1. Stockton Event Center Audit Recommendations and City Response
Perform a close out audit
Response:
City Auditor will obtain price quotes from Macias for the additional work.
Agenda item 10.01
August 15, 2006

2. Stockton Event Center Audit Recommendations and City Response
Establish City policy that construction projects are not initiated without completed design and price estimate of construction costs.
Response:
Establish City Council policy that before the expenditure of any City funds for Council approved construction, Council has approved award of the bid or contract and funds have been appropriated.

3. Stockton Event Center Audit Recommendations and City Response
Establish City policy that requires the City Auditor to perform an independent audit of proposed contracts to ensure internal controls are properly specified.
Response:
City Auditor will prepare language for Audit Committee consideration to establish internal controls for all City Council awarded construction contracts.

4. Stockton Event Center Audit Recommendations and City Response
Establish City policy prohibiting use of change orders to perform other projects outside the scope of work proposed under the construction GMP unless authorized by the City Council.
Response:
Reinforce existing City policy so all department heads/managers are aware that additional projects cannot be added to the scope of a Council approved construction project unless change is approved by City Council.

5. Stockton Event Center Audit Recommendations and City Response
Establish City policy that prohibits one person from having full authority over design and construction of a capital project.
Response:
City Council may establish a chain of command, on a project by project basis, other than the traditional line of authority in which departments administer projects with oversight provided by the City Manager’s Office.

6. Stockton Event Center Audit Recommendations and City Response
Ensure that City revenue receipts from the Event Center are used to offset interest expense of bonds used to pay for Event Center construction.
Response:
To the extent that Event Center revenues exceed operating costs, the City will consider using the excess revenues to offset interest expense.

7. Stockton Event Center Audit Recommendations and City Response
Implement a City-wide cost accounting system to track all labor and expenses on specific City projects.
Response:
The City does have a cost accounting system. Managers will be held responsible for charging all significant labor and expenses to their assigned projects.

8. Stockton Event Center Audit Recommendations and City Response
Monitor revenues to determine if the Event Center could pay for itself and provide funds to help support the $40 million in debt service.
Response:
To the extent that Event Center revenues exceed operating costs, the City will consider using the excess revenues to offset all debt service.