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HomeMy WebLinkAboutOrdinance 002 - Audit Committeev-ces urge 2� a Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Business Meeting of April 21, 2008 (Work Session) Please see directions for completing this document on the next page. DATE: 4/14/08. FROM: David Givans Administrative Services - Internal Audit 330-4674 TITLE OF AGENDA ITEM: Discussion of County Audit Committee ordinance No 2008-002. PUBLIC HEARING ON THIS DATE? No - But will be needed as move forward. BACKGROUND AND POLICY IMPLICATIONS: The County Audit Committee is currently prescribed by County Policy P-2004-108 as updated in 2004. The County Administrator requested that we look a codifying the policy given the importance of the audit committee to the County Internal Audit Program as well as their participation in the oversight of the external audit of the County. The current audit committee with the assistance of the County Internal Auditor has reviewed and developed recommended ordinance language that identifies their current roles and responsibilities. The ordinance is very similar to the original policy. This draft has been reviewed by the County Administrator and Legal counsel. The County audit committee recommends the approval of this ordinance by the board. FISCAL IMPLICATIONS: None noted RECOMMENDATION & ACTION REQUESTED: Move that ordinance be approved and brought forth for first and second public hearings. ATTENDANCE: David Givans, County Internal Auditor DISTRIBUTION OF DOCUMENTS: David Givans REVIEWED LEGAL COUNSEL For Recording Stamp Only BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON An Ordinance Adopting Chapter 2.15, County Audit Committee, of the Deschutes County Code and Setting Forth the Conditions and Specifics Under Which said Appointment Shall Function. * * * ORDINANCE NO. 2008-002 WHEREAS the Board of County Commissioners desires to form the Audit Committee as an advisory committee to advise the Board on fulfilling their responsibilities for financial reporting, internal controls, and compliance with laws, regulations, and ethics within the County; and WHEREAS the Audit Committee will provide oversight to auditing (external and internal) for the County; and WHEREAS government auditing independently reviews, evaluates and reports on the financial condition, the accuracy of financial record keeping, compliance with applicable laws, policies, guidelines and procedures, and efficiency and effectiveness of operations; and WHEREAS the Audit Committee protects the independence of the internal audit program by ensuring that the County Internal Auditor, who reports to the County Administrator, is not influenced by directives of the County Administrator or by specific Commissioners.; now, therefore: THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, ORDAINS as follows: Section 1. ADDING NEW CHAPTER. The Deschutes County Code is amended by adding a new chapter, Chapter 2.15, County Audit Committee, set forth in Exhibit "A", attached hereto and by thi reference incorporated herein. /// PAGE I OF 2 - ORDINANCE NO. 2008-002 (4/21/08) Section 2. REPEALING CHAPTER SECTION. The Deschutes County Code is amended by repealing chapter section DCC 2.14.100, Audit Committee, set forth as part of the ordinance for County Internal Auditor. It is being replaced by addition of the above new chapter. Dated this of , 2008 BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON ATTEST: DENNIS R. LUKE, Chair TAMMY (BANEY) MELTON, Vice Chair Recording Secretary MICHAEL M. DALY, Commissioner Date of 1st Reading: day of , 2008. Date of 2" Reading: day of , 2008. Record of Adoption Vote Commissioner Dennis R. Luke Tammy Melton Michael M. Daly Yes No Abstained Excused Effective date: day of , 2008. ATTEST: Recording Secretary PAGE 2 OF 2 - ORDINANCE NO. 2008-002 (4/21/08) EXHIBIT "A" Chapter 2.15. COUNTY AUDIT COMMITTEE 2.15.010 Authority. 2.15.020. Composition. 2.15.030 Meetings. 2.15.040. Responsibilities. 2.15.010. Authority. A. The Board of County Commissioners ("Board") hereby establishes the Audit Committee as an advisory committee. The committee shall advise the Board and County Administrator on significant audit matters including, but not limited to: 1. The selection, compensation, and removal of external auditors hired to audit the financial statements for the County and its related entities; 2. Consultation with the County Administrator regarding the appointment of the County Internal Auditor; 3. Increases and decreases to the requested budget for the internal audit program; and 4. The work plan for internal audits performed under DCC 2.14.040. 2.15.020. Composition. A. The audit committee shall be comprised of seven members appointed by the Board. B. Each member shall be appointed to serve a term of two years. Upon initial formation of the committee, the Board may appoint any member to a shorter term. A member may be appointed to more than one term. The Board may remove a member of the committee at any time. In the event of a vacancy on the committee the Board shall, as soon as practicable, appoint a person to serve the unexpired portion of the former member's term. C. The committee shall consist of one (1) member county commissioner, two (2) county department head members, and four (4) public members. The County Administrator shall be an ex -officio nonvoting member. D. A public member shall be a registered voter within Deschutes County. The chair of the committee shall be a public member and shall be selected by a majority of the public members. The chair shall serve a one-year term and may be selected for additional terms. If the public members cannot decide upon a chair, the larger committee shall decide. The chair shall preside over meetings, as well as provide input on topics for the agenda. 2.15.030 Meetings A. The audit committee shall meet as the committee deems necessary. A quorum shall constitute a majority of the members, two of whom must be public members. Vacant positions shall not be considered in determining whether a quorum exists. Minutes shall be prepared in accordance with the Oregon Public Meeting Law. The committee may require certain County management attend meetings to address reports being discussed. Auditee departments will be invited to meetings where their internal audit report is discussed. B. A department head audit committee member shall not vote on an issue relating to an audit directly pertaining to his or her department. If there is any question as to whether audit committee members should recu;e themselves from a vote, the committee should vote to determine whether the member should recuse himself or herself. C. The County Internal Auditor shall facilitate and coordinate such meetings, as well as provide ancillary support to the committee, as time permits. Exhibit "A" to Ordinance No. 2008-002 (4/21/08) Chapter 2.15 1 (04/2008) 2.15.040. Responsibilities. Responsibilities of the Audit Committee include: A. Overseeing the independent audit of the County's financial statements, including: 1. Overseeing the selection, renewal or removal of the independent external auditor by making a recommendation to the Board for final approval; 2. Meeting with the external auditors during planning of the audit, presentation of the audited financial statements, and discussion of the letter to management on recommendations; and 3. Overseeing the resolution of audit findings in, areas such as internal control, legal and regulatory compliance, and ethics. B. The committee shall work to assure coordination between the internal and external auditors, management, the County Administrator and Board. C. The audit committee shall ensure the internal audit program performs its function. The committee shall: 1. Review the internal audit ordinance (DCC 2.14) at least every other year; 2. Review proposed internal audit work plans and make recommendations concerning internal audit projects; 3. Review the budget and staffing levels of the internal audit program (DCC 2.14.050); 4. Review internal audit reports and other communications developed for the County; 5. Review and provide input on internal audit program goals; and 6. Review any quality assurance reviews created pursuant to DCC 2.14.090. D. The committee shall make appropriate recommendations concerning the internal audit program based upon the reviews that it conducts pursuant to subsection C of this section. E. The committee shall make an annual report to the Board summarizing the committee's activities and recommendations. The report may be delivered at an audit committee meeting attended by the Board or may be scheduled for a regularly scheduled meeting of the Board. The report shall be delivered to the Board on or before December 1 each year. F. The committee shall perform other activities related to this chapter as requested by the Board. (Ord. 2008-002 §1, 2008) Exhibit "A" to Ordinance No. 2008-002 (4/21/08) Chapter 2.15 2 (04/2008)