HomeMy WebLinkAboutORDINANCE 5862113 West Mountain
Street Fayetteville,
AR 72701
(479) 575-8323
Ordinance: 5862
File Number: 2016-0130
INTERNAL AUDIT DIVISION CHARTER:
AN ORDINANCE TO AMEND CHAPTER 33 OF THE FAYETTEVILLE CODE TO RENUMBER THE
SECTIONS OF ARTICLE XXV AUDIT COMMITTEE AND INTERNAL AUDITOR AND RESERVE
SECTIONS 33.365 THROUGH 33.369 AND 33.375 THROUGH 33.379 FOR FUTURE USE, AND TO
APPROVE AN AMENDMENT TO THE INTERNAL AUDIT DIVISION CHARTER REDUCING THE
NUMBER OF REQUIRED ANNUAL MEETINGS FROM FOUR TO THREE TO BE CONSISTENT
WITH THE REQUIREMENTS OF THE CITY CODE
WHEREAS, Chapter 33 of the Fayetteville City Code should be amended to renumber the sections of
Article XXV Audit Committee and Internal Auditor, and to reserve sections 33.365-33.369 and sections
33.375-33.379 for future use; and
WHEREAS, the Internal Audit Division Charter should be amended to reduce the number of required
annual meetings from four to three in order to be consistent with the City Code.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends the numbering of the
sections of Article XXV Audit Committee and Internal Auditor of the Fayetteville City Code from §§
33.365 through 33.369 to §§ 33.370 through 33.374, and further reserves §§ 33.365 through 33.369 and
§§ 33.375 through 33.379 for future use.
Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves an amendment to the
Internal Audit Division Charter reducing the number of annual meetings of the Audit Committee from
four to three in order to be consistent with the City Code.
Page 1 Printed on 416116
File Number: 2016-0130
Ordinance: 5862
PASSED and APPROVED on 4/5/2016
Attest:
Z,4-.6.
Sondra E. Smith, City Clerk
Treasurer
ti Li i� i ���
�� ►N III ON'r���,�
Page 2 Printed on 416116
City of Fayetteville Internal Audit Division Charter
Introduction:
Internal Auditing is an independent and objective assurance and consulting activity that is guided
by a philosophy of adding value to improve the operations of the City of Fayetteville. It assists
the City in accomplishing its objectives by bringing a systematic and disciplined approach to
evaluate and improve the effectiveness of the City's risk management, control, and governance
processes.
Role:
The City of Fayetteville Internal Audit Division is established by the City Council, and its
responsibilities are defined by the Audit Committee of the City of Fayetteville and the City
Council as part of their oversight function.
Policies and Procedures:
The Internal Audit Division will adhere to City of Fayetteville policies and procedures, and
specifically Policy and Procedure IC -01, Internal Auditing Procedure, and the City of Fayetteville
Internal Audit Standard Operating Procedures. The Internal Audit Division will apply the
International Standards for the Professional Practice of Internal Auditing as possible in a single
staff Internal Audit Division.
Authority:
Authority is granted for full, free, and unrestricted access by the Internal Audit Division to any
and all City of Fayetteville records, physical properties, and personnel relevant to any function
under review. All City of Fayetteville employees are requested to assist the Internal Audit
Division in fulfilling its role. The Internal Audit Division shall also have free and unrestricted
access to the City Council and the Audit Committee.
Documents and information given to the Internal Audit Division during a periodic review will be
handled in the same prudent and confidential manner as by those employees normally
accountable for them.
Organization:
The Internal Audit Division shall report administratively to the Mayor for assistance in
establishing direction, support, and administrative interface; and functionally through the Audit
Committee to the City Council for strategic direction, reinforcement, and accountability. The
Internal Audit Division shall meet with the Audit Committee at least three times annually.
Independence:
All Internal Audit Division activities shall remain free of influence by any element in the
organization, including matters of audit selection, scope, procedures, frequency, timing, or report
content to permit maintenance of an independent and objective mental attitude necessary in
rendering reports.
