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HomeMy WebLinkAboutAudit Committee Minutes 03-08-18\)VES S Co G For Recording Stamp Only Minutes of the Meeting of the Deschutes County Audit Committee Thursday, March 8, 2018 Members consist of 5 Public (P), and 3 County Management (CM) Quorum =five Committee Members resent: x Facilitator: David Givans, County Internal Auditor x Lindsey Lombard, Chair, P Administrative Services Director, Bend Park & Recreation District x Wayne Yeatman, (P) Professor, COCC x John Barnett,(P) CPA, Barnett & Company CPA Tom Linhares, (P) x Daryl Parrish, (P) x AnthonyDeBone, (CM) County Commissioner x Nancy Blankenship, CM County Clerk x Dan Despotopulos, (CM) Deschutes County Fair & Expo Center Director Others Present: Tom Anderson, CountyAdministrator; Erik Kropp, Deputy Administrator; Chris Ogren, Intern x Wayne Lowry, Finance Director x fxx Melissa Goddard, On-call Auditor Timm Schimke, Solid Waste Director; Sue Monette, Solid Waste Management Analyst x Laura Skundrick, Administrative Assistant — BOCC CALL TO ORDER: Chair Lombard called the meeting to order at 12:07pm. AGENDA: Lunch/Introductions/Announcements. Introductions were made. Outstanding Audit Committee Topics. None identified. Approval of Minutes: Motion made by Member Parrish and supported by Member DeBone to approve the minutes of the Audit Committee Meeting of November 9, 2017. Motion carried. INTERNAL AUDIT REPORT: Solid Waste — Controls Over Revenues Mr. Givans summarized work done with the Solid Waste department throughout 2017 with a focus on controls over revenue, and the department was very receptive. Mr. Schimke noted the audit was very thorough and he agrees with the recommendations provided. As a result, the department is adding several new positions, including the hiring of management analyst Sue AUDIT COMMITTEE MEETING Thursday, March 8, 2018 Page 2 of 4 Monette. Mr. Schimke stated that of the 16 final recommendations, about half have already been completed or are close, and eventually all of them will be. Mr. Givans suggested the analytics provided are a good tool to share with others. Commissioner DeBone agreed that seeing these trends now will be helpful in setting up conversations regarding the landfill's end of life and Ms. Lombard agreed. Mr. Schimke summarized types of data that are currently projected by Solid Waste and how they ensure good reserves for future planning. He also detailed the economics of the current landfill and potential system structure changes that could come with locating a new site. He summarized the master plan and upcoming needs. Mr. Parrish asked whether the department experiences issues with any franchises, and Mr. Schimke replied no, and he detailed differences between the franchise systems, franchise fees, and the benefits of using the franchise system structure. Mr. Parrish asked about the processing of recyclables and diversion rates. Mr. Schimke stated that recent changes in China's policy has created issues that will need to be addressed. He also explained how the department determines diversion goals, what their current standings are, and what could cause those fluctuations over the years. Ms. Lombard asked Ms. Monette about her functions in relation to the internal audit. Ms. Monette answered that she has been in training with the auditor and is in the process of creating written procedures and training materials. Her main function is to create separation of duties and she explained how they will do that. Mr. Schimke added that having Ms. Monette on staff will allow the accountant to focus on the cost accounting system. Commissioner DeBone asked about the status of the previous Solid Waste report from eight years ago. Mr. Givans replied that everything was closed out prior to this report, so this audit represents all current recommendations. He added that there will soon be a Sharepoint site for departments to view their current recommendations and status of each. INTERNAL AUDIT REPORT: Cell Phone Costs Mr. Givans stated this work is currently in progress and he expects it to be ready for discussion at the June meeting. Follow Ups: Fair& Expo — Concessions Follow Up Mr. Givans stated that Fair & Expo is 100% complete on their work plan. Mr. Despotopulos offered an update to the first recommendation, stating the department was able to procure biodegradable Greenware for all products. Additionally, all 28 outdoor food vendors at the County Fair will use these products as well. He explained potential challenges when looking at