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Low and Moderate Income Housing Fund and Other Assets Due Diligence Reviews

HSC Section 34179.5 requires each Successor Agency 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. 

Low and Moderate Income Housing Fund Due Diligence Reviews

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.  The Oversight Board has until October 15, 2012 to review, approve, and transmit to the Department of Finance and county auditor-controller the determination of the amount of cash and cash equivalents that are available for disbursement to taxing entities.

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.”

Pursuant to Health and Safety Code (HSC) section 34179.6 (f), the Department of Finance has ordered Successor Agencies to remit the unencumbered balances of their Low-and-Moderate Income Housing Fund (LMIHF) to their county auditor-controller for distribution to local taxing entities. According to the most recent information provided to the Department of Finance from the county auditor-controllers, the Successor Agencies contained in the following list have failed to remit the unencumbered LMIHF balances within the timeframe specified in statute. The Department of Finance has issued a letter to each Successor Agency identified on this list reminding them of their responsibility to remit their LMIHF funds as ordered and informing them of the penalties that could be enforced should non-compliance continue. The list of outstanding LMIHF remittances will be updated weekly to include new remittances reported by the county auditor-controllers.

All Other Funds and Accounts Due Diligence Reviews

Due Diligence reviews of all other funds and accounts must be submitted to the Oversight Board for the Successor Agency, the county auditor-controller, the State Controller’s Office, and the Department of Finance by December 15, 2012.  The Oversight Board has until January 15, 2013 to review, approve, and transmit to the Department of Finance and county auditor-controller the determination of the amount of cash and cash equivalents that are available for disbursement to taxing entities.

Department of Finance reviews of the determinations provided by the Oversight Boards will be completed no later than April 1, 2013.  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.”

Pursuant to Health and Safety Code (HSC) section 34179.6 (f), the Department of Finance has ordered Successor Agencies to remit the unencumbered balances of their Other Funds and Accounts (OFA) to their county auditor-controller for distribution to local taxing entities. According to the most recent information provided to the Department of Finance from the county auditor-controllers, the Successor Agencies contained in the following list have failed to remit the unencumbered OFA balances within the timeframe specified in statute. The Department of Finance has issued a letter to each Successor Agency identified on this list reminding them of their responsibility to remit their LMIHF funds as ordered and informing them of the penalties that could be enforced should non-compliance continue. The list of outstanding OFA remittances will be updated weekly to include new remittances reported by the county auditor-controllers.

Due Diligence Reviews Submittal Requirements

While HSC Section 34179.6 allows the Department of Finance to specify the form and manner in which information about the review shall be provided, no specific form will be required.  However, every due diligence review submitted, at a minimum, must contain the following:

A cover page delineating whether the due diligence review was conducted by a licensed accountant or the county auditor-controller along with verification of approval or concurrence of the due diligence reviewer by the appropriate entity.  

A summary addressing each of the six deliverables required. 

See HSC Section 34179.5 (c) (1) – (6).

Additional Information

The links below provide Due Diligence Procedures for use by Licensed Accountants who are conducting the Due Diligence Reviews. These were developed by the CPA society with input from the State Controller’s Office and the Department of Finance. Additionally, the FAQ below provides answers to frequently asked questions regarding due diligence reviews.

Information For County Auditor-Controllers

Low and Moderate Income Housing Fund Reporting Form

Other Asset Reporting Form

The Department of Finance has been getting requests to extend the October 1, 2012 deadline for the low and moderate income housing due diligence review submittals. Unfortunately, the due date is a statutory date that the Department of Finance has no ability to change. The Department of Finance asks that you do your best to meet the deadline. However, we do recognize the extreme time crunch and likely inability for some successor agencies to meet the deadline prescribed by law. In the event that you are not going to meet the deadline, please send an email to Redevelopment_Administration@dof.ca.gov and let us know the projected date in which you believe the review will be completed and submitted to Finance.

 

Webpage last updated December 3, 2013