AgdaPkt 2012-09-24 - Laserfiche WebLink

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6.2.A. - Page 1 RE PO RT To the Honorable Mayor and City Council From the Cit Mana er September 24, 2012 SUBJECT Successor Agency Agreement for Auditing Services of the Former Redevelopment Agency (Badawi & Associates) RECOMMENDATION Approve, by Motion, Agreement for auditing services for the Former Redevelopment Agency with Badawi & Associates for fiscal year 2011-12 by $23,675. BACKGROUND The City and the former Redevelopment Agency engaged an independent certified public accountant to conduct an audit of the City and the Former Redevelopment Agency's financial records. The current independent auditor, Badawi & Associates, was engaged by the City Council for the FY 2011/12 audit on April 9, 2012 based upon a recommendation from the Council's Audit Committee to assign the existing audit agreement from Caporicci & Larson to Badawi & Associates. ANALYSIS Effective February 1, 2012, the Redevelopment Agency was dissolved by the State under ABx1 26. Contained in this legislation were new reporting and audit requirements for the dissolved Redevelopment Agencies. Pursuant to ABx1 26, Badawi & Associates conducted an audit and issued a Redevelopment Agency financial report as of January 31, 2012. The additional cost for preparation of the financial report was $6,675 for a tota I cost of $15,000. On June 27, 2012, the State Legislature passed AB 1484, which included additional audit and reporting requirements for the Redevelopment dissolution process referred to as the Due Diligence Reviews (DDR's). The first DDR, which is due October 1, 2012, consists of review of the low and moderate income housing fund balances of the dissolved Redevelopment Agency. The second DDR, which is due December 15, 2012, consists of review of all other fund and account balances of the dissolved Redevelopment Agency. Badawi & Associates has agreed to perform both DDR's once the State has issued clarification and procedures for the work to be performed. Given the current lack of clear guidelines from the State, Badawi & Associates has not provided a firm proposal, but has estimated $7,000 to perform the first DDR. Staff is recommending an additional $10,000 to cover the second DDR and any final audit work that may be necessary to satisfy the State's reporting requirements.