BOARD MEETING DATE: June 14, 1996

AGENDA NO. 10

Proposal:

Issue a Request for Proposals to Audit AB 2766 Fee Revenue Recipients for Fiscal Years 1993-94 and 1994-95.

Synopsis:

AB 2766 requires any agency that receives fee revenues subvened to the AQMD from the Department of Motor Vehicles to be audited once every two years. The audit is to be performed by an independent Certified Public Accountant selected by the AQMD.

Committee:

Administrative, May 24, 1996, Recommended for Approval

Approve issuance of the RFP to audit AB 2766 Fee Revenue Recipients for FYs 1993-94 and 1994-95.

James M. Lents, Ph.D.
Executive Officer

Background
AB 2766 was chaptered into law as Health and Safety Code Sections 44220-44247 which were enacted to authorize air pollution control districts to impose fees on motor vehicles. These fees are to be expended specifically for the purpose of mobile source air pollution reduction measures pursuant to the California Clean Air Act of 1988 or the AQMD's AQMP pursuant to Article 5 of Chapter 5.5 of Part 3 of the Health and Safety Code.

The fee revenue is collected by the Department of Motor Vehicles and subvened to the AQMD. It is distributed as follows:

1. Forty cents of every dollar (40%) is placed in the Air Quality Improvement Trust Fund for quarterly disbursement to local governments;

2. Thirty cents of every dollar (30%) is placed in the Mobile Source Air Pollution Re-duction Trust Fund for projects awarded by the Mobile Source Air Pollution Reduc-tion Review Committee (MSRC) and approved by the AQMD's Board; and

3. Thirty cents of every dollar (30%) goes to support AQMD-approved programs for the reduction of emissions from mobile sources.

The first biennial audit for FYs 1991-92 and 1992-93 was conducted in FY 1994 and the findings reported to the Board in January 1995.

Proposal
The AQMD now is requesting proposals from qualified public accounting firms to per-form the audit of fee revenues received in FYs 1993-94 and 1994-95. Staff proposes to present the report on the audit to the Board at the March, 1997 meeting. Based on an opinion issued by the Deputy Attorney General of the State of California the audit will focus on the propriety of the expenditures, not their degree of efficacy in reducing air pollution.

The audit will cover the AQMD's use of the money, projects funded by the MSRC, and the use of fee revenues by selected local governments based on the audit guidelines. Staff has worked extensively with local government representatives to assist local governments in compliance.

Resources
The cost of the audit will be borne by the entities being audited in the manner set forth in the audit guidelines included as Attachment 2 of the RFP and will be deducted from fee revenues prior to distribution. Sufficient funding to cover AQMD�s portion of the audit costs is included in the FY 1996-97 Budget.

Attachment
Request for Proposals