addressed envelope enclosed. Upon receipt, we will execute the agreement on behalf of the City and return a fully executed copy to ;you for your records. ALICIA tot, WMWO1,17i , 'VITy CLERK Deputy AM,car cc. Finance Dept: r x rWo ` REQUEST FOR CITY COUNCIL ACTION � r Submitted by Dan T. V i l l el l a 'Department F i riance , Date Prepared May 13 , 19 $0 Backup Material Attached Yes ❑ No Sublect _Financial and Compliance Audit of the Redevelopment Agency of the City of Huntington Beach for the year ending June 30, 1980. City Administrator's Comments E •r ' A P$'ROYBD BY CITY COUNclj.,i Approve as reco=Fnded CL Statement of issue, Recommendation,Analysis, Funding Source,Alternative Actions: STATEMENT OF ISSUE: Health and Safety Code Section 33080.1 requires redevelopment agencies to have annual financial and compliance audits (Section 33080.1 attached).. These audits must be completed wtl,in six moriths after the end of the fiscal year- REC",%ENDATION: Accept PMM&Co. bid of $1 ,500 to complete the audit immediately (attached letter from PMMBGo.).and approve supplemental agreement. ANALYSIS: PMM'SCo. conducts the annual audit of the Ci ty`s financial statements and could conduct this additional audit with a minimal amount of additional time and effort if they could start curing the month of May. Otherwise, additional timing will require an increase In their fte, or bids from other auditors that are not familiar with our operation. r'1NDIIIC SOURCE: Redevelopment Agency funds 40 ALTERNATIVE ACTIONS: 1. Accept PMM&Co. bid at a later date with an 'increase cost of 2,500. 2. Request bids. 3. Do not have audit done for FY 1979-80. 3 W Jill is (OFFICE OF THE �1i T E CONTROLLER . DIVISION OF LOCAL GOVCRt`1MW FISCAL AFFAIRS EXCERPTS FROM THE HEALTH & SAFETY CODE 'io Accompany Redevelopment Compliance Audit Guidelines � `t Section Number i� 33080. Every agency shall file with the department, within six month,-, of the end of �E the agency's fiscal year, a coy of the report required b' Section 38080 1. g y P J 33080.1 Every redevelopawnt agency shalt present a report to its legislative beady within Y' six months of the end of the agency's fiscal year. The report stall contain all k s' of the following (a) fps, independent financial audit report for the previous fiscal year. "Audit " report" means an examination of, and opinion un, t'Ne financial statement; of the � agency which present the results of the operations and financial position of the agency. Such audit shall be conducted in accordance with generally accepted � auditing standards and the rules governing audit reports promulgated by the State Board of Accountancy. The audit report shall also include an orini=cn of the agency's compliance ;pith lawns, regulations and adrrinistra'-i.ve req.)ireinerts governing activi0es of the agency. However, the legislative h-ly may elect to ornit f*Sapp, incl—ion in ire as{?it rt:part, any distinct activity ol, the agency which is funded eAclusively by the Federal government and which is subject to audit by an agency or instrument:slity of the gal goverprient. (b, A work program for the coming year, includiry) goal— (c) An examination of the previous year's achieve:"ents .and a cotrpariso i Qf the achievements with the goals of the previous year's work protirart. (d) Recommendations for needed lenislatior, to ri'irily on isro,perly a Troq ii r'f housing and community development in California. 33080,2 The legislative body shall review the report and take any action which it deer., appropriate on the report submitted pursuant 'to Suction 330P0.1 r•o later than the first tr:eeting of the legislative Cody occurring more than 21 days fr;. (t the receipt of the report. 33080.3T Notwithstanding the pro•aisions of Section 33080 or 330W.1 , an opinion of Zha agency's compliance with laws, regulations and administrative re:lui rern r nts . governing activities of the agency, as required by subdivision (a) of Srac+i ,n 33080.1, shall be included for the first tin;o in the first report filed with the department and presented to the agency's legislative body for the agency's last fiscal year ended prior to March 1 , 1980. The State Controller shall develop guidelines for the content of such portion of the report not later' theta July 1 , 1979. The State Controller shall appoint an advisory cosnsnittee to advise the State Controller its. the development of the guidelines, consisting of one vieviter of a city council which serves as the governing body of its redevelopment a%,ri:y, who shall be nominated by the league of Ca l i i ornia Cities, one meatier of A. ►aunty board of suP,ervisors which serves as the governing body of its redevelo mreirt agency, who shall be nominated by the County Supervisors Association of California, and two representatives each from (1) the department, (2) the California Society of Certifie,, Public Accountants, (3) imunicipal finance officers, (411 redevelopirent agencies, and 15) independent authori ties in the field. r. Kj 'r Certified Public Accountants 660 Newport Center Drive Peat,Marwick,M tcheU&l a Newport Beach,Califomia92660 May 7, 1980 t� � ro, Mr. Frank B. Arguello a Director of finance City of Huntington Beach `rT 2000 Main Street Huntington Beach, California 9264$ x / y Dear ter. Arguello; ,: You have requested that Peat, Narwick, Mitchell & Co. (P ffi&Co,) submit a proposal to the City of Huntington Beach to conduct a compliance examination of the Re- development Agency of the City of Huntington, Beach (Agency) for the year ended June 30, 1980 pursuant to theHealth and Safety Code .