OB - Item 3B - Housing Due Diligence ReviewROSEMEAD SUCCESSOR
AGENCY STAFF REPORT
TO: THE HONORABLE CHAIR AND BOARD MEMBERS
FROM: MATTHEW HAWKESWORTH, ASSISTANT CITY MANAGER
DATE: SEPTEMBER 10, 2012
SUBJECT: HOUSING DUE DILIGENCE REVIEW
SUMMARY
Under AB1484, the Successor Agency is required to complete a due diligence review of
the former low- moderate housing fund. The legislation requires that the review be
completed by October 1, 2012 and transmitted to the Department of Finance (DOF) and
various other agencies no later than October 15, 2012. Unfortunately, the guidelines for
the review were not made available until August 27, 2012 which allowed for slightly
more than one month to review a proposal from a certified public accountant, approve
the contract by both the Oversight Board and the County, conduct the due diligence
review, receive and review the report, hold a public hearing and transmit the final report
to the DOF. Unfortunately, providing one month to complete all of these tasks is not
realistic; however, the Successor Agency staff and the recommended accounting firm
are committed towards working to meet the deadlines.
Realizing that the deadline imposed by AB1484 may not be attainable, Rosemead along
with many other successor agencies have requested an extension by the DOF. The
DOF has informed Rosemead that under AB1484, they do not have the authority to
modify the due date of the report; however, they have also pointed out that there is no
penalty for not filing the report by the deadline. The DOF response stated, "We just ask
that you try your best to submit it as close to the deadline as possible." A copy of the
email requesting a change in the date along with the response from the DOF has been
attached for reference.
As previously mentioned to the Board, in order to expedite the review staff had
recommended to continue using the same firm that the County had hired to conduct the
due diligence review of the former redevelopment agency. The firm of Vavrinek, Trine,
Day & Co., LLP does not have a previous relationship with the City and was included on
a list of acceptable firms provided by the County. The firm is currently working on a
proposal, but it was not available at the time the agenda was prepared. The proposal
will be forwarded to the Board as soon as it is available.
Staff Recommendation:
That the Oversight Board authorize Successor Agency staff to enter into an agreement
with Vavrinek, Trine, Day & Co., LLP to perform the Low and Moderate Income Housing
Fund due diligence review.
ITEM NO.
Rosemead Successor Agency Oversight Board
September 10, 2012
Page 2 of 3
BACKGROUND
Per Health and Safety Code Section 34179.5 each Successor Agency is required to
employ a licensed accountant, approved by the county auditor - controller and with
experience and expertise in local government accounting, to conduct a due diligence
review to determine the unobligated balances available for transfer to taxing entities. As
an alternative, an audit provided by the county auditor - controller that provides the
information required by this section may be used to comply with this section with the
concurrence of the oversight board.
Due Diligence reviews of the Low and Moderate Income Housing Fund must be
submitted to the Oversight Board, the county auditor - controller, the State Controller's
Office and the Department of Finance by October 1, 2012. All of the parties involved will
be working to finalize the review by the October 1s deadline. After October 1st and prior
to October 15 the Oversight Board will be required to hold two public meetings. The
first meeting will be held in order to receive public comment as required by Health and
Safety Code Section 34179.6 and the second meeting will be held in order to approve
the due diligence review. The Health and Safety Code requires that these two meetings
be held at least five business days apart and with the 72 -hour noticing requirement of
the Ralph M. Brown Act, this allows the Board very little room to work with. If the report
is ready on October 1s the public comment session could not be held until October 4th
without calling a special'meeting to avoid the 72 -hour noticing requirement. Then the 5
business day requirement between meetings would push the second meeting date back
to October 15 With this schedule the Successor Agency staff could transmit the
approved report immediately following the approval on the 15 and meet the
requirements. In the event that a quorum cannot be established for this meeting
schedule or the due diligence review has not been finalized by October 1s subsequent
meetings will need to be scheduled as soon as feasibly possible.
