Audit Committee

CITY OF HENDERSON AUDIT COMMITTEE REGULAR MEETING MINUTES Wednesday, December 6, 2023 I. CALL TO ORDER Chair Dan K. Shaw called the City of Henderson Audit Committee meeting to order at 3:06 p.m. in the Mayor and Council Boardroom, 4th Floor, City Hall, 240 South Water Street, Henderson, Nevada 89015. II. CONFIRMATION OF POSTING AND ROLL CALL Melissa Wright, City Auditor, confirmed the City of Henderson Audit Committee meeting had been noticed in compliance with the Nevada Open Meeting Law. PRESENT: Chair Dan K. Shaw Michael Hiltz Mayor Michelle Romero Councilman Dan Stewart ABSENT: Bryan Allison (excused) STAFF: Jennifer Bessette, Senior Internal Auditor Harmony Cole, City Clerk Services Specialist Richard Derrick, City Manager/CEO Shari Ferguson, Director of Parks and Recreation David Furber, Senior Internal Auditor Maria Gamboa, Director of Finance Matt Griebel, Senior Marketing Information Officer Robert Herr, Assistant City Manager Priscilla Howell, Director of Utility Services Joyce Mallari, Utility Admin Services Manager Jim McIntosh, Assistant City Manager/CFO Paul McPhee, Senior Internal Auditor Javier Mendez, Assistant Director of Human Resources Etajha Mourier, Social Media Officer JJ Moyes, Business Manager Kirk Niemand, Parks Superintendent Kyle Okamura, Assistant Director of Utility Services April Parra, Council/Commission Services Manager Brian Reeve, Assistant City Attorney III Rosa Reynolds, Administrative Manager – OPI Matthew Rice, Business License Auditor Natalie Sharp, Administrative Support Analyst Brooke Stream, Director of Human Resources Angela Summers, Assistant Director of Parks and Recreation Danielle Tapper, Utility Customer Services Manager Audit Committee Meeting Page 2 of 8 Wednesday, December 6, 2023 – Minutes Nicolas Vaskov, City Attorney Polly Walker, Manager of Office of Performance and Innovation David Weiser, Assistant Director of Finance Shawn White, Fire Chief Melissa Wright, City Auditor III. PUBLIC COMMENT There were no public comments presented. IV. ACCEPTANCE OF AGENDA (Motion) Mayor Michelle Romero moved to accept the agenda, as presented. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Councilman Dan H. Stewart, and Member Michael Hiltz and Mayor Michelle Romero. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). V. NEW BUSINESS 1 MINUTES AUDIT COMMITTEE MEETING SEPTEMBER 6, 2023 INTERNAL AUDIT Audit Committee Meeting minutes of September 6, 2023. (Motion) Member Michael Hiltz moved to accept the Audit Committee Meeting minutes of September 6, 2023, as presented. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Councilman Dan H. Stewart, and Member Michael Hiltz and Mayor Michelle Romero. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). Audit Committee Meeting Page 3 of 8 Wednesday, December 6, 2023 – Minutes 2 DRAFT FOLLOW-UP AUDIT REPORT FINANCE DEPT VENDOR MASTER FILE INTERNAL AUDIT Receive and approve draft follow-up audit report of the Finance Department Vendor Master File. Melissa Wright, City Auditor, gave a presentation and provided a summary of the draft follow-up audit report of the Finance Department Vendor Master File audit issued in April 2022. She said the original audit contained one recommendation, which has been implemented by the Finance Department and Human Resources. (Motion) Councilman Dan H. Stewart moved to approve the draft follow-up audit report of the Finance Department Vendor Master File. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Mayor Michelle Romero, Councilman Dan H. Stewart, and Member Michael Hiltz. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). 3 DRAFT FOLLOW-UP AUDIT REPORT HENDERSON POLICE DEPARTMENT DETENTION CENTER INTERNAL AUDIT Receive and approve draft follow-up audit report of the Henderson Police Department Detention Center. Melissa Wright, City Auditor, gave a presentation and provided a summary of the draft follow-up audit report of the Henderson Police Department Detention Center issued March 17, 2021. Audit Committee Meeting Page 4 of 8 Wednesday, December 6, 2023 – Minutes Ms. Wright said HPD staff have implemented the following six recommendations:  HPD confer with the City of Henderson (City) Management to determine if the Detention Center should continue to house inmates from other jurisdictions. If the decision is to continue to house inmates, the HPD should continue to work with the City Attorney’s Office to finalize an interlocal agreement for the current housing obligations of Clark County inmates. If the decision is to discontinue to house inmates, HPD should work with the City Management to develop a plan for a transport unit to transfer these inmates to the appropriate facility.  