Audit Committee

AUDIT COMMITTEE MINUTES DATE: January 31, 2018 LOCATION: CITY HALL FOURTH FLOOR CONFERENCE ROOM TIME: 3:00 PM I. CALL TO ORDER – Audit Committee Chairman The meeting was called to order by Joyce Norris at 3:00pm. II. ANNOUNCE MEMBERS IN ATTENDANCE (VERIFY QUORUM) Audit Committee members present: Wilbur Berry, Jeff Henley, Joyce Norris and Jerry Weatherspoon Audit Committee members absent: Lynn Stokes Quorum verified? Yes Internal Audit attendees: Rodney Wright, Stephanie Fox and Cassie Wheeler Other Attendees: Laurie Matta, City of Clarksville Chief Financial Officer Debbie Frazier, City of Clarksville Finance Director Brian Taylor, CDE General Manager David Johns, CDE Chief Financial Officer Gina Wilbur, CDE Comptroller Kim Greene, CDE Financial Accounting Jim Manning, CDE Customer Resources Division Director Privott Stroman, CDE Human Resources Director Wayne Wilkinson, CDE Power Board Chair Lori Wallis, Transit Finance Director Pat Hickey, CGW General Manager (joined shortly thereafter) Crosslin CPA’s attendees: Dan Miller and Erica Saeger III. ELECTION OF CHAIRMAN AND VICE-CHAIRMAN A. Chairman – Be knowledgeable of Audit Committee functions and responsibilities, chair meetings, represent the Audit Committee before City Council or any other official body as necessary, correspond as necessary in regard to Audit Committee issues, prepare Director’s annual performance evaluation and obtain the annual ethics acknowledgement, and coordinate with Human Resources to hire (or terminate) in regard to the Director’s position. B. Vice Chairman – Be knowledgeable of Audit Committee functions and responsibilities, fill in for or provide assistance to the Chairman related to any of the duties listed above.  Wilbur nominated Joyce for Chairman. Jeff seconded the nomination. A voice vote was taken and Joyce was elected Chairman. Wilbur nominated Jeff for Vice-Chairman. Jerry seconded the nomination. A voice vote was taken and Jeff was elected Vice-Chairman. IV. ADOPTION OF MINUTES: November 29, 2017 Audit Committee Meeting Joyce asked the Audit Committee members to review the minutes and called for a motion for approval. Jeff made a motion to accept the minutes, Jerry seconded. The minutes were approved as presented. V. EXTERNAL AUDIT PRESENTATION BY CROSSLIN The Crosslin team introduced themselves and presented the FY17 external audits for City of Clarksville, CDE Lightband, Clarksville Gas, Water and Sewer Departments (GWS) and Natural Gas Acquisition Corporation (NGAC) as well as the CAFR. Dan Miller – 1st Principal City General Erica Saeger – Audit Director all audits Dan reviewed the Audit Committee Results report for City General. Highlights include:  An unmodified opinion was issued on the audit of the City General financial statements.  Unmodified opinions were issued on Uniform Guidance compliance for both City and GWS.  The only accounting pronouncement significant to FY17 for the City was GASB Statement No. 77 Tax Abatement Disclosures, which was disclosed this information in Note T found on pages 84-87 of the CAFR.  The Management Letter from Crosslin noted one suggested item regarding capital assets for City General. During fiscal years 16 and 17, management recorded prior year adjustments to the City’s capital asset schedules based on retrospective reviews of capital assets. Crosslin suggests that management perform a physical inventory of capital assets by reconciling the physical assets to the supporting schedules and general ledger. In lieu of a physical count, which could be costly, another option would be to perform cycle counts over the next 3-5 years. This will help ensure that assets are properly recorded and/or removed from the City’s records and also prevent the need for adjustments at year end. Crosslin recommended Internal Audit conduct periodic reviews of capital asset policies and procedures. Erica reviewed the Audit Committee Results report for CDE, GWS and NGAC. Highlights include:  Unmodified opinions were issued on the audit of CDE, GWS and NGAC financial statements.  Due to a new requirement in the State of Tennessee’s Audit Manual, any cash shortages and other thefts must be reported to the State and it must be included in the report on internal control over financial reporting and compliance. CDE and GWS both have one finding of fraud over $100. Erica expressed appreciation for the assistance from management of each entity in the audit process. Joyce asked if anyone had any questions for Crosslin. Laurie addressed Jeff’s question regarding moving TRC from a component unit to a related entity. VI. DEPARTMENT REPORT A. Budget Report i. FY 2018 – Rod had nothing significant to report, but did point out the department will be under budget this year due to Stephanie’s leave. ii. ALGA Colorado Springs – Rod said the plan is one person will attend the annual ALGA conference in May and also attend the ALGA peer review training the day before the conference begins so the department can continue participating in the free peer review program. B. Update on Internal Audit Activity i. Audit schedule status – Rod reported Stephanie is back as of January. The Sole Source Purchase Audit status is the same. The Fleet Policy Audit report is being reworked and the draft is near completion and then will be discussed with management. The Payroll Audit has begun and we are midway through planning. Senior Management Expense audit will begin shortly and is a priority to finish before election season starts. Three follow up reviews were completed and one is remaining. We received three new fraud reports on the hotline since the last meeting. ii. Audit metrics – No discussion on this topic. VII. COMMITTEE ACTION REQUIRED A. None VIII. CITY COUNCIL ACTION REQUIRED A. None IX. NEW BUSINESS A. None X. ADJOURNMENT OF PUBLIC MEETING Jeff made a motion to adjourn regular session and enter executive session. Wilbur seconded. Public meeting adjourned at 3:43pm. XI. PUBLIC COMMENTS (5 minutes each) XII. NEXT MEETING - March 28, 2018 – 4:00 PM XIII. EXECUTIVE SESSION – Vote by the Committee to go into executive session. Wilbur made a motion to enter executive session. Jeff seconded. At this point in the meeting everyone other than Audit Committee members and those asked to attend by the Audit Committee to address a pending audit issue will be asked to leave. A. Ongoing audits and investigations B. Hotline reports C. Audit plan XIV. ADJOURNMENT OF EXECUTIVE SESSION Wilbur made a motion to adjourn executive session. Jeff seconded. Executive session adjourned at 4:35pm.