The Internal Audit Division shall have no direct operational responsibility or authority over any
of the activities reviewed. Accordingly, the Division shall not develop nor install systems or
procedures, prepare records, or engage in any other activity which would normally be audited.
Audit Scope:
The scope of the Internal Audit Division encompasses the examination and evaluation of the
adequacy and effectiveness of the City's governance, risk management process, system of internal
control structure, and the quality of performance in carrying out assigned responsibilities to
achieve the City's stated goals and objectives. It includes:
• Reviewing the reliability and integrity of financial and operating information and the
means used to identify, measure, classify, and report such information.
• Reviewing the systems established to ensure compliance with those policies,. plans,
procedures, laws, and regulations which could have a significant impact on operations
and reports and whether the City is in compliance.
• Reviewing the means of safeguarding assets and, as appropriate, verifying the existence
of such assets.
• Reviewing and appraising the economy and efficiency with which resources are
employed.
• Reviewing operations or programs to ascertain whether results are consistent with
established objectives and goals and whether the operations or programs are being carried
out as planned.
• Reviewing specific operations at the request of the Audit Committee, the City Council, or
management, as appropriate.
• Monitoring and evaluating the effectiveness of the City's risk management system.
• Reviewing the quality of performance of external auditors and the degree of coordination
with the Internal Audit Division.
• Reviewing the internal control statement by senior management, contained in the Letter
of Transmittal of the Comprehensive Annual Financial Report, and the related opinion
and comments by the attest auditor for audit planning.
Audit Planning:
Annually, the Internal Audit Division shall submit to senior management, the Audit Committee,
and the City Council, a summary of the audit work plan and budget"for the following fiscal year.
The audit work plan is to be developed based on a prioritization of audit tasks using a risk-based
methodology. Any significant deviation from the formally approved work plan shall be
communicated to senior management, the Audit Committee, and the City Council through
periodic activity reports.
City of Fayetteville, Arkansas
f
1
T
I
Text File
—J` File Number: 2016-0130
Agenda Date: 4/5/2016 Version: 1
In Control: City Council Meeting
Agenda Number: C. 3
INTERNAL AUDIT DIVISION CHARTER:
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Status: Passed
File Type: Ordinance
AN ORDINANCE TO AMEND CHAPTER 33 OF THE FAYETTEVILLE CODE TO RENUMBER
THE SECTIONS OF ARTICLE XXV AUDIT COMMITTEE AND INTERNAL AUDITOR AND
RESERVE SECTIONS 33.365 THROUGH 33.369 AND 33.375 THROUGH 33.379 FOR FUTURE
USE, AND TO APPROVE AN AMENDMENT TO THE INTERNAL AUDIT DIVISION CHARTER
REDUCING THE NUMBER OF REQUIRED ANNUAL MEETINGS FROM FOUR TO THREE TO
BE CONSISTENT WITH THE REQUIREMENTS OF THE CITY CODE
WHEREAS, Chapter 33 of the Fayetteville City Code should be amended to renumber the sections of
Article XXV Audit Committee and Internal Auditor, and to reserve sections 33.365-33.369 and
sections 33.375-33.379 for future use; and
WHEREAS, the Internal Audit Division Charter should be amended to reduce the number of required
annual meetings from four to three in order to be consistent with the City Code.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends the numbering of
the sections of Article XXV Audit Committee and Internal Auditor of the Fayetteville City Code
from §§ 33.365 through 33.369 to §§ 33.370 through 33.374, and further reserves §§ 33.365 through
33.369 and §§ 33.375 through 33.379 for future use.
Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves an amendment
to the Internal Audit Division Charter reducing the number of annual meetings of the Audit Committee
from four to three in order to be consistent with the City Code.
