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9-17-20 Audit Committee MinutesMinutes of the Meeting of the Deschutes County Audit Committee Thursday, September 17, 2020 Members consist of 6 Public (P), and 3 County Management (CM) Quorum =five Committee Members present: VIA ZOOM CONFERENCE CALL x Facilitator: David Givans, County Internal Auditor x Daryl Parrish, Chair, (P) Retired - City Manager of Covina, CA x Tom Linhares, (P), Retired - Executive Director, Multnomah County Tax Supervising and Conservation Commission x Scott Reich (P), Umpqua Bank - VP Fair Lending Stan Turel (P), President, Columbia Pacific Tax Service LLC x Patti Adair, (CM) County Commissioner x Nancy Blankenship, (CM) County Clerk x Nick Lelack (CM) County Community Development Director x Jodi Burch, CFO Redmond Fire and Rescue x Summer Sears, Summer Sears CPA, LLC -VIA PHONE Others Present: x Tom Anderson, County Administrator x Erik Kropp, Deputy County Administrator Greg Munn, County Chief Financial Officer (excused) x Aaron Curtis, Deschutes County Fair Board x Geoff Hinds, Fair & Expo Director x Kathleen Hinman, Human Resource Director x Samantha Pepper, Administrative Assistant - BOCC CALL TO ORDER: Chair Parrish called the meeting to order at 12:02 pm. AGENDA: Introductions/Announcements. Introductions were made. AUDIT COMMITTEE MEETING Thursday, September 17, 2020 Page 2 of 4 Approval of Minutes: Suggested edits on page 3 first paragraph by Member Linhares. "Reduction from instead of to". Motion made by Commissioner Adair and supported by Member Parrish to approve the minutes as amended of the Audit Committee Meeting of June 18, 2020. Motion carried. Internal Audit Report: #19/20-12 Fair & Expo Mr. Givans presented the Fair & Expo internal audit report. The summary of the CAFR presents the fair & expo and RV park separately. The report includes depreciation or assets at the fair & expo center. There was a property tax levy resource back in 2017 which ended with the payment of the underlying bonds. The tax levy, therefore expired and is no longer a resource to fair & expo. Fortunately, there are transient room tax fund transfers and general fund transfers to supplement it. The fund is not making enough to carry itself. Ms. Sears asked if the levy was a bond levy or operating levy. Mr. Anderson mentioned that the bond was put before the voters 20 or more years ago and has since been paid off. Mr. Linhares asked if there has been any thought to have the fair set up as its own taxing district. It is an option for consider in the future. The county is hoping that the facility can pay for itself at some point in the future. With the county fair being in July and August the accounting occurs over two fiscal years. There were several questions about revenue being down when actually they were up given the 12 month calendar basis. There were suggestions to break the budget into operating codes to make the numbers clearer to what is going on. The COVID-19 pandemic has had a huge effect on fair/expo numbers. Some of the unplanned expenditures included increases in entertainment costs. The rodeo was expanded and increased beyond what was anticipated. There has been a decrease in working capital from what was budgeted. It is suggested that costs in food and beverage be watched. Mr. Givans recommended that transfers out of county fair be justifiable in the context of statue and that the county fair fund retain some excess funds and operating reserve/ contingency for future events. The county Fair Board and Fair Association should come up with a memorandum of understanding of some sort for how the organizations work together to put on the County fair. Mr. Hinds thanked Mr. Givans for the analysis. Some of the items were anticipated and some are much appreciated suggestions. Mr. Linhares asked if the fair & expo had a contingency fund. There are several reserve funds that make for contingency type uses. Mr. Lelack asked where the process goes from here to implement recommendations. There will be a follow up in 9 months. A work plan from management has been given to Mr. Hinds. Commissioner Adair mentions how important it is to see calendar year financials versa fiscal year. The rodeo budget needs to be done AUDIT COMMITTEE MEETING Thursday, September 17, 2020 Page 3 of 4 sooner than later. She also mentions the food and beverage expenditures were 92% of budget. Mr. Givans added that there was food spoilage and expired beer. Mr. Hinds speaks to the addition of long term trending financials which he is working with finance to evaluate. Follow- up: Treasurer Transition #2021-1 Mr. Givans states that there were 20 of 22 recommendations that were completed for a completion rate of 91 %. Follow- uo: Human Resources Cash Handling #2021-2 Mr. Givans mentions there were an additional 5 recommendations completed in this follow-up bringing the report completion rate to 86%. Elections Preparedness County Clerk Nancy Blankenship states that elections activities started about 6 weeks before they previously have. There are 150,000-155,000 voters in Deschutes County expected. The Clerk's office is doing some education pieces for ads to educate voters. Oregon is prepared to take care of the folks who are displaced from their homes. Citizens can get their ballot from any county clerk office in the states other than just their own if needed. Ms. Blankenship explains the cycle of a ballot after it is turned in to the county. T Mr. Linhares asked how many ballots are rejected on average. Ms. Blankenship estimates around 3% of ballots are rejected. Turnout is expected to be high in Deschutes County this year. Mr. Lelack mentioned that many of the wildfire evacuees are going to the library to use their services. Ms. Blankenship added that Homeland Security came to the Clerks office to look at county facilities for security purposes in case someone wanted to do harm to Deschutes County. Ms. Sears thanks the elections team for all their hard work. Mr. Linhares asked if there are cameras placed at all drop box locations which there is n ot. AUDIT COMMITTEE MEETING Thursday, September 17, 2020 Page 4 of 4 County Internal Controls- County Fiscal Policies Mr. Givans introduces the importance of county policies. Policies are usually only available to employees on their employee portal but can be available to the public. The county has a general legal review administrative policies and financial policies. Most county departments have their own policies under the two main ones. Mr. Kropp finds it helpful that the audit committee suggests if something needs to be reviewed or needs attention. Mr. Linhares was surprised in his review that grants were not reviewed at the Board level. Mr. Givans indicated that grants fall under contracts and all receive reviews and approval by the Board as they are contemplated. . Mr. Parrish asked about county internet usage. Mr. Givans did an audit on that several years ago. Ms. Burch asks if there are ever problems updating policies. There are periodic refreshes of policies when management deems it necessary. UPDATES/Other Items: (David): Mr. Givans provided updates and explanations regarding other items: (He goes down the list on the second page of the agenda and updates members) • He encourages the committee to tell others about the audit committee for future member openings. • Working on a Munis (County financial system) project. • The CCO project is on hold. The respective agencies have not been willing to give information to conduct an audit. OTHER BUSINESS/CLOSING: None. Adjournment: Being no further issues brought before the Committee the meeting was adjourned at 1:50 p.m. Respectfully submitted, Samantha Pepper Administrative Assistant - BOCC