COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

DATE:

March 7, 2003

BOARD MEETING DATE:

March 25, 2003

TO:

Honorable Board of Supervisors

FROM:

County Counsel

SUBJECT:

Request for Adoption of a Resolution replacing the annual audit of the San Mateo County Resource Conservation District with a biennial audit covering a two-year period (continued from March 4, 2003 meeting).

Recommendation

Adopt a Resolution replacing the annual audit of the San Mateo County Resource Conservation District with a biennial audit covering a two-year period (unanimous vote required).

Background

Government Code section 26909 requires that the county auditor either make or contract with an accountant to make an annual audit of the accounts and records of every special purpose district within the county. The minimum requirements of the audit are prescribed by the state Controller and must conform to generally accepted auditing standards. Section 26909(f) allows for the governing board of a special district to request that their district’s annual audit be replaced with a biennial audit covering a two-year period. The request by the governing board of the special district must be unanimous, and requires the unanimous approval of the Board of Supervisors.

Discussion

The governing board of the San Mateo County Resource Conservation District has made a unanimous request to your Board, pursuant to Government Code section 26909, for adoption of a Resolution replacing the annual audit of the San Mateo County Resource Conservation District with a biennial audit covering a two-year period. In its request, the RCD board explains that it is seeking this change for the purpose of reducing operation costs.
The RCD has also submitted a letter of support from its auditors, C.G. Uhlenberg LLP, which states that the RCD is facing financial challenges and that an annual audit would create severe financial hardship, and that a biennial audit would not put the RCD at risk. Copies of the RCD’s request and the auditors’ letter are attached.

Your Board considered this request at the March 4, 2003 meeting, and requested additional information from the RCD. Specifically, the RCD was asked: 1) whether it would adopt a policy of selecting its auditor using a Request for Proposal process; 2) whether it would require that a new accountant be assigned to its audit every three years if the RCD were to continue to use the same audit company; and 3) to provide copies of its audits for the last two years.

At its meeting on March 6, 2003, the RCD Board of Directors adopted Resolution No. 2003-03, adopting a policy of selecting its auditor by RFP, and requiring that a new accountant be assigned to its audit if the RCD continues to use the same audit company for more than three years. Copies of RCD Resolution No. 2003-03, and the audits for the last two years, are attached.

Vision Alignment

Adoption of this Resolution would further the goal of promoting responsive, effective, and collaborative government.

Fiscal Impact

There would be no fiscal impact on the County. The Resource Conservation District would realize savings of approximately half its audit costs.