City of Fayetteville, Arkansas Page 1 Printed on 41612016
Leslie Smith
Submitted By
City of Fayetteville Staff Review Form
2016-0130
Legistar File ID
4/5/2015
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
3/10/2016 Internal Audit/
Chief of Staff
Submitted Date Division / Department
Action Recommendation:
Correction of error conflict between the Internal Audit Charter and Ordinance 5522 making the charter agree with
the ordinance and re -numbering city code to allow for reserved sections.
Budget Impact:
Account Number
Project Number
Budgeted Item? NA Current Budget
Funds Obligated
-Current Balance
Fund
Project Title
Does item have a cost? No Item Cost
Budget Adjustment Attached? NA Budget Adjustment
Remaining Budget $
V20140710
Previous Ordinance or Resolution #
Original Contract Number:
Comments:
Approval Date:
CITY OF
ayrle CITY COUNCIL AGENDA MEMO
AS
MEETING OF APRIL 5, 2015
TO: Mayor Lioneld Jordan and the City Council
THRU: Don Marr, Chief of Staff
FROM: Leslie Smith, Internal Auditor C�e's
DATE: March 10, 2016
SUBJECT: Correction of error conflict between the Internal Audit Charter and
Ordinance 5522 making the charter agree with the ordinance and re-
numbering city code to allow for reserved sections.
RECOMMENDATION:
Staff recommends City Council approval of an error correction between the Internal
Audit Charter and Ordinance 5522 making the charter agree with the ordinance. Also
staff recommends City Council approval of re -numbering of city code in order to allow
for reserved sections.
BACKGROUND:
There is a conflict between Ordinance 5522 and the Internal Audit Charter regarding the
minimum number of meetings required annually.
The numbering of Chapter 33: Departments, Boards, Commissions, and Authorities did not
allow for reserved numbers for future use. With the re -numbering and reserved numbers for the
Town and Gown Advisory Committee, the Audit Committee and Internal Auditor sections will
move to 33.370 through 33.374 with 33.375-33.379 reserved for future use.
DISCUSSION:
None.
BUDGETISTAFF IMPACT:
None.
Attachments:
Agenda packet for correction of Internal Audit charter and code Chapter 33.pdf
Mailing Address:
113 W. Mountain Street www.fayettevilie-argov
Fayetteville, AR 72701
City of Fayetteville Internal Audit Division Charter
Introduction:
Internal Auditing is an independent anti objective assurance anti consulting activily that is
guided by a philosophy of adding value to improve the operations ofthe City of
Fayetteville It assists the City in accornplishiug its ohicetives by bringing a systematic
and disciplined approach to evaluate and improve the effectiveness ofthe City's risk
management, connol,and governance processes
Tole
'['he City of Fayetteville Internal Audit Division is established by the City Council, and
its responsibilities are defined by the Audit Committee ofthe City of Fayetteville and the
City Council as part of [heir oversight function
Policies and Procedures:
The Internal Audit Division will adhere to City of Fayetteville policies and procedures,
and specifically Policy and Procedure IC -Qt, internal Auditing Procedure. and the City of
Fayetteville Internal Audit Standmd Operating Procedures The Internal Audit Division
will apply tile INeinarionalStandards for theProlessionalPracticeoflrtternalAudifing
as possible in a single staff lutetnal Audit Division
Authority:
Authority is grinned For full, free, and unrestricted access by the Internal Audit Division
to ant• and all City or rayetteville records, physical properties, and personnel relevant to
any function under review All City of Fayettevitle employees are requested to assist the
Internal Audit Division in frdfdling it's role The Inicinal Audit Division shall also have
free and unrestricted access to the City Council amt the Audit Committee_
Documents and inf'ornraliun given to the forcinal Audit Division during a periodic review
will be handled to the same prudent and confidential mamicr as by those employees
normally- accountable for [hem
Organization:
The Internal Audit Division shall report administratively to the Mayor for assistance in
establishing direction, support, and adruinistrative interface; and functionally through the
Audit Committee to [lie City Council lbr stra[eeic direction, reinforcement, and
accountability The Internal Audit Division shall meet with [he Audit Committee at least
threelea-tinres annually
Independence:
All Internal Audit Division activities shall remain free of influence by any clement in the
organization, including matters of audit selection; scope, procedures, frequency. timing,
or report content to permit maintenance ofan independent and objective mental attitude
necessary inrcnderingreports
The Internal Audi[ Division shall have no direct operational responsibility or authority
over any of the activities reviewed. Accordingly, the Division shall not develop nor
install systems or procedures, prepare records, or engage in ally Other activity which
would normally be audited.
