Ad Hoc Audit Committee

AGENDA Ad Hoc Audit Committee December 9, 2024 at 4:00 PM Lansing City Hall, City Council Conference Room 124 W. Michigan Avenue, 10th Floor To provide input or ask questions on any item that is listed on the agenda, members of the public may contact the City Council at city.council@lansingmi.gov or (517) 483-4177 prior to the meeting. To participate in public copmment and view the meeting live: https://www.lansingmi.gov/1212/Council-Committee-Meetings Councilmember Peter Spadafore, Chairperson Councilmember Tamera Carter, Vice Chairperson Councilmember Trini Pehlivanoglu, Member 1. Call to Order 2. Roll Call 3. Minutes A. November 18, 2024 4. Public Comment on Agenda Items (Up to 3 Minutes) 5. Discussion/Action: B. Continued Discussion on a Defined Annual Audit Plan - Internal Auditor C. DISCUSSION - Proposed Change to Council Rule 16 Standing Committee D. DISCUSSION- 2025 Meeting Dates 6. Other 7. Adjourn Persons with disabilities who need an accommodation to fully participate in these meetings should contact the City Council Office at 517-483-4177 (TTY 711) 24 hour notice may be needed for certain accommodations. An attempt will be made to grant all reasonable accommodation requests. Page 1 of 12  DRAFT MINUTES Ad Hoc Audit Committee Monday, November 18, 2024 @ 4:00 p.m. City Council Conference Room CALL TO ORDER Council Member Spadafore called the meeting to order at 4:07 p.m. PRESENT Council Member Peter Spadafore, Chair Council Member Tamera Carter, Vice Chair- arrived at 4:08 Council Member Trini Pehlivanoglu, Member OTHERS PRESENT Sherrie Boak, Council Office Manager Charles Randall, Internal Auditor Lisa Hagen- Lawrence, OCA Minutes MOTION BY COUNCIL MEMBER PEHLIVANOGLU TO APPROVE THE MINUTES FROM OCTOBER 28, 2024 AS PRESENTED. MOTION CARRIED 2-0. Public Comment No public comment at this time. Discussion/Action: Continued DISCUSSION – Defined Annual Audit Plan Council Member Spadafore recapped the charge from the last meeting for the Internal Auditor. After the update, this Committee will present feedback and if there is any changes those will be made and submitted to Council on 12/16/2024 in their Committee report. Council Member Pehlivanoglu asked, once this Committee approves and move forward, then will Council have input as well. Council Memer Spadafore confirmed, however there is another charge for the Committee as well before the report goes to Council, which is to decide if they want to proceed with this Committee in the future as a permanent City Council Committee. Council Member Spadafore concluded that if this Committee seeks to have that occur, they can look at a resolution amending the Council Rules adding Committee on Audit. Mr. Charles went through his proposed FY 2025 Audit plan, which has a priority using the payroll, invoices and expense report as high audit areas. By looking at the City 2025 budget he would look at the department spending, allocating out testing samples. For a control test, he believes that you would not allocate it out if is being done the same in all departments. This will be same Page 2 of 12  DRAFT control testing, the samples will be sub-selected to each department. Police and fire have the largest spending and payroll, therefore being first. There will be a focus on police and fire beginning in December and running through February. Mr. Charles anticipates samples will not be completed but carry over to March, because he anticipates questions. He will then begin adding in Public service, Parks and others. Mr. Charles stated he plans to have all testing completed in May and report out in June/July. The expense reporting will not be broken out by department, because they are not balancing expenses on credit cards monthly. Council Member Spadafore asked what his process will be for payroll. Mr. Charles stated that there is an employee entering their time sheet, supervisor approving, using time to processing payroll, then sent on to distribution. Council Member Carter asked how he determined the number of samples. Mr. Randall stated that normally for control you would do 45, and this is just to get a baseline for most departments. This is over sampling, but wanted depth so they are aware the payroll and invoices are being audited. Regarding invoicing, they depend on the department based on their monthly invoicing. Council Member Carter asked for January, if the police and fire will carry over to March due to the volume, and Mr. Charles confirmed he anticipates that, due to volume and potential questions. Mr. Randall assured the Committee that he plans to provide monthly status reports to this Committee. Council Member Spadafore referred back to an earlier statement made where the audit would be on expense reporting on credit cards, asking if there are also cash reimbursement expense reports to be audited. Ms. Boak confirmed that the City does do expense reports, and Mr. Charles stated he would ask Finance about that and see what the volume is. Council Member Pehlivanoglu asked if the departments roll into later months then listed on the timeline, will the sample numbers be adjusted. Mr. Charles assured the Committee that there should be enough time, because with payroll the process is the same for everyone; not a lot of variation. This is set for the highest number first, and depending on this committee feedback could shut off. Council Member Spadafore asked for Mr. Charles to make the update and the Committee will finalize at their 12/9/2024 meeting, along with deliberation and action on a resolution to adopt the audit plan and recommend a permanent audit Committee to the Council at their 12/16/2024 meeting. OTHER No other topics of discussion. ADJOURN Adjourned at 4:21 p.m. Submitted by, Sherrie Boak, Recording Secretary, Lansing City Council Approved by the Committee on Page 3 of 12  5. B. - RESOLUTION Continued Discussion Defined Annual Audit Plan Pending Document from Internal Auditor Please continue to watch for updates Page 4 of 12  CITY OF LANSING INTERNAL AUDITOR 124 W MICHIGAN AVE FL 10 LANSING MI 48933-1605 (517) 483-4159 Date: November 18, 2024 To: Ad-Hoc Committee From: Charles H Randall, Internal Auditor Subject: 2025 Audit Plan FY 2025 Audit Plan Process Timeline & Sampling Allocation Dec Jan Feb Mar Apr May Jun Process / Depts Police Police Fire Public Svc Park & Rec All Other Total Process Payroll 18 55 57 2 7 11 150 Invoices 4 12 8 16 3 7 50 Total Dept 22 67 65 18 10 18 200 Non-Dept Exp Rpt 10 0 0 5 5 5 25 Reporting Plan Monthly Status Report @ first Ad-Hoc meeting of the month. Department Control Report Process Report Page 5 of 12  DRAFT Recommended Changes from the AD HOC on Audit Committee BY THE CITY OPERATIONS RESOLVED BY THE CITY COUNCIL OF THE CITY OF LANSING WHEREAS, pursuant to Rule 41 of the Lansing City Council Rules, a proposed rule revision shall be placed on the Council Agenda for Council receipt and review, but “shall not be considered for adoption sooner than the next council meeting”; THEREFORE BE IT RESOLVED that the City Council hereby amends the City Council Rule 16 Standing Committees by inserting the Committee on Municipal Audit as set forth below. Rule 16 Standing Committees; the standing committees of Council and their functions are as follows: COMMITTEE ON MUNICIPAL AUDIT An objective of the Committee is to provide guidance and oversight to the City Council Internal Auditor in the performance of his/her responsibilities, create and review annual audit plans, evaluate the financial position of the City. The Committee on Municipal Audit will prepare an annual audit plan by June 30th each year. Page 6 of 12 Page 7 of 12 Page 8 of 12 Page 9 of 12 Page 10 of 12 Page 11 of 12 Page 12 of 12