RESOLUTION 90-20205 RESOLUTION NUMBER 90-20205
A RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA AUTHORIZING AND
DIRECTING THE EXECUTION OF AN AGREEMENT WITH
DELOITTE & TOUCHE FOR THE FINANCIAL AND
PROGRAMMATIC AUDIT OF MIAMI BEACH DEVELOPMENT
CORPORATION'S (MBDC) CDBG FUNDED HOMEOWNERSHIP
AND COMMERCIAL REVITALIZATION PROGRAMS
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, THAT,
WHEREAS, on September 28, 1990, the City received a
letter from the U.S. Department of HUD in regard to "Section 104
(e) (1) performance monitoring on the CDBG program" , based on a
review which occurred August 27-30, 1990; and
WHEREAS, as a result of this monitoring visit, three (3)
Findings were made by HUD regarding the Miami Beach Development
Corporation; and
WHEREAS, the City in accordance with HUD' s directive
properly responded with "corrective actions" for the above
referenced Findings, which at this time remain unresolved; and
WHEREAS, the City has determined that based on HUD' s
Findings that it is appropriate to obtain an independent audit on
the two (2) CDBG programs administered by MBDC in Program Year 15
(FY 89/90) ; and
WHEREAS, the U.S. Department of HUD has verbally advised
the City that financial liability for the City' s subrecipient MBDC
rests with the City as the contractual agent of the US HUD CDBG
funds; and
WHEREAS, based on the above, the City' s auditors,
Deloitte & Touche have prepared the attached Engagement Letter to
perform this audit at a cost not to exceed $26, 000. CDBG funds are
available for this contract, and the cost will be pro-rated against
the line items of the two projects being audited. HUD has
confirmed that this is an acceptable and appropriate expense and
method of payment; and
WHEREAS, it is essential that these audits be initiated
immediately in order to ensure that there are no irregularities
that could place the City and MBDC in a position of repaying any
funds to the HUD program.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH FLORIDA, that the City
Manager be authorized to execute the Engagement Letter with
Deloitte & Touche in an amount not to exceed $26, 000 for the audit
of the two (2) CDBG programs that were administered by MBDC.
Further, the cost for such audit will be pro-rated against the line
items of the two (2) CDBG projects being audited.
PASSED AND ADOPTED THIS 19th day of December , 19 0.
MAYOR
ATTEST:
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CITY CLERK ' DEPT
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OFFICE OF THE CITY MANAGER CITY HALL
ROB W.PARKINS 1700 CONVENTION CENTER DRIVE
CITY MANAGER TELEPHONE: 673-7010
COMMISSION MEMORANDUM NO. 44940
December 19 , 1990
DATE:
TO: Mayor Alex Daoud and
Members of the City Commission
FROM: Rob W. Parkins
City Manager '" Jl
SUBJECT: AUTHORIZATION TO ENTER INTO AGREEMENT WITH DELOITTE &
TOUCHE FOR THE FINANCIAL AND PROGRAMMATIC AUDIT OF MIAMI
BEACH CORPORATION'S (MBDC) CDBG FUNDED HOMEOWNERSHIP AND
COMMERCIAL REVITALIZATION PROGRAM
Asyou are aware, as a partof the follow-up to the U.S. HUD
"Findings" regarding the Miami Beach Development Corporation, the
City requires an independent audit of the CDBG funded programs
implemented by the Miami Beach Development Corporation (MBDC) o
After several meetings between the City Administration and
representatives of MBDC, it was decided that an audit would be
performed on the CDBG funded "Homeownership Program" and the
"Commercial Revitalization Program" for the two (2) fiscal years
which ended September 30, 1990.
The U.S. Department of HUD has verbally advised the City that they
feel these audits are important, as they advised us that financial
liability for the City's Subrecipient (MBDC) rests with the City as
the contractual agent of the HUD CDBG funds.
Based on the above, the City's auditors, Deloitte & Touche have
prepared the attached Engagement Letter to perform the audit.
The cost for the audit is ' not to exceed $26, 000. CDBG funds are
available for this contract, and the cost will be pro-rated against
the line-item of the two projects being audited. (HUD has
confirmed that this is an acceptable and appropriate expense and
method of payment) .
It is essential that these audits be initiated immediately in order
to ensure that there are no irregularities that could place the
City and MBDC in a position of re-paying any funds to the HUD
program.
ADMINISTRATION RECOMMENDATION:
The Administration recommends that the City Commission authorize
• the City Manager to execute the Engagement Letter with Deloitte
Touche not to exceed $26, 000, for the audit of the two CDBG
programs that were administered by MBDC. The costs will be pro-
rated against the line-item of the two projects being audited.
