AUDIT COMMITTEE Tennessee Tower, 3 rd Floor Conference Room M Thursday, June 14, :00 p.m. MINUTES

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1 STATE OF TENNESSEE TENNESSEE COMMISSION ON CHILDREN AND YOUTH Andrew Jackson Building, 9th Floor 502 Deaderick Street Nashville, Tennessee (615) (FAX) AUDIT COMMITTEE Tennessee Tower, 3 rd Floor Conference Room M Thursday, June 14, :00 p.m. MINUTES Present Christy Sigler, Chair Brenda Davis Phil Acord Gary Houston Rob Mortensen Absent Kelly Drummond Staff Linda O Neal, Exec. Dir. Richard Kennedy, Assoc. Dir. Craig Hargrow Latasha Mitchell Steve Petty Natasha Smith Sherry Snorton I. Welcome and Introductions Christy Sigler, Chair Sigler called the meeting to order at 12:06 p.m. II. Financial Integrity Act Update Sherry Snorton Snorton provided an update on the Financial Integrity Act and reported the TCCY fiscal, administration and program staff collaborated to ensure the completion of a risk assessment for the agency during the second quarter. Snorton commended Natasha Smith for submitting the risk assessment assurance letter on December 22, 2017 ahead of the due date of December 31 st. Snorton attended a roundtable discussion with John Rust, Director of Field Operations, in May The discussion focused on the changes to the Enterprise Risk Management (ERM) Form 2. Snorton reported there will be new guidelines for the Risk Assessment Form 2 this year. Snorton explained the ERM Form 2 is a set of objectives for our agency. It is now required that 1

2 each objective is described in specific and measurable terms by identifying: why are we doing this? what is to be achieved? who is to achieve it? how it will be achieved? and time frame for the achievement. Snorton said General Services shared a link to a helpful tool called the Key Performance Indicator (KPI) Library to assist agencies in identifying our objectives in a qualitative or quantitative manner. She said most of TCCY s objectives are identified in a qualitative manner, but the KPI Library does not really assist TCCY in the qualitative. Snorton reported the Division of Accounts and State Audit are working together to find a tool to assist TCCY in identifying the KPIs. 1) Acord asked about the frequency of the report and Snorton explained the Financial Integrity Act requires each agency file an annual report by December 31 st with the Comptroller s Office, Fiscal Review, and Finance and Administration (F & A). Kennedy further explained that this report is a way to assess anything that could possibly go wrong and to create strategies to prevent it from happening or mitigate the damage. He said the process used continues to be expanded. 2) O Neal added this is financial oversight that came as a result of Enron and all of the corporate missteps over the last two decades. She said the Financial Integrity Act is backed by federal legislation. Acord said even the non-profits have new guidelines and oversight because of the Sarbanes Oxley Act of Snorton said T.C.A provides an explanation as to what is required from the Finance and Administration and Comptroller offices to provide reasonable assurance of certain internal controls. III. Title VI Update Natasha Smith Smith reported the Tennessee Human Rights Commission (THRC) sent an in early February notifying agencies of the need to modify their implementation plans. They hired a new Title VI coordinator who read all state agency plans and suggested various modifications. Smith made the necessary changes and THRC sent a letter describing the process, the findings and TCCY s immediate compliance. THRC will send new guidelines in July and Smith will attend the annual Title VI Training given by THRC to answer any questions for this year s plan. 2

