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HomeMy Public PortalAbout20070719AuditMinutes.pdfCity of TYBEE ISLAND Audit Committee Meeting Monday, July 19, 2007 4:00 PM Tybee Old School – Room 7 MINUTES Attendance: John Major, Freda Rutherford, David Birdwell, Jim Anderson, & Sue Off Staff: John Redmond John Major called the meeting to order at 4:05 PM. Jim Anderson proposed to amend the minutes to reflect questions about the budget vs. actual report on the May 31st financial statements. There was a motion by Jim, second by David, to approve the minutes as amended from the June 11th meeting. All approved. UPDATE ON FINANCIAL STATEMENTS, REPORT ON CAMPGROUND FINANCIALS: John Redmond handed out the May 31, 2007 financials statements. He explained that the negative line item in parking services was because of the purchase of new meters. He said that the deficit will wash out in the June financial statement. He then reported on the campground financials. He said the news is good. As of June, the cash flow is positive. The profitability has increased to about $10,000 per month. Redmond said that there will be a need for more electrical on the vacant lot, but this will consequently increase revenues. AUDIT FINDINGS: Redmond said that he has been monitoring to ensure that the Hotel/Motel taxes are recognized and recording all tax adjustments monthly. For the second finding (due to/due from) Jan Fox is training Claire to ensure that adjustments are made on a monthly basis. The third finding (accrued interest on outstanding debt) is now being accrued on a monthly basis. The fourth finding (pooled cash reporting) is tricky. Auditors want all funds to reflect a positive balance at the end of each month. He said four funds will be negative at the end of May because the general fund did not have the funds to transfer and he could not move funds from the money market account. This will be cleared up in July. For the fifth finding (accounts payable liabilities) he will ensure that all outstanding liabilities are recorded. The management letter recommends fund risk management – that we identify all areas of potential fraud and develop plans to ensure controls are in place. John Redmond said it is a big project to determine all areas of risk. Major said maybe this is an area where the audit committee can provide some assistance. Redmond agreed. He noted that the problems in the past have been in parking services. The auditor also recommended that water/sewer billing occur on a monthly basis. Redmond said that the city attorney has drafted an ordinance and monthly billing can be implemented in September or October. Freda asked about the problem with water bill collections when properties are sold. Redmond said that in LaGrange the city ran a credit report on new customers and if the score was low they required a deposit. The alternative is to put liens on property. Major asked for a report to define the extent of the problem. Major then asked about the $186,000 budget adjustment for life guards that was on the last council agenda. Redmond reported that the life guards were moved from the supervision of the police chief to the fire chief this year. The head life guard overran his budget and was out of funds about the beginning of July. This occurred because more life guards were put on payroll than had previously been the case. Freda asked about head count as a budget control mechanism. Redmond replied that more hours were worked by each life guard than had been planned. Freda suggested that more internal controls be placed on head count and/or payroll hours. Redmond said that this will work out because the tax digest will probably produce about an additional $200,000. He noted that some of this surplus needs to go to campground upgrades. Sue asked about contracting out life guards. Redmond replied that it was probably not feasible. AUDIT RFP FOR 2007 AUDIT John Major reminded the committee that we had an e-mail from Craig Moye, M & J, regarding extending their audit contract. Redmond handed out a draft RFP and asked for comments from the committee. Send to: tybeecfo@comcast.net or Jredmond@cityoftybee.org. Freda asked if we were not bidding for a compliance audit because we believed that SAS 104-111 will emphasize compliance as a part of the regular audit. Major proposed that language be included in the RFP. Discussion followed regarding auditor selection procedures and criteria. David referenced the Audit Committees GFOA booklet and noted that the recommendation that the length of engagement be five years. Sue pointed out that we could extend the M&J contract for another two years and be at a five year length of engagement. Major said that he would respond to Craig’s e- mail and ask for their cost proposal and terms. ETHICS COMMITTEE REPORT: Sue reported that the ordinance has been approved. Council was to have made appointments to the committee by July 15th. She said that it was her understanding the appointments would be made at the next council meeting. OLD BUSINESS: John Major said that the city’s postings of ordinances etc. have problems. Sue said she thought the clerk was doing a much better job of keeping things up-to-date and transmitting the changes to Muni Code. Major added that he had an experience where an ordinance was not up-to-date and had caused some problems. NEW BUSINESS: Freda raised the issue of relocation costs for new staff. Major said he thought the city policy was in all likelihood uncompetitive. He proposed that the audit committee survey other communities to see what their policies are and make a recommendation to council to be consistent. After discussion the committee proposed to refer the recommendation to council liaison Kathryn Williams. Major proposed that the audit committee delay the September meeting until after staff training on SAS. The committee agreed to meet on September 11th. The meeting was adjourned at 5:20PM. Respectfully submitted, Freda Rutherford, Secretary