HomeMy WebLinkAbout2021-1 Follow-up Treasurer Transition (Final 9-14-20)Follow-up Treasurer Transition #20/21-1 September 2020
2020
FOLLOW-UP REPORT
Treasurer Transition
(Internal audit report #19/20-1 issued December 2019)
To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org
Deschutes County,
Oregon
David Givans, CPA, CIA
County Internal Auditor
1300 NW Wall St
Bend, OR 97703
David.Givans@deschutes.org
Audit committee:
Daryl Parrish, Chair - Public member
Jodi Burch - Public member
Tom Linhares - Public member
Scott Reich - Public member
Summer Sears - Public member
Stan Turel - Public member
Patti Adair, County Commissioner
Nancy Blankenship, County Clerk
Nick Lelack, Community Development Director
Follow-up Treasurer Transition #20/21-1 September 2020
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TABLE OF
CONTENTS:
HIGHLIGHTS
1. INTRODUCTION
1.1. Background on Audit …………..………………………………………….……….……..…. 1
1.2. Objectives and Scope …………….………………………………….…………….………… 1
1.3. Methodology …………………………………….…..………………………….……….……… 1
2. FOLLOW-UP RESULTS …………………….……….…………………………………….…… 2-3
APPENDICES
Appendix I – Updated workplan (status as of September 2020) …….…........... 3-7
Appendix 2 – Greg Munn Oath of Office (County Treasurer)
taken August 7, 2020 …………… 8
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1.
Introduction
1.1 BACKGROUND ON AUDIT
Audit Authority:
The Deschutes County Audit Committee has suggested that follow-ups occur within nine months of
the report. The Audit Committee would like to make sure departments satisfactorily address
recommendations.
1.2 OBJECTIVES and SCOPE
“Audit
objectives” define
the goals of the
audit.
Objectives:
The objective was to follow-up on recommendations from the original audit.
Scope:
The follow-up included eighteen (18) recommendations from the internal audit report for the
Treasurer Transition (#1920-1), issued in December 2019. The original internal audit report should
be referenced for the full text of recommendations and associated discussion. Four
recommendations were complete with the issuance of the original report. The follow-up reflects the
status as of September 2020.
1.3 METHODOLOGY
The follow-up report was developed from information provided by County Administration and
County Finance. Comments were sought for the status of these recommendations. The follow-ups
are, by nature, subjective. In determining the status of recommendations that were followed up, we
relied on assertions provided by those involved and did not attempt to independently verify those
assertions. The updates received are included in Appendix I.
Since no substantive audit work was performed, Government Auditing Standards issued by the
Comptroller General of the United States were not followed.
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2. Follow-up Results
Figure I -
How were
recommendations
implemented?
The follow-up included eighteen (18) recommendations agreed to by County Administration and
County Finance. Figure I provides an overview of the implementation status of the
recommendations.
With this follow-up, sixteen (16) of the eighteen (18) recommendations or eighty-nine percent (89%)
have been completed. In total, twenty (20) of the original twenty-two (22) recommendations or
ninety-one percent (91%) have been completed.
The details of the eighteen recommendations followed up on and their status are included at the end
of the report in Appendix I. In interpreting the status, the County Internal Auditor may sometimes
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raise or lower the status provided by the department based on the communication(s) received from
the department.
APPENDIX Appendix I – Updated workplan for identifed outstanding recommendations for #1920-1
(status as of September 2020)
Items that are not completed are greyed out.
Rec
# Recommendations Status
Estimated or
Actual Date
of
Completion Updated Follow-up comments
2 It is recommended the appointed
Treasurer consider administering
oaths to appropriate treasury staff
(CFO and Investment Officer).
Completed Aug-20 A written oath acknowledgement was signed by Greg Munn on 3-
10-20, and a verbal oath was administered to Greg Munn by County
Clerk Nancy Blankenship on 8-7-20 (See Appendix II).
Tom Anderson, County Administrator
3 It is recommended the Treasurer/CFO
provide financial information satisfying
the statutory requirements, in terms of
stipulated content and timeliness, as
indicated in ORS 208.090.
Completed Sep-20 Finance is now preparing a report that will be distributed by the
tenth of the month that meets the requirements of the statute.
Greg Munn, Chief Financial Officer and Treasurer
5 It is recommended for Finance to
consider eliminating the charge to
investment earnings.
Completed Jul-20 We researched the private sector for investment service options
and found that the cost would be approximately $60,000 annually.
Additionally, a review of our internal staff time placed the cost to
provide the service in house near the same amount. As a result, the
investment fee in the FY21 budget was changed from a percent of
interest earnings to a flat $60,000 annual fee.
Greg Munn, Chief Financial Officer and Treasurer
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Rec
# Recommendations Status
Estimated or
Actual Date
of
Completion Updated Follow-up comments
6 It is recommended that the County
reduce the LGIP within 20 days to the
allowable amount.
Completed Aug-20 The County’s cash resources are actively managed daily. Every
effort has been made, and will continue to be made, to manage the
balance in the LGIP fund within the maximum limit.
Greg Munn, Chief Financial Officer and Treasurer
8 It is recommended the County require
the Treasurer to make an annual
disclosure for conflicts as specified in
the investment policy to the Board of
County Commissioners.
Completed
Apr-20 The Treasurer files a statement of economic interest with the
Oregon Government Ethics Commission annually. This statement is
available publicly and complies with the County's Investment Policy
Guidelines (F-10).