Department of Finance reviews of the determinations provided by the Oversight Boards
will be completed no later than November 9, 2012. Any decision to overturn
determinations made by the Oversight Board to authorize a Successor Agency to retain
assets or funds will be conveyed to the Oversight Board and Successor Agency via a
letter. Successor Agencies have five days from receipt of the decisions to request "meet
and confer" if necessary.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process in
accordance with the Brown Act.
Rosemead Successor Agency Oversight Board
September 10, 2012
Page 3 of 3
Prepared by:
Ma&ewE. aw esworth
Assistant City Manager
Attachments: A — Email Correspondence with the DOF
B — Due Diligence Review Guidelines
Attachment A
Matt Hawkesworth
From: Redevelopment Administration < RedevelopmentAdministration @dof.ca.gov>
Sent: Tuesday, September 04, 2012 10:23 AM
To: Matt Hawkesworth
Subject: RE: Due Diligence Review Procedures
We do recognize the very difficult timeframe for completing the Due Diligence Reviews. Unfortunately, there is nothing
we can do to change the due date, as that is set in statute. However, we do note that there are no penalties associated
with submitting the review past the deadline in statute. We just ask that you try your best to submit it as close to the
deadline as possible.
Department of Finance
Redevelopment Agency Administration
From: Matt Hawkesworth [ mailto: mhawkesworth@cityofrosemead.org]
Sent: Monday, August 27, 2012 2:27 PM
To: Redevelopment Administration
Subject: RE: Due Diligence Review Procedures
In light of the fact that CPA firms still must prepare a proposal, the Oversight Board must approve a contract, the
audit /review must take place and then a public hearing and review must be finalized by the Oversight Board all in less
than 1 month, has there been any consideration or discussion regarding an extension of the October 1st deadline? I do
not believe that completing all of the above tasks in one month's time is realistic or feasible.
Respectfully,
Matt Hawkesworth
Matthew E. Hawkesworth
Assistant City Manager /Finance Director
City of Rosemead
8838 E. Valley Blvd.
Rosemead, CA 91770
Phone (626) 569 -2107
Fax(626)307 -9218
www.cityofrosemead.org
,� Please consider the environment before printing this e-mail.
From: Redevelopment Administration [ mailto: RedevelopmentAdministration @dof.ca.gov
Sent: Monday, August 27, 2012 12:37 PM
To: eileen.dalton@acgov.ory dootter @cLalameda.ca.us cadams @albanyca.org wcosin @CityofBerkeley.info
dauker @ci.emeryville.ca.us hcommons @fremont.gov kelly.morariu @hayward- ca.gov etoeterson @ci.livermore.ca.us
terrence.grindall @newark.org SSchlenk@oaklandnet.com jkay @sanleandro.org MarkE (&ci.union - city.ca.us
jhenness @ci.chico.ca.us khelvey@gridley.ca.us salsimj @cityoforoville.org gwill @townofparadise.com
dme rchant @ci.antioch.ca.us kbreen@brentwoodca.gov moelletier @ci.clayton.ca.us johnm @ci.concord.ca.us
Mau reen.Toms @dcd.cccountv.us ehudson @danville.ca.cl ; Ltrevino @ci.el- cerrito.ca.us NMastay @ci.hercules.ca.us
Attachment B
V.8 -27 -12
List of Procedures for Due Diligence Review
General information regarding these procedures:
1. The procedures associated with Sections 34179.5(c)(1) through 34179.5(c)(3) and
Sections 34179.5(c)(5) through 34179.5(c)(6) are to be applied separately to (a) the Low
and Moderate Income Housing Fund of the Successor Agency and to (b) all other funds
of the Successor Agency combined (excluding the Low and Moderate Income Housing
Fund).
2. The due date for the report associated with the Low and Moderate Income Housing Fund
is October 1, 2012.
3. The due date for the report associated with all other funds of the Successor Agency
combined (excluding the Low and Moderate Income Housing Fund) is December 15,
2012.
4. Because the procedures required by Section 34179.5(c)(4) pertain to the Successor
Agency as a whole, these procedures should be addressed in the report that is due on
December 15. 2012.
