HomeMy WebLinkAbout12-15-2005 Audit Committee MinutesORl~.O..Qt.17
Minutes
AUDIT COMMITTEE MEETING
City of Orange - Weimer Room Thursday,
December 15, 2005 3:00 p.m.ATTENDEES:
AUDIT
COMMITTEE Voting
Members)Present
David
E. Sundstrom CPA, Chair John
W. Sibley, City Manager Jeanne
Arehart CPA, Internal Audit Mgr.Dwight
Nakata CPA David
Piper, CPA Absent
Eric
Woolery, CPA CITY
STAFF Richard
Jacobs, Finance Director David
Christian, CPA, Assistant Finance Director EXTERNAL
AUDITORS Steve
Larson, CPA, Partner Caporicci & Larson I.
Call to Order: Chairman David Sundstrom called the meeting to order at 3 :06 p.m.2.
Approval of Minutes of June 23. 2005: Minutes approved as read.3.
Status of 2004-05 Financial Audit: Steve Larson. Steve Larson of Caporicci &
Larson presented handouts with the status of the 2004-05 Financial Audit.
Audit Committee members received copies of audited financial statements with their
agenda packets. Steve reported that the audit went well. There were only two comments
on the management letter. One was a recommendation that the City implement a
fraud policy. The other was a recommendation to implement a disaster recovery
plan.4. Status of 2005 Audit Plan: Jeanne Arehart. An audit was done of our City
telephone bills which was a follow-up to one done several years ago. The cost was $
5100 for the audit and we anticipate savings of $18,500 annually. The
Transportation Corridor Agency (TCA) audited fees that we collect on their behalf. Only one
instance was found where there was a fee was overcharged and TCA refunded the
overpayment. A follow-up audit was done on the City's payment of City property tax bills
and it was concluded that we
are in compliance.Audits currently underway are the PERS Audit, the cash drawer audit
and in the summer, the audit of donations from Concerts
in the Park.A follow-up review is underway on the false alarm billings that are
done out of the police department. A report should be issued in
5. Miscellaneous Audit Reports: Jeanne Arehart. OCTA contracted with an audit firm to
review city's Measure M expenditures and we are in full compliance. Another
completed audit was of our main library expansion bond program grant agreement.
Weare in compliance. In progress are the cash drawer audit, petty cash audit and the
follow-up on the false alarm billings. New audits include reviewing
procedures related to purchasing of computers and related items, reviewing procedures for
grant administration in all city departments, review of the Community
Service Department's procedures for construction management, review of compliance
with the Quimby Ordinance, and review of Community Development's process
for calculating and collecting fees on behalf of other departments and agencies like
the Transportation Corridor Agency. Follow-up audits include
the Economic Development audit of their performance-based
agreements and owner-participation agreements, and in Personnel, of their process for
ensuring the employee evaluation process is being adhered to, and that people are
getting timely evaluations, etc.6. Risk Assessment/2006 Audit Plan: Jeanne Arehart. The
risk assessment is complete and the results were presented
to the Audit Committee.7. Draft Fraud Policv: Jeanne Arehart. One of the
recommendations in the management letter is that we have a fraud policy. Jeanne prepared a draft policy
and presented it to the Audit Committee for comment. Committee members concurred
that the policy is fine as is. This draft has been reviewed by the City
Attorney, Personnel, and City Manager. It will be routed to all Department Heads as part of
our process for the administrative policy and once it is finalized, a small training
session will be held.Supervisors will be held responsible, therefore, training will
be
provided on fraud indicators.8. Annual Receivables Write Off: Our write-off policy
gives the Finance Director the ability to write-off receivables under $2000 and the
CM to write off receivables over 2000. These reports come to
the audit committee for a review.Caporicci &
Larson was excused from the meeting.Financial Audit Services Contract: Rich Jacobs. This is the
end of our 3rd year of audits with Caporicci & Larson and it
was recommended that another auditing firm be sought. It was determined that
Conrad & Associates (the firm before Caporicci &Larson) is eligible to bid again. The Audit
Committee or a sub-committee will be involved in the process of finding a new firm. It
will be determined, at a later
date,specifically what
their involvement will be.9.
Public Comment:There was no public comment.10. Adjournment: The meeting