Audit Scope:
The scope ofthe Internal Audit Division encompasses the examination and evaluation of
the adequacy and effectiveness ofthe City's governance, risk management process,
system of internal control structure, and the quality of'performance, in carrying out
assigned responsibilities to achieve the City's stated goals and objectives. It includes:
Reviewing the reliability and integrity of financial and operating ntftnrnation and
the means used to identify, measure, classify. and report such information.
Reviewing the systems established to ensure compliance with those policies,
plans, procedures_ latus, and regulations which could have a significant impact on
operations and reports and whether the City is in c'omplianc'e.
Reviewing the means ofsafeguarding assets and, as appropriate, verifying the
existence of suclt assets.
• Reviewing and appraising the economy and efficiency with which resources are
employed.
Reviewing operations or programs to ascertain whether results are consistent with
established objectives and goals and whether the operations or programs are being
carr ied out as planned.
Reviewing specific operations at the request of the Audit C ontrnittee, the City
Council, or management, as appropriate
• Monitoring and evaluating the effccliveness orthe City's risk management
system
Reviewing the quality ofperfoi nance orexternal auditors and the degree of
coordination with the Internal Audit Division
Reviewing the internal control statement by senior management, contained in the
Letter of Transmittal ofthe Comprehensive Annual Financial Report, and the
related opinion and commenls by the attest auditor lin audit planning
Audit Planning:
Annually, the Internal Audit Division ;hall submit to senior management, the Audit
Committee, and the City Council. a sumulary ofthe audit work plan and budget for the
following fiscal year. "rhe audit work plan is to be developed based on a prioritization of
audit tasks using arisk-based methodology. Any significant devialion from the formally
approved work plan shall be communicated to senior management, lite Audit Committee,
and the City Council through periodic activity i eports
FAYETTEVILLE CODE OF ORDINANCES
TITLE III ADMINISTRATION
the University of Arkansas, to be selected by the
Chancellor or the Chancellors designee.
(Ord_ 5511, 7-3-12. Ord. 5564. 02-05-13)
33.362 Terms Of Office
Members appointed by the City Council shall serve a
two (2) year term, Members appointed by the Mayor,
with the exception of the City Council member
appointed by the Mayor, shall serve at the pleasure of
the Mayor. Members appointed from the University of
Arkansas shall serve for such period as to be
determined by the University.
(Ord. 5511, 7-3-12)
33.363 Officers And Quorum
At the first regularly scheduled Committee meeting of
each calendar year, the members of the Committee
shall elect from among themselves a Chairperson and
a Secretary, who shall operate as Vice -Chair, A
majority of the whole number of members shall
constitute a quorum to conduct business, and a
majority vote of those present shall be sufficient to
approve or deny any matter before the Committee.
(Ord. 5511. 7-3-12)
33.364 Meetings
The Town and Gown Advisory Committee shall meet
at least once per quarter to conduct regular business,
at a time and place that is mutually convenient to the
membership- The Town and Gown Advisory
Committee may meet more frequently if needed.
(Ord. 5511, 7-3-12)
33.365-33.369 Reserved
ARTICLE XXV
AUDIT COMMITTEE AND INTERNAL
AUDITOR
33.370 Establishment and Purpose
The Audit Committee which was established by
Resolution No. 134-00 remains established pursuant
to this Article. Its purpose remains to serve in an
advisory capacity between the City Council, the
independent auditor, the Internal Auditor and City
Administration concerning financial accounting and
reporting, audit functions, internal controls and
compliance with governmental regulations. The Audit
Committee shall ensure the independence of the
independent auditor, the ability and responsibility of
CD33:34
the Internal Auditor to report any concerns about
finances or accounting to the Audit Committee,
Administration and City Council, the integrity of the
Administration and the adequacy of public
disclosures. The Audit Committee shall, in conjunction
with the external auditors, review the City's financial
reports and information, the City's system of internal
financial and accounting controls, and the City's
compliance with governmental laws and regulations
regarding financial matters.