+ect on 33080.1. As in- dependent. auditors f.:r the June 30, 1980 financial examination of the Agency, M—%Co. is prepared to conduct the compliance examination for the Redevelopment Agency of the Cit . of Huntington Beacb for fiscal 1980 in accordance, with the guidelines set %,,rth by the Division of Local Government Fiscal Affairs of the State Controller's Office, State of California. Our Firm is prepared to conduct the compliance examination for the Redevelopment r Age-icy of the City of Huntington .Beach for a not to exceed fee of $1,500 i+icludin out-of-packet expenses. This fee contemplates that the examination would be completed during our interim examination in May 1980. If you wish to delay this ccnipliance examination until a later time our fees would not exceed $2,500 including out-ofpocket expenses. If this meats with your approval, please sign and retu_n the copy* of this engage- u meat letter as soon as possible, Very truly yours, PEAT, MRWICK, MITCH LL & CO, Ijr- Wade F. Hampton, Partner WFO:do ACC-9PTED x 11AT�s f r A r: PEAT. MARWICK,MITCaEzr & Co. ¢` CRSTIVIED PUBLIC ACCOUNTANTS 600 NE'WPoFrr l MIMBIt Dravji NE'°WPORT BEACH,CALIFORNIA 92960 August 20, 1979 rat{ Ms. Alicia M. IJer-tworth City ulerlc City of ftatington Beach P. 0. Box 190 Hunt4itgton Beach, CA 92648 Tear Ms. Wentworth: Enclosed please find the original agreement, which has been signed, of the Supplemental Agreement No. 6 between the City and PIOI&Co. which provides for a $2,500 increase for audit service fee for the fiscal y>ar 1978 bringing the total fee to $24,000. Very truly yours, PEAT, MARWICK, MITC'HELL & CO. Wade F. Hampton, Partner WFH:cg , Enclosure i I N .6. CITY OF HUNTING TON BRAG t: INTER-DEPARTMENT COMMUNICATION � )JUIMNGTON BEA04' To Floyd C. aelsito Fnm Arnold Ross City Administrator Inter"Aal Auditor �. Subject EXTERNAL AUDITS FOR FISCAL Date Api 1 12, 1979 YEAR 1978-1979p4 A roview has been made of the correspondence Sated April b, 1979, `3 submitted to the City by Peat, Marwick 0 Mitchell regarding the various ; annual, audits to be performed for fiscal yes ; 1978-1979. For purposes of conducting audits of the City of Huntington Beach, Parking Authority, Public Facilities Corporation, Corimunity Development � Block Grant and Revenue Sharing, PM M has requestdrd an upward adjustment in their fee of $3,500 to offset the cost: living increases experienced since June 30, 1977.. Communications held on this date with the Bureau of ,Labor, Statistics - Orange County indicated that there had been an inflationary factor of 11.9% extending from June 30, 1977, through the most recent check point available - February 1979.. The imposition of such a factor to the $21,500 fee that has been charged to the City for each of the two most recent annual audits would result in � figure of $24,`000, ,.or an increase of $2,500 Thr fiscal. year 1978-1979 audit will be the fourth successive annual engagement by PM&M with the City of Huntington'Beach with but one more year remaining in the multi-yeas agreement with the accounting firm. Logic would suggest that the tirm's familiarity with City personnel and acrou�►ting systems might facilitate; their effort and lessen. the required Man-boars in performing thxc latest go-around. Over this pericd of time, weaknesses in the financial accounting structure, as noted by MOM, have been called: to the attention of City management aid remedial action taken to implement these recommendations to the extent deemed appropriate and practical. PM&M has come to rely to a greater -degree on the veracity of the Ci:ty's internal control system thus minimizing the field test work that should be necessary prior to undertaking. the upcoming annual .audit. The most; recent management letter submitted by PM&M was indicative of the fact .that the Ci.ty's financil 1 statement/degree of internal control Was in a commendable state• and had benefi,tted significantly due to the high priority assigned to this task by the City and the relevant comments %ade by the auditors. Vz;COMMENDATION in vt- w of these considerations and information engendered from, the attached, schedul.os of -recent audit engagements, it would be recommended -by tliis suffice that t1`te fee for the 1978-1979 audits:-for the City of 1ivatio too Beach, Pazkitg, Autncr,,R`i.t.y, Public Facilities, Corporatz,)r. r-' M*Winit'y Dovol.gtient osoCk Crate,, and Revenue Sharing not exceed 24, t10 anc ghat due consideratione given towards extending this same fee to ;, oaur ensate P.MNfur the 1,519-1980 engagement. <L xnywq DE. EX' E'VNAL A7 1T pplrS 1974 - 1979 , + 1374-1975 1975-19 6 1925-1976 . Cooper 4 Lybrand p,AM P,'`&M (tictual) (proposal) � kctua1) Pours P 3our 'iota ljour;' $ iicar 'Total � flour. $/Hour Total $ 49.5 SO 241'S 10 bta 24pp 2i) 6C 12pp .nor ..