AGENDA MEETING OF THE CITY OF CAPE CORAL AUDIT COMMITTEE

Transcription

1 1015 Cultural Park Blvd. Cape Coral, FL AGENDA MEETING OF THE CITY OF CAPE CORAL AUDIT COMMITTEE April 17, :00 PM Conference Room Meeting called to order A. Chair Hiatt 2. ROLL CALL A. Austin, Hiatt, Stevens, Stout, and Wolfson 3. CHANGES TO AGENDA / ADOPTION OF AGENDA 4. Public Input 5. APPROVAL OF MINUTES A. February 20, 2019 Meeting Minutes 6. BUSINESS A. City Auditor's Office Update Report - City Auditor Butola 7. Member Comments 8. Time and Place of Next Meeting A. The next Audit Committee meeting will be held on Wednesday, May 15, 2019 at 3:00 p.m. in Conference Room Motion to Adjourn In accordance with the Americans with Disabilities Act and Section of , Florida Statutes, persons with disabilities needing special accommodation to participate in this meeting should contact the Office of the City Clerk at least forty-eight (48) hours prior to the meeting. If hearing impaired, telephone the Florida Relay Service Numbers,

2 (TDD) or (v) for assistance. If a person decides to appeal any decision made by the Board/Commission/Committee with respect to any matter considered at such meeting or hearing, he will need a record of the proceedings, and for such purpose, he may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is based.

3 Item Number: 5.A. Meeting Date: 4/17/2019 Item Type: Approval of Minutes AGENDA REQUEST FORM CITY OF CAPE CORAL TITLE: February 20, 2019 Meeting Minutes SUMMARY: ADDITIONAL INFORMATION: ATTACHMENTS: Description February 20, 2019 Meeting Minutes Type Backup Material

4 MINUTES OF THE MEETING OF THE CITY OF CAPE CORAL AUDIT COMMITTEE Wednesday, February 20, 2019 PAGE: 65 CONFERENCE ROOM PUBLIC WORKS GREEN A200 3:00 P.M. The meeting was called to order at 3:00 p.m. by Chair Hiatt. ROLL CALL: Austin, Hiatt, Stevens, and Wolfson were present. Nelson arrived at 3:08 p.m. ALSO PRESENT: No speakers. Andrea Butola, City Auditor Victoria Bateman, Finance Director Public Input Chair Hiatt requested to add future meeting locations to the Agenda as Item C. under the Business section. There were no objections. Voice Poll: All ayes. Approval of Minutes: January 16, 2019 Meeting Minutes The minutes from the Audit Committee meeting of January 16, 2019 were presented for approval. Vice Chair Stevens moved, seconded by Committee Member Wolfson, to approve the minutes as presented. Voice Poll: All ayes. Motion carried. BUSINESS City Auditor s Office Update Report City Auditor Butola reviewed the 1/15/19 through 2/19/19 Update of City Auditor s Office Activities dated February 19, 2019 which was ed to the Committee and was posted online. They included the following: In Progress External Auditors Clifton Larson Allen (CLA) External Financial Auditors (CAFR) FY 2018 CLA Pension Plan Audits (Police, Fire, and General) FY 2018 CLA City Auditor Butola acknowledged that Finance Director Bateman attended today s Audit Committee meeting. She announced that she contacted Clifton Larson Allen and opined that the external auditors process appeared to be moving along as scheduled and she does not foresee any issues as in the past.

5 PAGE: 66 Discussion held regarding: New member added to CLA team Chris Kessler s fast and efficient response from actuaries Mr. Kessler tackled first task and resolved the matter within a day Mr. Kessler provided all updates for Pension Plans Prior issues with timely communications between CLA and Auditor s office Assigned CLA personnel to the Audit City Auditor Butola opined that she is impressed with the CLA team and inquired if there were any questions from the Board regarding the external audit. Chair Hiatt responded that there were no questions. City Auditor Butola continued reviewal of the City Auditor s Office Activities as follows: In Progress Internal Staff: Public Works Storm Water Operations Parks and Recreation Coral Oaks Golf Course Operations Public Works Citywide Fleet Vehicles City Auditor Butola informed that each pending audit was assigned to an auditor team member and they are each following-up with the process accordingly. Finance Director Bateman inquired about what work was being done on Fleet. City Auditor Butola responded that there are three Fleet objectives, which include acquisitions, maintenance, and utilization. Discussion held regarding: Mileage calculations through FASTER (City s asset management system) Analyzing reports based on the low and high calculations Policy on dealing with low and high results Guidelines and management of mileage Audit Committee assistance in determining if vehicles are still feasible for the City Comparing and double-checking Fleet assets against master asset list Discussions with Fleet Manager regarding reports including inactive assets Utilizing 130/Meter Exception Report focusing on pivot tables for 17 and 18 City obtaining recommendations from the audit Transportation for the Charter Schools currently out for bids Charter Schools issues with buses not being maintained and turnover of drivers Member Nelson arrived at 3:08 p.m. Finance Director Bateman continued to explain maintenance process, inhouse and outsource service options, fuel and acquisition status, and working with City Manager and Superintendent Collins on which direction would be taken going forward.