Fiscal year references below refer to fiscal years ending on June 30. This language should be
modified for those agencies that have a different fiscal year -end.
For purposes of the procedures below and the related exhibits, the amount of the assets presented
should be based upon generally accepted accounting principles (GAAP), unless otherwise noted.
To the extent the procedures listed below are duplicative to the agreed upon procedures that were
performed pursuant to HSC 34182 (a)(1), it is acceptable to obtain and use information from the
HSC 34182 (a)(1) procedures for purposes of this due diligence review without having to re-
perform the procedures. When this is done, the due diligence report should refer to the report that
was issued for the agreed upon procedures performed under HSC 34182 (#]).
Certain assets may qualify as a deduction under more than one category of deduction. In such
cases, care should be taken to ensure that such assets have been included as a deduction in the
summary schedule only once.
Citation:
34179.5(c)(1) The dollar value of'assets transferred from the,former redevelopment agency
to the successor agency on or about February 1, 2012.
Suggested Procedure(s):
Obtain from the Successor Agency a listing of all assets that were transferred from the
former redevelopment agency to the Successor Agency on February 1, 2012. Agree the
amounts on this listing to account balances established in the accounting records of the
Successor Agency. Identify in the Agreed -Upon Procedures (AUP) report the amount of
the assets transferred to the Successor Agency as of that date.
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Citation:
34179.5(c)(2) The dollar value of assets and cash and cash equivalents transferred after
,January 1, 2011, through June 30, 2012, by the redevelopment agency or the successor
agency to the city, county, or city and county that formed the redevelopment agency and the
purpose of each transfer. The review shall provide documentation of' any enforceable
obligation that required the transfer.
Suggested Procedure(s):
2. If the State Controller's Office has completed its review of transfers required under both
Sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy
of that report as an exhibit to the AUP report. If this has not yet occurred, perform the
following procedures:
A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) from the former redevelopment agency to the city, county, or
city and county that formed the redevelopment agency for the period from January 1,
2011 through January 31, 2012. For each transfer, the Successor Agency should
describe the purpose of the transfer and describe in what sense the transfer was
required by one of the Agency's enforceable obligations or other legal requirements.
Provide this listing as an attachment to the AUP report.
B. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and -services) from the Successor Agency to the city, county, or city and
county that formed the redevelopment agency for the period from February 1, 2012
through June 30, 2012. For each transfer, the Successor Agency should describe the
purpose of the transfer and describe in what sense the transfer was required by one of
the Agency's enforceable obligations or other legal requirements. Provide this listing
as an attachment to the AUP report.
C. For each transfer, obtain the legal document that formed the basis for the enforceable
obligation that required any transfer. Note in the AUP report the absence of any such
legal document or the absence of language in the document that required the transfer.
Citation:
34179.5(c)(3) The dollar value of any cash or cash equivalents transferred after January 1,
2011, through June 30, 2012, by the redevelopment agency or the successor agency to anv
other public agency or private party and the purpose of each transfer. The reviei-r shall
provide documentation of any enforceable obligation that required the transfer.
Suggested Procedure(s):
3. If the State Controller's Office has completed its review of transfers required under both
Sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy
of that report as an exhibit to the AUP report. If this has not yet occurred, perform the
following procedures:
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A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) [from the former redevelopment agency to any other public
agency or to private parties for the period from January 1, 2011 through January 31,
2012. For each transfer, the Successor Agency should describe the purpose of the
transfer and describe in what sense the transfer was required by one of the Agency's
enforceable obligations or other legal requirements. Provide this listing as an
attachment to the AUP report.
B. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) [from the Successor Agency to any other public agency or
private parties for the period from February 1, 2012 through June 30, 2012. For each
transfer, the Successor Agency should describe the purpose of the transfer and
describe in what sense the transfer was required by one of the Agency's enforceable
obligations or other legal requirements. Provide this listing as an attachment to the
AUP report.
C. For each transfer, obtain the legal document that formed the basis for the enforceable
obligation that required any transfer. Note in the AUP report the absence of any such
legal document or the absence of language in the document that required the transfer.
