HomeMy WebLinkAboutAudit Committee Minutes 07-13-2004
Deschutes County -
Audit Committee
MINUTES - 7/13/2004
Re: Deschutes County Audit Committee Meeting Minutes – Tuesday, July 13, 2004
Committee Members Present: Commissioner Dennis Luke; David Givans, County Auditor; Les Stiles,
Sheriff's Office; Barry Jordan, Jade Mayer, Jim Keller, and James Kerfoot, Public Sector.
Others present were Marty Wynne, Finance; and Mike Maier, County Administrator. Guests present for a
portion of the meeting from Harrigan Price Fronk & Co. were Candace Fronk, Wes Price, Jennifer
Welander, and Richard Bailey.
Barry Jordan called the meeting to order at 12:15 p.m.
External Auditor Planning
Candace Fronk, with Harrigan Price Fronk & Co. (County’s external auditors), gave a brief
overview of their audit approach, timeline, what County is looking for, etc.
Audit Approach
1. Reliance on beginning balances of prior auditor - They have gone to Eugene and
reviewed Moss Adams work papers to see that the beginning balances were tested. Most of
what was available to them for review was the paperwork that was provided to Moss Adams by
the County Finance Department.
2. Audit Procedures - Some of the Departments have already been visited by them to get an
understanding of how things are handled and how that interacts with what Finance does. The
Audit Committee will help identify which Departments need to be done and help determine the
items that need to be looked at.
Some of the items they will be concentrating on will be: Departments that are taking in large
amounts of cash, source documents, fixed assets, revenue and expenditures. They will have a
balance sheet approach to make sure funds are accounted for and that money is going into the
correct fund. They will look at Grant Contracts and miscellaneous revenues to see if money
came in and was distributed properly.
3. Controls over accounts payable & payroll - They will be relying on County Internal
Controls for accounts payable and payroll. In June they went through invoices and payroll
records to make sure that everything was supported. The expenditure side is running as should
be. The revenue side is a little more complicated because of so many diverse sources. They
will confirm a lot of grants and State money directly with the State. The Federal grants will be
based on the grant contract.
Minutes of Audit Committee Meeting Tuesday, July 13, 2004
Page 1 of 4
4. Compliance testing and Single Audit - The Single Audit is in reference to Federal money.
Anyone who spends more than $500,000.00 in Federal money has a Single Audit. They will be
testing all the programs that are over $300,000.00. Last year that was primarily WIC,
Community Development Block Grant, and Federal funds; school and roads. They test the
Road Department in quite a bit of depth anyway to make sure their expenditures are really for
roads. This is partially because they have to send comment to the Secretary of State that
County has used gas tax money appropriately.
The other Road Department area will be their cost accounting system. Technically, one of the
comments that is made to the Secretary of State is that they have a cost accounting system. If
the County Road Department is going to do work themselves, as opposed to contracting it out,
they need to show that they have captured those costs and are doing it at the least cost. They
will check on the bids and quotes and make sure funds are being used where they are
supposed to.
Identify areas the Audit Committee or management feel have audit risk or need further
review -
1. Land Inventory – Marty Wynne asked that they take a look at inventory of land and value of
land.
2. Controls over technology, potential use of previous County Consultant reports- Mr.
Wynne asked about controls over technology. Ms. Fronk said that they don’t go too deep into
the technology side but they can watch for potential problems.
Ms. Fronk felt that the Departments that they should make an extra effort to review this year are:
Solid Waste, CDD, Health Department, and Mental Health Department (mainly because of the
cash/revenue issues.) She asked the Committee if they had any input on Departments that they
would be looking at. Commissioner Luke said that if there are other ones to do, Solid Waste
may not be the one to do at this time due to Land Use Hearings they will be busy with this year.
Solid Waste has had an Internal Audit done this year. Sheriff Stiles asked that the Sheriff’s
Office get another review this year. Per Sheriff Stiles, David’s audits have been very helpful in
terms of fixes.
Accounting for additional PERS payment from pension obligation bonds - One thing they
found that Moss Adams did not appear to go into depth on was PERS. They will look at full
accrual balance sheet and might need to adjust the beginning numbers.
External Audit Timeline for completion –
Thru Sept 17th – Service/Library Districts audit fieldwork
Sept 20th - County provides adjusted trial balance, supporting work papers,
preliminary draft financial schedules
Sept 20th – Oct 8th HPF audit fieldwork at County
Oct 11th – Oct 29th HPF wrap-up & review at our office
Oct 29th County provides draft CAFR Excel & Word files to HPF
Oct 29th – Nov 24th HPF reviews CAFR and HPF admin staff completes formatting,
headings, pagination, table of contents, etc.
Nov 24th HPF provides final draft of CAFR to County for review (and drafts
of service/library district reports, if not provided earlier)
Minutes of Audit Committee Meeting Tuesday, July 13, 2004
Page 2 of 4
Dec 1st County provides corrections/changes of final draft to HPF
Dec 3rd HPF provides 15 bound completed copies of the CAFR to the
County
Dec 14th HPF meets with Commissioners and Audit Committee
HPF provides remaining 35 bound copies of CAFR, 10 copies
each of final bound service/library district reports, Data Collection
form, DEQ agreed-upon procedures report and Secretary of
State forms
Dec 17th Reports mailed to GFOA, Secretary of State, etc.
Audit Committee Meeting Dates -
David Givans will send out an email with some meeting dates for next year. The days will
change from Tuesdays to Thursdays.
Request to Distribute Minutes
Mr. Givans was asked by Departments if the Minutes could be posted. It was decided to go
ahead and post the Minutes as well as other Audit Committee information to the County Intranet
for Departments review.
Work Plan
Mr. Givans passed out a draft of the Audit Work Plan. (See attached as Exhibit A.)
Risk Assessment (spread sheet)
Mr. Givans explained the Risk Assessment worksheet. Finance would like to see review of cash
controls on receipts. Prioritization of items was discussed and recommended changes made.
JADE MAYER: Moved approval of the Audit Work Plan, subject to revisions.
JIM KELLER: Second
VOTE: Unanimous approval.
Internal Audit Program Charter - Mr. Givans would like a Charter/Ordinance provide authority for the
internal audit program. (See attached as Exhibit B.)
Status of Audit Projects and Internal Audit Program
Mr. Givans gave the Committee brief status update of the following projects:
Health Benefits Trust – (See attached as Exhibit C.)
Sheriff Office Report
Solid Waste Report
Minutes of Audit Committee Meeting Tuesday, July 13, 2004
Page 3 of 4
Being no further issues brought before the committee, Barry Jordan adjourned the meeting at
2:30 p.m.
Respectfully submitted,
_________________
Connie Thomas
Senior Secretary
Minutes of Audit Committee Meeting Tuesday, July 13, 2004
Page 4 of 4