Audit Finance Board

AUDIT FINANCE BOARD Wednesday, February 28, 2024 Conference Room 201 Regular Session 5:00 PM SECOND FLOOR OF CITY HALL 7008 S. RICE AVENUE BELLAIRE, TX 77401 Agenda Board Member Gus E. Pappas Mayor Board Member Board Member Board Member Cindy Cohen Taylor Jackie Georgiou Mark McCullough Council Member Council Member Citizen Appointee Ex-Officio Member Ex-Officio Member Sharon Citino Terrence Beaman City Manager Chief Financial Officer City of Bellaire Texas Page 1 of 6 Agenda Audit Finance Board February 28, 2024 REGULAR SESSION - 5:00 P.M. A. Call to Order and Announcement of a Quorum - Gus E. Pappas, Mayor. B. Approval of Minutes. Consideration of and possible action on the adoption of the minutes of the Regular Session of the Audit Finance Board of the City of Bellaire, Texas, held on Monday, February 27, 2023 - Submitted by Terrence Beaman, Chief Financial Officer. 2023_02_27 - Audit Finance Board - Draft Minutes C. Fiscal Year 2023 Audit and Annual Comprehensive Financial Report. Presentation and possible discussion of the fiscal year 2023 audit and review of the Annual Comprehensive Financial Report of the City of Bellaire, Texas, for the Year Ended September 30, 2023 - Submitted by Terrence Beaman, Chief Financial Officer; Presented by Patrick Simmons of Whitley Penn LLP, Certified Public Accountants. D. Investment Policy. Overview and possible discussion related to the City Council's annual review of the City's Investment Policy as required by the Public Funds Investment Act (Texas Government Code, Chapter 2256, Public Funds Investment, Section 2256.005, Investment Policies; Investment Strategies; Investment Officer, Subsection (e)), and by Chapter 2, Administration, Article I, In General, Section 2-10, Investment policy, Subsection (t), Annual review, of the Code of Ordinances of the City of Bellaire, Texas - Presented by Terrence Beaman, Chief Financial Officer. E. Adjourn. City of Bellaire Texas Page 2 of 6  AUDIT FINANCE BOARD Monday, February 27, 2023 Conference Room 201 Regular Session 5:00 PM SECOND FLOOR OF CITY HALL 7008 S. RICE AVENUE BELLAIRE, TX 77401 Minutes REGULAR SESSION - 5:00 P.M. A. Call to Order and Announcement of a Quorum – Kathy Tedore. Kathy Tedore called the Regular Session of the Audit Finance Board of the City of Bellaire, Texas to order at 5:03 p.m. on Monday, February 27, 2023. The Regular Session was held in Conference Room 201, Second Floor of City Hall, 7008 South Rice Avenue, Bellaire, Texas 77401-4411. Mrs. Tedore announced that a quorum of the members of the Audit Finance Board were present as follows: Ross Gordon, Council Member Present Jim Hotze, Council Member Present Nathan Wesely, Council Member Present Kathy Tedore, Citizen Appointee Present Sharon Citino, City Manager and non-voting member Present Terrence Beaman, Chief Financial Officer and non-voting member Present Also present were Jim Harrison, Assistant Director of Finance, Subin Chacko, Senior Accountant, Patrick Simmons, Partner at Whitley Penn, LLC, and Andrew Jennett, Manager at Whitley Penn, LLC. Mr. Simmons and Mr. Jennett of Whitley Penn, LLC, and Mr. Chacko left the session at the conclusion of the Fiscal Year 2022 Audit and Annual Comprehensive Financial Report agenda item. B. Election of a Chair. Kathy Tedore introduced the item and opened the floor for nominations. Ross Gordon, Council Member, nominated Kathy Tedore, Audit Finance Board Citizen Appointee Member, for Chair of the Audit Finance Board. City of Bellaire Texas Page 1 of 4 Page 3 of 6  Nathan Wesely, Council Member, seconded the nomination for Kathy Tedore, Audit Finance Board Citizen Appointee Member. Hearing no further nominations, Kathy Tedore, Audit Finance Board Citizen Appointee Member, called for a vote. Motion: To appoint Kathy Tedore as Chair of the Audit Finance Board. {Moved by Ross Gordon, Council Member, and seconded by Nathan Wesely, Council Member} RESULT: ADOPTED (4 TO 0) MOVER: Ross Gordon, Council Member SECONDER: Nathan Wesely, Council Member AYES: Ross Gordon, Council Member, Jim Hotze, Council Member, Nathan Wesely, Council Member, Kathy Tedore, Audit Finance Board Citizen Appointee Member NAYS: None ABSENT: None C. Approval of Minutes. Consideration of and possible action on the adoption of the minutes of the Regular Session of the Audit Finance Board of the City of Bellaire, Texas, held on Wednesday, May 11, 2022 - Submitted by Terrence Beaman, Chief Financial Officer. Kathy Tedore, Audit Finance Board Chair, introduced the item noting draft minutes of the Regular Session of the Audit Finance Board of the City of Bellaire, Texas, held on Wednesday, May 11, 2022, had been distributed to Audit Finance Board Members for their review. All members indicated they had reviewed the minutes. Ross Gordon, Council Member, moved to approve the minutes of the Regular Session of the Audit Finance Board of the City of Bellaire, Texas, held on Wednesday, May 11, 2022. Jim Hotze, Council Member, seconded the motion. Nathan Wesely, Council Member, noted he would abstain from voting because he was not a member of the Audit Finance Board at the time of the May 11, 2022, meeting. Motion: To approve the minutes of the Regular Session held on Wednesday, May 11, 2022. {Moved by Ross Gordon, Council Member, and seconded by Jim Hotze, Council Member} City of Bellaire Texas Page 2 of 4 Page 4 of 6  RESULT: ADOPTED (3 TO 0 WITH 1 