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HomeMy Public PortalAbout20070917AuditMinutes.pdfCity of TYBEE ISLAND Audit Committee Meeting Monday, September 17, 2007 4:00 PM Tybee Old School – Room 7 MINUTES Member Attendance: Sam Adams, Freda Rutherford, David Birdwell, Jim Anderson, & Sue Off Member ( inactive): John Major Staff: John Redmond Sam Adams called the meeting to order at 4:05 PM. Jim Anderson motioned to approve the minutes from the July 19th meeting, Sue Off seconded. All approved. John Major asked the minutes reflect that the Ethics Ordinance requires that members of city appointed boards and committees who have qualified to run for local office become inactive during the campaign season. Thus, he is attending the meeting as a guest. SAS 104 – 111 TRAINING: Sam said he appreciated the attendance of John Redmond to train us on what he learned at the SAS training. John Redmond said that the SAS training constituted about 30 minutes of the 2 day training session with the bulk of the time devoted to GASB because some of it has changed. He said that he has familiarized himself with SAS 104 – 111 and proceed to hand out a summary of the new requirements. He read from the summary that, “The primary objective of these statements is to enhance auditors’ application of the audit risk model in practice by specifying among other things:  More in-depth understanding of the entity and its environment, including its internal control, to identify the risks of material misstatement in the financial statements and what the entity is doing to mitigate them.  More rigorous assessment of the risks of material misstatement of the financial statements based upon that understanding.  Improved linkage between the assessed risks and the nature, timing, and extent of audit procedures performed in response to those risks.” Freda asked if these standards were directed at the auditors? Redmond said yes, but it affects us. He said we need to assess any internal controls to ensure that we have everything in place for the auditors. Sue asked if we have a copy of the checklist? John said no and it’s not available on the web site. He said he thought we could get it once we have engaged an auditor. Sue then asked what controls are in place to ensure documentation month-to- month? Redmond said that is what he is working hard on. If auditors feel any threat of risk they expand the audit. Redmond suggested that the audit committee take a look at internal controls, e.g. cash receipts, bank statements, & check writing. He said the AC review would give the auditors a level of assurance. Freda asked about bank reconciliation. Redmond said there have been some problems with the software and a consultant from Incode has been in. The consultant discovered some problems with the program being incorrectly set. This has been corrected and Claire has been able to move forward. She should have everything resolved in a couple of weeks. John proceeded to walk the committee thorough the standards and explain the implications of each one. Discussion continued about small funds and the level of materiality. CONTRACT EXTENSION WITH MAULDIN AND JENKINS – ACTION ITEM: Sam referenced the conference call with Mauldin and Jenkins and handed out the notes from the call. There was a motion by Jim, 2nd by Sue, to recommend that council extend the contract for two years and accept the price proposal of $19,000 + an amount not to exceed $5,000 for the E911 audit. Discussion followed about the cost reasonableness of the E911 audit costs. John said the fund is only $65,000. Sue asked if we could get a second auditor for that account? Redmond said he thought we could get a second auditor but the fund would still affect the audit opinion. John Major asked if there could be some establish criteria for billing the entire amount. Redmond said that he doesn’t know how much time the auditors devoted to that fund on the prior audit. Sam asked if Jim and Sue would amend their motion to include that Sam would call M & J to get clarification on the E911 fund audit price of “not to exceed $5,000” so that we will not be charged the maximum if that level of audit work is not required. Both agreed to the amendment. David asked why extend for two years. Sam said it fixes the price for the next two years and a five year audit period is what GFOA recommends. Sam called for the vote and all approved. Sam said he will get on the next council agenda to make our recommendation. UPDATE ON FINANCIAL STATEMENTS, REPORT ON CAMPGROUND FINANCIALS: John Redmond handed out the Base Balance Sheet as of August 31, 2007 and the Rivers End Park & Campground 2007 Financial Results by Month. He pointed to the campground statements and said that August revenue was down a little; Spring and Fall will always be better. He walked the committee through the report including the Capital Investments and Debt service which he included in the report. Sam asked that the committee study the financial statements and ask Redmond any questions. GFOA AUDIT COMMITTEE REVIEW: Sam said that due to the length of the meeting he would delay the review of the next two sections until the October meeting. ETHICS COMMITTEE REPORT: Sue reported that the Ethics Ordinance was passed unanimously at the May meeting but that it had been put up for a new vote due to some typos and a deleted definition. The council - who had voted unanimously to approve it voted 4 – 2 on the clean-up vote. It will come up for the second reading at the next council meeting. It will then be posted on Muni Code. She noted that the version that was passed in May has never been posted. Sam commented that maybe we should review the Muni Code contract for compliance. Sue announced that there are seven members were appointed to the permanent ethics committee with three alternates; she is one of the alternates. OLD BUSINESS: None. NEW BUSINESS: Redmond announced that he attended a GMA session on tax reform, HB 900, with Wanda Doyle. This bill would eliminate property taxes and add a tax on services. He said he thinks this bill will pass the House and go on to the Senate. It would have the effect of doing away with home rule. GMA thinks additional revenue will go in the state coffers. Locals could still pass SPLOST and include operating costs. Freda said she knew that Wanda has requested a presentation at a future council meeting but that she thought both sides should be presented. Sam schedule meetings for October 8th, November 12th and December 10th. The meeting was adjourned at 5:30PM. Respectfully submitted, Freda Rutherford, Secretary