6 PAGE: 67 Vice Chair Stevens questioned if there would be a cost reimbursement by the Charter Schools. Finance Director Bateman responded that it would not be a reimbursement as the Charter Schools would pay for the expenses directly for the maintenance. Currently buses are maintained by the City s Fleet and since this change the City has hired two trade certified bus mechanics. She provided further information on the rental of buses as Charter Schools did not maintain the buses properly and they have incurred an additional expenditure of $200,000 on transportation so far. The City has been working with the Superintendent on evaluating the costs, employee turnover, and all other factors dealing with the buses. City Auditor Butola mentioned that these items were outside of the scope of the audit. Vice Chair Stevens inquired about how close the bids from A&S and other bidders received for the school buses. Finance Director Bateman responded that they were less than $100,000 difference. She explained the negotiation process, possible buy-out of the buses, and concerns by the Superintendent. There was no Plan B and if this plan does not work out, then the school buses would be gone with no replacements. There are ongoing negotiations on this matter. City Auditor Butola inquired if there were any further questions on the remainder of the report. Finance Director inquired when the City Auditor would be done with Coral Oaks. City Auditor Butola responded that she would be working on a draft report by the end of March. The City Auditor and Staff have attended numerous training sessions during this past period. The following areas of the City Auditor s Office Update report were discussed: Post Audit Review Timekeeping Post Audit Review City Clerk Records Division Post Audit Review Public Works Road Resurfacing Post Audit Review Charter School Best Practices Finance Director Bateman inquired about the Road Resurfacing open recommendation that was anticipated to be completed back in December She advised that there is a meeting tomorrow and she will be questioning When will we get this done? and she would be recommending that current report be updated. City Auditor Butola responded in the affirmative and discussion was held on the following topics: Communications and responses from Procurement Manager

7 PAGE: 68 Closure of Post Audit Review-Charter School-Best Practices POs approval and signing authority Recommendation to mirror Procurement manual Procurement Manager Roop and Superintendent Collins signing authority Vice Chair Stevens inquired if the dates for the eight audits listed in the report were the original or revised completion dates. City Auditor Butola responded that these were the original dates and no revisions have been necessary. She continued with her update as follows: Non-audit Service Fuel Acquisition, Monitoring, Disbursement, and Usage Non-audit Service Parts Acquisition, Monitoring, Disbursement, and Usage Other Per Audit Committee request, City Irma payroll observations draft response is complete. Needs finalization. City Auditor Butola provided update on the Audit Committee s task request to inquire on the payroll observations and stated the following: Task was not an official audit, only an informal review Draft copy of the memo Observations not categorized by departments Teams working on identifying each of their respective sections Deputy Finance Director reviewed each and every Form 214, Labor Record, Timesheet, Workbook and other records No reimbursement request in excess of what the City actually paid-out Finance Director Bateman requested that City Auditor Butola perform the informal review in anticipation that FEMA would do this as well For one year, two employees reviewed and reconciled what was paid to each employee and that hours listed on Form 214 matched up with Labor Records Chair Hiatt questioned if there was a more efficient way to handle this task. Finance Director Bateman responded that this was the reason why she requested the City Auditor s observations. Further discussion held regarding: Future changes Response to the observation Identifying what did and did not work Incorporating findings in the observation response Coordination and responsibilities of department heads Chair Hiatt questioned if there has been any response from FEMA.