�ianag r 104.0 3l3 3952 125 30 3150 147 30 4410 r 268 22 5896 25t1 " 55L0 62t 22 12,G4(t _ l' si.stant.s a33.p is 59 4 235 1S 5130 139 15 25,15�a . ery i sor5 - - 1995 l xpense 1271 — 1220 l9 58S "t�tl 1R,t)pp 218:1 Totals 754,5_ , 16,Sf3t? ' A per contlract 1 2s,300 3>ollled Overage 3,p8R ,Y (Pr+ pcsal) (Actual) __(Actual) l artn ra r._ ~ ~HoUrS $/fl our Total Hours 5/Fitti Total ? tra Ictal�$ R_ w 16 20 l 9p 2 60 40 2400 15 Y .. 3�' 'St) 19 35 6755 =l< aa 13Ct 35 45 ztT ISO 35 �� ?^ t(,YTfI Sltl 22 11 220 495 ?" 10,$9C� fi3?tl E�{t5 is 1(t,p44 ?"" 18 13,9 .ass zstaats 110 l8 - _ alp ert<1 sox-S 60 30 1800 - 2117 30 1xpenscs _,_._, t �3 � ' 35,368 3 i'otals 870 21,500 1283 0,2 . 149 21,5p 2l,5(!tt ?1,500 0 ,s vr contract Jnt i 1 loci m crage y 2mici �.a 1 l rtainzng soleiv to per or,nrxnce cif Citr'q ATnual T�i'�r}.Inj1T,� xl�c��it�t l3lC,�Cvmtnunits T)evelc�T^mcnt Cramand revenue �? 1'e:rtainfit��; tt� .�u�.1xt ��f �:i.�rX's Financitil Sta:t:e�;;cnt, *3 Il zt;a ptrrtxnent t o ''licuws Was not prescribed an auditor's Proposal L q S FEAT. 111ARW1Cx.y1.xTG11ELL 8C CO. CERTIFIED PUBLIC ACCOUNTANTS 660 NF-WPORT CENT3:R 13AIVE NE—WrORT BEACII,C 1XrOILVZX 92COO April 6, 1979 hk F kr" Mr. Floyd G. Belsito z City Manage' City of Huntington Beach P. 0. Box 190 � x ' Huntington Beach, CA 92648 ;J�af; Subject: Audit Fees June 30, 1979 Dear Mr. Belsito: rw In reference to Paragraph 4 of our Supplemental Agreement #1 dated April 4, 1977, anending the Agreement dated June 22, 1976, between the City of Huntington Beach and Peat, Mai7wick, Mitchell & Co. which states "hourly rates and total compensation for fiscal years ending subsequr:nt to June 30, 1977 shall, be subject to the mutual agreement of both parties". r For the yours endert June 30, 1977 and 1978, we have performed the audits of the City of Huntington Beac14., larking Auth-:i ry,, Public Facilities Corporation, Community Deveio> 2,ent Block ';.cant and Revenue Sharing for -u total fee of the $21,500. „e are anticipating performing the same engagements for the year ended June 30, 1979 and would .like to request an increase in the fee tatting into consideration only the cost of living index (inflationary factor) that bes occurred since ,Tune 30, 1977. The followiYtg computation is based on the Bureau of Labor. Statistics - Los Augcles/Long Beach area is as follows: VM-19'7 Fee $21,500 Cost of Li],xing Inavease, 1977-78 7..8% 1,677 23,177 Cost of Living, Increase. Estimated 1978-79 8.07 1,854 $251031 Using these airnunts I would like to propose a. figure o:: $25 000 for the yeas-ertded June 30, 1979 which in constant dollars is the same as $21,500. l would hope than you and the counsel, would be receptive to this increase based strictly on the, cost of living increases we have experienced over the last couple of years I believe it should also be made clear that we Ore not retroactively trying to pick -up the increases in prior years, but 't; S' t P, M. M. a co, City of Huntington Bex:h .April b, 1579 Page wish to adjust the current year to the same dollars as our origiral contract. Also, the hourly Yates, as reflected in the contract, will remain the same, as I am proposing no increase in those rates. Thank you for your consideration in this matter, and I would be happy to discuss it with you at your convenience. � Very truly yours, lYrr; PEAT MARUTICK, MITCHELL & CO I� �. E x Wade F. Hampton, Partner -F WFH cg a� INN"4UMNS .0 ;r . t- s r r REQUEST FOUR CITY COUNCIL ACTION Submitted oy Flovd G. Bels?to Department Administration Date Prepared AnTi1 27 ,1979 Backup Material Attached f-RI Yes No fir^t Subject REQUEST FOR INCREASE IN AUDIT FEE FROM PEAT, MARWICK, MI`I'CHELL AND COMPANY City Administrator's CommentsCaLl r�PE'RQV r' Y 0 7 Approve as recommended ____- --------" �gN : - ----- Statement of issue, Recommendation,Analysis, Funding Source,Alternative Actions: STATEMENT OF ISSUE; Peat, Marwick, Mitchell and Company (PM&M) has submitted a letter to the City Administrator requesting A cost of living increase of $3500 over the base fee of $21,500 that is provided for under the current agreement. RECOMMENDATION Approve a $2500 increase in PM&M audit service fee for fisc_ year 1978 bringing the total fee to $24,000,direct preparation of supplemental agreement. ANALYSIS: The Ci :y Council entered into an agreement with Peat, Marw-c1c, Mitchell and Co:mparty for auditkag services for fiscal years 1977 , 1978, 1979, and 1980 PM&M has completed the audit for fiscal year 1977, and has been paid $21,500 for thoir services in accardance with Paragraph 3 of ,aye Agreement, Paragraph 4 of the Agreement provides that. "Hourly rates and total compen- sation for fiscal years ending subsequent to June 50, 1977, shall be sub j ect to the mutual agreement of the parties." Used. on Paragraph 4 of the Agreement, PM$M is requesting an increase in the 'base fee from ?1.,500 to 25,031. The request for the increase is j based can the cost of living index (inflationary factor) that has occurred since June 30, 1977. The Ci:ty's lnterral Auditor has reviewed the PM&M requested increa:e. Based upon the contacts that ba made with the Bureau of Labor and Statistics, Orange County has experienced an inflationary factor of 11.9 peTc;ent betwean Juno SOP 1977 and Pebrua.ry 1979. Based upon this inflationary r#.te, the Internal Auditor has xeco,umended that PMfiM be given an :increase of USOO for A total fee of $24,000, This would be $1,031 less than what is; being requested by PM&N. -' � Page 2 FUNDING SOURCE; General Fund Non Departmental Account. ALTERNATIVE ACTION: ' 1. Approve an increase of $3531 as requested by PM&M for a total fee � of $25 031. 