Citation:
341?9.5(c)(4) The review shall provide expenditure and revenue accounting information and
identify transfers and funding sources for the 2010 -11 and 2011 -12 fiscal years that
reconciles balances, assets, and liabilities of the successor agency on Jame 30, 2012 to those
reported to the Controller for the 2009 -10 fiscal year.
Suggested Procedure(s):
4. Perform the following procedures:
A. Obtain from the Successor Agency a summary of the financial transactions of the
Redevelopment Agency and the Successor Agency in the format set forth in the
attached schedule for the fiscal periods indicated in the schedule. For purposes of this
summary, the financial transactions should be presented using the modified accrual
basis of accounting. End of year balances for capital assets (in total) and long -term
liabilities (in total) should be presented at the bottom of this summary schedule for
information purposes.
B. Ascertain that for each period presented, the total of revenues, expenditures, and
transfers accounts fully for the changes in equity from the previous fiscal period.
C. Compare amounts in the schedule relevant to the fiscal year ended June 30, 2010 to
the state controller's report filed for the Redevelopment Agency for that period.
D. Compare amounts in the schedule for the other fiscal periods presented to account
balances in the accounting records or other supporting schedules. Describe in the
report the type of support provided for each fiscal period.
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Citation:
34179.5(c)(5) A separate accounting for the balance for the Low and Moderate Income
Housing Fund, for all other funds and accounts combined shall be made as
(A) A statement of the total value of each fund as of June 30, 2012.
Suggested Procedure(s):
5. Obtain from the Successor Agency a listing of all assets of the Low and Moderate
Income Housing Fund as of June 30, 2012 for the report that is due October 1, 2012 and a
listing of all assets of all other funds of the Successor Agency as of June 30, 2012
(excluding the previously reported assets of the Low and Moderate Income Housing
Fund) for the report that is due December 15, 2012. When this procedure is applied to the
Low and Moderate Income Housing Fund, the schedule attached as an exhibit will
include only those assets of the Low and Moderate Income Housing Fund that were held
by the Successor Agency as of June 30, 2012 and will exclude all assets held by the entity
that assumed the housing function previously performed by the former redevelopment
agency. Agree the assets so listed to recorded balances reflected in the accounting records
of the Successor Agency. The listings should be attached as an exhibit to the appropriate
AUP report.
Citation:
34179.5(c)(5)(B) An itemized statement listing any amounts that are legally restricted as to
purpose and cannot be provided to taxing entities. This could include the proceeds of any
bonds, grant finals, or funds provided by other governmental entities that place conditions on
their use.
Suggested Procedure(s):
6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that
are restricted for the following purposes:
A. Unspent bond proceeds:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures, amounts set aside for debt service
payments, etc.)
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting documentation (specify in the AUP
report a description of such documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of
language restricting the use of the balances that were identified by the Successor
Agency as restricted.
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B. Grant proceeds and program income that are restricted by third parties:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures).
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting documentation (specify in the AUP
report a description of such documentation).
iii. Obtain from the Successor Agency a copy of the grant agreement that sets forth
the restriction pertaining to these balances. Note in the AUP report the absence of
language restricting the use of the balances that were identified by the Successor
Agency as restricted.
C. Other assets considered to be legally restricted:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures).
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting documentation (specify in the AUP
report a description of such documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of
language restricting the use of the balances that were identified by Successor the
Agency as restricted.
D. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to
the AUP report. For each restriction identified on these schedules, indicate in the
report the period of time for which the restrictions are in effect. If the restrictions are
in effect until the related assets are expended for their intended purpose, this should
be indicated in the report.
Citation:
341- 9.5(c)(5)(G) An itemized statement of the values of any assets that are not cash or cash
equivalents. This may include physical assets, land, records, and equipment Tor the purpose
of this accounting, physical assets nia be valued at purchase cost or at any recently
estimated market value. The statement shall list separately housing- related assets.
