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Home My WebLink About9-8-22 Audit Committee Minutes ApprovedX For Record ing Stamp Only Minutes of the Meeting of the Deschutes County Audit Committee Date: September 8, 2022 Facilitator: Dav i d Givans, County Internal Auditor Audit Committee Public Members (6 members) Daryl Parrish, Chair X Jodi Burch (v ia Zoom) X Scott Reich (via Zoom) X Summer Sears, Vice Chair X Stan Turel *12:53 p.m . arrival X Joe Healy (via Zoom) Audit Committee County Management Members (3 members) Patti Adair, Commissioner Charles Fadeley, Justice of the Peace Lee Randall, Facilities Director Others Present: X Nick Lelack, County Admin . X Aaron Kay, Performance Auditor X Erik Kropp, Deputy County Jana Cain , Accounting Mgr Admin . (via Zoom) Whitney Hale, Deputy County Deevy Holcomb, Community Justice X Admin . X Angie Powers, Admin . Asst. Wayne Lowry, Interim CFO/ Treasurer Joe Sadony, IT Director X Kevin Furlong, IT Manager Scot Langton, County Assessor Tana West, Deputy Director, Assessor's Office Jodi Stacy, Court Administrator This meeting was held virtually via Zoom Conference Call and in the DeArmond Room . AUDI T COMMITIEE MEETING June 10 , 20 22 Page 1 of 6 CALL TO ORDER: Acting Chair Summer Sears called the meeting to order at 12:04 p.m . AGENDA: 1. Approval of Minutes for June 10, 2022 (12:56 p.m.) Stan Tu rel moved approval of the minutes of the June 10, 2022 meeting. Jod i Burch supported the motion. VOTES : All Yes, except Joe Healy : Abstain. Motion carried. 2. Internal Audit Report: Cybersecurity Assessment -Initial #21/22-6 David Givans presented and summarized the results of the report. Cybersecurity is the leading risk for most organizations, and this audit is an important part of the County's risk management. The Oregon Secretary of State uses the Center for Internet Security (CIS) controls, which has 18 different areas. Thi s assessment used the CIS's Critical Security Controls Assessment Tool (CSAT). In each area of controls the assessment scores identify gaps between where the County is in level of maturity and where it should be (goal of 100). Findings were that the County lacks a comprehensive and formalized cybersecurity program, and needs to put additional effort into addressing cybersecurity controls. Kevin Furlong shared that the County does have plans to develop a formal Cybersecurity unit, as part of the Information Technology department. [Firewall] penetration testing was the first contract that went out for bids. Joe Healy shared the importance of having cyber-insurance in the event of a breach, and having a forensic team ready to go. Erik Kropp confirmed that the County does have a cyber- insurance policy. 3. Internal Audit Report: Assessor's Office -Cash Handling #21/22-13 Aaron Kay presented and summarized the results of the report. Cash handling audits are on an eight-year cycle . The Assessor's office picked up additional duties since their last audit manufactured home payments (title transfers, moving permits) and counter payments (maps, sketches, copies). Observations were that there was an inconsistent system of controls over received monies, and appropriate recommendations were made. The department accepted all of Mr. Kay's recommendations. Follow-up will take place approximately nine months after the audit. 4. Internal Audit Report: Treasurer Transition #21/22-12 (Potentially) Audit Committee Meeting September 8, 2022 Page 2 of 6 The County has three candidates for Treasurer. A new CFO, Robert Tintle, will start at the end of September. This audit is being delayed until the outcome of the election for the open Treasurer position. 5. Postponed until December: Internal Audit Report: Justice Court Cash Handling #21/22-15 Charles Fadeley, Justice of the Peace, and Jodi Stacy, Court Administrator, were unable to attend today's meeting, so this discussion will be delayed until December. 6. County Code Updates Mr. Givans reported that the County Code updates have been approved and accepted by the Board of County Commissioners. 7. Inflationary impacts at the County Erik Kropp reported that personnel/labor is the County's highest cost and has experienced inflationary impacts. Labor contracts stipulated a 3.5% cost of living increase, plus an additional 2% was added across the board . Materials and services, including personnel service contracts, is another area experiencing inflationary i mpacts . This increase in materials and services will be likely offset with vacancy savings due to unfilled positions. As contracts are renewed, contractors will pass on their increased costs to the County, and costs will go up. Chris Doty, Director of the Road Department, reported that chip seal (rock/asphalt) costs have gone up approximately 20%. Lee Randall , Facilities Director, reported the cost of janitorial supplies increasing 14-20% (some offset due to decreased building occupancy from remote workers and vacant positions) and furniture costs increasing 20%. 