2. Not approve an increase and continue the fee at $21,500 for auditing services. ' r Re �I- ?<x RB:ja M�s I I wG ti 1k Y3 . .� City of HuntingtonBeach T� P.O, sox ISO CALIFORNIA SZM OFFICE OF THE CITY CLERK �y April 18, 1979 Peat, Marwick, Mitchell Co, Certiflea Public Accountants 555 S. Flower Los Angeles, California 90071 Gentlemen: The City Council of the City of Huntington Beach at its regular meeting help( Monday, April 17, 1979 approved an agreement with your firm for the audit of Comprehensive Ereiployment and Training Act Funds. We have enclosed a duly executed copy of the agreement for your records. Sincerely, Alicia M. Wentworth City Clerk AM.C4"..e - Enclosure 1 I RCA 79-13 -.. JoeREQUEST FOR CITY COUNCIL ACT Submitted by - Floyd G. Bel's•i,to Department Administration �•` ©ate Prepared �April 5 , 15 79 Backup Material Attached i.rJ Yes No Subject AUDIT OEC12:YIS CETA FUNDS FOR A PERIOD 9F T1W FXTFNi DTNG �«, FROM JULY 1, 1976, THROUGH MARCH 31, 1979 } City Administrator's Comments rv ' _ s 4. 6556VED uy CITY coz7NCI _ 14,( 1921 Approve as recommended. rD Statement of Issue, Recommendation,Analysis,Funding Source,Alternative Actions: STATEMENT OF ISSUE: To revise Supplemental Agreement No. 3 and Exhibit A of the Agreement that calls for Peat, Marwick, Mitchell and Company to conduct a fiscal audit of the City's allotment of the Comprehensve Employment Traiping Act (CETA) funds for a period of time extending from July 1, 1976, through September 30, 1978. CETA guidelines require that recipients of CETA funds be audited once every two years. RECOMMENDATION; Approve the attached Revised Supplemental Agreement No. 4 with Peat, Marwick, Mitchell and Company to have the firm audit City CETA funds from July 1, 1976 through March 31 1979, at a cost that is not to exceed $8,,750. ANALYSIS; In August 1978, Peat, Marwick 'Mi.tchell and Company submitted a proposal to the City to audit the City's CETA funds. On September 18, 1978, the City' Council and Peat, Marwick, Mitchell and Company executed Supplemental Agree- me nt #3 that provides for Feat, Marwick, Mitchell and Company to conduct all audit of the Comprehensive Employment Training Act (CETA) funds. Since that time, several factors have occurred which have necessitat :d P.M, & M. to request an increaser in the fee for this audit, the primary one being' the resignation of the Assistant Finance Director 'oho was the individual most knowledgeable of the financial operation of the City's CETA Program. Peat, Marwick Mitchell, and Company state izi the attached proposal the absence of this key i.nctivid:ual will cause substantial increase in the time spent on this engagement, For this reason,, Peat, Marwick, Mitchell and, Company is requesting an increase of $4,750 for a. total cost f $8,7S0 page` 2 A Request for Council Action (RCA) to auChorize the increase in funds to conduct the CETA audit as prepared by Peat, Marwick, Mitchell and Company was before the City Council at its March S, 1979 meeting, at which time V` it was sent back to City staff for additional information and to see if the scope of work could be expanded, ' Personnel Director Ed Thompson contacted George Gates of the Orange County Manpower G'ommissiorAudit Staff to discuss the possibility of his staff conducting the Huntington Beach audit. Mr. Gates informed Ed that the Orange County Manpower Commission audit funds were initially set aside for the Huntington Beach CETA audit but have since been reprogrammed ' to other CETA audits within the County since the City had made the decision in September 1978 to have Peat, Marwick & Mitchell Company conduct the City CETA audit. The Commission audit staff had originally estimated 800 hours to do the Huntington Beach CETA audit. Mr. Gates p indicated that the Peat, Marwick $ Mitchell Company proposal to conduct > the CETA audit for $$8,750 is quite reasonable and is less than what the . Commission audit staff had anticipated spending with their audit of the ;r' Huntington Beach CETA Program. Also, Rich Barnard discussed the Proposed CETA audit with Bob Cunningham, Manpower Administrator for the City, and he indicated that one of the primary reasons the City decided to contract with Peat, Marwick f, Mitchell Company instead. of the Commission to conduct the CETA audit was to reduce the possibility o'z" having conflicting recommendations .from different auditors concerning how CETA requirements and City requirements would be integrated. The initial plan was to have the CETA audit done concurrently with the audit of all other City funds by Peat, Marwick Kitchell Company, thus providing recommendations from one auditor who not only understood the CETA requirements but had a working knowledge of how the CETA requirements could be effectively included within the City - financial. procedures. Since the March 5 City Council meeting, City staff has met with rep- resentatives, of Peat, Marwick Mitchell and Company