HomeMy WebLinkAboutPR 11964:AUDIT EDC OPERATIONS Memorandum
City of Port Arthur, Texas
Finance Department
To~
From:
Date:
Subject:
Steve Fitzgibbons, City l~ana~g_~r~d~
Rebecca Underhill, Direc~l~gf,,Yq'fian~
September 27,2002 ~' -
Proposed Resolution 11964
Presented for Council consideration and approval is Proposed Resolution 11964. This resolution
authorizes the City Attorney, City Manager, and Director of Finance to negotiate a contract with
Briggs and Veselka Co. to perform a compliance audit of the EDC operation.
The City Council approved an RFP for compliance auditing services in July 2002. The specific
areas of compliance to be reviewed were the documentation of jobs created by the grantee
companies. The auditors were also asked to detail the ownership of the grantee companies. On
August 14, 2002, the City received a proposal from the firm Briggs and Veselka Co., Bellaire,
Texas. The estimated cost of the proposal was $28,000.
On September 27, 2002, the City received certain recommendations from Gayle W. Botley, CPA,
independent auditor for the City, conceming the activities of the Port Arthur Economic Development
Corporation. These recommendations are for a compliance audit of the EDC's past and current
practices and procedures, including the eligibility of companies to receive grants, the awarding of
grants by the EDC and the monitoring of these grants.
This resolution would allow city staff to negotiate a contract with Briggs and Veleska to expand the
scope of services as originally proposed to include the recommended compliance work. (In
conversations with the firm, they noted that the expectations of the public, the City Council, and the
EDC might not be same as they proposed. The audit manager was also concerned about comments
recently made in the media that the audit will reveal all improprieties.)
The City Council will be asked to approve the contract at a future meeting.
RESOLUTION NO.
P. R. NO. 11964
09/27/02 ts
A RESOLUTION AUTHORIZING THE CITY ATTORNEY,
CITY MANAGER, AND THE DIRECTOR OF FINANCE
TO NEGOTIATE A CONTP. ACT WITH BRIGGS &
VESELKA CO. TO DO A COMPLIANCE AUDIT OF THE
EDC OPEP. ATIONS.
WHEREAS, on September 27, 2002, the City received a
recommendation from its auditor, Gayle W. Botley, that the
City should authorize an expanded compliance audit of the EDC
operations; and
WHEREAS, this recommendation includes a compliance audit
that will review the EDC's past and current practices and
procedures. This also includes eligibility to receive grants,
awarding of grants and monitoring of grants; and
WHEREAS, on August 14, 2002, Briggs & Vaselka submitted a
proposal to do a compliance audit at a cost not to exceed
$28,000; and
WHEREAS,
the City' s Request for Proposals approved by
Resolution No. 02-203 dated July 9, 2002 did not envision or
include the expanded scope of inquiry into EDC operations as
now suggested by Gayle Botley, the City Auditor. The Request
for Proposal indicated the following:
"The City desires the auditor to determine if the grant
and loan recipients are complying with the terms of their
agreements.
The City specifically desires the auditor determine the
number of jobs each entity created as a result of the
grant/loan and the duration of the jobs. The auditor
will confirm a detail of ownership of each recipient.
This detail should show where the owners reside, and
their financial interest in the entity."; and
WHEREAS, the City Council deems it in the public
interests that the compliance audit of EDC operations also
include the items as recommended by the City Auditor.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PORT ARTHUR, TEXAS:
Section 1. That the facts and opinions in the preamble
are true and correct.
Section 2. That the City Attorney, the City Manager
and the Director of Finance are herein authorized to negotiate
a contract with Briggs & Veselka Co. Associates for an
expanded compliance audit of the EDC operations as suggested
by Gayle Botley and bring
Council for consideration.
Section 3. That since
the proposed contract to the City
this involves the operations of
the Economic Development Corporation and the contractual
compliance of EDC grant recipients, the City Council expects
z.prl1964
and recommends that the Section 4A Economic Development
Corporation either pay for the audit or promptly reimburse the
City for the
the EDC grant
costs thereof. Also, pursuant to the terms of
contracts, the grant recipients will be liable
to i~ediately reimburse the Economic Development Corporation
for any cOsts disallowed pursuant to the compliance audit.
Section 4. That a copy of the caption of this
resolution be spread upon the Minutes of the City Council.
READ, ADOPTED AND APPROVED on this __ day of
, A.D., 2002, at
Council of the City of Port Arthur, Texas,
vote: AYES: Mayor
Councilmembers
a Regular Meeting of the City
by the following
NOES:
ATTEST:
MAYOR
CITY SECRETARY
z.pr11964
APPROVED AS TO FORM: APPROVED FOR ADMINISTRATION:
CITY ATTOP~NEY
CITY MANAGER