ABSTENTION) MOVER: Ross Gordon, Council Member SECONDER: Jim Hotze, Council Member AYES: Ross Gordon, Council Member, Jim Hotze, Council Member, Kathy Tedore, Audit Finance Board Chair NAYS: None ABSENT: None ABSTAIN: Nathan Wesely, Council Member D. Fiscal Year 2022 Audit and Annual Comprehensive Financial Report. Presentation and possible discussion of the fiscal year 2022 audit and review of the Annual Comprehensive Financial Report of the City of Bellaire, Texas, for the Year Ended September 30, 2022 - Submitted by Terrence Beaman, Chief Financial Officer; Presented by Patrick Simmons of Whitley Penn LLP, Certified Public Accountants. Terrence Beaman, Chief Financial Officer, introduced the Fiscal Year 2022 audit and annual comprehensive financial report and recognized Patrick Simmons of Whitley Penn, LLC to present the fiscal year 2022 audit results and the annual comprehensive financial report. Patrick Simmons, Partner at Whitely Penn, LLC, presented the fiscal year 2022 audit results and the annual comprehensive financial report, including discussion of the Whitely Penn, LLC engagement team, the audit process, the purpose of the audit, the auditor’s unmodified (“clean”) opinion on the financial statements, the auditor’s clean opinion on internal control and compliance, the auditor’s clean opinion on the federal single audit report, financial highlights, and required communications. Mr. Simmons noted Whitley Penn, LLC had considered the City of Bellaire’s internal control over financial reporting as a basis for designing their audit procedures, and in their testing of the internal controls. He noted that during the performance of their audit procedures, Whitley Penn, LLC did not become aware of significant deficiencies in internal control, material weaknesses in internal control, or other weaknesses in internal control or opportunities for efficiencies which would rise to the level of reporting in a management letter. During the presentation and at the conclusion of the prepared presentation, Audit Finance Board members asked an extensive variety of questions which were answered by the Whitely Penn, LLC representatives, Terrence Beaman, Chief Financial Officer, and Jim Harrison, Assistant Director of Finance. Members of the audit Finance Board also submitted suggestions for revisions to the annual comprehensive financial report. Mr. Beaman notified members they can submit additional comments on the annual comprehensive financial report via email through Wednesday, March 1, 2023. At the conclusion of all discussions, the Whitely Penn, LLC representatives were excused from the session and did not attend the remainder of the session. Mr. Chacko escorted the Whitley Penn, LLC representatives out, and he also did not return for the remainder of the session. E. Investment Policy. Overview and possible discussion related to the City Council's annual review of the City's Investment Policy as required by the Public Funds Investment Act (Texas Government Code, Chapter 2256, Public Funds Investment, Section 2256.005, Investment Policies; Investment Strategies; Investment Officer, Subsection City of Bellaire Texas Page 3 of 4 Page 5 of 6  (e)) and by Chapter 2, Administration, Article I, In General, Section 2-10, Investment Policy, Subsection (t), Annual Review, of the Code of Ordinances of the City of Bellaire, Texas - Presented by Terrence Beaman, Chief Financial Officer. Terrence Beaman, Chief Financial Officer, introduced the investment policy. Mr. Beaman noted the investment policy had been distributed to Audit Finance Board Members for their review. Mr. Beaman discussed the Public Funds Investment Act (PFIA), which requires the City of Bellaire’s city council to review the investment policy annually. Mr. Beaman noted that changes to the investment policy are frequently in response to legislative changes to the PFIA, but there was no biennial meeting of the Texas legislature in 2022, so there are no legislative changes to consider. Mr. Beaman also noted City staff was not recommending any other changes to the investment policy. During the presentation, Audit Finance Board members asked a variety of questions which were answered by Terrence Beaman, Chief Financial Officer. At the conclusion of the discussion Mr. Beaman indicated that City staff would prepare an agenda item for the March 20, 2022, City Council meeting for their annual review of the investment policy, and if the Audit Finance Board members agreed he would include in that agenda that the Audit Finance Board recommends to City Council no changes to the investment policy for 2023. Nathan Wesely, Council Member, moved to recommend to city council no changes to the investment policy for 2023. Jim Hotze, Council Member, seconded the motion. Motion: To recommend to city council no changes to the investment policy for 2023. {Moved by Nathan Wesely, Council Member, and seconded by Jim Hotze, Council Member} RESULT: ADOPTED (4 TO 0) MOVER: Nathan Wesely, Council Member SECONDER: Jim Hotze, Council Member AYES: Ross Gordon, Council Member, Jim Hotze, Council Member, Nathan Wesely, Council Member, Kathy Tedore, Audit Finance Board Chair NAYS: None ABSENT: None F. Adjourn. Chairperson Tedore announced that the Regular Session of the Audit Finance Board of the City of Bellaire, Texas was adjourned at 6:21 p.m. on Monday, February 27, 2023. City of Bellaire Texas Page 4 of 4 Page 6 of 6