Audit Advisory Committee

City of Marco Island Florida 51 Bald Eagle Drive Marco Island, Florida cityofmarcoisland.com Meeting Minutes - Final Wednesday, October 9, 2013 8:30 AM Community Room Audit Advisory Committee Audit Advisory Committee Meeting Minutes - Final October 9, 2013 Chairperson Bill Schroeder called the meeting to order and presided. (1) ROLL CALL The meeting was called to order at 8:30 AM Committee members present: Steven Arena, James Conway, Laura Gelman, Raymond Rosenberg, Bill Schroeder and Ed Walsh Councilor Joe Batte, Councilor Bob Brown and Councilor Larry Honig. City Staff present: Guillermo Polanco, Interim City Manager; Debi Mueller Acting Finance Director; Lynn Musgrave, Accountant; Lori Rizzo, Administrative Assistant (2) APPROVAL OF AGENDA MOTION by Member Walsh, seconded by Member Gelman, to approve the agenda. MOTION CARRIED BY THE FOLLOWING VOTE: Unanimously 6-0. (3) APPROVAL OF MINUTES MOTION by Member Rosenberg, seconded by Member Arena, to approve the July 25, 2013 Minutes. MOTION CARRIED BY THE FOLLOWING VOTE: Member Conway abstained. Vote 5-0 (4) BUSINESS a. Update Guillermo gave an update on the Auditors preliminary work: The Auditors • tested the Internal Controls • did a walk-through of receipts, disbursements and payroll Nothing significant has come back from the auditor except a couple recommendations: Finance is changing the protocol of distributing Employee physical checks and getting a lockbox for the checks. The City actually did a physical audit of paycheck. All employees had to personally pick up their paychecks and verify the deductions taken off the checks. This also gave the City a physical audit to make sure all employees are accounted for. Eventually the paystubs will be available on line for direct deposit checks. The Auditors will be returning December 9, 2013 and staying approximately a month. This will leave time available for the Audit Advisory Committee to meet with the Auditors. City of Marco Island Florida Page 1 Audit Advisory Committee Meeting Minutes - Final October 9, 2013 Debbie Mueller is the Interim Finance Director and a Temporary Staff person has been hired in Finance to help during the Audit. The Temp Staff is a CPA and his responsibilities are the Balance sheet accounts. And there is a Dual system of approvals setup so all work for the CAFR is double checked. The Closeout Audit for Goldenrod and Copperfield has been completed by MHM Auditors. b. Discussion of AAC Responsibilities-Draft Purpose of the Audit Advisory Committee is three fold: • Assist in oversight of preparation of Financial Information • Monitor effectiveness of internal accounting controls • Interface with external auditors Other objective can be derived from the Matrix proposed by M&J on page 17 of their proposal: • Control Environment • Risk Assessment • Control Activities • Information and Communication • Monitoring The Committee discussed the draft list of Audit Advisory Committee Objectives to help determine if the Committee wanted to broaden or narrow their scope of responsibilities. Some of the objectives discussed were Risk Assessment and Regulatory Compliance Monitoring. Please note these objectives may be added as new objectives for the AAC •The AAC will review the City’s policies with respect to related party transactions and adherence to such policies, including appropriate financial statement disclosures in the CAFR. •The AAC members will be financially literate and financially independent of any City operations or City financial obligations. •Annually, all AAC members will attend an orientation session presented by the Chairperson of the AAC with assistance of City Management, where appropriate, covering such items as responsibilities, City governance and management structure, Government (fund) accounting and the CAFR. •Prior to the completion of the audit to give a status update on any material weakness, significant deficiencies or material misstatements. •The AAC will consider assisting in any other ad hoc functions requested by City Council. •The above objectives and responsibilities have been designed to comply with the requirements of Florida Statute Section 218.391 The only ordinance that could be found in regards to an Audit Advisory Committee was in the selection of an outside audit Firm. The selection of the Audit Firm cannot be based on price alone. The Committee will continue to work on the AAC objectives at our next meeting. c. Discussion of External Auditor Evaluation Form The Committee approved the evaluation form and it will be given to the Audit Firm, M & J so the firm knows how they will be evaluated. d. Councilor Larry Honig’s Thoughts on MI’s Spending Cap Councilor Larry Honig spoke to the Committee about the MI Spending Cap and how it is calculated. Councilor Honig requested some assistance from the Committee in re-writing Resolution No. 03.03 The Committee agreed that this was not within their scope of duties. City of Marco Island Florida Page 2 Audit Advisory Committee Meeting Minutes - Final October 9, 2013 (5) PATH FORWARD Finalize AAC Responsibilities and Objectives Next Meeting November 20, 2013 at 8:30 AM Meet with Auditors December 17, 2013 at 8:30 AM Keep track of AAC Volunteer Hours (6) PUBLIC COMMENT Councilor Joe Batte requested the AAC get on the agenda to present to City Council a progress report of the significant deficiencies that were noted in the MHM Auditor reports given to the City. (7) ADJOURN There being no further business to come before Audit Advisory Committee, the meeting adjourned at 10:08 A.M. ________________________________________ Bill Schroeder, Chairman _________________________________________ Lori Rizzo, Administrative Assistant City of Marco Island Florida Page 3