HPD reconcile both systems (PeopleSoft and InTIme) to ensure accuracy and appropriate overtime management.  HPD work closely with the Department of Information Technology to obtain the necessary upgrade to PeopleSoft to eliminate dual entry and ensure the system is used to its full potential.  HPD continue to monitor this area to ensure that housing ICE (Immigration and Customs Enforcement) detainees continues to be a viable option for the City. This would include analyzing costs, political climate and any potential changes that may occur in the future.  HPD perform a cost analysis and explore options that could potentially reduce required overtime, such as alternative work schedules (i.e., 10- hour shifts) and/or the addition of full/part-time positions to provide adequate coverage.  HPD discuss optimal solutions given available resources with City Management. A brief discussion ensued regarding further follow up with the Police Department and if there has been discussion regarding the jail outsourcing. Jim McIntosh, Assistant City Manager/CFO, detailed there are options for a 3rd party and potential outsourcing resources; however, it is not fiscally viable. (Motion) Mayor Romero moved to approve the draft follow-up audit report of the Henderson Police Department Detention Center. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Mayor Michelle Romero, Councilman Dan H. Stewart, and Member Michael Hiltz. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). Audit Committee Meeting Page 5 of 8 Wednesday, December 6, 2023 – Minutes 4 DRAFT AUDIT REPORT DEPARTMENT OF UTILITY SERVICES WATER CONSERVATION INTERNAL AUDIT Receive and approve draft audit report of the Department of Utility Services Water Conservation. Melissa Wright, City Auditor, gave a presentation, which was added to the agenda as additional back up after the meeting, and provided a summary of the draft follow-up audit report of the Department of Utility Services Water Conservation. She said the scope of the audit was July 2, 2021, through June 30, 2023. The following nine recommendation were made from the audit:  Continue to work towards the purchase and installation of smart water meters.  Continue to work with the Department of Communications to ensure that information about water conservation is advertised properly to reinforce water conservation efforts.  Review all current policies and procedures to ensure that they are accurate, consistent, in compliance with Henderson Municipal Code, consolidate policies and procedures if applicable.  Determine what conditions and requirements related to the Clark County School District’s approved exemption from certain watering restrictions and requirements are still relevant, and both parties sign an updated acknowledgement form agreeing to comply with the updated conditions and requirements.  Ensure that all applicable CCSD sites have signs prominently displayed stating that an alternate watering schedule is in use.  Ensure adequate notes are recorded in Contact Henderson to fully explain the reason for not taking enforcement action on reports of suspected water waste.  Continue to analyze water usage to determine if additional rate changes for higher water users should be implemented. Following the inquiry of Member Michael Hiltz regarding a timeline for responses on recommendations and who monitors the implemented timelines, Priscilla Howell, Director of Utility Services, and Melissa Wright, City Auditor, detailed a timeline will be presented and Internal Audit Department is responsible for monitoring such timelines are followed. A discussion ensued regarding the audit team and how they work with all departments to try to find solutions for deficiencies and gives departments resources for solutions. Audit Committee Meeting Page 6 of 8 Wednesday, December 6, 2023 – Minutes A brief discussion ensued regarding feedback from Parks and Recreation department staff about parks needing signage for watering. Melissa Wright, City Auditor, stated Parks and Recreation is exempt from watering requirements and stated per staff, there will be signs going up soon. Following the inquiry of Councilman Dan Stewart regarding pricing for Smart Meter configuration, the number of meters to be replaced, and the project implementation window changing from three years to five years, Priscilla Howell, Director of Utility Services, and Kyle Okamura, Assistant Director of Utility Services, stated agreements will most likely be presented in the early first quarter of 2024. Mr. Okamura stated age and predictive failure of systems will play a role in the implementation process and working with the same production company we are currently using for the Smart Meters. (Motion) Mayor Michelle Romero moved to approve the draft audit report of the Department of Utility Services Water Conservation. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Mayor Michelle Romero, Councilman Dan H. Stewart, and Member Michael Hiltz. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). 5 DRAFT AUDIT REPORT CITYWIDE OVERTIME INTERNAL AUDIT Receive and approve draft audit report of Citywide Overtime. Melissa Wright, City Auditor, gave a presentation, which was added to the agenda as additional backup after the meeting, and provided a summary of the draft audit report regarding citywide overtime. She said the scope of the audit was July 1, 2023, through June 30, 2023. The following seven recommendations have been made from the audit:  City Management direct department directors to review overtime practices and implement policies addressing excessive overtime to ensure the wellbeing of City staff and aid in reducing potential fatigue and burnout.  Department management monitor increases in workers’ compensation claims and ensure employees are following safety precautions including identifying fatigue or burnout.  Departments work with the Finance Department to establish accurate overtime budgets through the annual budget process. Audit Committee Meeting Page 7 of 8 Wednesday, December 6, 2023 – Minutes  City Management consider requiring departments to show reduction in overtime when used as justification for additional positions.  City Management review the criteria for what constitutes time worked for the purposes of calculating overtime to determine if changing criteria would be appropriate for the City.  Departments with non-exempt employees review their overtime on a periodic basis by implementing a reporting mechanism to help ensure appropriate use of overtime and accountability, along with mitigating potential consequences of fatigue and burnout.  City Management consider looking at overtime policies and practices in departments with high use, along with the consequences of excessive overtime. A discussion ensued regarding overtime hours worked by employees over a five-year period. Areas of discussion included:  Bringing down the overtime hours being worked.  Stricter guidelines and more accountability on employees.  A report for department directors to track overtime. Mayor Michelle Romero expressed concern that employees could be abusing overtime hours, and it is being used as supplemental income. She stated there needs to be a cap on how many hours of overtime can be worked in a year. Following an inquiry of Mayor Michelle Romero regarding the Police Department and Fire Department increased staffing and overtime hours worked, Fire Chief Shawn White gave a detailed explanation that three new fire stations have been approved and the positions created are to fill the vacancies to staff those new stations. Chief Shawn White stated the Union decides how many staff the department can have. (Motion) Mayor Michelle Romero moved to approve the draft audit report of Citywide Overtime and return in 90 days to review any progress. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Mayor Michelle Romero, Councilman Dan H. Stewart, and Member Michael Hiltz. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). Audit Committee Meeting Page 8 of 8 Wednesday, December 6, 2023 – Minutes CERTIFICATE OF RECOGNITION AUDIT COMMITTEE BRYAN ALLISON, MEMBER-AT-LARGE INTERNAL AUDIT Present Bryan Allison, Member At-Large, with a certificate of recognition for his 10 years of service to the Henderson Audit Committee. (Motion) Mayor Romero moved to continue this item due to Mr. Allison not being present at the meeting. (Vote) The roll call vote favoring passage was: Those voting aye: Chair Dan K. Shaw, Mayor Michelle Romero, Councilman Dan H. Stewart, and Member Michael Hiltz. Those voting nay: (None). Those absent: Bryan Allison. Those abstaining: (None). VI. CHAIRMAN\MEMBER COMMENTS There were no Chairman\Member comments presented. VII. SET NEXT MEETING The next meeting was set for March 21, 2024, at 10:00 am. VIII. PUBLIC COMMENT There were no public comments presented. IX. ADJOURNMENT There being no further business to be discussed, Chair Dan K. Shaw adjourned the meeting at 4:14 p.m. Respectfully submitted, /s/ Harmony Cole Harmony Cole City Clerk Services Specialist