HomeMy WebLinkAbout28-City Attorney
~
C,TY OF SAN BERNARDINO - REQUEST FOR COMMITTEE ACTION
From: JAMES F. PENMAN
CITY ATTORNEY
0,"','''''''' ~L
{,'\;i,../i
Subject: Submission of the Audit of the City of San
Bernardino's Economic Development Agency's Contractual
Relationship with Alvarez & Associates for Services through
the Acquisition, Rehabilitation and Resale and Mortgage
Assistance Programs dated October 2001 by the Harvey M.
Rose Accountancy Corporation
Dept: CITY ATTORNEY
Date: November 29, 2001
Synopsis of Previous Committee Action:
July, 2001: Mayor and Common Council Authorized Retention of Harvey M. Rose Accountancy
Corporation to conduct an Audit of the City of San Bernardino's Economic Development
Agency's Contractual Relationship with Alvarez & Associates for Services through the
Acquisition, Rehabilitation and Resale and Mortgage Assistance Programs.
Recommended motion:
That the Mayor and Common Council receive and file said audit report.
That the Economic Development Agency be directed to implement the 21 recommendations
in the audit report.
L--
(l
7./~
Signature
Contact person: James F. Penman. City Attorney
Supporting data attached: Staff Renort
FUNDING REQUIREMENTS: Amount:
Phone:
Ward:
None at this time
5255
All
Source:
Finance:
Committee Notes:
75-0262
Agend
)/o.2f
1:1-/17)0)
'.
STAFF REPORT
Council Meeting Date: December 3. 2001
TO:
FROM:
DATE:
AGENDA:
Mayor and Common Council
City Attorney's Office
November 29, 2001
Item #31
In July of this year, the Mayor and Common Council authorized the retention of Harvey M.
Rose Accountancy Corporation ("Accountancy Corporation") to conduct an audit of the City of San
Bernardino's Economic Development Agency's contractual relationship with Alvarez & Associates
for services through the Acquisition, Rehabilitation and Resale and Mortgage Assistance Programs.
The Accountancy Corporation has completed its audit report and it is now ready to be released.
The audit report contains four areas of findings and twenty-one (21) recommendations. As
stated in the transmittal letter of October 12, 200 I: "The findings and recommendations concern the
consistency of Agency procedures and compliance with program regulations, Agency monitoring
of and controls over contractor costs, an assessment of the financial risk to the City resulting from
the Agency's contractual relationship with the contractor, and conflict of interest policies to ensure
that no improper transactions take place between Agency staff and contractors."
The Executive Summary sets forth a summary of the findings and the recommendations for
each of the four areas (pp. i-vi). The main body of the audit report sets forth seven (7)
recommendations on the consistency of Agency procedures and compliance with program
regulations (pp.I3-I4); eight (8) recommendations on Agency monitoring of and controls over
contractor costs (p 25); four (4) recommendations on financial risk to the City resulting from the
Agency's contractual relationship with the contractor (p. 32); two (2) recommendations on conflict
of interest policies.
The audit report contains tables reflecting MAP loans issued, MAP loan foreclosures, and
MAP loan foreclosure rates (pp. 28-29). The information contained therein indicates that there have
been twenty-nine (29) foreclosures in the ARR program, all from MAP loans made to buyers
supplied by Alvarez & Associates, for a total loss of $268,394. The audit reports extrapolates an
additional $99,380 in potential losses resulting from loans made to buyers supplied by Alvarez &
Associates which are projected to be in foreclosure in the coming years.
The audit report is being supplied to the Mayor and Common Council, the Executive Director
of the Economic Development Agency, and other interested parties. It is requested that the
Economic Development Agency be directed to implement the twenty-one (21) recommendations in
the audit report and that the Mayor and Common Council receive and file said audit report.
..
STAFF REPORTS
City Attorney
# Submission of the Audit of the City of San Bernardino's Economic
Development Agency's Contractual Relationship with Alvarez &
Associates for Services through the Acquisition, Rehabilitation and
Resale and Mortgage Assistance Programs dated October 2001 by
the Harvey M. Rose Accountancy Corporation.
MOTION: That the Mayor and Common Council receive and
file said audit report.