Audit Committee

MINUTES Audit Committee of Roanoke City Council Location: Council Conference Room Noel C. Taylor Municipal Building, Room 451 South Date: June 7, 2017 Time: 4:00 p.m. to 4:30 p.m. Attendees: Audit Committee Member Present (Y/N) William Bestpitch (Chair) Y Anita Price (Vice-Chair) Y Michelle Dykstra Y Sherman Lea (ex-officio) N Barbara Dameron, Director of Finance Brian Townsend, Acting City Manager Sherman Stovall, Assistant City Manager for Operations Drew Harmon, Municipal Auditor Dawn Hope Mullins, Assistant Municipal Auditor Tasha Burkett, Information Systems Auditor Wayne Parker, Senior Auditor Cari Spichek, Senior Auditor Jeremy Croy, Senior Auditor Rob Churchman, Partner, Cherry Bekaert 1. Call to Order: Mr. Bestpitch called the meeting to order at 4:00 p.m. and welcomed everyone. 2. Audit Plan for Year Ended June 30, 2017: Mr. Churchman presented a summarized overview of the Fiscal Year 2017 audit plan. He discussed the audit services to be provided including: - Audit of City’s financial report - Audit of Pension Plan’s financial report - Audit of City’s major federal grants as required by the Single Audit Act - Audit of City’s compliance with Commonwealth of Virginia requirements - Examination of Virginia Retirement System census reporting - Agreed-upon procedures on Sheriff’s internal controls - Agreed-upon procedures on City’s Comparative Report Transmittal Forms June 7, 2017 Page 2 of 3 The overall audit plan is similar to last year’s with no change in communication requirements or city operations. Mr. Churchman provided a high-level review of Cherry Bekaert’s audit team and discussed team members’ responsibilities. He also emphasized the importance of their information technology team in verifying effective access and system controls are in place and functioning properly. Mr. Churchman reviewed the planned timing for audit work, beginning in April and ending in December. He also discussed the firm’s approach to performing the audit, including considerations of federal guidelines, Commonwealth of Virginia audit requirements and areas of emphasis based on the firm’s risk assessment. He also reviewed a number of significant audit areas. Mr. Churchman emphasized that City and Cherry Bekaert staffs communicate openly throughout the audit process. Beginning with Fiscal Year 2017, localities will be required to disclose material tax abatements. The standard mandates changes to footnote disclosure and will not affect the balance sheet presentation. Mr. Churchman advised that the standard is intended to require disclosure of large projects in which the locality will forgo material future tax revenues. This statement is not intended to include disclosure of abatements given to individuals on their homes. Mr. Churchman also discussed the Government Accounting Standard Board’s [GASB] statements 74 and 75 that require recognizing future liabilities related to other post-employment benefits, more commonly referred to as OPEB. This is a Fiscal Year 2018 reporting requirement. The OPEB liability is actuarially determined and will be reported in the same manner as the pension liability. Localities have the option reduce or eliminate benefits to reduce the liability. OPEB liabilities may not be comparable to peers as localities offer differing types and levels of benefits. Mr. Bestpitch thanked Mr. Churchman for the briefing and noted that the City recently received the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Program for the Fiscal Year 2016 Comprehensive Annual Financial Report. The audit plan was received and filed without objections. 3. Clerk of the Circuit Court: Mr. Harmon briefed the committee on the engagement. Municipal Auditing completes a portion of the audit program and the Virginia Auditor of Public Accounts (APA) performs the remainder of the work. The APA’s report was issued in April and delivered to the Mayor’s office. No findings were identified in either the City’s or the APA’s report. The report was received and filed without objection. June 7, 2017 Page 3 of 3 4. Other Business: Mr. Harmon reminded members that the next Audit Committee meeting will be held on September 6, 2017 at 4:00 p.m. The December meeting will be held on the 13th at 4:00 p.m. at which time the final communications from Cherry Bekaert related to Fiscal Year 2017 audits will be received. 5. Adjournment: Mr. Bestpitch adjourned the meeting at 4:30 p.m.