11-0325_AUDITING FINANCE_Minutes_Special MeetingMINUTES
March 25, 2011
AUDITING FINANCE AD-HOC COMMITTEE
SPECIAL MEETING
CALL TO ORDER:
Maria Morris, City Clerk, called the Special Meeting of the Auditing Finance Ad -Hoc
Committee of the City of San Juan Capistrano to order at 3:34 p.m. in the City Council
Chamber. Mayor Allevato led the Pledge of Allegiance.
Rf)l 1 CAI I
COMMITTEE MEMBERS PRESENT: John Harper, Ray Miller, John Perry,
Jim Reardon, Council Member Derek Reeve, and Mayor Allevato
COMMITTEE MEMBERS ABSENT: None
Agenda items are presented in the originally agendized format for the benefit of the
minutes' reader, but were not necessarily heard in that order.
SELECTION OF CHAIR AND VICE -CHAIR:
JOHN HARPER SELECTED TO SERVE AS CHAIR AND JOHN PERRY SELECTED
TO SERVE AS VICE -CHAIR FOR THE AUDITING FINANCE AD-HOC COMMITTEE
Maria Morris, City Clerk, called for nominations for Chair.
Mayor Allevato nominated Council Member Derek Reeve as Chair. Council Member
Reeve respectfully declined the nomination.
Committee Action: Moved by Mayor Allevato, seconded by Committee Member Miller,
and carried 4-2, with Committee Member Perry and Committee Member Reardon
opposed to select John Harper as Chair.
ROLL CALL:
AYES: COMMITTEE MEMBERS: Miller, Reeve, Allevato and Chair Harper
NOES: COMMITTEE MEMBERS: Perry and Reardon
ABSENT: COMMITTEE MEMBER: None
Maria Morris, City Clerk, called for nominations for Vice -Chair.
Committee Action: Moved by Council Member Reeve, seconded by Mayor Allevato,
and carried unanimously to select John Perry as Vice -Chair.
ORAL COMMUNICATIONS: None
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DISCUSSION ITEMS:
ROGERS, ANDERSON, MALODY & SCOTT SELECTED FOR
RECOMMENDATION TO CITY COUNCIL FOR INDEPENDENT AUDITING
SERVICES (310.70)
The following three firms provided a presentation and responded to questions:
• Rogers, Anderson, Malody & Scott
• Teaman, Ramirez & Smith
• Mayer Hoffman McCann P.C.
The representative of Teaman, Ramirez and Smith appeared with a limited
presentation and indicated to the Committee that his firm had already been
informed they were the Td choice out of three applicants, by City staff, and that they
were not selected."
Omar Sandoval, City Attorney, provided a staff report and responded to questions.
Cindy Russell, Chief Financial Officer/Treasurer; Laura Rocha, Accounting
Manager; and Bradford Rockabrand, Accountant, provided information on the
request for proposal (RFP) process and responded to questions.
Bradford Rockabrand, Accountant, disclosed his prior employment with Rogers,
Anderson, Malody & Scott.
Committee Comments:
• Expressed concern with the negative impression of hiring the former City of Bell
Auditor, (Mayer Hoffman McCann). Felt that Mayer Hoffman McCann has
probably improved their service as a result of the City of Bell incident.
• Felt that Mayer Hoffman McCann would particularly avoid further incidents due
to their work experience with the City of Bell.
• Would not like the potential newspaper headline if Mayer Hoffman McCann is
selected; felt that Roger, Anderson, Malody & Scott is more customer oriented;
felt comfortable recommending to the City Council either Roger, Anderson,
Malady & Scott or Mayer Hoffman McCann.
• Expressed concern with the following language used in the Annual Financial
Report for Fiscal Year Ending June 30, 2010 (page 54), "Opinion Letter" of the
Community Redevelopment Agency: "however, providing an opinion on
compliance with those provisions was not an objective of our audit;" felt that the
prior auditor were directed not to apply State Controller Guidelines. Jennifer
Farr, Mayer Hoffman McCann, clarified that the statement referenced above is
required by Auditing Standards to be included by all auditors within their audits.
• Consensus on the negative impression Mayer, Hoffman, McCann would give the
City, if selected as the independent auditor.
Committee Action: Moved by Committee Member Perry, seconded by Committee
Member Miller and carried unanimously to recommend Rogers, Anderson, Malody
and Scott to the City Council to perform independent auditing services.
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2. CONSIDERATION OF SCOPE OF WORK FOR SPECIAL AUDITING SERVICES —
ITEM CONTINUED TO APRIL 15, 2011 MEETING (310.70)
Committee Comment:
• Requested that Rogers, Anderson, Malody and Scott attend the April 15, 2011
meeting, in order to provide assistance with the "scope of work" for the special
audition services.
3. ADDITIONAL MEETING SCHEDULED FOR FRIDAY, APRIL 15, 2011 AT 3:00
P.M. (310.70)
Mayor Allevato requested the appointment of Richard Hard, Utilities Commissioner,
to the Auditing Finance Ad -Hoc Committee; felt that he could contribute with his
knowledge of Utilities and his financial background; clarified that the intention to
select three members was not to have control over the committee but to have an
odd number of members to avoid split votes on recommendations.
Omar Sandoval, City Attorney, clarified that the City Council appointed Mayor
Allevato and Council Member Reeve to select members of the public with
auditing/finance background to the Ad -Hoc Committee, and clarified that the motion
did not limit the number of members that could be appointed to the committee.
Consensus to appoint Richard Hard to the Auditing Finance Ad -Hoc Committee.
ADJOURNMENT:
There being no further business, Chair Harper adjourned the meeting at
5:41 p.m. to Friday, April 15, 2011 at 3:00 p.m. in the City Council Chamber.
Respectfully subm
CHRJ8TY'JAKQDEP0TYY CITY CLERK
Approved: April 29, 2011
ATTEST:
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JOHN HARP HAIRMAN
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