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AUDIT 2012/10/25 MinutesThe City of Lake Forest AUDIT COMMITTEE Proceedings of the October 25, 2012 Meeting 5:15 p.m. – City Hall, 220 E. Deerpath City Hall Conference Room Minutes I. Call to Order and Roll Call Chairman Moreno called the meeting to order at 5:10 p.m. Audit Committee Members present: Chairman Moreno, Baier, Logan and Marwede. Absent: Mayor Cowhey, Ms. Krebs and Finance Chairman Pandaleon. Quorum present. City staff present: Robert Kiely, City Manager; Elizabeth Holleb, Finance Director; Diane Hall, Assistant Finance Director; Michael Thomas, Public Works Director; Dan Martin, Superintendent. Other present: Linda Abernethy, Partner with McGladrey & Pullen, LLP and Dan Sethness with McGladrey & Pullen. Number present in the audience: none. II. Consent Agenda Approval of minutes from Audit Committee held on April 19, 2012 Mr. Marwede made a motion to approve the April 19, 2012 minutes. The motion was seconded by Ms. Baier. The motion carried unanimously by voice vote. III. Review Draft of Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended April 30, 2012 Ms. Holleb, Finance Director introduced herself to the Committee and reviewed the changes that had occurred in the Finance Department during FY2012, which included three new staff members resulting from the City’s Early Retirement Incentive program. Finance Chairman Pandaleon entered the meeting at 5:20 p.m. Ms. Holleb reviewed the Early Retirement Incentive program, stating that 26 employees took advantage of the program. She stated that seventeen positions were filled and the City took advantage of Tier 2 IMRF employees where possible. She reviewed the projected savings from the program will be $400,000 per year. Ms. Holleb stated that during the fall of 2011, the City took advantage of $2.5 Million present value savings by refinancing six debt issues. Ms. Holleb reviewed a summary report covering the CAFR Government-Wide highlights. The Committee discussed the current reporting of pension liabilities for IMRF, Police and Fire as well as future requirements provided in GASB54. The Committee discussed the City’s bond refunding policies and procedures. Ms. Holleb stated that the City uses financial advisors that continually review for opportunities. The City has three SSA bonds that will be refinanced through Lake Forest Bank and Trust. IV. Review Draft of Report to the Audit Committee (Includes Management Letter) as Prepared by McGladrey LLP Ms. Linda Abernethy, Partner reviewed the management letter comments with the Committee. Ms. Abernethy stated that with the change in staff there were concerns with internal controls, but does not feel that there is a problem at this time. V. Review Draft Single Audit Report for the Fiscal Year Ended April 30, 2012 Ms. Abernethy reviewed the report and stated that requests for reimbursements need to be made on a more timely basis. Ms. Holleb stated that new procedures have been implemented and additional procedures will be developed for future grants. VI. Executive Session with Auditors A motion was made by Ms. Baier at 6:15 to adjourn into executive session with Ms. Abernethy, McGladrey & Pullen LLP. The motion was seconded by Mr. Marwede. The motion was approved unanimously by voice vote. A motion was made by Mr. Marwade to adjourn back into open session at 6:30 p.m. The motion was seconded by Ms. Baier. The motion was approved unanimously by voice vote. A motion was made by Ms. Baier to accept the FY2012 CAFR, Management Letter, Single Audit and McGladrey & Pullen LLP’s Report to the Audit Committee as is. The motion was seconded by Mr. Marwede. The motion was approved unanimously by voice vote. VII. Other Business Ms. Holleb stated the City received the GFOA award for the 33rd year for FY2011. Audit Services Request for Proposals Ms. Holleb reviewed the joint Request For Proposal procedures that were followed in issuing a consolidated RFP with Glenview, Cary, Skokie, Grayslake and Highland Park. She stated that on October 18, 2012 the City received 8 proposals and these will be reviewed after the November 5, 2012 City Council meeting. She stated that City staff will review the proposals and will bring three prospective firms to the January Audit Committee for interviews. The Committee discussed state law does not require the lowest bid to be selected. The Committee requested City staff to try and locate the questions used during the previous interviews. Presentation of Audit to the City Council on November 5, 2012 at 7:30 p.m. Ms. Moreno will present to the City Council on November 5, 2012. VIII. Opportunity for Public to Address the Audit Committee – None IX. Adjournment There being no further business, a motion was made by Ms. Baier to adjourn the meeting. The motion was seconded by Mr. Logan. The motion was approved unanimously by voice vote. The meeting was adjourned at 6:50 p.m. Respectfully submitted, Diane Hall Assistant Finance Director