Metropolitan Audit Committe Minutes - January 27, 2009
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Metropolitan Audit Committe Minutes - January 27, 2009

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METROPOLITAN AUDIT COMMITTEEJANUARY 27, 2009MINUTESOn Tuesday, January 27, 2009 at 4:00 p.m., the Metropolitan Audit Committee met in thendMetropolitan Courthouse, 2 Floor Committee Room 3. The following were inattendance at the meeting:Committee Members OthersBob Brannon, Chairman Mark Swann, Metropolitan AuditorBrack Reed, Vice Chairman Carlos Holt, Audit ManagerDiane Neighbor, Vice Mayor Kim McDoniel, Division of AccountsWalter Hunt, Metro Council Gene Nolan, Finance DepartmentCharles Tygard, Metro Council Toby Compton, Mayor’s OfficeMargaret Darby, Metro Law DepartmentMembers Not in AttendanceRich Riebeling, Finance DepartmentThe meeting was called to order by Bob Brannon, Chairman.Approval of MinutesThe minutes of the last meeting held, on December 9, 2008, were seconded andapproved.New Business Mr. Swann noted that three audit reports had been issued since the last meeting:Metro Nashville Police Department – Vehicle Impound, Metro Public HealthDepartment – Food Protection Services, and Metro Information TechnologyServices Department Information Security Management. Mr. Brannon asked whythe impound lot showed a deficit even though they appear to be making money.Mr. Swann explained that the deficit has been carried over and has gotten smalleras revenues exceed expenses. The initial deficit was likely due to start up costs.Mr. Swann stated that the Metro Public Health Department audit’s main findingwas that more follow-up inspections are ...

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METROPOLITAN AUDIT COMMITTEE
JANUARY 27, 2009
MINUTES
On Tuesday, January 27, 2009 at 4:00 p.m., the Metropolitan Audit Committee met in the
Metropolitan Courthouse, 2
nd
Floor Committee Room 3.
The following were in
attendance at the meeting:
Committee Members
Others
Bob Brannon, Chairman
Mark Swann, Metropolitan Auditor
Brack Reed, Vice Chairman
Carlos Holt, Audit Manager
Diane Neighbor, Vice Mayor
Kim McDoniel, Division of Accounts
Walter Hunt, Metro Council
Gene Nolan, Finance Department
Charles Tygard, Metro Council
Toby Compton, Mayor’s Office
Margaret Darby, Metro Law Department
Members Not in Attendance
Rich Riebeling, Finance Department
The meeting was called to order by Bob Brannon, Chairman.
Approval of Minutes
The minutes of the last meeting held, on December 9, 2008, were seconded and
approved.
New Business
Mr. Swann noted that three audit reports had been issued since the last meeting:
Metro Nashville Police Department – Vehicle Impound, Metro Public Health
Department – Food Protection Services, and Metro Information Technology
Services Department Information Security Management. Mr. Brannon asked why
the impound lot showed a deficit even though they appear to be making money.
Mr. Swann explained that the deficit has been carried over and has gotten smaller
as revenues exceed expenses. The initial deficit was likely due to start up costs.
Mr. Swann stated that the Metro Public Health Department audit’s main finding
was that more follow-up inspections are performed as compared to other food
inspection activities within Tennessee and also nationally. Metro Public Health
Department may be the “low cost leader” in food inspections. However, more
frequent inspections have not decreased the number of violations and this is being
looked at.
Mr. Swann presented the Office of Internal Audit (OIA) risk assessment
methodology used to create a CY 2009 Audit Work Plan. A module of the
Metropolitan Audit Committee Meeting Minutes
January 27, 2009
Page 2
automated work papers in use by the OIA, TeamMate, facilitated the
development. Quality points and delivery objectives were determined, then risks
were evaluated and metrics determined. Only inherent risks factors were used.
The resulting metrics positioned departments with a high number of employees
and high dollar revenues or expenses high on the list. The frequency of prior
audits was also factored into the CY 2009 Audit Work Plan.
