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Mr. Gerardo Mouet <br />Executive Director, PRCS <br />City of Santa Ana <br />November 2, 2004 <br />for Task 3.1 is $4,500.00. This price includes costs related to one visit to the <br />Finance Department to review records and review findings. <br />Task 3.2 — 2004 Franchise Fee Audit <br />In connection with this engagement, for a flat fee of $7,500.00, CSG will review <br />Adelphia's books and records to determine if the Company has paid the City the <br />appropriate franchise fees on cable services for the calendar year January 1, <br />2004 through December 31, 2004. Our review will consist of the following <br />procedures: <br />a. We will review the company's internal controls and systems and <br />procedures for accounting for gross revenue and franchise fee <br />payments. <br />b. We will identify the various types of subscriber revenue recorded by <br />the company. <br />c. We will review the company's method for identifying subscribers to the <br />proper franchise area. To assist us in this, we will request that a city <br />map and an Excel listing of approximately 50 addresses of homes <br />located along City borders be provided to us by the City. <br />d. We will select a random sample of revenue transactions for the City <br />for the period from January 1, 2004 through December 31, 2004, and <br />will trace them through the company's books and records. <br />e. We will review the accounting records of the company for any non - <br />subscriber revenue items not being reported to the City with the <br />periodic remittances. (This includes advertising, home shopping, <br />launch fees, and local origination.) <br />f. We will request a schedule from the company of all gross revenues <br />related to high-speed cable modem access that have been reported to <br />the City. <br />h. We will perform an analysis of the practices of the company as to <br />whether it has been paying franchise fees on franchise fee revenues <br />for the period from January 1, 2002 through June 30, 2004. <br />i. We will test the mathematical accuracy of the remittances to the City for <br />the period January 1, 2003 through June 30, 2004. <br />Communications Support Group, Inc. © 2004 Proposal to City of Santa Ana 3 of 6 <br />