and renegotiated the proposed Supplemental Agreement No. 4. peat, Marwick,Mitchell and K . Company has agreed to extend the audit period up through March 31 , 1979 versus September 30, 1978 , as called for in the previously proposed Supplemental Agreement This extended audit period will be done with no additional fee beyond. the $4,750 that they had originally asked for when this matter came before the City Council on March 5, 1979. FUNDING SOURCE: Source of funding for CETA audit is CETA Administration Funds, ALTERNATIVE ACTION Reject proposed revision to Supplemental, Agreement No. 3. FGB:RB;j a 1+ Attachmotts 1. Current Supple,.,ental Agreement No. 4 Z. Revised Supplemental Agreement No. 3. Memo from Internal Auditor dated April Z, 1979 u. _., Aga, ' CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION To Floyd G. Bel s .to From Arnold Ross City Administrator Internal Auditor Su[ject CETA AUDIT PROPOSAL Date .April 2, 1979 � r% A review 4•f the most recent .CETA Audit Cost Proposal was conducted by this office for purposes of evaluating same and offering a recommended course of action ,for your consideration. The CETA Audit Proposal that was discussed with representatives of " Peat , Marwick on March 30, 1979, will allow for the audit period to extend up through March 31, 1979, versus September 30, 1978, 4 as called for iii. the previous request for a supplemental agreement by the accounting firm. Despite the substantial increase in time necessitated by the extended engagement, Peat, harifick 4 Mitchell has agreed to limit their fee to a cost not to exceed; $8,750, or the same fee that had been previously requested for the shorter engagement. To assist in expediting the delayed analysis of CETA funds, it has been requested that the City Administrator''s staff be supplied with materials relative to sc:hedulesfassignmer is made to employees i)l the respective departments of Manpower and Fsnance. This would tend to emphasize the high degree of urgency that the City Administrator and the City Council have placed on the project and .enhance the external auditor's ability to follow through on their sampling testing procedures in ;as timel.r manner as possible By extending the audit time period up through March 31, 1979, the City will be the recipient of several advantageous positions; 1. The .end result, will make available to the City an unusually current dispos tional status of CpTA funds - and forestall the necessity of contracting, for similar auditing services foi at Ll,ast -tyo full years Aa inclusion in the audit program of the many recently refined and 'Tevlarified regulations affecting CETA that will assist in bringing to the Gity�s attention possi-ble areas where compliance may have heeiat.variance with the latter. 31 'The ability;. to utilize the services of an auditing firm that is bath uniquely qualified and thoroughly familiar with City fina.ncial systems and persoxutel, 'thus able to minimize disruption of employees while performing a quality audit at a price that W 014 be diff"ic4lt to %match by a competing auditing firm unfamiliar With the City accounting systems. ' Page RECONIENDATZON: � { That the City Adm nistrato-, r o.ecommend t tle City Council the approval of an appropriate ;.y worded Supplemental Agreement that .. would expressly prohibit tie costs of the CET,A audit to exceed :m $8,750 and would specify that the period of time to be reviewed by the external auditors wr uld extend from July 1, 1976, through March 31., 1979. ,AR::,D a r 1 3 1 r: iI t. CITY OF HUNTINGTON BEACH �r 4m a INTER-DEPARTMENT COMMUNICATION tH�:ri+x.rrxV xtuii TO Floyd G. Belsito From ichard Barnar City Administrator Administrative Assistant . 4 Subject AGENDA ITEM M-3 gate March 15, 1979 CETA AUDIT Ed Thompson contacted George Gates of the Orange County Manpower Commission Audit Staff to discus's the possibility of his staff r ;r f conducting the Huntington Beach audit. bar. Gates informed Ed that the Orange County Manpower Commission audit funds were initially set aside for the Huntington Beach CETA auditbut have sitce been reprogrammed to other CETA audits within the County since the City had ;Wade the decision to have beat, Marwick 4 Mitchell Company conduct the City CETA audit. The Commission audit staff had originally estimated 800 hours { to do the Huntington Beach CETA audit. Mr. Gates has indicated that �{ the Pe.,* , .Marwick $ Mitchell Company proposal to conduct the CETA audit k , for $8,750 is quite reasonable and is less than what the Commission audit staff had anticipated spending with their audit of the Huntington Beach CETA program. Also, I discussed the matter with Bob Cunningham, Manpower Administrator for the City, and he indicated that one of the primary reasons the City decided to conrract with Peat, Marwick & Mitchell Company instead of the Col mission to conduct the CETA audit was to reduce the possibility of having conflicting recommendations from different auditors concerning how 'CETA requirements and City requirements would be integrated. The initial elan w-is to :have the CETA audit done concurrently with the audit of all other City fonds by Feat, Marwick & Mitchell Company, thus providing recommendations from one auditor who not only