Chief Administrative Office 200 South President Street = Post Office Box 17 ae Jeckson, Mississippi 39205-0017 Telephone: 691-960-2314 MEMORANDUM TO: Council Members FROM: Gus McCoy, Chief Administrative Officer WV DATE: March 31, 2016 RE: City of Jackson audit FY 2014-2015 Due to extenuating circumstances, the Department of Administration has determined that we will be unable to file the City of Jackson's audit for FY 2014-2015 by March 31, 2016, as required by our Continuing Disclosure Undertaking (CDU) for prior bond issuances. Following several meetings with our audit firm, we have been advised that they are unable to complete the audit in a timely manner. We were advised of this on the afternoon of Tuesday, March 28, 2016. The audit firm has cited the following extenuating circumstances with respect to water and sewer revenues: (1) Unable to verify the accounts receivable balance. 2) Deposits for water, sewer, and sanitation revenues must be segregated in the accounting system, in order that they may be properly posted. (3) Unable to reconcile deposits as reported by our system vs. bank statements, Internally, we have undertaken the following steps: (1) Our staff is in the process of reconciling the accounts receivable balances, (2) Siemens has agreed to provide a dedicated employee to the City in order to assist in segregating the deposits for water, sewer, and sanitation revenues. (3) Requested guidance from Douglass Selby of Hunton & Williams LLP. Hunton Williams has filed disclosure notices on behalf of the City in recent years, and is being recommended to serve as Disclosure Counsel for the upcoming Water & Sewer refunding transaction The next steps to be taken are as follow: (1) Hunton & Williams will provide guidance as to the necessity to file a disclosure notification with the Municipal Securities Rulemaking Board. If necessary, Hunton & Williams will draft the notification. (2) Although the accounting challenges are occurring at an inopportune time, the delay will enable the City and the audit firm to review, and report accurate, and up-to-date data. (3) We will be able to file the audit in a timely manner with the Office of the State If you have any questions or concerns, please contact my office. ‘Thank you