HomeMy WebLinkAbout06-09-23 Audit Committee Minutes ApprovedX
For Recording Stamp Only
Minutes of the Meeting of the
Deschutes County Audit Committee
Date: June 9, 2023
Facilitator: David Givans, County Internal Auditor
Audit Committee Public Members (6 members)
X Daryl Parrish, Chair X Summer Sears
X Scott Reich X Jodi Burch (via Zoom)
Stan Turel Joe Healy
Audit Committee County Management Members (3 members)
X Patti Adair, County X Charles Fadeley, Justice of the Peace
Commissioner (via Zoom)
X Lee Randall, Facilities Director
Others Present:
X Aaron Kay, Performance X Nick Lelack, County Administrator
Auditor
X Erik Kropp, Deputy County X Whitney Hale, Deputy County
Administrator Administrator
X Robert Tintle, CFO X Jana Cain, Accounting Manager/
Controller
X Kathleen Hinman, Human X Kevin Mullerleile, Senior Manager
Resources Director (via Zoom) Moss-Adams (via Zoom)
X Elizabeth Pape, County Internal
I Auditor Candidate
This HYBRID meeting was held virtually via Zoom Conference Call and in the Barnes &
Sawyer Room of the Deschutes Services Building.
CALL TO ORDER: Chair Daryl Parish called the meeting to order at 12:10 p.m.
AUDIT COMMITIEE MEETING June 9, 2023 Page 1 of 6
AGENDA:
1. Approval of Minutes for March 10, 2023
Summer Sears moved approval of the minutes of the March 10, 2023
meeting. Commissioner Adair supported the motion.
Votes: All yes
Motion carried.
2. External Audit Plan for FY 23 -Moss Adams LLP -Kevin Mullerleile,
Senior Manager
Kevin Mullerleile, Senior Manager, Moss Adams LLP presented the External
Audit Plan for FY 23 . This is Moss Adams LLP second year as the County's
External Auditor. Kevin summarized that Mo ss Adams' responsibilities are to
audit the County's financial statements to make sure they are in accordance
with U.S. Generally Accepted Accounting Principles (GMP).
The external audit process is broken up into three categories: Internal
Controls, Analytical Procedures and Substantive Procedures. Their concern is
material misstatements, where materiality is something that a financial
statement user would consider to be a material error. Kevin summarized five
significant areas of focus . He spoke about their consideration of fraud, to
improve the likelihood that auditors will detect material misstatements due
to fraud in a financial statement audit.
The timeline for the audit was sum ma rized. Planning discussions with
management took place in April -May 2023, and the presentation to the Audit
Committee of FY23 audit results will take place on December 8, 2023 .
Kevin spoke briefly about some new accounting standards, GASB 96:
Subscription-Based Information Technology Arrangements, and GASB 94 :
Public-Private and Public-Public Partnerships and Availability Payment
Arrangements .
Responding to David Givans, Kevin provided a timeline for delivery of the
audit reports in a timely manner to service districts . Robert Tintle shared that
the Budget Committee approved a new position for a public procurement
position, which will help with compliance .
(Note: Audio quality was poor and discussion was indiscernible).
Audit Committee Meeting June 9, 2023 Page 2 of 6
3. County Internal Auditor -Candidate Presentation (15 minutes)
David Givans introduced candidate for County Internal Auditor, Elizabeth
Pape, who presented to the group. The topic of her presentation was an
overtime audit for the City of Portland's Police Department.
(Note: Audio quality was poor and discussion was indiscernible).
4. Internal Audit Report: Finance/Tax -Controls over receipts #22/23-8
Aaron Kay, Performance Auditor, presented the report. He provided an
overview of property tax revenues, and some background on Transient
Room Tax (TRT). Internal Audit's recommendations include:
1. Develop and document controls over cash handoffs
2. Explore elimination of the bank account providing
duplicate services
3. Resume audits of transient room taxpayers
4. Implement and document periodic management review
of property tax adjustment reports
5. Internal Audit Report: Continuity of Operations Plans -Initial
Assessment #22/23-6
Mr. Kay presented the report. This analysis was initially designed as a
departmental gap analysis, but as the audit planning process began, a high-
level assessment was determined to be of greatest value to the County. He
acknowledged the Sheriff's Office's Emergency Services Unit (ESU) for their
contributions to this assessment. A Continuity of Operations Plan (COOP) is a
critical part of an overall emergency management system. Destructive events
such as natural disasters or technology system failures could have
tremendous impacts on the County's ability to provide services. Planning and
identifying essential services which cannot be delayed is an important first
step.
Following a statewide exercise in 2017 simulating a Cascadia Megaquake,
gaps in continuity were identified and the County's COOP became an action
item. FEMA's Continuity Guidance Circular book and COOP Assessment Tool
for non-federal organizations were highlighted. The strategic elements
include: Planning, Organizing, Equipping, Training and Exercising (POETE).
