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<br />5. Amortization of Existinq Assets in Service as of June 30, 2009. The <br />Compliance Auditor shall review both Water and Hetch Hetchy Enterprise records to determine <br />whether the payoff amount for Existing Assets allocated to the Wholesale Customers as shown <br />on Attachment K-1 through K-4 was calculated as provided in Section 5.03 o'f this Agreement. <br /> <br />6. Revenue-Funded Capital Appropriations/Expenditures. The Compliance <br />Auditor shall review San Francisco's calculatiorl of actual expenditures on the wholesale share <br />of revenue-funded New Regional Assets and remaining unexpended and unencumbered project <br />balances in the uWholesale Capital Fund" described in Section 6.08, to determine whether the <br />procedures contained in that section were followed. <br /> <br />7. Hetch Hetchv Expenses. The Compliance Auditor shall determine <br />whether Hetch Hetchy Enterprise expenses were allocated to the Wholesale Customers as <br />provided in this Agreement. <br /> <br />D. Use of and Reliance on Audited Financial Statements and Water Use Data <br />1. In performing the audit, the Compliance Auditor shall incorporate any <br />adjustments to the cost ledgers recommended by the independent certified public accountant, <br />referred to in Section 7.01.1, which audited the financial statements of the Water and Hetch <br />Hetchy Enterprises. The Compliance Auditor may rely upon the work performed by that <br />independent certified public accountant if the Compliance Auditor reviews the work and is willing <br />to take responsibility for it as part of the compliance audit. <br /> <br />2. In performing the Compliance Audit and issuing its report, the Compliance <br />~uditor may rely on water use data furnished by the Water Enterprise, regardless of whether the <br />Wholesale Customers contest the accuracy of such data. The Compliance Auditor shall have <br />no obligation to independently verify the accuracy of the water use data provided by San <br />Francisco; however, the Compliance Auditor shall disclose in its report any information which <br />came to its attention suggesting that the water use data provided by San Francisco are <br />inaccurate in any significant respect. <br /> <br />E. Exit Conference. Upon completion of the audit, the Compliance Auditor shall <br />meet with San Francisco and BAWSCA to discuss audit findings, including (1) any material <br />weakness in internal controls and (2) adjustments proposed by the Compliance Auditor and San <br />Francisco's response (i.e., booked or waived). <br /> <br />-66- <br /> <br />1840795.8 <br />