3 Acord asked about a previous issue with THRC. Kennedy explained there was an audit in 2015 where THRC suggested TCCY place the Title VI notice in the reception area to be visible to our guests. TCCY had the sign posted in the mailroom because TCCY just relocated and General Services did not allow signs to be posted on the walls. As a solution, Kennedy framed the notice and it now sits on a table in the reception area. THRC was satisfied and sent a compliance letter. IV. Contract Monitoring Latasha Mitchell Mitchell reported on the contract monitoring process and added that from January to March 2018, she audited the process of grant contract monitoring to determine what was sufficient and what needed to be changed. Much time was devoted to looking over previous monitoring reviews and going over the current contracts with a fine-toothed comb. She said her main goal is to make sure what we are monitoring is being reflected in the contracts. She has updated monitoring guidelines and the process to build on the strengths of the former methods and enhance them by improving customer service, clarity, validity, and reliability. Mitchell reported each grantee s point of contact receives an with a Scheduling Letter, Monitoring Guide, Sample Invoice, Reaffirmation Letter, Management Representation Letter, and any additional documentation that is specific to their grant. This also notifies the grantee of the review date and type of review desktop or site visit. A phone call is scheduled between the contract monitor and the grantee to go over the documents, explain the monitoring process, and answer questions. Either a desktop review is submitted or the site visit is completed. During the site visit, the contract monitor asks for any missing documentation and generally explains to the grantee what issues (if any) were discovered during the site visit. This allows the grantee to be aware of the findings/observations so that there are no surprises when the grantee receives their official Results Summary. All of the directors have been very receptive to this process. They said that it helped them see what needed to be corrected and eased their anxiety about the review. Mitchell said this now gives the contract monitor an opportunity to provide guidance and brainstorm with the directors to think of ways they can improve their processes. Monitoring Guide and Results Summary documents are completed and sent to the grantee, along with a Cover Letter. If there were any findings or observations, the grantee has 30 days to submit a Corrective Action Plan to the contract monitor and the Director of Juvenile Justice. The Corrective Action Plan must include specific steps to remedy the findings/observations and the expected date of completion. The contract monitor will the grantee the approval or request for changes to the Corrective Action Plan. During the grantee s next contract monitoring review, the most recent Corrective Action Plan will be examined to ensure that it was fully implemented. 3

4 Monitoring results will be gathered to assign a risk level to each grantee, used to determine when each grantee will be monitored again. Mitchell reported a new Central Procurement Office (CPO) Plan will be developed and submitted in October The major tentative changes she would like to propose to the CPO Plan include risk levels and frequency of monitoring (e.g. determining risk levels by the type AND number of findings/observations, monitor the CASA programs at least every other year). The goal for future monitoring is to break up monitoring so that CASA reviews occur in November and December, Reimbursement Account reviews occur in January and February, and Federal Formula Grants (FFG) reviews occur in April and May. Mitchell said all CASA site visits have been completed, and reviews are in process. The goal is to complete the CASA reviews by the end of June, and then complete the Reimbursement and FFG reviews in July. She said scheduling s have been sent to all the Reimbursement Accounts, and the scheduling s for FFG will go out next week. Mitchell said documentation has been a consistent problem, making it hard to verify actions. 1) Acord asked how Mitchell placed weight on the more critical findings. She explained observations versus findings for heavier problems. The grantees have 30 days to submit a corrective action plan where they will have to implement the plan. 2) Acord commended Mitchell for being an ally instead of a police officer. V. Office of Criminal Justice Monitoring Sherry Snorton Snorton reported the Office of Criminal Justice Programs (OCJP) under Finance and Administration conducted a desk review for the ACEs Public Awareness campaign grant during the months of April and May. The review was completed and the exit interview occurred on May 23 rd. Snorton said the annual report due July 31 st was submitted on June 12 th. The report included the quarterly program income and project equipment summary. WCTE purchased a server to store the material used for ACEs and sent pictures of the unit with the serial number for our records. VI. Records Assessment Sherry Snorton Snorton said the Secretary of State s Office, Records Management Division conducted a records assessment site visit with TCCY on April 20 th. They looked at records organized 4

5 efficiently and accessible to all employees and discussed electronic records and the retention of paper records. The field offices will also have an upcoming records assessment. Snorton said TCCY could send our records from Commission meetings to archive. At this time, we do not want to send to archives just in case we need to readily access them. We also need to re-create Records Disposition Authorizations (RDAs) for federal formula grants. TCCY previously had an RDA, but under the recommendation of Records Management, it was discontinued due to the Southwest RDA. It was determined TCCY will need our own RDA for federal awards based upon the federal audit guidelines. Snorton explained Records Management representatives came to measure how much paperwork was in the office so they can determine how much material would have to be disposed of when that time comes. It all depends on the records and retention policy. Most records need to be retained for five years. Edison is our records keeper for invoices and travel claims. VII. Other Business There being no further business the meeting adjourned at 12:37 p.m. Minutes Prepared by: Minutes Approved by: Natasha M. Smith Director of Operations Christy Sigler Committee Chair 5