understood the CETA requirements but had a working knowledge of how the CETA requirements could be effectively included within the City financial procedures. Peat, Marwick & Mitchell. Company inadvertently Left out "out-of-pocket � expenses" 61.0 in their Supplemental. Agreement No. A, Exhibit A, page. 4 �w "Fees." This amount is currently included in the total audit cost of $8,7a0 and does not represent any change in total amount requested. by Peat, Marwick & Mitchell Company. Raja -1 Imp c FOR CITY COUNCIL ACTION Submitted by Floyd G. Belsito Department- City Administrator ;a Date Prepared Septpmher 11 , 19 78 Backup Material Attached Fx-] 'ees 1 No k, Subject AUDIT OF COMPREHENSIVE EMPLOYMENT AND TPLAINING ACT FUNDS r City Administrator's Comments Y Approve as recommended, cz , Statement of Issue, Recommendation,Analysis,Funding yL +�%A7te native Actions: STATEMENT OF ISSUE The City Council at its meeting of September S, 1978, directed that the existing agreement with Peat, .Marwick, Mitchell and Company be extended to include the CETA funds audit. RECOMMENDATIONS Approve the attached agreement.. ANALYSIS: The agreement provides that the ,.,: dit will be conducted for a sum not to exceed $4,000. The audit will identify strengths and weaknesses in the systems of internal acco`uLtblg control of the City and its CETA funded sub-grantee . The compliance aspects of the grant agreement with the Departmment of Latter will he reviewed, as will the numbers that appear in the financial report to the DOL. ALTERNATIVE, Request proposals from other audit companion. FUNDINt SOURCE: CRTA funds., �. vid Ana a ri h° EAT, MARWICK, MUCHELL & CO. CERTIFIED PUBLIC ACCOUNTANTS 555 SOUTS FLOWER STREET. A. 1.OS AT C3ET:E5.f7ALIFORNIA 90071 January 26, 1Q79 PRIVATE Mr. Floyd G. Ee'sito, City Administrator � Y. City of Huntington Beach 3>,� 2000 Main otreet Huntington Beach, California 92648 r _' Dear Mr. Bel s i to: In a pricy" letter, we responded to your Request for Proposal for the a examinativa of funds received by the City of Huntington Beach (city) t- under the Comprehensive Employment Training Act (CETA). Our proposal contemplated those facts which we considered relevant in determining the most efficient and economical audit approach.. for the most part, such facts centered on the economies that could be achieved by performing the examination of CETA funds in conjunction with our annual audit of the City. [ Several events-, unforeseeable at the time of our original proposal ,, have since occurred which have necessitated a reconsideration of our ' estimate of 'fees. Accordingly, we request that the City adjust the previously agreed-upon maximum fee to account for the additional effort we now believe will be required to examine the City's CETA funds. The events leading up to our request for an increase in fens have been discussed with officials of the City's Finance Department, , the CETA program, and a representative of the City Administrator's office. We understand that these individuals concur with the reasons for our request. Br=efly stated', the priinctpal reason for our request for an increase In fees is that the individual most knowledgeable of the financial oper:stfons of the City's CETA program resigned his position as Assistant Director of Finance shortly after commencement of the final phase of our examination of the general financial statements of the City. We believe that the absence of this key individual will cause a substantial increase in the time to be spent on the C'LTA funds engagement.- For your information, we have revised our original proposal an have described' our audit approach more thoroughly. Our .revised proposal contemplates the addition al time we believe will be required to successfully complete the examination of the City°s CETA funds s F i �a P, M. M. E CO. � Mr. Floyd G. Bels-i to Jaruary 26, 1979. ; z , .E We;hope that you will favorably ,-,onsider our request For amenJm—ent c` the CETA audit cnhtract. We will be pleased to further discuss the contents ' s of our proposal at your convenience and will provide any additional ' information that you may require in evaluating our revized proposal. ' Very truly yours, ;. T, MARWICiC, MITCNELL & CO. JeIrti. Miller Partner " JMM:H4p l' k s. E: fi Tw'Ql -oT FOR Rr-,D VELOPMHNT AGENCY nCTION /_ 3l ' Submitted by Floyd G. Belsito Department City Administrator Date Prepared Set%,tember 11 , 1978 Backup Material Attached Yes No l6i r Subject AUDIT OF REDEVELOPMENT AGENCY i kv ._ AppRovir,n By CITY C City Administrator' Gom a is-_ Ir!p In c.:i1'X �ail Approve as recommended. Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions; r STATEMENT OF ISSUE: At its meeting of September 5, 1978, the Redevelopment Agency directed that the City's existing agreement with. Peat, Marwick, Mitchell and Company be extended to include the Community Redevelopment Agency audit. RECONZIENDATI ON Approve the attached agreement... ANALYSIS Vie agreement provides that the audit will be conducted for a sum not to exceed $1,250. By State law, audit ^lust be prepared by an independent, firm by ,October 1, 19781. ALTERNATIVE: Do not approve the agreement, FUNDING SOURCE Redevelopment Agency Funds -- Contractual. Services. FB:,IC.