Audit Committee Meeting

MINUTES Audit Committee Meeting Monday, November 16, 2020 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, South Dakota 57104 1. Call To Order Present: Committee Member Dean Buckneberg (Via telecom), Committee Member Tony Goettsch (Via telecom), Committee Member Rose Grant (Via telecom), Committee Chair Rick Kiley, Committee Member Greg Neitzert (Via telecom), Committee Member Curt Soehl (Via telecom) Absent: Committee Member Alex Jensen Committee Chair Rick Kiley called the meeting to order at 4 p.m. 2. Approval of Minutes A. Monday, November 9, 2020 A motion was made by Committee Member Buckneberg and seconded by Committee Member Soehl to approve the minutes of Monday, November 9, 2020. Roll call vote to approve. 7 Yes: Buckneberg, Goettsch, Grant, Jensen, Kiley, Neitzert, Soehl; 0 No: (None). Motion Passed. 3. Reports and Updates A. Update on External Audit of City’s 2020 Financial Statements by Eide Bailly, LLP Brian Stavenger of the Eide Bailly Fargo office, provided the presentation remotely and Joy Fiege, Sioux Falls office, assisted in person. Stavenger spoke about the service team assigned to the audit and reviewed the objectives. The audit will: 1) be performed in accordance with generally accepted auditing standards, Government Auditing Standards, and Title 2 U.S. Code of Federal Regulations (CFR); 2) obtain reasonable, not absolute, assurance about whether the financial statements are free of material misstatement; 3) include examining, on a test basis, evidence supporting amounts and disclosures; 4) include discussions with management; and, 5) assess the quality of accounting principles and significant estimates. Planning for the audit will take place in November/December, 2020 with interim testing taking place throughout December and January. Year-end testing will occur in January, February, and March; the final audit will be issued in late March.  Stavenger explained some of the impacts have had on the audit approach and emphasized the importance of ongoing communication throughout the year using online publications, webinars, and providing access to specialists. He reviewed the risk assessment by differentiating between "inherent" and "fraud" risk and concluded with a review of new professional audit standards expected to be implemented in the next few years. B. Audit Report 20-02: BID Tax The objectives of the audit were to: 1) determine if adequate controls are in place to ensure the accuracy of the BID tax collection and remittance processes from the hotels in the Business Improvement District; 2) evaluate the City of Sioux Falls’ BID tax collection and remittance processes; and, 3) determine if adequate controls are in place to ensure expenditures of BID tax revenue are appropriate and align with the purpose of the BID tax. Vandelanotte next reviewed some background and four findings: 1) chapter 37 of the City of Sioux Falls Code of Ordinances should be reviewed and updated; 2) compliance with Ordinance 37.196, Statement Required Along with Occupational Tax Payment, is not being enforced; 3) based on testing of hotel BID tax payments, we determined that the BID Occupational Tax Worksheet is 1) filled out inconsistently by hotels; 2) a requirement by City Finance, but not by City Code of Ordinances; and, 4) in reviewing the City of Sioux Falls Finance department’s policies and procedures, established in February 2020, we found the policy and procedure documentation could be strengthened. The report provided recommendations to address each finding. Discussion followed regarding the incorporation of reasonableness testing to future audits. A motion was made by Committee Member Grant and seconded by Committee Member Buckneberg to submit the Audit Report to the City Council. Roll call vote to submit. 6 Yes: Buckneberg, Goettsch, Grant, Kiley, Neitzert, Soehl; 0 No: (None). Motion Passed. C. Follow-Up Audit 20-03: Landfill Licensing The purpose of the follow-up was to assess the status of management action plans for the recommendations previously noted in the Landfill Licensing Audit Report 19- 01, which was issued in December 2019. Internal Audit confirmed that the Landfill has updated the 2021 hauler license application. An updated copy has been obtained as well. Internal Audit also verified that the application is available on the City website for haulers to access for 2021 hauler licensing. In addition, haulers have the option to pay for their license either electronically or by check. Internal Audit verified that the routing and signing of the hauler licensing process is now being handled electronically, through the DocuSign software. Internal Audit confirmed that the licensing documentation is being filed electronically as well. Internal Audit obtained a copy of the Landfill’s policies and procedures that are being developed over hauler licensing. This is currently a work in progress as changes, updates, and additions are made. Further follow up by Internal Audit will be completed in the coming months. Internal Audit was able to access the EnerGov platform that is currently being developed to keep track of inspections at the Landfill. Load inspections are now being done electronically & uploaded to the  system instantly. This process is not fully completed yet, so further follow up will occur in the coming months upon full completion and implementation. 4. Committee Member Remarks There was none. 5. Public Comment There was none. 6. Adjournment Committee Chair Rick Kiley adjourned the meeting at 5:07 p.m. Thomas M. Greco, City Clerk