Broken Arrow City Council
Meeting of: 11-18-2019
Title:
title
Consideration, discussion, and possible approval of the creation of a Finance Audit Committee
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Background:
On March 30, 2018, the City received a Report on Best Practices for Financial Operations from Crawford and Associates. The report has been a guide for developing updated policies and procedures for the Finance Department. To date the Finance Department has adopted policies regarding:
• Internal Control Framework
• Purchasing Cards
• Cash Receipts/Revenues/Receivables
• Payroll
• Timeliness of completion of financial audit reports
• Staff Training
• Fund Balance Required Reserves
One of the proposed items in the report was the establishment of an audit committee. The report recommended the committee consist of at least one City Council member and external individuals with finance-related backgrounds.
The Government Finance Officers Association (GFOA) recommends that every state and local government establish an audit committee or its equivalent. The recommendation is that the committee should be established by a resolution or other appropriate legal means. The written documentation establishing the audit committee should describe the scope of the committee’s responsibilities, as well as its structures, processes and membership requirements. The committee should periodically review such documentation no less than once every five years.
To determine action items for the audit committee the staff has contacted both the City of Edmond and the City of Norman. Below is a summary of duties for each City’s committee:
Edmond:
Finance and Audit Committee - The committee consists of the City Treasurer as Chair and two members of the Governing Body. Monthly meetings are scheduled, but typically the committee meets 4 to 8 times annually. The committee has only recommending authority to the City Council.
Duties include:
Review all financial professional service contracts;
Review and recommend to the City Council or appropriate authority on all debt issuance;
Review monthly investment report and revenues vs expense reports;
Review the audit and internal audits prior to council.
Recommend all non-utility fees and rates.
Norman:
The committee consists of four (4) City Council members, which is ½ of the governing body and the Mayor as a 5th member. The committee meets monthly.
Duties include:
Review of monthly Revenues and Expenditures;
Review auditor’s contracts;
Sales tax collections;
Review outside agencies request for funding
Recommendation for the City of Broken Arrow:
The staff recommends that the Crawford Report recommendations be implemented as follows:
1. The Finance Audit committee consist of two City Council members and one external representative appointed by a majority vote of the City Council.
2. Committee training on the financial reporting and related functions to be coordinated through Crawford and Associates and city staff.
3. Duties will include monthly review of fund Revenues and Expenditures; review all financial professional service contracts and submit a recommendation to the City Council; review applications for all debt issuance and submit recommendations to the City Council or Authority as required; review the audit prior to City Council action; and review and recommend all fees and rates.
Cost: $0
Funding Source: None
Requested By: Russell Gale, Assistant City Manager - Administration
Approved By: City Manager Office
Attachments: Frank Crawford Best Practices report
Recommendation:
recommend
Approve creation of the Finance Audit Committee and direct the Legal Department to prepare a Resolution to create the committee.
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