°i FIo 3t7a REQUESTS FOR REDEVELOPMENT AGENCY ACTION 1° Submitted by Floyd G. Belszto Department City Ar ,inistrator 1/0/. Date Prepared September ll 1978 Backup Material Attached Yes No Subject AUDIT OF REDEVELOPMENT AGENCY tlPgR�VEA.BY - City Administrator' fiats-----. "IR Approve as recommended. ' "' Statement of Issue,Recommendation;Analysis, Funding Source,Alternative Actions: STATEMENT Or ISSUE: At its meeting of September 5, 1978, the Redevelopment- Agency directed that the City's existing agreement with Peat, Marwick, Mitchell and Company be extended to include the Community Redevelopment Agency audit. RECOMMENDATION; Approve the attached agreement. ANALYSIS; The agreement provides that the audit will be conducted for a sum not to exceed $1,.250. By State law, audit must be prepared by an independent firm by October i,. 1978. AIJERNATIVE Do not approve the agreement. FUNDING SOURCE: ltedevo opment Agency Funds _ Contractual Services. FE:X iIC E A is cl:D REQUEZ51- IFOR CITY COUNCIL� ACTON 78-44 Submitted by Floyd Q. del sito Department City Administrator Date Prepared Se tem eT 29 , 19778 Backup Material Attached a Yes ❑ No Subject CITY of KWINGTON BEACH and PEAT MARWICK MITU ELL and COMPANY AGREaffff r City Administrator's Comments } .Approve as recummended. i Statement of Issue, Recommendation,Analysis, Funding Source,Alternative factions- �t,�.✓` STATRE T OF ISSUE: At the meeting .;f September 18, 1978, the Redevelopment Agency approved the supplemental agreement between the City of Huntington Beach and Peat, Manaick, Mitchell and Company, to perform an audit. Since the firm's original agree- ment is with the City, not the Redevelopment Agency, the City must also approve the agreement. RECOWEMED XrION< Approve the attached agreement. ANALYSIS. The agreement provides th�� the audit will be conducted for a sum not to exceed $1,250. Attached are the agreement and the proposal for professional services. ALTERIdAT1VE: s Do not approve the agreement. FUNDING SCURCE Redevelopment Agency Funds Contractual Services. FB:JC-ik t fr' Pq AWN Cil.-X of Huntington c` �,a,. �£ P.O. BOX ism CALIFORNIA 46 yJ OFFICE OF 'T14E CITY CLERK September 19, 197$ ; �a Peat, Maniich: Mitchell & Co, Certified Public Accountants 1' 555 S. Flower ' Los Angeles, California 90071 Gentlemen: The City Council of the City of Huntington Beach at its regular iw;eet ng held Monday„ September 18, 1978 approved agreements with your firm for the audit of the Redevelopment Agency and the audit of Comprehensive Employment and Training Act Funds, We .have enclosed a duly executed copy of each agreement for your records. Alicia li. Wentworth City Clem AMW:CB bt Enclosure s s s" t 1 Pril 5, 397:1' a Peat, Marwick Mitchell. & Company, Certified Public .c�ccount=ts, 555 South Flamer, Los Ang,9les, Ca. 90071 Gentlemen. The CLty Council of the City of BAntington Beach, at its regulax meeting ]held Mondays April. 4, 1977, approved an agreement with your fixm Co perfo-m the annual, City audit. We are enclosing a duly executed copy of said agreement for your files, Sincerely your$, Alicia X. W'entworth City Clerk T AM/CB/Lit VIM i i IL s CITY OF 0UN'tINGTON BEACH CA 77-50 1 , COUNCiL. - ADMINISTRATOR COMMUNICATION L< HUNi1NGTON BEACH To Honorable Mayor and From Floyd G. Belsito, City Council Members City Administrator Subject PEAT, MARWICK & MITCHELL AUDIT Date ;`larch 29, 1977 � The City Council, at its meeting of March 21, 1977, approved the selection of Peat, Marwick f Mitchell as the City's annual financial auditor. Attached is the agreement which has been executed by Peat, ;" ;Marwick 4 Mitchell for your consideration. R,E COMMENDAT I ON Approve the agreement between the City and Peat, Marwick and Mitchell for the City's annual financial audit Respectfully submitted, E1oy G. Belsito Cit , Administrator EGB/EJ*1-p_ Attachment 'y i CITY OF HUNTI"GTON BEACH CA 77-36 COUNCIL-ADMINISTRATOR caarUNIcarrty ia, E3 #� vsEaC4K , 70 "fie Honorable Mayor and From Floyd G. Belsito LA-ty Council Members City Administrator ; Subject SELECTION 01 ANNUAL Date March16, 197 7 E NANCIAL. AUDITOR d ' In order to expedite this year's Annual Financial. Audit, I have re, quested and received proposals from four highly Qua.ilif;;.ed firms. After careful review and consideration of the City's n :eds, teat, Marwick, Mitchell and Company has been recommended to me by staff. Based on staff recommendation and my satisfaction with the firm's prior work, I concur sixth the recommendation. The contract is for one year with an. annual renewal clause for the following three years, Cost of the 1976/`77 Financial. Audit is not to exceed $21,500. RECOMMENDATION Approve the selection of Peat, Marwick, Mitchell and: Company for the Annual Financial Audit and direct staff to have a contract prepared for City Council approval at the April: 4, 1977, City Council meeting. Respectfully submitted, _ AA�PROVED BY CITY 00TJ*.4C1L Floyd Eelsito City dzinistxator __ - a •.CITY t l:rAx FGB:EM*.'bb Attachment t_ s F EEti: CITY OF HUNTmcriroN BEACH 14Dfl- INTER-DEPARTMENT COMMUNICATION HUNTM.TGN BEACH To Floyd. G. Belsi,to From Erich Matthews �,.,.. City Administrator Administrative Assistanto Subject SELECTION OF ANNUAL FINANCIAL Date March 16, :!977 ry