The tool scales progress along a maturity scale : Initiating, Building Capability
and Maintaining. The County's progress scoring is in three categories . Each
department's COOP was scored, then aggregated and averaged. Scoring was
as follows :
Audit Committee Mee ting June 9, 2023 Page 3 of 6
• Overal! (4.9/10)
• Maturity: Initiating (5.7/10), Building (5.6/10) and Maintaining
(3.5/10)
• POETE: Planning (4.5/10), Organizing (7.5/10), Equipping
(8.2/10), Training (3.2/10) and Exercising/Testing (2.6/10)
Internal Audit came up with six recommendations in identifying areas of
improvement:
1. Determine whether the capabilities of the new COOP
software meets County requirements or explore other
viable options. A new Oregon COOP launches on July 21,
and if it falls short of expectations the County can upload
portal for plans outside of State software.
2. Direct staff to complete comprehensive COOP planning
documentation with the support of DCSO-ESU .
3. Re-establish reg ula r COOP planning meetings to review
and revise COOP plans.
4 . Review and update its COOP activation scenarios .
5 . Establish a COOP training program for all personnel.
6. Conduct regular COOP exercises and make necessary
improvements identified as weaknesses.
In response to Summer Sears speaking about a recent cyber-attack on Curry
County, there was some discussion about IT's plans for cybersecurity,
ransomware, and the potential for State funding for Continuity of Operations
Plans. Scott Reich suggested consideration of assigning dates by which plans
must be completed. Erik Kropp suggested that perhaps a reassessment take
place at a future date, at which time there would be a better grasp on the
state's new COOP database's capabilities . Lee Randall recognized that the
pandemic, in and of itself, was one big exercise.
Mr. Givans shared that once an audit is complete, it becomes management's
role to im plement their recommendations and In ternal Audit becomes a
resource and can provide guidance. In his opinion, redoing the same audit
over and over causes it to lose its value, and suggested that follow-ups or
audits on related topics could be more useful.
6. Follow-ups:
a. Assessor cash handling #22/23-11
Mr. Kay reported that 100% of Audit's recommendations are completed .
b. Initial cybersecurity assessment #22/23-12
Audit Committee Meeti ng June 9, 2023 Page 4 of 6
Mr. Kay reported that 67% of the recommendations are underway and
33% are planned. IT has contracted with a managed cybersecurity
company that identifies vulnerabilities, and a new IT Director started in
March 2023. Anticipated completion date is July 2024.
7. Update -County leadership recruitments/changes
Erik Kropp, Deputy County Administrator, shared that the transition of the
Solid Waste Director is underway. Currently, Chad Centola is the outgoing
Solid Waste Director, and he is retiring at the end of June 2023. Tim Brownell,
incoming Solid Waste Director, will be solo as of July 1. New landfill siting has
taken a lot of Chad's time. Whitney Hale , Deputy County Administrator,
shared with the group that the County's most recent podcast included an
interview with Chad and Tim, and provides some insight into this transition.
The next podcast will include interviews with David Givans and Aaron Kay.
8. Biennial Audit Plan development 2024-2025 -Discussion
Mr. Givans opened by sharing that this is a lengthy plan and is inte nded to be
a plan for his successor. He summarized his approach methodology. In
determining future audits to take place, a project approach is taken. He
summarized in-process and carryover projects . Important topics and project
areas for FY24 were covered, some of which include: a review of third-party
administration of high cost medical claims, internal software development
general controls, personnel data entry control assessment, translation and
interpreter services equity and effectiveness and recr uitment/retention in
the post-pandemic era . He also provided a list of project topics for FY25,
some of which include : evaluate alcohol sales for 2024 County Fair,
courthouse construction project, evaluate food and beverage for 2024
concession events, election controls for May 2025 election, assess
effectiveness of houseless response, and evaluate methodology for charges
to law enforcement districts. He shared a list of other potential topics, adding
that he received over 100 suggestions from departments and management.
Discussion ensued about adding other potential topics to the work plan . Ms.
Sears expressed concerns about Audit's time constraints and staff capacity.
Mr. Givans will come back to the Committee with an amended work plan for
FY24 and FY25.
Scott Reich made a motion to accept the discussion draft list for the Audit
work plan for FY24 and FY25 with the changes discussed, removing the non-
Audit Committee Meeting June 9, 2023 Page 5 of 6
audit service from FY24 & FY25 and replacing the FY24 project with equity
review of salary and benefits; and in FY 25 removing law enforcement
methodology for law enforcement districts and replacing with review of body
and auto cams and spreading remaining hours as needed. Supported by
Chair Parish.
Votes: All yes.
Motion carried.
9. 2023 ALGA Conference
David Givans attended the 2023 Association of Local Government Auditors
annual conference. He brought with him the plaques representing the
awards received -2022 Knighton Award -Distinguished Winner-Extra small
shop for audit of "Management of Pandemic Case Investigation and Contact
Tracing" and Lifetime Achievement Award to David Givans.
10. Updates/Other Items
The Audit Committee thanked Mr. Givans for his years of service as County
Internal Auditor, and congratulated him on his upcoming retirementJune 30.
They also thanked Scott Reich for his service on the Audit Committee, as his
term is up June 30.
11. Other Business/Closing
Chair Parish thanked everyone for their attendance and participation .
Next Meeting is scheduled for September 8, 2023, 12:00-3:00 p.m.
Adjournment: Being no further issues brought before the Committee, the meeting was
adjourned at 3: 19 p.m.
Respectfully submitted,
$~-~
BOCC Administrative Assistant
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