HomeMy WebLinkAbout2009-11-06 Audit Commission MinutesAUDIT COMMITTEE MEETING
NOVEMBER 6, 2009 PAGE 1 of 4
Audit Committee
Draft Minutes
November 6, 2009 1:00pm
Council Chambers
1175 East Main Street
Call to Order
The Audit Committee meeting was called to order at 1:15.
Roll Call
Committee members Nutter, Silbiger, Christensen and Everson were present. Stebbins was absent.
STAFF PRESENT: MARTHA BENNETT, CITY ADMINISTRATOR
LEE TUNEBERG, ADMINISTRATIVE SERVICES AND FINANCE DIRECTOR
CINDY HANKS, FINANCE DIVISION MANAGER/ ACCOUNTING DIVISION
DON ROBERTSON, PARKS DIRECTOR
MELISSA HUHTALA, ADMINISTRATIVE SECRETARY
Mr. Tuneberg discussed the election of a Chair and gave an overview of what would be discussed.
Everson/Silbiger ms Guy Nutter as Chair. All Ayes.
Approval of Minutes
Audit Committee Minutes of October 29, 2008
Everson identified misspelling of her name on page.
Everson/Nutter ms to approve minutes as submitted. All Ayes.
Presentation by the Auditors
Kenny Allen presented to the Committee the Audit report (see attached). Mr. Allen stated that there
were no new significant deficiencies during the audit. There were no difficulties encountered in
performing the audit, no uncorrected misstatements, and no disagreements with management. Mr.
Allen thanked the staff for their assistance. Kenny discussed how there are FDIC and collateral rule
changes each year.
Banks are looking at increasing the percentage involving collateral. Mrs. Christensen stated that the
banks will continue to increase collateral percentage as the years continue.
AUDIT COMMITTEE MEETING
NOVEMBER 6, 2009 PAGE 2 of 4
Parks Management Letter:
Mr. Allen presented the Management Report for Ashland Parks and Recreation. He suggested that
City and Parks formalize their intergovernmental agreement for accounting services.
Mr. Allen discussed other matters. He stated that over the last year or two there is more risk for
investments. Since it is a difficult time to be in investments, investments should be looked at more
carefully.
Mr. Allen discussed Local Government Investment Pool. The Pool is an investment even though it is
treated as a depository. Ms. Christensen stated that the money is not all in the pool about 44% of the
City’s portfolio is in a Pool. She stated that the portfolio was recently updated, which includes changes
in the banking industry.
Mr. Allen discussed page 43 regarding future earnings. He stated that each year the City looks at the
investment pool and figures what the value of each share would be. The Committee questioned how
the City would be affected if the pool were to see a large amount of investors leaving. Mr. Allen
answered that the loss would be heavier for the City. If all investors leave then the State takes the loss.
Mr. Allen discussed Future Accounting and Auditing Issues: GASB 51 and GASB 54 (see attached).
He stated that there is more detail of what reservations and requirements are.
The Committee questioned whether item number three (see attached) in the Parks and Recreation
Management letter continues forward as an exception. Mr. Allen answered yes.
The Committee questioned who is in charge of investment policy for the City. Ms. Christensen
answered she is who is in charge.
City Management Letter:
Mr. Allen went over the City Management Letter and stated that there were no new deficiencies in the
FY 2008-09 audit. Mr. Allen stated the recommendations that were repeated from the report to
management for the year ended June 30, 2008 (see attached).
Mr. Allen discussed investments and third parties. The Committee questioned seize and desist orders
and if it is addressed in investment policy. Ms. Christensen answered that the City is only allowed in
certain securities and certain banks, for example collateralization. She also stated that not just small
local banks get seize and desist orders.
Mr. Tuneberg thanked Cindy Hanks and the Accounting group for all their hard work throughout the
year. Due to the hard work the audit was done quicker then prior years. Mr. Tuneberg also thanked
Melissa Huhtala for putting the CAFR/CUFR documents into new software.
Mr. Tuneberg thanked elected officials for their work and support. Mr. Tuneberg stated that not all
agencies do the Audit to the level that the City of Ashland does. He thanked the auditors for their work.
Mr. Tuneberg discussed the CAFR and CUFR replacement pages and stated that there may be more
corrections until the final books go to the printer. Mr. Tuneberg stated that both reports have clean
audit opinion which can be found on page three for the City and page one for Parks.