AUDITOR As you know, last year's contract for the annual financial audit was M for one year only; the City has solicited proposals for this ,)-ear's � audit. The scope of the audit has been expanded to include General � Revenue Sharing and Community Development Block Grant funds. Also, the firms were informed that the contract was to be for one year with a renewal clause for the following three years. pour firms ('Coopers, Lybrand, Arthur young, 'Ernst & Ernst, and. Peat, Marwick, & Mitchell} were requested to submit proposals and all four responded. Costs ranged from $17,000 plus to $25,000. In selecting a firm to meet the City's needs, several points were kept in mind; particularly in light of reaction to previous audits of the Finance. Department and the City Councl.'s mandate to correct problem areas. z The selected firm's professional, capability and audit approach, 2. Ability to work and communicate with city management during the, audit process 3. CCntinuit)r of the audit process. 4: Reasonaiblo cost of the annual audit; All tour firms meet the above criteria and are highly qualified. It i.s my 1'ecommendation that Peat, MaVxt ck, !Mitchell and Co. be selected his the annual auditors. Cost of the audit is not to exceed ,2I ,SC10,. In Peat, Marwick, Mitchell 4 Co. 's proposal., the firm states it will_ provide the City, with a pre-audi t and review the degree of 4pleraentation of their prior year's letter to management The firm: wall provi.do the City vi.th a letter to management setting forth their i�valua-ti.or as to the degree of implementation -of the prior,year's recommendations and other pertinent matters the farm deems significant. This is of 'param=t importance to City management because of the Cxt �iau_*zcil �s direction 'regarding the prior year's audit. By having this p��e-4udjt, it will allow management to take corrective action Tlxe firm. l J will, Is'io e moAitoring the progress of the Internal. Auditor and assist : in the deVelopmenti;,of audit prog�:n.ms, x.e., (;Ity concession, leases. A i)Iol and im . rtant Cons iFjoration on xhi.ch_this recommendation is based i atia.geilen.ts satisfaction tfitb -peati, ffarwick Mitdile-1l A Co� is o tha prior year. The firm gave rtaaagoment'a weekly status report, repotxtg jaott%al proiem5 etc, This type of relnti,onshp and con- id.WAC is critlaal, ,because .of the prObl'.e.%s created by prerr dus audits, CITY OF HUNTING TON BEACH Cz , COUNCIL � ADMINISTRATOR COMMUNICATION HVNDNGTQN BEACM. . A To The Honorable Mayor and From Floyd G. Belsito i City Council Members City Administrator Subject AUDIT OF REIMBURSEMENT Date p , "' September 1 197 6 �= AGREEMENT PROCEDURES .k I have requested Peat, Marwick, Mitchell & Company to submit a proposal h to assist the City in a review of the accounting and administrative ~ E, procedures for reimbursement agreements relating to drainage, and 'sewer �c and water improvements. The annual audit performed last year by Coopers & Lybrand recommended such action, and the Arthur Young Management Audit also recommended a review. The attached proposal from Peat, Martaick, Mitchell &Company describes the scope of Work to be performed. Also, I have directed Arnold Ross Internal Auditor, and Mark Ambrozich, of the Finance Department, to assist in this review. The contract between the 'City and Peat, Marwick, Mitchell & Company allows for a supplemental agreement of additional services subject to City Council approval. RECOMMENDATION ;Approve supplemental contract between the City and Peat, Marwick, Mitchell & Company not to exceed $3,000. Sufficient funds are in Account No. 101395, Contractual Services--Auditinq. Respectfully submitted, Floyd Delsito City dminstrator -PGB:bb , t i r, — .- ra yf J-4 ity of Huntington Bead P.O. Box Ito CALIFORNIA � OFFICE OF THE CITY CLERK 1 June 23, 1976 Peat, Marwick, Mitchell & Company Certified public ,AC 7ountznts { 555 South Flowers . Los Angeles, California Attention: Tom Snow Gentlemen: The City Council of the "" ' of Huntington Beach at its allne 21, 1976 meeting approved an annual audit agreement between the City and your firm, to perform the annual audit of the city, Public Facilities Association and. Parking Auttrity: We are enclosing a duly executed copy for ,your files. Sincerely yours, Alicia M. Wentworth City clerk G t ry F t F NAME AND A V!,'�:. A-,E'W-N _..__._.COMPANIES_..._.4 .......,_ -AFFORDING COVERAGES x T Fred. S. James >s Pennsylvania General Public Ledges Building _ > Insetr-ani C Philadelphia, PA 19106 ^µ` x" General Accident rim & Life Insurance Co. NAME A.N'.i American Excess Insurance Costl�a ,. Peat, Marwick & Mitchel? & Co. j 4 345 Park Avenue New York, NY 10022 t - 'CT of any co.^.Sra Cr 8r < k. terms. Limits of Liabdity to 7fiousaods i� GENERAL LIABILITY B r SMP 251232 7/1/83 ,,000 4 { x y 51,000 AEYCt3MOBIt E LIABILIT v g'. x BAP 217791 7'/l/82 500 500 EXCESS LIABILITY C: F,. ,r: ULP 5818676 7/l/82 10,000 "10,000 A; and U 688572 7/l/82 EMPLOYERS'LIABILITY OTHER d City of Huntington Beach is namd as A.dditscral Ins r {`147�flg�alQiS: t' td 3t s*} #3 x4. .r yr �� : r ,�:iT3�'i1r i. f�, .#r�➢ . #r. rn 3 JtJ Alicia M. iTe ntwo th City Clerk 9r'25/81 Katy of HLI Itington Head :. 2000 r'bin street Huntin on Beach, 2 10