8. Follow-Ups • County Fair Ticketing #21/22-18 Mr. Kay presented and summarized the County Fair ticketing follow up . To -date, they have completed 76% of the recommendations from their Audit Report, 18% of the recommendations are underway and 6% are planned. Now that they've completed a fair season, they're likely closer to 100% of recommendations implemented. • Adult Parole & Probation cash handling #22/23-3 Mr. Kay presented and summarized the Adult Parole & Probation follow-up at 100% completed ahead of the scheduled follow-up . Audit Committee Meeting September 8, 2022 Page 3 of 6 9. Whistleblower Hotline Report Mr. Givans summarized the report (7 /1 /2020 -6/30/2022). All of the reports were received via the website, no calls/emails/FAX. A total of nine reports were received over this time period, and all of the reports have been closed. The bulk of the reports came from larger departments: Adult Parole and Probation, Health Services and Sheriffs Office. 10.County Internal Controls (fiscal -continued) Mr. Kay gave a briefing on Internal Controls -County Policies, based on three categories of internal controls: operations, reporting and compliance . • County Policy F-12 : Payment Cards was discussed. Nick Lelack, County Administrator, stressed the importance of Finance 's role in reinforcing these policies with new staff and training current employees on a periodic basis . • County Policy F-13 : Reserve Policy for the Health Benefits Trust was covered. The County is self-insured for employees' health benefits, and this policy ensures they have enough money in reserve to pay out claims (ORS 731 .036 (6)(e) referenced). • County Policy F-15 : Payments to Suppliers was briefly discussed, w ith 1 O different areas of internal control systems . Department purchasing thresholds were covered . • Stan Turel asked about a fleet audit. David Givans has a copy of the Fleet Aud it Report, which he will provide to Stan . • Aaron asked for suggestions from the group for future presentations . No suggestions given . 11. Internal Audit Succession Planning Mr. Givans acknowledged that someday the County Internal Auditor will retire. Six main goals were reviewed . Aaron Kay was hired in March 2022 as Performance Auditor, working towards the first goal of providing for additional staffing. Succession planning is all about maintaining momentum. Acting Chair Sears acknowledged that she no longer sees a need for this to be a standing agenda item, and it can now be an annual update. She applauded Mr. Givans and Mr. Kay in their efforts towards succession planning. Motion : Mr. Turel moved that Risk Management approach the DA's office for a repo rt evaluating the ratio of arrests-to -dropped charges. Mr. Turel has had Audit Comm ittee Meeting September 8, 2022 Page 4 of 6 Bend PD officers and County staff approach him with concerns on these matters. No second on the motion . Motion died without a second. 12.Update on Leadership Recruitments • CFO Mr. Lelack reported that the County has hired a new Chief Financial Officer, who begins September 26 th . His name is Robert Tintle and he has worked for Lane County and for the City of Eugene. He has both technical competence and leadership skills . • Health Services Director Mr. Lelack reported thatJanice Garceau, the County's Behavioral Health Deputy Director, has been hired as the County's new Health Services Director, and she begins her new role on October 1st. This will relieve Mr. Kropp from h is role as the Interim Health Services Director. We are also welcoming a new Director for Houseless Strategies and Solutions, her name is Cheyenne Perrington and she starts on September 19th . 13. Updates/Other Items • Audit Committee Recruitment Mr. Givans introduced Joe Healy (present via Zoom) as a new Audit Committee Member. Mr. Healy was appointed yesterday, September 7, 2022 and his term extends through June 30, 2024. • Review status list • Audits and follow-ups in process: Sheriff's Office, TML, Data Privacy, Global follow-up initiation 14.0ther Business/Closing 15.TOUR of Information Technology Next Meeting is scheduled for December 9, 2022 . Audit Committee Meeting September 8, 2022 Page 5 of 6 Adjournment: Being no further issues brought before the Committee the meeting was adjourned at 2:32 p.m. Respectfully submitted, BOCC Administrative Assistant Audit Committee Meeting September 8, 2022 Page 6 of 6