AUDIT COMMITTEE MEETING
NOVEMBER 6, 2009 PAGE 3 of 4
Mr. Tuneberg discussed historical information. He stated that the City has gone through several years
of decreases in fund balances, but in this last budgetary year the City has tightened belts and has
scene improvements in the ending fund balance.
Committee Discussion:
The Committee questioned page 45 in receivables. The Committee questioned why this year’s
receivables are higher then last years and noticed that Hotel Receivables were not mentioned last year
but were this year. Ms. Hanks responded that last year there was a minimum report required by GAP,
but recommended more disclosure for this year.
The Committee questioned how long write offs are in the books before determined not collectable bad
debt. Mr. Tuneberg answered that each write off has a different schedule.
The Committee questioned whether staff goes to Council to make sure the write offs are within the
timeline of debt collected. Mr. Tuneberg answered no, but if there was a prevalent issue then the write
off would be taken to Council.
The Committee questioned why the CPI had a decrease in the time frame that says to make the
comparison (page 57). Ms. Bennett stated that a specialty use permit for the Forest Service has a cap
of $200,000. The Committee suggested this information to be disclosed.
The Committee questioned where the value of Ashland Community Hospital is reflected. Mr. Tuneberg
answered that the original values of the structure is reflected on page 100. Mr. Tuneberg stated that
assets stated on page 100 are secure.
The Committee questioned what the interfund loan reflects on page 89. Ms. Bennett answered that it
was the purchase of the Clay Street property. It is a loan from the City to the City, meaning the City
owns the land and the City got a loan to purchase the land. Since the Food and Beverage Tax has
been renewed Parks now has a revenue stream. The first $625,000 will go to pay the loan.
Public Input-
None
Signing the Annual Letter-
Mr. Tuneberg asked if there were any issues that would prevent the Committee from accepting the
report and signing the annual letter allowing the comprehensive annual financial report to Council.
Everson/Silbiger ms that the Committee signs the annual letter accepting the City’s audit and financial
report. All ayes.
The letter was submitted for the Committee members to sign.
AUDIT COMMITTEE MEETING
NOVEMBER 6, 2009 PAGE 4 of 4
Review of Audit Contract
Mr. Tuneberg discussed the Audit contract renewal. He stated that Fiscal Year 2009-10 is the third
year of a three year contract with Pauly, Rogers and Co., PC. There is a possibility of two, one year
extensions of the contract. Lee discussed the options of extending the contract with Pauly, Rogers and
Co. or to go out and bid for a new auditor. He stated that three years ago Pauly, Rogers and Co. was
the only one to bid now there are more options.
The Committee stated that it is recommended to bid. Ms. Christensen stated that she is happy with
auditors and supports extending the contract another year.
The Committee questioned staff as to whether or not they would prefer to bid or extend the contract.
Cindy Hanks stated she would prefer to extend the contract.
The Committee stated that it is a good idea to extend the contract as it may be difficult to switch.
The Committee stated that by going out to bid may cause the price to go up a big chunk. The
Committee also stated that five years is usually the longest a contract should go.
After hearing the Committee’s comments Mr. Tuneberg stated that it sounded as though the group is
okay with extending the contract with Pauly, Rogers and Co.
Everson/Nutter ms to extend the contract with Pauly, Rogers and Co. All Ayes.
Mr. Tuneberg stated a quote from Kenny Allen. Due to the Audit being done in such a successful
manner the price for audit will be reduced for next year. Mr. Tuneberg stated that the audit was
successful because of staffs hard work and dedication. The book was written entirely by staff and is
electronic format, therefore making it much easier for the auditors.
One difficult thing during this years audit was the actuarial study. Mr. Tuneberg stated that four or five
years ago there were more problems and since then staff has been correcting those issues. Staff has
been working on internal controls, cross training, documenting and thinking about audit all year round
which brings the City a successful audit!
Mr. Tuneberg suggested the Committee getting together again in March to lay out all information and
talk about new requirements to plan for the audit. By March there will be an informal update on
comments that the auditor made on internal controls.
Adjournment
The meeting was adjourned at 2:50 p.m.
Respectfully Submitted,
Melissa Huhtala
Administrative Secretary
Administrative Services Department