Greg Munn, Chief Financial Officer and Treasurer
9 It is recommended for the Treasurer to
develop a written system of internal
control over the investments covering
the investment policy requirements
and those issues identified above.
Planned
Jun-21 Current practices will be memorialized in the form of written
procedures.
Greg Munn, Chief Financial Officer and Treasurer
10 It is recommended the accountant
responsible for accounting for the
investment purchase/sale (and making
the associated journal entries) collect
independently information on the
confirmation of investment
purchase/sale (from the custodial
bank) and the transfer of monies (from
the LGIP). Support should be scanned
in with the associated journal entry.
Completed May-20 When there is a sale or maturity of an investment, the custodial
bank sends the Sr. Accounting Tech an email advising of the
payment or wire instructions. The Sr. Accounting Tech records this
information in Sympro and Munis with a journal entry. When a
purchase is made, the CFO sends both Sr. Accounting Techs the
purchase info from the broker. One Sr. Accounting Tech enters the
purchase information in Sympro. The other Sr. Accounting Tech
makes the payment from the LGIP and enters the transaction in the
general ledger.
Greg Munn, Chief Financial Officer and Treasurer
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Rec
# Recommendations Status
Estimated or
Actual Date
of
Completion Updated Follow-up comments
11 It is recommended the Investment
Advisory Committee and Treasurer
provide additional policy clarification
on what is considered a “competitive”
bid and to what extent it is needed by
investment type or circumstance.
Underway Sep-20 This item is on the agenda for the September IAC meeting.
Greg Munn, Chief Financial Officer and Treasurer
12 It is recommended for the
Treasurer/Investment Officer to collect
and retain the support for investment
competitive bids as clarified.
Completed Sep-19 All documentation for each purchase is kept together in an
electronic format.
Greg Munn, Chief Financial Officer and Treasurer
13 It is recommended for the County to
clarify, in the investment policy, the
types of permitted investments with
these particular agencies that also deal
in mortgage backed securities.
Completed Mar-20 Language review with the Treasury department confirmed our
language was sufficient in the policy in that we are allowed to invest
in agencies that are backed by the general creditworthiness of the
agency (not mortgages).
Greg Munn, Chief Financial Officer and Treasurer
14 It is recommended for the Treasurer to
consider improvements in monthly
reporting by including the investment
activity since the last report
(redemptions and sales); distribution
of investments by broker; and flagging
the non-compliance issues that
occurred.
Completed Aug-20 Included beginning with July's fiscal report that was delivered to the
BOCC on 08.24.20.
Greg Munn, Chief Financial Officer and Treasurer
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Rec
# Recommendations Status
Estimated or
Actual Date
of
Completion Updated Follow-up comments
15 It is recommended for the Treasurer to
consider also utilizing a shorter-term
index (such as the 12-month US
treasury rate) for a performance
comparison (at this time).
Completed Aug-20 We will continue to evaluate other indexes that provide better
information regarding the performance of the portfolio.
Greg Munn, Chief Financial Officer and Treasurer
16 It is recommended the Board clarify
the policy on how the investment
committee member selection occurs
from the Budget committee.
Completed Aug-20 At the Budget Hearing in May 2020, the Budget Committee
discussed Audit Committee placement, and Commissioner Adair
was confirmed as a member, with Commissioner Henderson as
back-up. This will be a discussed with the Budget Committee each
year going forward.
Tom Anderson, County Administrator
17 It is recommended for the Treasurer to
periodically develop and update cash
flow projections to determine:
a) the dollar amount of the portfolio
that needs to remain liquid (liquidity
buffer) to meet disbursement
obligations within a six-month period
(short-term),
b) what dollar amount is required
within the next 6 - 12 month period,
and
c) whether there is a 'core' of funds
available for longer-term investing.
Completed Aug-20 This is an ongoing analysis based on returns available for different
investment instruments at a given time. Currently, and over the last
year, the best return/liquid option is the state’s short-term
investment pool. The pool limit, plus county tax and other
operating revenue are significantly more than sufficient to fund
expenses over the next 6-12 months. Investments with longer term
maturities (within County policy) are considered based on the yield
curve.
Greg Munn, Chief Financial Officer and Treasurer
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Rec
# Recommendations Status
Estimated or
Actual Date
of
Completion Updated Follow-up comments
18 It is recommended the cash flow
projections be periodically be used to
inform whether to use longer term
investment maturities if this matches
with the investment strategy.
Completed Ongoing Because of the size and liquidity of the state investment pool, the
consideration of whether purchase a longer-term investment has
less to do with cash flow needs and more with security and
capturing an adequate return for the additional investment term.
Greg Munn, Chief Financial Officer and Acting Treasurer
19
It is recommended for the prior
Treasurer to be removed from all
County banking relationships.
Completed Jan-20 These banking permissions have been removed.
Greg Munn, Chief Financial Officer and Acting Treasurer
20 It is recommended for County Counsel
to review changes to signers on
banking relationships.
Completed Jan-20 Finance will have County Counsel review these as they occur.
Greg Munn, Chief Financial Officer and Acting Treasurer
22 The Treasurer/CFO should consult with
legal counsel on extending or
developing a new contract for the
custodial bank and whether it would
be beneficial to seek bids prior to
renewing this service.
Completed May-20 We reviewed custodial banking options and selected Zions Bank in
the early spring. Service transitioned in May 2020.
Greg Munn, Chief Financial Officer and Acting Treasurer
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Appendix 2 – Greg Munn Oath of Office (County Treasurer) taken August 7, 2020
{End of Report}