Audit Committee

AUDIT COMMITTEE MINUTES DATE: July 25, 2018 LOCATION: CITY HALL FOURTH FLOOR CONFERENCE ROOM TIME: 4:00 PM I. CALL TO ORDER – Audit Committee Chairman The meeting was called to order by Joyce Norris at 4:00pm. II. ANNOUNCE MEMBERS IN ATTENDANCE (VERIFY QUORUM) Audit Committee members present: Jeff Henley, Joyce Norris, Lynn Stokes and Jerry Weatherspoon Audit Committee members absent: Wilbur Berry Quorum verified? Yes Internal Audit attendees: Rodney Wright, Stephanie Fox and Cassie Wheeler Other Attendees: None III. ADOPTION OF MINUTES: May 23, 2018 Audit Committee Meeting Joyce asked the Audit Committee members to review the minutes and called for a motion for approval. Lynn made a motion to accept the minutes, Jeff seconded. The minutes were approved as presented. IV. DEPARTMENT REPORT A. Budget Report i. FY2018 – Under budget as predicted in both salaries and operating. ii. FY2019 – Nothing significant to report yet. B. Update on Internal Audit Activity i. Audit schedule status – Rod reported the Sole Source Audit is in the draft phase. Payroll Audit is in the testing phase. Testing is essentially done in the Senior Management Expense audit and Stephanie is working on finalizing the findings. ii. Audit metrics – Rod said the utilization rates were unchanged for FY19. Cassie is moving closer to the goal of the metric and Stephanie was on target. iii. RFP, schedule, selection process – Rod is almost done with the draft RFP. He will send to Laurie Matta, Fred Klein, and David Johns for their review. The goal is to have it out so the RFP can be open for three weeks. Rod is giving the respondents a chance to make a presentation to the Audit Committee mid to late September. The RFP will be posted on the City’s Purchasing website and will be sent to firms that have requested to receive the RFP. Rod said members could send other  contacts if anyone has any other CPA firm suggestions. The contract term is for one year, with the option to renew for four additional years. iv. Facebook – The page is created, but there are no posts or activity yet. v. Intern – Rod has contact information for the intern program at Austin Peay and plans on an intern starting for the spring semester. vi. Approach to Conflicts of Interests – Rod wants to formalize the Internal Audit department’s approach to potential ethics policy violations. He discussed the limitations of the current process. Joyce suggested we look at other cities to see how they handle potential ethics violations. Rod explained that Red Book requires an audit of the Ethics Policy. The committee agreed that we should continue to research solutions. vii. IT – Rod and Amie Wilson, IT Director, have discussed formalized sharing of information from IT. Rod shared example IT metrics that could be reported to a committee. Lynn and Rod discussed that IT does not have a committee like other departments. Rod said the audit schedule for FY19 includes an IT organizational structure audit. Other IT audit engagements would possibly be outsourced. viii. Annual Report Status – Rod is postponing this report until the completion of the audits from FY2018. ix. Dedicated Phone for Hotline – Getting a dedicated phone number will cost $100/month. We are still considering other options. x. District Attorney Meeting – Rod wants to meet with the District Attorney to discuss what types of cases they want and how information should be formatted. xi. Red Book Peer Review – Colorado Springs – Rod was selected to go to Colorado Springs for a Red Book peer review in October. xii. 360 Management Review – Rod said Joyce and Department Heads recently completed a 360 management review. He said this was the best review he’s ever received. The respondents felt like they can approach our department and use us as a resource. xiii. CFE – Cassie – Rod shared that Cassie recently earned the Certified Fraud Examiner (CFE) designation. V. NEW BUSINESS A. Audit Committee Meeting Schedule – Rod requested that the Audit Committee start meeting quarterly in January 2019. He said he could send monthly reports to the committee members, including metrics and budget reports. Also, the Chair can call meetings anytime, if needed. Lynn made a motion to move to quarterly meetings. Jeff seconded. The motion passed. B. Annual Schedule – Rod reviewed the audits planned for FY2019 including: Golf Course cash handling and inventory, Evidence Room, I-9/e-verify, Fire Department staffing and overtime, ethics policy, and IT organizational structure. Lynn made a motion to approve the FY2019 audit schedule. Jeff seconded. The annual schedule was approved.