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My Life on the Audit Committee AAA GNP Mid-Year Meeting 2012

My Life on the Audit Committee AAA GNP Mid-Year Meeting 2012. Charles Sellers, CPA. 1996. Republican National Convention Manager’s Proposal One (MP1) Pension Contributions. 1998. Padres go to World Series! Prop. C Passes ( Petco Park) Lawsuits Delay Construction Cost Balloons to $500M.

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My Life on the Audit Committee AAA GNP Mid-Year Meeting 2012

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  1. My Life on the Audit CommitteeAAA GNP Mid-Year Meeting 2012 Charles Sellers, CPA

  2. 1996 Republican National Convention Manager’s Proposal One (MP1) Pension Contributions

  3. 1998 Padres go to World Series! Prop. C Passes (Petco Park) Lawsuits Delay Construction Cost Balloons to $500M

  4. 2002 Managers Proposal Two (MP2) Same deal as MP1, but with whole new City Council DiannShipione Objects (SDCERS) Only Donna Frye Votes “No”

  5. 2002 Continued • DiannShipione & Donna Frye • Publicly Vilified by Local Media • Receive National Attention

  6. 2003-2005 • S**t Hits Proverbial Fan • NY Times “Enron by the Sea” • Vinson & Elkins Report • Local Firm Issues Flawed AFS • Sewer Bonds Issued with Deficient AFS Attached

  7. 2003-2005 Continued • Charter Reform Gains Momentum • Petco Park Finally Opens! • Mayor Murphy Won’t Seek Re-Election • Mayor Murphy Does Run & “Wins” • April 2005 – Murphy Gives Notice (Why?)

  8. Time MagazineApril 17, 2005 When he was elected mayor in 2000, Dick Murphy thought he had his hands full dealing with a troubled ballpark project and sewer spills that were shutting down San Diego's beaches. But then Murphy, 62, a state superior court judge, became embroiled in an even bigger mess: a $1.35 billion deficit at the city's public-employee pension fund. The crisis has so discredited him, he almost lost his job last November to Donna Frye, a last-minute write-in candidate who runs a surf shop. She actually won more votes, but some 5,500 people who wrote in her name failed to shade in an oval box, and the courts ruled the ballots invalid. It was Murphy's predecessor who first approved underfunding the pension fund. But when a balloon payment became due in 2002, Murphy dodged it by fashioning another underfunding plan, winning the pension board's acceptance with a promise to hike pension payouts and give special benefits to the union presidents. Now the FBI, the U.S. Attorney and the SEC are investigating the deal. --By Terry McCarthy. With reporting by Jill Underwood/San DiegoRead more: http://www.time.com/time/magazine/article/0,9171,1050330,00.html#ixzz1nWvNwQ1a

  9. July 2005 • Michael Zuchett • Becomes Mayor • Resigns After Indictment • Toni Atkins Becomes Mayor • Special Election to be Held in August • Frye Wins, but Not Outright

  10. Jerry Sanders November 2005: Wins Special Election December 2005: Becomes Last “Weak” Mayor January 2006: Becomes First “Strong” Mayor Engages Kroll to Conduct Investigation

  11. Kroll Report • Issued August 2006 • "The evidence demonstrates not mere negligence, but deliberate disregard for the law, disregard for fiduciary responsibility and disregard for the financial welfare of the city's residents over an extended period of time“

  12. Kroll Report Reforms • Create CFO Position • Establish ICOFR • Certification of AFS • Audit Committee • Auditor General • 5-Year Financial Plan • Director of Budget and Planning • Independent Monitor

  13. November 2006 SEC Cease and Desist Order

  14. March 2007 Stanley Keller Hired by Mayor

  15. April 2007 – June 2008 • City Council AC is Created • AFS for 2003 – 2007 Issued • Jerry Sanders Re-Elected • Second Proposition C Passed • Creates City Charter Section 39

  16. November 2008 • Jan Goldsmith Elected City Attorney • Four New City Council Members • District 1: Sherri Lightner • District 3: Todd Gloria • District 5: Carl DeMaio • District 7: Marti Emerald

  17. January 2009 Independent AC is Established Confirmation Hearing Initial Resistance The List The Brown Act

  18. April 2009 • City Auditor is Hired • 10-Year Appointment • Not an “At-Will” Employee • Required to Dismiss: • Majority Vote of AC • 2/3 Vote of City Council • Financial Terms Not Stipulated

  19. October 2009 Reality Sets In City Attorney Biases AC Charter Revenue Audits Public Committee Members Lack Both Access and Resources

  20. March 2010 CAFR About to be Issued Continuing Disclosure Deadline Order of Posting New Protocol AC Charter Provisions What is DPWG?

  21. April 2010 Stanley Keller Concludes 3-Year Term as SEC Monitor Budget Limitations Preclude Continuing Relationship Mayor is Not Interested in Any Further Advice

  22. October 2010 • June 30th AFS Delayed • How Long?... A Few Months? • Summer (8-31-2011) • CDDs Are Missed • Five Years of Disclosure

  23. December 2010 What About the SEC? To Disclose or Not… Frye / Sellers Letter Attorney / Client Privilege

  24. July 2011 • Performance Audits • County Animal Services • City is Primary Customer • Allocation Formula is Skewed • 2 Council Districts are Main Culprits • Dog Owners Subsidizing Cat Owners • Should We License Cats? • Public Health Issue • Budgetary Issue http://www.youtube.com/watch?v=eqTNou1wTGc

  25. August 2011 June 30, 2010 CAFR Finally Issued DPWG Reviews AFS, MD&A, and L of T AC Reviews CAFR, SAS 114 Letter, and Yellow Book Report

  26. January 2012 June 30, 2011 CAFR Issued Timely

  27. 2012 Agenda Items SAP ERP System Audit Sarbanes-Oxley Applications

  28. Questions

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