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AUDIT 2011/04/21 Minutes The City of Lake Forest AUDIT COMMITTEE Proceedings of the April 21, 2011 Meeting 5:15 p.m. – City Hall, 220 E Deerpath City Manager’s Conference Room I. Call to Order and Roll Call Chairman Jacobs called the meeting to order at 5:15 p.m. Audit Committee Members present: Chairman Jacobs, Mr. Marwede, Ms. Reich, Ms. Moreno, Mayor Cowhey (ex- officio) and Finance Committee Chairman Grumhaus (ex-officio). Absent: Ms. Krebs. Quorum present. City staff present: Robert Kiely, Jr., City Manager; Kathleen Reinertsen, Finance Director, Louise Breckan, Assistant Finance Director and Diane Hall, Senior Accountant. Others present: Linda Abernethy, Partner with McGladrey & Pullen, Mark Milliman, Treasurer of the Parks and Recreation Foundation and Wendy McKiernan, Superintendent of Recreation. Number present in the audience: none. II. Consent Agenda Approval of minutes from Audit Committee held on October 21, 2010 Ms. Reich moved, seconded by Ms. Moreno to approve the minutes from the Audit Committee meeting held on October 21, 2010. The motion carried unanimously by voice vote. McGladrey & Pullen April 30, 2011 Engagement Letter The Committee reviewed the engagement letter with Ms. Linda Abernethy, Partner with McGladrey & Pullen. Next year, the Committee would like to see a red lined version of the engagement letter. A motion was made by Ms. Moreno subject to the addition of the following words on page 4, under Claim Resolution, “except for those cases in which there has been gross misconduct or negligence on the part of McGladrey & Pullen, LLP”, seconded by Ms. Reich, to recommend to the City Council to accept the engagement letter. The motion carried unanimously by voice vote. III. Lake Forest Park and Recreation Foundation – Review of Financial Information for the Fiscal Year Ended September 30, 2010 Mr. Robert Kiely, City Manager explained that due to the recent financial difficulties experienced by the Gorton Community Center Commission, the City Council directed the Audit Committee to at least annually review the non profits that have direct or quasi affiliations with the City. Mr. Kiely stated that the Audit Committee can decide how often it wants to review the financial statements. The Committee discussed and agreed: 1. To review the federal and state tax returns, Form 990, Form AG990-IL. 2. To review audits, if available 3. To review annual financial statements prepared on an accrual basis 4. To have representatives come to an Audit Committee meeting once a year Audit Committee Meeting Minutes – April 21, 2011 Page 2 of 2 5. To ask internal control questions 6. To have Finance Director Reinertsen update and provide the Committee with the Foundation Financial Review one page summary. 7. City Manager Kiely and Finance Director Reinertsen will suggest to the Committee which non profits to closely monitor. Mr. Mark Milliman, Treasurer with the Parks and Recreation Foundation explained that the purpose of the foundation is to help fund facility improvements utilized by the Parks and Recreation Department. He reviewed the profit and loss statements with the Committee. Mr. Milliman stated that it is the goal of the foundation to have 100% sponsorship of events. The two main fund raising events are the Festival and Fireworks and Golf Outing. As Treasurer of the Foundation, Mr. Milliman pays the bills and signs the checks. The projects are voted upon by the Board and minutes are kept of the meetings. Mr. Milliman stated that the Parks and Recreation Foundation is following the internal controls for events which were given to them by their auditors. Mr. Milliman stated to please contact him at any time if the Committee wanted to see any financial statements. The Committee thanked Mr. Milliman and Ms. McKiernan for coming to the meeting. The Committee agreed to have Ragdale Foundation present financial reports at the July meeting and Gorton Center Commission present financial reports at the October meeting. At the July meeting, Ragdale Foundation should present an overview of the construction project, fund raising update and budget variances. IV. Other Business: none V. Opportunity for the Public to Address the Audit Committee: none VI. Adjournment There being no further business, Ms. Moreno moved, seconded by Mr. Marwede, to adjourn the meeting. The motion was approved unanimously by voice vote. The meeting was adjourned at 5:50 p.m. Respectfully submitted, Louise Breckan Assistant Finance Director