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HomeMy WebLinkAboutAudit Committee Minutes 11-09-2017JTES C a < For Recording Stamp Only Minutes of the Meeting of the Deschutes County Audit Committee Thursday, November 9, 2017 Members consist of S Public (P), and 3 County Management (CM) Quorum =five Committee Members resent: David Givans, County Internal Auditor x Facilitator: Lindsey Lombard, Chair, (P) Administrative Services Director, Bend Park & Recreation District x Wayne Yeatman, (P) Professor, COCC John Barnett,(P) CPA, Barnett & Company CPA x Tom Linhares, (P) x Daryl Parrish, (P) x Anthony DeBone, (CM) County Commissioner x Nancy Blankenship, (CM) County Clerk x Dan Des oto ulos, (CM) Deschutes County Fair & Expo Center Director Others Present: x Tom Anderson, County Administrator x Erik Kropp, Deputy County Administrator x Wayne Lowry, Jeanine Faria, Finance Department x Phil Henderson, County Commissioner x I Melissa Goddard, Management Analyst x Laura Skundrick, Administrative Assistant — BOCC x Chris Ogren, County Intern x Lealan Miller, Partner, Eide Bailly LLP CALL TO ORDER: Chair Lombard called the meeting to order at 12:04 pm, noting that due to Mr. Givans' absence, some agenda items may be adjusted or postponed. AGENDA: • Lunch/Introductions/Announcements. Introductions were made. • Outstanding Audit Committee Topics. None identified. Approval of Minutes: Motion made by Member Linhares and supported by Member Blankenship to approve the minutes of the Audit Committee Meeting of September 14, 2017. Motion carried. AUDIT COMMITTEE MEETING Thursday, November 9, 2017 Page 2 of 4 Presentation of County's Comprehensive Annual Financial Report for Fiscal Year ended June 30, 2017 — Eide Bailly LLP, Lealan Miller, Partner Chair Lombard introduced Lealan Miller to present this year's external audit. He summarized his attachment, stating the October 30th 2017 report presented unmodified opinions, which identify that the County provided clean financial statements with no material weaknesses or significant deficiencies. He added that because the county receives more than $750,000 in federal funds, a single audit is required, which returned no discrepancies. Mr. Miller noted the actuarial accrued liability is an estimate, but shows up as a large liability on financial statements and skews the numbers. Jeanine Faria added that those estimates are provided by Oregon PERS and are one year old by the time they are in the financial statements. Mr. Miller explained 2017 reporting standards required by the Governmental Accounting Standards Board (GASB) as well as upcoming GASB requirements for 2018. Mr. Linhares asked whether there was a concern identified around separation of duties between Mr. Lowry's positions of both Finance Director and County Treasurer. Mr. Lowry stated that there is separation, since the County Assessor determines taxes in a completely separate office than Finance. Mr. Miller added that a concern would only occur if staff worked on both sides of that process, in a position that they had opportunity to take advantage of that. Chair Lombard asked whether this is the last year of the contract with Eide Bailly and if that goes out for an RFP. Mr. Lowry replied there may be one year still on the contract, which eventually gets solicited through County Auditor Givans. Mr. Lowry overviewed the Comprehensive Annual Financial Report, highlighting particular pages of interest. Mr. Parrish asked how often the investment policy changes or is discussed, to which Mr. Lowry replied the policy is reviewed each year with changes made as necessary. Mr. Linhares commented that his review of the financials confirmed the county is in positive financial position. He stated specifically that the county is proactive with the reserve fund, there isn't a large amount of debt, and typically revenues are coming in higher than budgeted with expenses coming in lower. Mr. Miller agreed it's a very strong county. Ms. Faria replied there has been a lot of forward thinking and vision, such as the self-funded healthcare plan. Audit Committee 2015-16 Annual Accomplishments Report - Lindsey Chair Lombard reviewed the report of accomplishments, summarizing that three internal audit performance reports were issued throughout the year as well as two follow-up reports, along with a global follow-up report. Performance measures show 97% overall satisfaction. In addition, the committee reviewed, discussed and approved a 2017/2018 workplan. The committee currently has one vacancy. Chair Lombard asked Ms. Goddard to introduce herself and summarize her duties on Mr. Givans' staff. Ms. Goddard summarized her professional background and experience, adding that she currently provides Mr. Givans with on-call project support and helps to substantiate his work at his request. AUDIT COMMITTEE MEETING Thursday, November 9, 2017 