Audit and Investment Commission

City of Woodbury Audit and Investment Commission Minutes November 12, 2020 Pursuant to due call and notice thereof, a meeting of the Audit and Investment Commission was held at Woodbury Public Safety, 2100 Radio Drive, on the 12th day of November 2020. Item 1: Call to Order / Roll Call Acting Chair Ken Johnson called the meeting to order at 7:30 a.m. Upon roll call, the following members of the Audit and Investment Commission were present: Heidi Conrad, Ross Dahlin, Blake Darsow, Ken Johnson, Jeanine Kuwik, John Lehman, and Richard Osborn. Aileen Lyle was in attendance via telephone. Others present: Matt Mayer, CPA – Auditor, BerganKDV; Amy Scoggins – Council Member; Angela Gorall – Assistant City Administrator; Judy Afdahl – Controller, and Roxy Nowicki – Recording Secretary. Item 2: Approval of Minutes – August 5, 2020 Moved by member Kuwik, seconded by member Conrad to approve the August 5, 2020 minutes. Voting in favor: All present Voting Against: None Item 3: Review Audit Scope and Engagement Letter with BerganKDV Acting Chair Johnson stated that Auditor Mayer was in attendance to review the audit scope and engagement letter. Auditor Mayer stated that the audit commission is required to receive specific communication prior to the audit as well as after the audit. Prior to the audit he needs to communicate his responsibilities as the City’s auditor, as well as the plan, scope and timing of the audit, which is laid out in the engagement letter. Auditor Mayer stated it is the City’s responsibility to prepare financial statements and the scope of the audit is to test, examine and give an opinion on the financial statements that are prepared by the City. As part of the audit they also evaluate internal control. They will not give an opinion on internal control, but will report to the City any material weaknesses or significant deficiencies they find. Auditor Mayer continued talking about the planned scope and timing of the audit, which will be slightly different this year. The City received significant Federal funds during 2020 under the CARES Act. Whenever a local government receives more than $750,000 in Federal funding, there is something called a single audit that is required. It is more of a compliance audit and the objective is to ensure that the provisions of the grant to which the City agreed have been met and that the dollars that were received associated with that grant were appropriately spent. Auditor Mayer stated this is also an opportunity for the commission to provide input on the scope. Acting Chair Johnson asked the commission members if they had any thoughts to offer Audit and Investment Commission Minutes November 12, 2020 Page 2 the audit firm before they begin the audit. Acting Chair Johnson asked Mr. Mayer what he thought about the enterprise funds in the scope of work this year. Mr. Mayer stated that typically the auditors look at the revenue stream when it comes to enterprise activity to ensure it is an accurate representation. A discussion ensued regarding the CARES Act and distribution of those funds. The funds can be used for such things as public safety, reconstruction of City Hall, telecommuting and PPEe. A question was asked whether any of the funds would have to be paid back to the Federal Government. Auditor Mayer stated that if the auditors’ opinion on the compliance of the award is unmodified, it is unlikely any money would have to be paid back. Member Conrad asked if this was an A-133 audit. Auditor Mayer stated it was. Member Conrad stated that her experience is they intend to be very detailed, much more compliance-oriented than a regular financial audit. She thought it would be nice to have a member of the Commission to be the connection and get updates. Depending on the timing of that, Member Conrad could take that on, but at this moment she does not have the time. Member Lehman asked if the auditor will be making any kind of a comment on how the City of Woodbury fared through Covid. Auditor Mayer stated they issue a document called the communications letter which gives some analysis beyond the generally accepted accounting principals presentation. A short discussion ensued. After discussion, a question was asked if there were any new GASB guidelines from last year. Auditor Mayer stated there is one that probably won’t pertain to the City of Woodbury that has to do with fiduciary fund activity where the City is the custodian of funds outside of the City. Ms. Afdahl stated that transition was made last year. After discussion a question was asked if the unfunded liabilities attributable to PERA are tracked and if the state publishes a state-wide report of municipalities and if that is included in the audit. Auditor Mayer stated that PERA issues a report that provides the funding levels for the plan itself. They allocate that out to each individual participant based on their contributions for that fiscal year. That unfunded liability trickles down to the City’s books. Auditor Mayer stated a commission member is usually selected for a broad interview each year to discuss the fraud risk associated with the City. Commission Member Osborn volunteered to be interviewed. A motion was made to approve the engagement letter with BerganKDV. Moved by member Conrad, seconded by member Lehman. Voting in favor: All present Voting Against: None Item 4: Other business No other business to discuss. Adjournment Meeting adjourned at 7:50 a.m.