HomeMy Public PortalAbout20080414AuditMinutes.pdfCity of TYBEE ISLAND
Audit Committee Meeting
Monday, April 14, 2008
1:30 PM
Tybee Old School – Room 7
MINUTES
Member Attendance: John Major, Freda Rutherford
Staff: Diane Schleicher, Bonnie Kline
John Major called the meeting to order at 1:30 PM and announced that we do not have a quorum,
thus we will delay the approval of the March 17th minutes until the May meeting.
John welcomed Bonnie Kline to Tybee and the audit committee meeting.
REVIEW – BUDGET TO ACTUAL DETAILED UNAUDITED AS OF February 29, 2008
John informed Bonnie that the audit committee went from getting no information on the
expenditures to getting too much. He asked Bonnie if she would provide the committee with
summary pages and detail only where there are deviations from budget. Freda said that the
campground financial report appeared not to have accruals included. Also she said the committee
did not receive a copy of the 5-year capital budget. Bonnie said she would clean up the March
report and have it for the committee at the next meeting.
OLD BUSINESS
Freda said that last year the ceramic club was an issue during the audit. At that time, Diane
informed the auditors that the club would be closed, owners would remove their equipment and
the locks would be changed. Freda said that she received a complaint a couple of weeks ago that
the club was still in operation. Diane said they were to have removed their supplies & equipment
by last April and she would check into it.
The meeting adjourned at 1:55 to begin the Auditors Entrance Conference.
Entrance Conference
Craig Moye, representing Mauldin & Jenkins joined the audit committee group. Diane announced
that the city would change its fiscal year to run from July to June. Craig said it might be difficult
for him to continue to represent M & J since he already has audits booked for that timeframe.
Diane said the change would make it easier for the city to manage capital projects – which occur
in the winter. He also noted that the city will have no property tax revenue to show in the first
fiscal year and may need to dip into their fund balance. This will look strange on the books. He
said the next audit will need to be scheduled this August or September.
John Major asked about impact on corrective action needed from this audit. Craig said some SAS
112 findings would carry over. Internal controls will be an issue on corrective action. This audit
will be complete before May. John noted that the dates should be locked in quickly. Craig said we
are likely to get David Irwin as our auditor for more of the work. Wade Sansbury will be here
tomorrow and we can discuss staffing with him.
Audit committee questions of the auditor:
A. Briefly discuss the changes in SAS requirements that have gone into effect since the last
audit.
Craig: SAS 104-111 have been implemented there were five findings in the last audit. One has
already been identified this year.
B. What difference in scope, or methods does the audit team anticipate as a result of the
new SAS requirements?
Craig: More documentation and testing of controls even at audit committee. Comparison of year-
to-year deviations. Standard testing, i.e. campground & public safety.
C. Based on what you have seen in your audit preparation, what concerns do you have going
into the audit?
Craig: In the general fund construction in process is reported as an asset ($800K) instead of an
expense. Cost of goods sold in the general fund should have been expensed. City has an inventory
that it didn’t have in the past
D. Are you aware of any accounting or system changes that have been made by the city
since your last audit that could impact the outcome of the audit?
Craig: Nothing as significant as prior years. Freda asked about software bugs in Incode. Craig
said he would check.
E. Have you been provided with everything you requested in the PBC letter or other
requests?
Craig: Yes. The only problem was confirmations – the city mailed the out instead of M & J. He
also got a paper report instead of electronic. M & J would rather control the whole confirmation
process.
F. Are you comfortable with our management structure and are you confident that we will
be able to provide the resources you need?
Craig: Seems OK. Have talked with John Redmond a couple of times.
G. What concerns do you have regarding our CFO transition and how that might impact the
audit process?
Craig: Must consider change in CFOs when assessing risk. Will do more testing.
H. To what extent will you be interviewing staff this year, compared to prior years?
Craig: Much more with SAS changes. There will be more questions on processes.
I. Is there any areas f the city’s finances that you will not be auditing? Why?
Craig: No, we will measure everything.
J. To what extent will you be assessing risk as a part of your audit?
Craig: Extensively. Freda asked about legal risks. Craig said at the end of the engagement they
will send the letter to the city attorney for his assessment. He waits to make sure everything is
covered. SAS 104-111 parallels Sarbanes-Oxley. In the past the biggest risk has been
management override of controls.
K. How will the audit scope differ from last year?
Craig: Significantly more tests.
L. Are there any issues, however minor, from last year’s audit that remain unresolved?
Craig: Won’t be able to tell until later.
M. When do you plan to have the exit meeting?
Craig: Thursday – 4:00, maybe earlier.
N. When do you expect to have the draft report? Final report? (Not answered???)
Bonnie asked about preparing a CAFR (certified audit and financial report). Craig said it was a
good thing to do; the state encourages it. It may be difficult with the 6-month timeframe in the
next fiscal year.
Arrangements were made for daily meetings between the audit committee members and Craig.
Meeting ended at 3:00 Pm.
Respectfully submitted,
Freda Rutherford, Secretary
Approved May 12, 2008