(Ord. 5522, 9-4-12)
33.371 Composition and Term
The Audit Committee shall include one City Council
member appointed by the Mayor and three citizens of
Fayetteville, at least one of which shall be a Certified
Public Accountant. The three citizens shall serve
three year terms of office.
(Ord. 5522, 9-4-12)
33.372 Meetings
The Audit Committee shall meet at least three times
annually, one of which must be with the independent
auditor, Internal Auditor, and Administration to discuss
the independent auditor's report and findings following
its audit of the City.
(Ord. 5522, 9-4-12)
33.373 Responsibilities and Duties
To fulfill its responsibilities and duties the Audit
Committee shall:
(A) Review the Charter periodically and update as
conditions dictate;
(t3) Serve on the review committee to select the
independent auditors. On an annual basis, the
committee should review and discuss with the
auditors all significant relationships the auditors
have with the City to determine the auditor's
independence, The annual independence review
should include a review of all non -audit related
consulting fees for nature of services and effect
on independence: a review of any and all
relationships between members of the audit firm
and employees of the City; the obtaining of a
formal written statement from the auditors as to
their compliance with professional guidelines
relating to independence; and discussion with the
auditors regarding the firm's own internal controls
over monitoring independence,
FAYETTEVILLE CODE OF ORDINANCES
TITLE III ADMINISTRATION
(C) Review the City's annual financial statements
and related financial information, including any
certification, report, opinion, or review rendered
by the independent auditors and any changes in
accounting principles or the application thereof;
(D) Review the performance of the independent
auditors. Annually, clarify with the independent
auditors that the auditors are ultimately
accountable to the City Council and that the City
Council has ultimate power in the appointment or
removal of the independent auditors;
(E) Periodically consult with the independent
auditors, outside the presence of management,
regarding internal controls and the completeness
and accuracy of the organization's financial
statements and related disclosures;
(F) In conjunction with the external auditors, review
with financial and accounting personnel and the
Internal Auditor the adequacy and effectiveness
of the accounting and financial controls of the
City, including controls over data processing
activities and functions. Approve
recommendations for the improvement of such
internal control procedures;
(G) Establish regular reporting to the Audit
Committee by management, the Internal Auditor
and the independent auditors regarding any
significant judgments made in financial
management's preparation of the financial
statements and the view of each to the
appropriateness of such judgments; and
(H) Following completion of the annual audit, review
with management and the independent auditors
financial statements and supplemental
disclosures required by generally accepted
accounting principles,-
(1)
rinciples;
(1) The City's Comprehensive Annual Financial
Report, including the financial statements
and supplemental disclosures required by
generally accepted accounting principles;
(2) Significant transactions not a normal part of
the City's operations;
(3) Selection of, and changes, it any, during the
year in the City's accounting principles or
their application,
(4) Significant adjustments proposed by the
CD33:35
independent auditors conclusions regarding
the reasonableness of those estimates;
(5) Any disagreements between the
independent auditor and management about
matters that could be significant to the City's
financial statements or the auditor's report;
(f) Difficulties encountered in performances of
the audit;
(7) Evaluate the cooperation received by the
independent auditor during its audit including
its access to all requested records, data and
information. Also, elicit the comments of
management regarding the responsiveness
of the independent auditor to the City's
needs. Inquire as to whether there have
been any disagreements with management
that, if not satisfactorily resolved, would have
caused the independent auditor to issue a
nonstandard report on the City's financial
statements_
(1) Advise the City Council on any issues reported
by the Internal Auditor and recommendations to
improve or correct any situations brought to the
Committee's attention by the Internal Auditor;
(J) Perform any other activities consistent with the
City's governing law, as the City Council deems
necessary or appropriate.