8 PAGE: 69 Finance Director Bateman responded in the affirmative and provided the following update: Weekly communications with FEMA; numerous changes of FEMA representative Back and forth on FEMA decision to pay claims Getting Community Recovery Center (CRC) department involved in the process FEMA denied Finance Director Bateman s request to communicate with CRC Resolving issues one at a time, but others still pending to be resolved About 90-95% of what FEMA was claiming that City has not produced, was clarified on yesterday s conference call and confirmed received Difficulties with FEMA keeping straight records of what City has produced Follow-up request to speak with CRC department at yesterday s conference call $10,000 currently received from FEMA Total claims amount was about $17 million; FEMA only reimburses 75% $7 million has passed through to DC FEMA FEMA claiming that there was a missing document for the $7 million City has clarified that all documentation has been submitted FEMA contacting DC FEMA to get clearance on payout Expecting $7 million within a few months Payment process from State to Federal levels Reimbursement occurs within 3-5 years after event by FEMA Thousands of Form 214 returned by FEMA with changes requested FEMA voluminous request to revise returned Form 214 Finance Director Bateman s response that this would not be done Continuous process and optimistic that City would be paid by FEMA City Auditor Butola supplemented that the City Irma payroll observation was completed at Finance Director Bateman s request and the task was accomplished as there was confusion on the forms and correlating labor records. It was anticipated that FEMA would inspect the records. Finance Director Bateman announced that she recommended the independent audit to identify the effectiveness of the current procedures and action taken was appropriate. The feedback was welcomed to continue progress in the future. She discussed that training plans should be taking place in June each year and now Standard Operating Procedures (SOP) are being updated to aid employees on completing the forms and assigning support staff in each department. City Auditor Butola continued with her update as follows: Conducted telephone interviews February 8 and 11. In-person interviews are scheduled for the week of March 4. City Auditor Butola reported that the interview questions had to be revised due to the new entry level position. She discussed the salary range and different applicants.

9 PAGE: 70 There are four in-person interviews scheduled in a panel format the week of March 4 th and she opined that by the end of March a decision could be made to fill the position. City Auditor Butola continued with her update as follows: Attended all day kick off session for new financial software. Revision and leaning of office and audit processes as they relate to the EWP s is ongoing. Attended City Council meetings and City Manager s Director Staff meeting. Continue to review and update CAO policies and procedures, report, and memo formats. Continue ongoing monitoring of open audit recommendations through EWP software. Budget Review Committee memo with City Manager Discussion held regarding the last item in this section and a proposed plan of action to address this matter has been contemplated by various department heads. Finance Director Bateman announced that she and Assistant City Manager Barron would be attending the next Budget Review Committee (BRC) meeting to clarify this matter. City Auditor Butola referenced that Resolution 5-12 established the duties of the BRC, and the Audit Committee tells the City Auditor what to do, that is the reason why she was involved, and she signed the letter. Finance Director Bateman and City Auditor Butola suggested to the Audit Committee to review the BRC January 2019 meeting minutes. Discussion continued regarding the Council guidance to the BRC. City Auditor Butola has implemented a new office procedure to quickly glance and review all the board minutes to identify any reference to the City Auditor s Office. She continued with the remaining items in the report as follows: FY 2019 YTD Follow Up Action Register: Attachment A as of February 19, 2019 Professional Development: Department staff attended training webinars and seminars during this period on fraud. Audit standards require all members of the audit staff to achieve continuing education credits each year. Focus for the next period: The City Auditor and staff: Internal staff will:

10 PAGE: 71 o Focus on reviewing and updating audit policy and procedures to reflect new processes transitioning to EWP. o Attend new financial software implementation meetings as necessary o Finalize office budget o Continue ongoing work on follow up for prior audits performed. o Continue work on audits and special projects in progress and assign FY2019 audits per audit plan. o Continue with final selection for Internal Auditor position Continue tracking recommendations for post audit review. City Auditor Butola concluded her report and stated that the office will continue following and monitoring the pending audits. She was encouraged with the results of the audit plan and looking forward to hiring the new Internal Auditor. At the end of April, there is a virtual audit bootcamp and the new personnel will be attending that seminar with no travel costs as it would be an online session. Attendance Chair Hiatt welcomed Member Nelson back to the meeting and stated that this section of the agenda was mostly about addressing her attendance. She highlighted the importance of having a Councilmember present at the Audit Committee meetings to be the liaison between the Committee and City Council. Member Nelson responded in the affirmative and she is contemplating on giving this position to another Councilmember. Due to her day job, it is difficult to attend the meetings in-person. She expressed support of the concept of meetings by phone, so she can be in attendance with more consistency. Discussion held regarding: Virtual or Skype attendance Contacting ITS to find out logistics Member Nelson questioned if the Committee is requesting that she inquire if another Councilmember would take over. Chair Hiatt reaffirmed that the Committee needs a Council Liaison. Discussion held regarding: Skype vs. speaker phone Issues with voting capability Consulting with ITS how virtual meetings could be possible Chair Hiatt stated that the decision to replace the Committee s Council Liaison would need to be Member Nelson s decision we would like a body here or virtual body here.

