Finance Advisory and Audit Committee

City of Columbia, Missouri Meeting Minutes Finance Advisory and Audit Committee Friday, February 19, 2016 Conference Room 5A Regular Columbia City Hall 2:00 PM 701 E. Broadway I. CALL TO ORDER Present: 4- John Clark, Maria Oropallo, Edward Scavone and John Blattel Absent: 2- Victor Arnold and Kristian Bloom II. APPROVAL OF MINUTES Approval of the August 24th, 2015 Meeting Minutes Ed Scavone moved to approve the minutes from the August 24th, 2015 meeting, seconded by Maria Oropallo, and the minutes were approved unanimously III. SPECIAL ITEMS Audit Findings by McGladrey Prior to this meeting, McGladrey was rebranded as RSM. Mr. Smith summarized the post audit letter that he distributed to the Board members. He stated that the audit went very well. He mentioned the new accounting standards that were adopted by the City this year, primarily GASB 68 and 71, the new pension disclosures. Mr. Smith also stated that there were no unusual transactions in FY15. He said the City had a net pension asset in relation to its participation in LAGERS, meaning that it was showing as overfunded. Mr. Blattel explained that because the amount of unfunded accrued liability shown on the actuarial report was for current employees, and there was more money for retirees than was needed on an actuarial basis, it showed as overfunded. Mr. Clark asked if it was possible to have the notes in the electronic version of the CAFR hyperlinked in the document, and while Mr. Blattel said that could not be done, he said however the entire document was searchable. Mr. Smith added that there was also a table of contents for the notes as well. Mr. Smith then discussed the internal control elements relating to financial reporting. He discussed the compliance reports dealing with federal grants and financial reporting, and stated there were no significant deficiencies or findings. Mr. Scavone asked Mr. Smith about the process for next year’s audit. Mr. Smith said they would visit during the summer months to do some planning, and would begin the official field work in August. Mr. Blattel also mentioned that RSM was beginning the second year of a three-year contract with two (2) additional one (1) year renewal options. IV. REPORTS City of Columbia, Missouri Page 1 Printed on 8/22/2016 Finance Advisory and Audit Meeting Minutes February 19, 2016 Committee Update by Greg Slinkard, Internal Auditor Mr. Slinkard gave an update regarding the projects he had been working on since the last meeting. Projects included the internal controls of the procurement card program, an inventory of the vehicle equipment fleet, a record audit of the small cash bonus incentive program, and reviewing the telephone audit. He also discussed his ongoing project of reviewing delinquent utility charges. Mr. Scavone asked if the review of delinquent utility charges was in regards to just people turning off their utilities and leaving town and Mrs. Cannon replied that it was that plus people who were delinquent in making their payments beyond five day grace period from the due date per the City ordinance. Mrs. Cannon added that over the past two years the City has been able to step up collection enforcement. Mr. Clark asked a clarification question, and Mr. Blattel responded that the delinquent charges included both people that hadn’t paid their bill yet as well as those with late penalty charges. Mr. Blattel and Mrs. Cannon then discussed the high and low temperatures thresholds for not turning off utilities for delinquent customers. Mrs. Oropallo asked what Mr. Slinkard was looking for during this review, and Mr. Slinkard said it involved situations of delinquent accounts at former addresses for current customers. He said he reviewed the current policies and found the policies were reasonable. Mr. Clark asked how much of the delinquent accounts were commercial properties versus residential, and Mr. Blattel said only $85,000 of the $500,000 written off by the City were commercial. Mr. Slinkard said his future projects included revisiting the City’s current policy for the Red Flag Rule Program, the City-owned cell phone policy, reconciliation of parking meter payments and surprise petty cash reconciliations by the Internal Auditor. Financial and Budget Updates by John Blattel Mr. Blattel mentioned the need for a chairperson for the Committee, since chairs serve a one-year term. Mr. Scavone agreed to serve another term as the Chairperson of the Committee, and Mr. Clark and Mrs. Oropallo voted to keep Mr. Scavone in his same position for another year. Mr. Blattel also asked Mr. Scavone to present the City’s Financial Reports at the City Council’s March 7th meeting. Mr. Blattel said the City’s current revenue was flat compared to the prior year. He said the City had previously budgeted a 3% growth in sales tax revenue but that was not materializing, so the City has directed departments to hold open positions for one month before filling a vacated position. Mr. Blattel said the City has also put a hold on supplemental purchases, or equipment purchases. He said those two measures will decrease the City’s expenditures by 3% and keep the budget balanced. Mrs. Oropallo asked if this was a surprise, and Mr. Blattel said it wasn’t a surprise because he had been monitoring it. Mr. Blattel said the FY16 budget was based on an economic forecast from the prior summer, and at that time a 3% growth was forecasted. Mr. Clark asked a clarification question regarding the City’s revenue, and Mr. Blattel said the general fund was primarily made up of the sales tax and the pilot tax for winter utility usage, and utility bills were a different revenue stream. City of Columbia, Missouri Page 2 Printed on 8/22/2016 Finance Advisory and Audit Meeting Minutes February 19, 2016 Committee Mr. Blattel said he was proud of the City’s Accounting staff in regards to the previously mentioned audit results. He then reported to the Committee that the City had implemented the payroll and Human Resources modules of the new Accounting system, and that had gone very well so far. He also mentioned that the Utility Module was scheduled to go-live the first weekend in May, and the City was also working on a time and attendance module, or Kronos, with no go-live date set yet. Mr. Blattel also said the scheduled go-live date for the general ledger modules was October 1st. V. NEW BUSINESS Mr. Scavone congratulated and thanked Mr. Blattel on behalf of the Committee for his years of service to the City and this Committee since Mr. Blattel had announced he was retiring on March 11th, 2016. VI. ADJOURNMENT There being no further business, Mrs. Oropallo moved to adjourn the meeting, and Mr. Clark seconded. The meeting was adjourned at 3:06 P.M. Members of the public may attend any open meeting. For requests for accommodations related to disability, please call 573-874-7214. In order to assist staff in making the appropriate arrangements for your accommodation, please make your request as far in advance of the posted meeting date as possible. City of Columbia, Missouri Page 3 Printed on 8/22/2016