to Farmworker Housing Centers by the Napa Valley Housing*

R12

Governmental entities must avoid having one individual serve in an executive position with access to financial resources for two organizations. Such a policy will significantly reduce the opportunity for conflict of interest and commingling or misallocation of funds. HACN Response to Recommendation 12: While the HACN understands and agrees with the underlying goal of this recommendation, the HACN respectfully disagrees with the particular implementation as written since it is not a reasonable method to achieve the goal. The HACN understands the Grand Jury's goal to be to ensure that governmental entities establish appropriate financial controls to significantly reduce the opportunity for conflict of interest and commingling or misallocation of funds. The HACN shares this goal, not only for the separation of funds that are held by the City for the benefit of separate legal entities (such as the City of Napa, the Housing Authority of the City of Napa, and the Napa Community Redevelopment Agency), but also for the separation of dozens of segregated funds that are held by the City for separate (but similar) purposes due to their separate funding source (such as the separation of "Citywide" Street Improvement Fees from "Big Ranch Road Area" Development Impact Fees from Gas Tax revenues from CDBG grants). Just as City staff has an obligation to ensure that revenue from separate funding sources are separately accounted and utilized in accordance with their particular purposes, City staff also has an obligation to ensure that revenue held for separate legal entities is properly accounted and utilized to achieve the goals of that entity. Similarly, just as it is infeasible to establish a separate executive to monitor each separate funding source, it is also infeasible to establish a separate executive to monitor each separate legal entity for which the City provides financial services. However, the HACN has taken steps to establish checks and balances for the utilization of any funds managed by the City (whether separate legal entities or separate funding sources) to minimize the opportunity for conflicts of interest and commingling or misallocation of funds. FINANCIAL IMPACTS: None. CEQA: The Executive Director has determined that the recommended action described in this report is not subject to CEQA, pursuant to CEQA guidelines. DOCUMENTS ATTACHED: None - A copy of the Grand Jury Report is available at the City Clerks office for public review. NOTIFICATION: RECOMMENDED ACTION: HACN staff recommends that the Housing Authority move, second and approve each of the actions set forth below, in the form of the following motion stated as: Move to approve the HACN's response to the findings and recommendations of -2008 Final Report on Renovation of Farmworker Housing Centers by the Napa Valley Housing Authority (as outlined above, and incorporating any changes made to the responses by the HACN Board of Directors during the meeting), and direct the Executive Director to submit the response on behalf of the HACN Board, the Executive Director, Legal Counsel and other HACN officials as required, to the presiding judge of the Superjor Court. EXECUTIVE DIRECTOR

R9

professional and have sufficient trained staff to maintain operations. HACN Response to Recommendation 9: The City has already implemented this recommendation. The Finance Director is a State of California licensed Certified Public Accountant. The Finance Manager is a State of Missouri licensed Certified Public Accountant. A newly created position of Finance Analyst was filled effective April 16, 2008 with an experienced professional accountant. Management is working closely and continually with existing staff providing training on the job and allows and encourages staff to obtain the appropriate formal training when opportunities arise.