86-05A

PRELIMINARY SURVEY MEMORANDUM
CITY VENTURE CORPORATION

The purpose of this survey is to quickly identify areas of audit potential and to estimate the time and City Auditor resources needed to complete a proposed performance audit of City Venture Corporation.

It should be noted that my Preliminary Survey was restricted to reviewing all of the available documentation in the Department of Neighborhood Preservation files regarding City Venture Corporation and to interview the CDBG coordinator responsible for monitoring the project. Other typical Preliminary Survey procedures such as conducting an entrance conference and interviewing appropriate personnel are part of my proposed audit plan and will be completed should the Finance Committee and the City Council opt for initiating the audit of City Venture Corporation. This divergence from my standard practice was necessitated by the time requirements of this Preliminary Survey and the location of key City Venture personnel and records in Minnesota.

It should also be noted that I am proposing the use of outside auditors to supplement my own staff on this assignment. In my opinion, this is the optimum approach given 1) the need to complete this assignment as quickly as possible and 2) that I am still recruiting to fill the new Program/Performance Audit positions authorized for this fiscal year.

Accordingly, based upon my review of available City Venture Corporation documentation and interviews with CDBG, I estimate that a performance audit of City Venture Corporation will take nine to ten weeks and will require 1) 300 hours of contracted services at a cost not to exceed 915,000, 2) 592 City Auditor staff hours and 3) 92,000 in travel expenses for trips to Minneapolis.