(Ord. 5522, 9-4-12)
33.374 internal Auditor
The City of Fayetteville Internal Audit Division Charter
(attached) is approved and adopted. Any
amendments to such Charter must be approved by
the Audit Committee with the revised Charter
provided to the City Clerk. The desire and intent of
the City Council is that the, Internal Auditor shall report
directly to the City Council if the Internal Auditor
believes any audit: financial or accounting issue is not
being properly and timely addressed by the Audit
Committee, independent auditor or administration,
(Ord. 5522, 9-4-12)
33.375-33.379 Reserved
RECEIVED
NORTHWESTARKANSAS APR B 7 2016
CITY
FAYETTEVILLE*t1lazefte
CLRKOC
!?GC � 'PAX: 479.695 1119, e -%-`v t' .N 1,1NA G,' 1
AFFIDAVIT OF PUBLICATION
I Cathy Wiles, do solemnly swear that I am the Legal Clerk of the
Northwest Arkansas Democrat -Gazette, printed and published in
Washington County and Benton County, Arkansas, and of bona fide
circulation, that from my own personal knowledge and reference
to the files of said publication, the advertisement of:
CITY OF FAYETTEVILLE
Ord 5862
Was inserted in the Regular Edition on:
April 14, 2016
Publ'cation Charges $115.70
n
l
Cathy Wiles
Subscribed and sworn to before me
This 25day oft"j`ff►1 2016.
A�N% A t
Notary Public
My Commission Expires 7 fZ 12-,!S-
ASHLEY
Z�
ASHLEY DAVIS
Arkansas - Washington County
Notary Public - Comm# 12694247
My Commission Expires Jul 2, 2025
**NOTE**
Please do not pay from Affidavit.
Invoice will be sent.
Ordinance: 5862
File Number: 2016-0130
INTERNAL AUDIT DIVISION
CHARTER:
AN ORDINANCE TO AMEND CHAPTER'
33 OF THE FAYETTEVILLE CODE TO
RENUMBER THE SECTIONS OF
ARTICLE XXV AUDIT COMMITTEE
AND INTERNAL AUDITOR AND
RESERVE SECTIONS 33.365 THROUGH
33.369 AND 33.375 THROUGH 33.379
FOR FUTURE USE, AND TO APPROVE
AN AMENDMENT TO THE INTERNAL
AUDIT DIVISION CHARTER
REDUCING THE NUMBER OF
REQUIRED ANNUAL MEETINGS FROM
FOUR TO THREE TO BE CONSISTENT
WITH THE REQUIREMENTS OF THE
CITY CODE
WHEREAS, Chapter 33 of the Fayetteville
City Code should be amended to renumber
the sections of Article XXV Audit
Committee and Internal Auditor, and to
reserve sections 33.365-33.369 and sections
33.375-33.379 for future use; and
WHEREAS, the Internal Audit Division
Charter should be amended to reduce the
number of required annual meetings from
four to three in order to be consistent with
the City Code.
NOW, THEREFORE, BE IT ORDAINED
BY THE CITY COUNCIL OF THE CITY
OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City
of Fayetteville, Arkansas hereby amends the
numbering of the sections of Article XXV
Audit Committee and Internal Auditor of the
Fayetteville City Code from §§ 33.365
through 33.369 to §§ 33.370 through
33.374, and further reserves §§ 33.365
through 33.369 and §§ 33.375 through
33.379 for future use.
Section 2: That the City Council of the City
of Fayetteville, Arkansas hereby approves
an amendment to the Internal Audit Division
Charter reducing the number of annual
meetings of the Audit Committee from four
to three in order to be consistent with the
City Code.
PASSED and APPROVED on 4/5/2016
Approved:
Lioneld Jordan, Mayor
Attest:
Sondra E. Smith, City Clerk Treasurer
73655684 April 14, 2016