11 PAGE: 72 Member Nelson agreed to follow up with IT Department on Skype attendance for the meetings and she would also speak to Council to find out if they are able to be part of this board. Chair Hiatt inquired if Member Nelson is a liaison or a member on the Charter Schools Governing Board. Member Nelson responded that she is a member of that board. Chair Hiatt stated that she is not comfortable with having Member Nelson as part of Audit Committee and part of the Charter Schools Governing Board. The concern is that the Audit Committee is very involved and focused on the Charter Schools. Chair Hiatt stated that she would put the decision back in Member Nelson s hands to make. Member Wolfson questioned the concern. Member Nelson restated the concern that she is on the governing board for the Charter Schools and a member of the Audit Committee which focuses on the audits of the Charter Schools. Chair Hiatt stated that her primary issue is to have a Council Liaison available to carry back the Committee s issues to the Mayor and/or City Council. Vice Chair Stevens stated that it could be a virtual or in-person attendance, and he was fine with speaker phones. He opined that Committee does not need to get elaborate. Member Nelson agreed to check on both possibilities. Member Austin responded that she was fine with virtual, Skype, or having someone inperson. Chair Hiatt questioned Committee if they were comfortable with putting the decision onto Member Nelson to make the decision if she wanted to find a replacement or pursue the electronic attendance to the meetings. Member Nelson clarified what was said about her serving on the governing board of the Charter Schools. She restated that if the Committee has an issue with this, then she should not be a member to this board as she is on the board. Chair Hiatt responded in the affirmative. Member Austin responded in the affirmative. Further discussion held regarding: Having another Councilmember take over this board

12 PAGE: 73 List of Councilmembers with day jobs Pursuing the electronic attendance to the meetings Member Wolfson stated that he does not have any objection with Member Nelson being on the Audit Committee. Vice Chair Stevens agreed with Member Wolfson. Further discussion held regarding: Prior Audit Committee requests to Council Neutrality and conflicts of serving on different boards Possible Issues that may arise Member Nelson stated that she would follow-up on the items requested. Future Meeting Locations Chair Hiatt inquired on the different conference rooms for the Committee to hold their meetings. Further discussion held regarding: Burrowing Owl Room 170 Limited space and not conducive for meetings Using prior meeting location in Conference Room 2006 Issues with doors being locked, elevators, and stairs not accessible Scheduled reservations of Conf Room 2006 from March to December 2019 Looking into availability and possible change to another meeting room Scheduling meetings in Conf PW Green Room A200 (where meeting held today) Accessibility to the Conf Room 2006 through City Hall s elevator Issues with finding a parking place at City Hall Member Nelson reconfirmed that she will follow-up with the tasks assigned to her and provide update to the Committee. Member Nelson left at 4:01 p.m. Chair Hiatt continued with discussion about meeting in the Burrowing Owl Room and mentioned that parking would be easier, and she opined that access was easier as well. Discussion held regarding room network wiring, WIFI and remote access capabilities, and making sure that the room is properly equipped for the meetings. Recording Secretary Castillo volunteered to inquire if the Burrowing Owl Room is equipped and conducive for the Committee to hold their future meetings at that location or inquire about alternate locations based on discussion held today. None. Member Comments

13 PAGE: 74 Time and Place of Next Meeting The next meeting was scheduled for Wednesday, March 20, 2019, at 3:00 p.m. in Conference Room City Auditor Butola quickly checked her schedule and stated that everything looked good. Motion to Adjourn There being no further business, the meeting adjourned at 4:03 p.m. Submitted by, Betty Castillo Recording Secretary

14 Item Number: 6.A. Meeting Date: 4/17/2019 Item Type: BUSINESS AGENDA REQUEST FORM CITY OF CAPE CORAL TITLE: City Auditor's Office Update Report - City Auditor Butola SUMMARY: ADDITIONAL INFORMATION: