AUDIT_2018_10_18_MINUTESThe City of Lake Forest
AUDIT COMMITTEE
Proceedings of the October 18, 2018 Meeting
5:15 p.m. – City Hall, 220 E. Deerpath
City Hall Conference Room
Minutes
I. Call to Order and Roll Call
Chairman Sparrow called the meeting to order at 5:15 p.m. Audit Committee Members present:
Magnuson, Smith, Stieber and Mayor Lansing. Absent: Mr. McFadden and Finance Chairman Morris .
Quorum present.
City staff present: Robert Kiely Jr., City Manager; Elizabeth Holleb, Finance Director; Diane Hall,
Assistant Finance Director
Others present: Joe LIghtcap of Baker Tilly
II. Consent Agenda
Approval of minutes from Audit Committee held on July 19, 2018
Mr. Smith made a motion to approve the July 19, 2018 minutes. The motion was seconded by Mr.
Magnuson. The motion carried unanimously by voice vote.
III. Review Draft of Comprehensive Annual Financial Report for the Fiscal Year Ended April 30, 2018
Ms. Elizabeth Holleb, Finance Director reviewed a summary of highlighted areas in the
Comprehensive Annual Financial Report (CAFR). She reviewed significant changes as compared to
FY2017.
The Committee discussed the pension adjustments and the different variables used to calculate the
unfunded liabilities. The City’s tax levy will not be reduced based on lower IMRF City contribution
rates, as the tax levy does not cover the full actual expenses. They discussed the addition of Other
Postemployment Benefits (OPEB) to be included in the financial statements starting in fiscal year
2019. Fiscal year 2019 will reflect significant increases to the Police and Fire Pensions to reduce the
unfunded liability.
IV. Review Draft of Report to the Audit Committee (Includes Management Letter) as Prepared by Baker
Tilly Virchow Krause, LLP.
Mr. Joe Lightcap of Baker Tilly stated City staff was prepared when they arrived. He stated the audit
includes standard procedures based on the City’s internal controls. No deficiencies were found.
He reviewed upcoming GASB required additions to the report.
He stated the October 2018 Audit Committee meeting is the start of preparations for the following
year’s audit. He stated based on a new financial system implementation, additional internal controls
would be reviewed to identify any areas of concern.
V. Review Draft of Report on Applying Agreed-Upon Procedures as Prepared by Baker Tilly Virchow
Krause, LLP
Mr. Lightcap stated testing was performed on the City’s contingency accounts. He stated the City was
aware findings would be identified in the review.
Ms. Holleb reviewed seven recommendations presented to the City Council for changes to the
contingency account procedures. She stated the Finance Chairman receives a report monthly
identifying all transactions and a new report will be developed from the new financial system for
additional purchasing review.
Mr. Lightcap stated the new procedures that have been implemented were reviewed and no changes
were recommended.
VI. Executive Session
Committee members entered into executive session with Mr. Lightcap at 5:46.
Committee members adjourned the executive session at 5:53.
VII. Approval of Executive Session Minutes
The Committee members requested the minutes to be approved annually at the regular January Audit
Committee meeting.
Mr. Smith made a motion to approve the Executive Session Minutes for October 16, 2014; October
15, 2015; October 20, 2016 and October 19, 2017. The motion was seconded by Mr. Stieber. The
motion carried unanimously by voice vote.
VIII. Other Business
Foundation Summary – No changes have been made to the summary.
Foundation Financial Review – No changes have been made to the summary.
IX. Opportunity for Public to Address the Audit Committee – No one in attendance
X. Adjournment
There being no further business, a motion was made by Mr. Stieber to adjourn the meeting. The
motion was seconded by Mr. Smith. The motion was approved unanimously by voice vote. The
meeting was adjourned at 5:55 p.m.
Respectfully submitted,
Diane Hall
Assistant Finance Director