Suggested Procedure(s):
7. Perform the following procedures:
A. Obtain from the Successor Agency a listing of assets as of June 30, 2012 that are not
liquid or otherwise available for distribution (such as capital assets, land held for
resale, long -term receivables, etc.) and ascertain if the values are listed at either
purchase cost (based on book value reflected in the accounting records of the
Successor Agency) or market value as recently estimated by the Successor Agency.
B. If the assets listed at 7(A) are listed at purchase cost, trace the amounts to a
previously audited financial statement (or to the accounting records of the Successor
Agency) and note any differences.
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C. For any differences noted in 7(B), inspect evidence of disposal of the asset and
ascertain that the proceeds were deposited into the Successor Agency trust fund. If the
differences are due to additions (this generally is not expected to occur), inspect the
supporting documentation and note the circumstances.
D. If the assets listed at 7(A) are listed at recently estimated market value, inspect the
evidence (if any) supporting the value and note the methodology used. If no evidence
is available to support the value and \or methodology, note the lack of evidence.
Citation:
34179.5(c)(5)(D) An itemized listing of any current balances that are legally or contractually
dedicated or restricted,for the funding of an enforceable obligation that identifes the nature
of the dedication or restriction and the specific enforceable obligation. In addition, the
successor agency shall provide a listing of all approved enforceable obligations that includes
a projection of'annual spending requirements to satisfy each obligation and a projection of
annual revenues available to fund those requirements. If a review finds that fixture revenues
together with dedicated or restricted balances are insufficient to fsnd future obligations and
thus retention of current balances is required, it shall ident� the amount of current balances
necessary for retention. The review shall also detail the projected properly tax revenues and
other general purpose revenues to be received by the successor agency, together with both
the amount and thning of the bond debt service payments of the successor, agency, for the
period in which the oversight board anticipates the successor agency will have insufficient
property tax revenue to pay the specified obligations.
Suggested Procedure(s):
8. Perform the following procedures
A. If the Successor Agency believes that asset balances need to be retained to satisfy
enforceable obligations, obtain from the Successor Agency an itemized schedule of
asset balances (resources) as of June 30, 2012 that are dedicated or restricted for the
funding of enforceable obligations and perform the following procedures. The
schedule should identify the amount dedicated or restricted, the nature of the
dedication or restriction, the specific enforceable obligation to which the dedication
or restriction relates, and the language in the legal document that is associated with
the enforceable obligation that specifies the dedication of existing asset balances
toward payment of that obligation.
i. Compare all information on the schedule to the legal documents that form the
basis for the dedication or restriction of the resource balance in question.
ii. Compare all current balances to the amounts reported in the accounting records of
the Successor Agency or to an alternative computation.
iii. Compare the specified enforceable obligations to those that were included in the
final Recognized Obligation Payment Schedule approved by the California
Department of Finance.
iv. Attach as an exhibit to the report the listing obtained from the Successor Agency.
Identify in the report any listed balances for which the Successor Agency was
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unable to provide appropriate restricting language in the legal document
associated with the enforceable obligation.
B. If the Successor Agency believes that future revenues together with balances
dedicated or restricted to an enforceable obligation are insufficient to fund future
obligation payments and thus retention of current balances is required, obtain from
the Successor Agency a schedule of approved enforceable obligations that includes a
projection of the annual spending requirements to satisfy each obligation and a
projection of the annual revenues available to fund those requirements and perform
the following procedures:
i. Compare the enforceable obligations to those that were approved by the
California Department of Finance. Procedures to accomplish this may include
reviewing the letter from the California Department of Finance approving the
Recognized Enforceable Obligation Payment Schedules for the six month period
from January 1, 2012 through June 30, 2012 and for the six month period July 1,
2012 through December 31, 2012.
ii. Compare the forecasted annual spending requirements to the legal document
supporting each enforceable obligation.
a. Obtain from the Successor Agency its assumptions relating to the forecasted
annual spending requirements and disclose in the report major assumptions
associated with the projections.
iii. For the forecasted annual revenues:
a. Obtain from the Successor Agency its assumptions for the forecasted annual
revenues and disclose in the report major assumptions associated with the
projections.
C. If the Successor Agency believes that projected property tax revenues and other
general purpose revenues to be received by the Successor Agency are insufficient to
pay bond debt service payments (considering both the timing and amount of the
related cash flows), obtain from the Successor Agency a schedule demonstrating this
insufficiency and apply the following procedures to the information reflected in that
schedule.
i. Compare the timing and amounts of bond debt service payments to the related
bond debt service schedules in the bond agreement.
ii. Obtain the assumptions for the forecasted property tax revenues and disclose
major assumptions associated with the projections.
iii. Obtain the assumptions for the forecasted other general purpose revenues and
disclose major assumptions associated with the projections.
D. If procedures A, B, or C were performed, calculate the amount of current unrestricted
balances necessary for retention in order to meet the enforceable obligations by
performing the following procedures.
i. Combine the amount of identified current dedicated or restricted balances and the
amount of forecasted annual revenues to arrive at the amount of total resources
available to fund enforceable obligations.
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ii. Reduce the amount of total resources available by the amount forecasted for the
annual spending requirements. A negative result indicates the amount of current
unrestricted balances that needs to be retained.
iii. Include the calculation in the AUP report.
Citation:
34179.5(c)(5)(E) An itemized list and analysis of any amounts of current balances that are
needed to satisfy obligations that will be placed on the Recognized Obligation Payment
Schedules for the current fiscal year.
Suggested Procedure(s):
9. If the Successor Agency believes that cash balances as of June 30, 2012 need to be
retained to satisfy obligations on the Recognized Obligation Payment Schedule (ROPS)
for the period of July 1, 2012 through June 30, 2013, obtain a copy of the final ROPS for
the period of July 1, 2012 through December 31, 2012 and a copy of the final ROPS for
the period January 1, 2013 through June 30, 2013. For each obligation listed on the
ROPS, the Successor Agency should add columns identifying (1) any dollar amounts of
existing cash that are needed to satisfy that obligation and (2) the Successor Agency's
explanation as to why the Successor Agency believes that such balances are needed to
satisfy the obligation. Include this schedule as an attachment to the AUP report.
Citation:
34179.5(c)(6) The review shall total the net balances available after deducting the total
amounts described in subparagraphs (B) to (E), inclusive, of paragraph (5). The review shall
add any amounts that were transferred as identified in paragraphs (2) and (3) of subdivision
(c) if an enforceable obligation to make that transfer did not exist. The resulting sum shall be
available for allocation to affected taxing entities pursuant to Section 34179.6. It shall be a
rebuttable presumption that cash and cash equivalent balances available to the successor
agency are available and sufficient to disburse the amount determined in this paragraph to
taxing entities. If the review finds that there are insufficient cash balances to transfer or that
cash or cash equivalents are specifically obligated to the purposes described in
subparagraphs (B), (D), and (E) of paragraph (5) in such amounts that there is insul�cient
cash to provide the full amount determined pursuant to this paragraph, that amount shall be
demonstrated in an additional itemized schedule.
Suggested Procedure(s):
10. Include (or present) a schedule detailing the computation of the Balance Available for
Allocation to Affected Taxing Entities. Amounts included in the calculation should agree
to the results of the procedures performed in each section above. The schedule should
also include a deduction to recognize amounts already paid to the County Auditor -
Controller on July 12, 2012 as directed by the California Department of Finance. The
amount of this deduction presented should be agreed to evidence of payment. The
attached example summary schedule may be considered for this purpose. Separate
schedules should be completed for the Low and Moderate Income Housing Fund and for
all other funds combined (excluding the Low and Moderate Income Housing Fund).
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Suggested Procedure(s):
It. Obtain a representation letter from Successor Agency management acknowledging their
responsibility for the data provided to the practitioner and the data presented in the report
or in any attachments to the report. Included in the representations should be an
acknowledgment that management is not aware of any transfers (as defined by Section
34179.5) from either the former redevelopment agency or the Successor Agency to other
parties for the period from January 1, 2011 through June 30, 2012 that have not been
properly identified in the AUP report and its related exhibits. Management's refusal to
sign the representation letter should be noted in the AUP report as required by attestation
standards.
I