Loading...
HomeMy WebLinkAbout2013-06-12 - MinutesMinutes of the June 12, 2013 Audit Committee Meeting The following audit committee members were present: Tony Uth, Jr. Judy Jacobs Adam Motherwell Alderwoman Adella Gray The following City staff members were present: Paul A. Becker, Finance and Internal Services Director Marsha Hertweck, Accounting Director Vicki Deaton, Internal Auditor Shelly Turberville, Accounting Manager – Investments & Cash Trish Leach, Accounting Manager – Payroll and Pension The following Grant Thornton staff were present: Ben Kohnle, Partner Dan Barron, Partner Juliet Williams, Senior Associate Approval of Minutes The minutes of the February 26, 2013 audit committee meeting were approved by all audit committee members. Draft minutes from this meeting and the February 26, 2013 final approved minutes will be forwarded to the City Council to keep them informed of committee proceedings. Approved minutes are posted on the City’s website on the audit committee page. Internal Audit Update: Assisted with external audit and review of financial statements – February – May, 2013 Issued Petty Cash Memo, 1/15/13 Issued report of Follow Up on DFA Audit of Construction Craft Surcharges, 2/8/13 Issued report of Uniform and Protective Wear Audit, 4/26/13. There are several action items currently under implementation from this audit. FEMA declared disaster – The City of Fayetteville is eligible for public assistance related to severe storms during the spring of 2011. The City has claims with a total project cost of $743,000. Expected reimbursement is $653,000. Most projects were completed last fall, but 6 projects were extended to an ADEM approved completion date of 11/9/13. A status update was completed at the end of the 1st quarter 2013 and the 2nd quarter 2013 update will be due before 7/1/13. Issued Computer Asset Inventory Review report, 5/22/13 Parking Cash Controls final report - with the Mayor for his signature, then will be issued Currently working on the Retirement Savings Plan Reconciliation and Audit There were questions about the Parking Cash Controls audit related to how the monies are removed from the parking pay stations. Coins and bills are removed in locked coin and bill safes that are only unlocked for the deposit preparation at the City Administration building. There were a few questions about the scope of the Retirement Savings Plan Reconciliation and Audit. The primary objective of the audit is to perform a reconciliation of each plan participant’s contribution accounts for the year. The reconciliation verifies that each employee participant’s required contribution and City contribution on behalf of the participant agree for both the City and the plan trustee (Bank of Oklahoma Financial Services provided by Bank of Arkansas) for the prior year. Other objectives of the audit are to verify the eligibility of each participant, verify the status of each participant with the trustee, verify the City’s pension administration fees, and ensure timely investment of participant funds by the trustee. The tentative date for presentation of the 2012 CAFR to the City Council is July 16, 2013, at the regular City Council meeting which begins at 6pm in Room 219 of the City Administration Building. Communications Related to the 2012 Audit – Ben Kohnle, Dan Barron, and Juliet Williams, Grant Thornton LLP Ben Kohnle thanked City staff and management for their assistance and cooperation during the audit. He prefaced the presentation by noting that the results of the audit were very favorable with little to communicate to the committee. Dan explained Grant Thornton’s responsibilities during the engagement. He also talked about the financial reporting responsibilities of both City management and the audit committee. Juliet described Grant Thornton’s approach to the audit and reviewed the audit timeline. Dan elaborated on their planning for the engagement by meeting with the former auditors and reviewing some prior year workpapers. This was done because this is the first year for Grant Thornton to perform the City’s audit. This is standard practice for new auditors. Juliet explained that Grant Thornton will use the work of the two auditors that performed audits of the City’s component units. BKD, LLP audited the Fayetteville Public Library’s 2012 financial report and Beall Barclay and Company, PLC audited the Fayetteville Advertising and Promotion Commission 2012 financial report. Juliet listed their primary areas of focus during the audit. One of the areas of focus was the implementation of new accounting standards that were made during 2012. Also, three City federal grant programs were required to be audited this year due to OMB Circular A-133 guidelines. There were no findings related to the grants, which Dan noted as a significant achievement for the City. Dan reported to the committee that during the audit, the auditors found certain accounting adjustments that were proposed to management. Some of the adjustments were recorded by the City and some were not. Most of the proposed adjustments were related to the timing of tax revenue recognition. The adjustments that were recorded were made to include all tax revenues that were earned during 2012 in that period. Due to the adjustments that were made, Grant Thornton reported a significant deficiency in internal control. A significant deficiency is a deficiency in internal control that is not severe, but should be communicated to those charged with governance. Because the City made the adjustments to tax revenues in 2012, the deficiency has been remediated. The adjustments to tax revenues only effect 2012, so there will be no adjustments or deficiency communications related to this in the future. There were no other matters noted by Grant Thornton to communicate to the audit committee. Dan concluded the meeting by reviewing upcoming governmental accounting technical updates with the committee. The committee thanked the Grant Thornton staff for their attendance and the presentation. The meeting was adjourned.