becoming fully recyclable, which they will address in the future. Mr. Schimke stated that while these products will still enter the landfill, it is a much better material than plastic. Ms. Lombard asked whether Munis has provided Fair & Expo better access to data, as expected. Mr. Lowry replied that likely hasn't been fully achieved yet, but departments are beginning to AUDIT COMMITTEE MEETING Thursday, March 8, 2018 Page 3 of 4 see the power of the reports available. Mr. Despotopulos added that Finance staff does a great job of providing regular reports with that information, which has been helpful. From Prior 11/9 Agenda: • County College exercise/input Mr. Givans summarized the exercise he led County College students through in the fall, and he provided a handout displaying the results. He had provided the students the opportunity to vote which departments they believed should be audited and why. It was a healthy discussion and he will carry these ideas forward with the plan. • Internal audit program — budget request Mr. Givans provided a handout and explained how many hours the on-call position has been utilized thus far. • Contract options (2-1 yr.)/RFP Process for External Audit contract Mr. Givans addressed this item since it came up in his absence during the November meeting. The 2018 FY audit will occur in December, as the last year of the auditor's five-year contract. The contract then allows two -one year options. The Finance Department will provide their input and feedback on their experience with the auditor, and the auditor will provide a cost quote for the first option year. The Audit Committee will discuss these at the June meeting and make a determination how to advise the Board on the option or open an RFP. Input on Periodic Audit Committee Tasks Mr. Givans stated that every couple years the Audit Committee is charged with reviewing county code and the Audit Committee survey. • Review of County code 2.14 & 2.15 Mr. Givans stated peer review of county code was done in September 2017 with no fmdings for change, but it is open for discussion of the Audit Committee. He asked the committee to review the code and prepare for discussion at the June meeting. • Audit Committee survey Mr. Givans stated the survey does not need to be addressed again until 2019. UPDATES/Other Items: (David): • Current audit work status: Sheriffs Office — Jail Inmate Health and Cellular Costs Mr. Givans stated he is currently working with the Sheriff s Office, and Ms. Goddard is taking the lead on the cell phone report. • Human Resources Munis/ Class & Comp/ Hotline work Mr. Givans noted the Munis work has slowed down, the Class and Comp study has completed, and work on the hotline is continuing. AUDIT COMMITTEE MEETING Thursday, March 8, 2018 Page 4 of 4 • See Internal Audit status report November 2017 through February 2018 6/30/18 renewals Mr. Givans stated four member terms will come up for renewal in June. Mr. Barrett, Mr. Parrish and Mr. Despotopulos expressed interest in renewing their member terms. Mr. Linhares was absent from today's meeting. Mr. Givans also mentioned the position of Chair should be periodically reviewed, Ms. Lombard offered the position to anyone interested, and Mr. Parrish volunteered. Motion made by Member Yeatman and supported by Member Blankenship for Mr. Parrish to become Audit Committee Chair, effective at the June 2018 meeting. Motion carried. Internal audit workplan input Mr. Givans stated this work is continuing. OTHER BUSINESS/CLOSING: • Mr. Givans mentioned recruitment efforts done to fill the one vacant committee seat. Commissioner DeBone suggested that the Board of Commissioners continue discussing the appointment at a future work session. • Mr. Barrett asked Mr. Givans to explain the cell phone audit work. Mr. Givans explained that with Ms. Goddard on staff, they have the capacity for a computerized audit to analyze the efficiency of County -provided cell phones to employees. The County has mostly shifted away from providing cell phones in lieu of providing stipends, but it still makes sense to assess efficiencies of the biggest users. Mr. Givans discussed that he had reviewed the issued report for C.O.L.E.S. and that it didn't have any issues noted. This report appears to be now occurring on schedule. Adjournment: Being no further issues brought before the Committee the meeting was adjourned at 1:34 p.m. and was followed by a tour of Solid Waste Landfill operations with Timm Schimke. Respectfully submitted, 4au4randYrick Administrative Assistant - BOCC