RWP/sg
Attachments
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FU NDI NG APPROVED
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i f `. • , / l AGENDA
Management and Budget ITEM C - `
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DATE
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Deloitte &
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Touche
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Certified Public'accountants 100 Southeast Second Street
CiTYt1.4
LMiami, Florida 33131-2135
` r Telephone:(305)358-4141
ri_ Facsimile:(305)358-1451
November 14 , 1990
Mr . Rob W. Parkins
City Manager
City Hall
1700 Convention Center Drive
Miami Beach , Florida 33139
Dear Mr . Parkins :
This letter is to confirm our engagement to perform the proce-
dures requested by you and your staff, as described below , with
respect to the City of Miami Beach ( the "City") Community
Development Block Grants that are administered by Miami Beach
Development Corporation ( "MBDC") : specifically the "Acquisi-
tion Home Ownership Program" and the "Commercial Revitalization
Program" ( the "Programs") . The procedures that we will perform
for the two fiscal years ended September 30 , 1990 relating to
the two Programs are summarized as follows :
1 . We will read the contract between the City and MBDC and the
applicable Federal Regulations relating to the Programs .
2 . We will test , to the extent we deem necessary , the charges
to the Programs to determine whether they are :
a . allowable program costs as set forth in the U.S.
Department of Housing and Urban Development Regulations
regarding Community Development Block Grant Programs ;
b . properly recorded and supported by source documenta-
tion ;
c . necessary and reasonable for the proper administration
of the Programs ;
d . given consistent accounting treatment and applied
uniformly to both the Programs and other activities of
MBDC ;
e . net of applicable credits ; and
f. allocated equitably to benefiting activities , including
other projects of MBDC .
Mr. Rob W. Parkins
November 14 , 1990
Page Two
3 . Determine that MBDC is ensuring that individuals applying
for grants meet the eligibility requirements of Federal
Regulations .
4 . Perform additional tests to determine compliance with
Federal Regulations as deemed necessary .
5 . In connection with the procedures enumerated above , we will
communicate to you any deficiencies in the internal control
structure that come to our attention . However , these
limited procedures are not directed toward evaluating the
internal control structure .
Our report on the foregoing procedures is intended solely for
your information in determining the amounts charged to the
Programs were allowable and that MBDC complied with the terms
of the contract with the City and with applicable Federal
Regulations and is not intended to be used for any other
purpose .
Because the foregoing procedures are not sufficient to consti-
tute an audit made in accordance with generally accepted
auditing standards , we will not express an opinion on the
amounts charged to the Programs or on the financial statements
of MBDC .
In addition , management of the MBDC is responsible for estab-
lishing and maintaining the internal control structure suffi-
cient to provide a reasonable , but not absolute , assurance that
assets are safeguarded against loss from unauthorized use or
disposition and that transactions are executed in accordance
with management ' s authorization and recorded properly to permit
the preparation of financial statements in accordance with
generally accepted accounting principles .
Because the above procedures do not constitute an audit in
accordance with generally accepted auditing standards , we may
not detect potential errors or irregularities that may be
material to the financial statements . Also , audit procedures
that are effective for detecting a misstatement that is
unintentional may be ineffective for a misstatement that is
intentional and is concealed through collusion between client
personnel and third parties or among management or employees of
the client .
Our fees are based on the amount of time required at various
levels of responsibility plus actual out-of-pocket expenses .
Mr . Rob W. Parkins
November 14 , 1990
Page Three
Our services will be billed at a combined average rate of $65
per hour up to an estimated maximum of $26 ,000 . We will notify
you immediately of any circumstances we encounter that will
significantly affect our estimate .
If the above terms are acceptable to you and the procedures
outlined are in accordance with your understanding , please sign
the copy of this letter in the space provided and return it to
us .
Yo rs truly ,
214.:‘,tk Ito, /0.1.4„dtdc___
DELOITTE & TOUCHE
IP
Approv=d for City o Mi• . Beach :
i Id... -11.-___a FORM APPROVED
By; bi..�r �
7 LEGAL SEPT.
Title : ity Manager By &10,...-4—.4.)„ ,
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Date /Z/�/9,-
Date: January 8, 1991
ORIGINAL
RESOLUTION NO. 90-20205
Authorizing and directing the execution
of an agreement with Deloitte & Touche
for the financial and programmatic audit
of Miami Beach Development Corporation's
(MBDC) CDBG funded homeownership and
commercial revitalization programs.