Page 3 of 4 At 1:OOpm, Commissioner Henderson had to leave the meeting. Chair Lombard asked Mr. Kropp for an update on the hotline. Mr. Kropp explained there is a small group working through the details of the hotline, which would be in addition to the current fraud and misconduct reporting policy, providing another avenue to report suspicious activity, but in an anonymous way. The hotline personnel would be trained to get the pertinent information and direct it to the appropriate person. Follow Ups: Global Follow U Chair Lombard summarize the follow-up report and explained it pertains to any outstanding recommendations made to departments. Mr. Parrish stated it looks as though lots of work has been done. Mr. Linhares added that several programs had been discontinued, so follow-up was not possible. Chair Lombard asked about Human Resources recommendations regarding compliance with the Federal Credit Reporting Act, and the process for that. Mr. Kropp explained that due to H.R.'s focus on the class and comp study, there recently hasn't been much work done toward that recommendation. CDD Mr. Parrish asked about the draft policy that did not get approved. County Administrator Anderson stated there were some follow-up questions and the commissioners were not ready to approve it at that time. It will be brought back during budget committee this year, which will help clarify some of those questions. County College exercise/input — David Mr. Ogren briefly overviewed the exercise that Mr. Givans provided during his County College presentation and some input received from the class. County Administrator Anderson suggested that Mr. Givans can report on the details if he'd like at the next meeting. Internal Audit program — budget request This item was tabled due to Mr. Givans' absence. Chair Lombard offered to follow up with Mr. Givans to ensure this conversation can happen prior to the March meeting if anything is needed from the committee. Finance and HR Software Update — Erik or Wayne Mr. Lowry explained the financial system went live July first and has gone very well, and vendors are now being paid from this system. The big challenge will come June, using the past year's worth of data to build the Comprehensive Annual Financial Report. He added the H.R. payroll portion of the system was planned to go live January first, but will likely be April or July. Mr. Kropp explained the goal of bi-weekly payroll starting in January and the barriers that need to be addressed prior to that. Chair Lombard offered to provide her feedback from their experience switching pay periods about a year ago. AUDIT COMMITTEE MEETING Thursday, November 9, 2017 Page 4 of 4 UPDATES/Other Items: (David): • Current audit work status: Solid Waste Ms. Goddard stated she believes the audit work is done and Mr. Givans is working on the report. • Next on work plan — Sheriffs Office Ms. Goddard suggested that she will be assisting with this audit, focused around the nurse and medical program. • Committee open position recruitment — County Administrator Anderson noted that a press release was sent out. • Human Resource Munis/Class & Comp/ Hotline Work Regarding the Class & Comp Study, Mr. Kropp stated that a steering committee has been working with H.R., and the study covers AFSCME employees and non -represented employees. The steering committee's recommendations have been shared with the board three times, and Monday will be the fourth. Chair Lombard asked about the market used for the study and who was included. Mr. Kropp replied it included other cities in the area, Oregon counties of similar size, and private sector organizations. County Administrator Anderson added that it was customized based on classifications, and based on finding out who our competition is, so it could be more specific. Chair Lombard asked if cost of living was taken into account, and Mr. Kropp confirmed how economic adjustments were factored in. Mr. Linhares asked whether the study work has been internal or external, and Mr. Kropp replied an outside firm was hired, but some work has been done internally, with H.R. working very closely with management of each department. • See Internal Audit status report September 2017 through Oct 2017 This item was skipped due to Mr. Givans' absence. OTHER BUSINESS/CLOSING: County Administrator Anderson mentioned the ALGA handout that was sent out. No discussion. County Clerk Blankenship asked when the RFP for audit services would begin. Mr. Lowry suggested beginning the process around July or August in order to prepare for the current contract expiration date in December. Chair Lombard suggested discussing the RFP timeline and process at the March Audit Committee meeting. Adiournment: Being no further issues brought before the Committee the meeting was adjourned at 1:45 p.m. Respectfully submitted, ra drick Administrative Assistant - BOCC