Mr. Swann presented the resulting audit plan as well as the seven projects that are
currently underway. Mr. Reed questioned why several component units
(Nashville Electric Services, Metropolitan Airport Authority, Metropolitan
Transit Authority, Metropolitan Development and Housing Authority, etc.) were
not subject to any recent audits. Mr. Swann explained that there is a question as to
how much authority the OIA has to perform audits of some of these units. Ms.
Darby stated that there is no clear cut answer for this question but the Metro Law
Department is still reviewing the issue. Mr. Tygard asked if this is an area that the
Metro Charter may need to be amended to which Ms. Darby stated that was
certainly a possibility. Mr. Reed added that the boards are all approved by council
but that there is little oversight of their funds.
Mr. Tygard made a motion to approve the CY 2009 Audit Work Plan as presented
and the motion was seconded by Ms. Neighbors. Motion was approved.
Mr. Tygard wanted to know how the two construction projects on the FY 2008
Audit Work Plan were chosen. Mr. Swann stated that he recommended them due
to several factors, mainly project dollar value, contact audit timeframe and
availability of information. Further, that the OIA was using the two projects as a
learning experience for the audit staff concerning the changed Metro process on
capital construction projects (function was recently moved to General Services
Department in FY 2008.) Mr. Swann stated that currently, contract compliance
with pay standards was the focus, with subcontractor payroll records being
reviewed. Mr. Tygard asked if the review could also determine if the
subcontractors were properly licensed to do business in Metro at the time they
performed work. Mr. Swann agreed to add this objective to the audit plan.
Old Business
Mr. Brannon discussed the FY 2008 Comprehensive Annual Financial Report
(CAFR), noting that the organizational charts do not include the Metropolitan
Audit Committee or the OIA. Ms. McDoniel stated that was a good point and that
the audit committee and OIA need to be properly reflected. Mr. Brannon stated
that the FY 2008 CAFR could be discussed at future meetings.
Metropolitan Audit Committee Meeting Minutes
January 27, 2009
Page 3
Metro Silent Whistle
Mr. Holt presented updates for submission during the two months ended
December 31, 2008 showing that 16 new submissions were received. He noted
that a seasonal decrease frequently occurs at many organizations this time of year.
He presented several submissions and resolutions of recent items.
Internal Audit Project Status
Mr. Swann briefly discussed the current state of the following seven previously
approved projects:
Nashville General Hospital (NGH):
Just met with Dr. Coopwood - Chief
Executive Officer, Metropolitan Nashville Hospital Authority, and are very near a
final report.
Public Works Traffic Operations:
OIA meeting with public works on potential
observations this week.
Juvenile Court Clerk (JCC) Victims’ Compensation Trust:
Taking longer that
originally planned due to the need to obtain third party (bank) documents from 17
institutions.
Metro Employee Pension Plan:
KPMG will begin fieldwork next month after
being awarded a contract for approximately $110,000. Mr. Swann stated that even
though the costs may sound high, Metro pensions are of such importance and
significance that it is vital to have a periodic audit performed by an independent
auditor.
Davidson County Sheriff’s Office Revenue:
Fieldwork underway.
Metro Nashville Public Schools Information Technology Security:
Audit
fieldwork is underway.
General Services Department Construction:
Collecting data from contractors.
Other Administrative Matters
.
Mr. Swann informed the committee that during the current audit of the JCC, a
flash drive containing some confidential information could not be located. It was
last used, and presumed lost, inside the JCC computer room and that no social
security numbers or birthdates were included in the information. Ms Darby stated
that she would assist by determining what, if any, notifications should be made.
The JCC was previously informed.
Mr. Tygard stated that Chairman Brannon’s term ends soon and inquired if a letter
had been sent to the Nashville Chapter of the Tennessee Society of Certified
Public Accountants requesting his continuance or a replacement. Mr. Brannon
stated that the letter had been sent and that he is interested in returning but does
not know if he will be nominated.
Metropolitan Audit Committee Meeting Minutes
January 27, 2009
Page 4
Adjournment
Next meeting scheduled for March 10, at 4 p.m.