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AUDIT_2024_10_17_MINUTESThe City of Lake Forest AUDIT COMMITTEE Proceedings of the October 17, 2024 Meeting 5:15 p.m. – City Hall, 220 E. Deerpath Minutes I. Call to Order and Roll Call Chairman Dillon called the meeting to order at 5:15 p.m. Audit Committee Members present: Chairman Dillon, Mr. Durkin, Mr. Hirsch, Ms. Larisey and Mr. Nowlin. Absent: Finance Committee Chairman Weber and Mayor Tack. Quorum present. City staff present: Diane Hall, Assistant Finance Director; Mark Krygeris, Staff Accountant; Jamese Scott, Staff Accountant Others present: Joe Lightcap, Baker Tilly II. Consent Agenda Approval of Minutes From Audit Committee Meeting Held on July 18, 2024 Mr. Hirsch made a motion to approve the minutes from the July 18, 2024 Audit Committee meeting. The motion was seconded by Mr. Durkin. The motion carried unanimously by voice vote. III. Review Draft Annual Comprehensive Financial Report for the Fiscal Year Ended April 30, 2024 Ms. Diane Hall, Assistant Finance Director reviewed a summary of highlighted areas of the Annual Comprehensive Financial Report, including significant changes compared to FY23. This included the addition of the Deerpath Park Athletic Fields to fixed assets and the donation of the RT 41/Deerpath storm water pumping station to the City. This donation had an impact on Contributions/Donations and fixed assets. Interest income increased in FY24 as a result of higher interest rates. With the anticipation of interest rates reducing, the City began increasing investments in CD’s to lock-in favorable longer term interest rates. Surplus revenues over expenses in the General Fund were transferred to the Capital Fund to be used for future projects. The Committee discussed Police and Fire funding ratios. The City has been proactive in providing actuary calculated contributions based on recommendations from the City’s Pension Subcommittee to reduce required contributions in the future. Information provided in the Notes to the Financial Statement for IMRF is provided to the City through IMRF’s actuary report. The Committee discussed the General Fund reserve balance and how it compares to other communities. The City’s General Fund reserve requirement is 35% of non-passthrough operating revenues plus accrued sick and vacation leave. The Committee discussed recommended changes to the report including updating unemployment language and adding a reference to cyber security under the Risk Management section of the notes. IV. Review Draft of Report to the Audit Committee as Prepared by Baker Tilly Virchow Krause LLP Mr. Joe Lightcap of Baker Tilly provided an overview of the Report to the Audit Committee. No unusual transactions were identified, and internal controls are good. A compliance letter for the City’s TIF District will be provided. The Committee discussed internal controls for the Finance Department. The City’s financial software BS&A has good internal controls in place. V. Executive Session The Committee elected not to adjourn into executive session. VI. Other Business Foundation Summary – No discussion Foundation Financial Review – No discussion Annual Committee Chair Report to the City Council – Monday November 4, 2024 - City staff will work with Chairman Dillon to prepare the November 4th presentation to the City Council. A draft of the presentation will be sent to Committee members for review. The Committee requested an update on the status of the IT Dashboard requested in January. This is a high priority for the Committee and the dashboard or any other document outlining a matrix the IT department follows to ensure the City’s systems are protected is requested. The Committee is requesting the IT Department present semi-annually and to provide information on the latest IT audit and how AI may impact the City’s security. VII. Opportunity for Public to Address the Audit Committee – No one requested to address the Audit Committee VIII. Adjournment There being no further business, a motion was made by Mr. Durkin to adjourn the meeting. The motion was seconded by Ms. Larisey. The motion was approved unanimous by voice vote. The meeting was adjourned at 6:33 pm. Respectfully submitted, Diane Hall Assistant Finance Director