HomeMy WebLinkAboutMinutes - Minutes - Audit Committee - Meeting Date: 3/3/2022ci:z!%k
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Glendale
A R I Z O N A
MINUTES
AUDIT COMMITTEE
CITY HALL, 4th FLOOR CONFERENCE ROOM
5850 W. GLENDALE AVE.
GLENDALE, ARIZONA 85301
MARCH 3, 2022
2:00 P.M.
1. CALL TO ORDER
2. ROLL CALL
Present: Jamie Aldama, Vice Mayor
Ian Hugh, Councilmember
Irene Avalos, Member
Kevin Phelps, City Manager, Ex -officio Non-voting Member
Lisette Camacho, Budget & Finance Director, Ex -officio Non-voting Member
Absent: Raymond Malnar, Councilmember
Rusty Simmons, Member
Also Present: Khala Stanfield, Department of Organizational Performance Director
Michael Kingery, Independent Internal Audit Program Manager
James Gruber, Chief Deputy City Attorney
Jack Friedline, Assistant City Manager
Shahid Abbas, Transportation Director
Dan Cleavenger, Transportation Interim Director
Tony Abbo, City Traffic Engineer, Transportation
Allan Galicia, Transportation Systems Administrator, Transportation
Stin Weber, ITS Supervisor, Transportation
Feroz Merchhiya, Chief Information Officer
Arlene Chemello, Deputy Chief Information Officer
Jonathan Hill, Tax & License Manager, Budget & Finance
Albert Zatonskiy, BI Assistant, Department of Organizational Performance
Attendees: Chelsea Ritchie, Consulting Manager, Moss Adams (Guest)
Tammy Lohr, Manager, Moss Adams (Guest)
Jessie Lenhardt, Consulting Senior, Moss Adams (Guest)
Paul Ashe, President, Securance Consulting (Guest)
3. CITIZEN COMMENTS
No members of the public were present. No comments.
4. APPROVAL OF THE MINUTES
Councilmember Hugh motioned to approve the Audit Committee Minutes of the
December 7, 2021 meeting as written. Member Avalos made the second. Motion
carried unanimously.
5. MOTION TO CALL FOR AND ENTER INTO EXECUTIVE SESSION
Councilmember Hugh motioned to call for and enter into Executive Session at 2:05 p.m.
Member Avalos made the second. Motion carried unanimously.
6. EXECUTIVE SESSION
Session was held.
7. MOTION TO ADJOURN EXECUTIVE SESSION AND RECONVENE IN OPEN SESSION
Councilmember Hugh motioned to adjourn Executive Session at 2:32 p.m. Member
Avalos made the second. Motion carried unanimously and Open Session was
reconvened.
8. CONSIDERATION AND POSSIBLE VOTE ON EXECUTIVE SESSION ITEMS
Chair Aldama announced that the committee would review and consider vote to approve
the following three audit reports: Intelligent Transportation System (with modification to
one management response); Arizona Sports & Tourism Authority (AZSTA); and, IT
Security. Councilmember Hugh motioned to approve all three audit reports. Member
Avalos made the second. Motion carried unanimously.
Mr. Kingery presented the proposed FY23 audit plan for committee consideration. Mr.
Kingery provided a background and brief summary/scope of the following 12 audits (the
first 8 by contracted vendors; the remaining four by the City's Independent Internal Audit
Program (IIAP)) for FY23: Field Operations — Facilities Management & Maintenance
evaluating the initial year of utilizing the new asset management system (Lucity); two
separate audits within Community Services, one each in Housing and in Revitalization to
evaluate new processes and systems; two separate audits within IT, one pertaining to
Third Party Risk of our IT vendors and one to address Password Security across the City,
with special focus on Police systems as part of their CALEA accreditation requirements;
Fire Department Asset Management, including vehicles and large equipment, along with
supplies taken to each call; complete review of the non -purchasing card Procurement
process (bids, awards, purchase orders, payments, vendor onboarding, etc.) and
benchmarking against other municipalities for staff size, responsibilities, and staff/council
approval limits; and an audit of City Fees related to general services such as business
licenses, permitting, Fire, safety, and construction inspections, any associated penalties
and/or late fees, and assessment of how fees are determined and how often they are
reviewed. Excluded from the review would be fees for specific service usage such as
landfill or water that have their own volume- based rates, along with Development Impact
Fees (which Ms. Camacho indicated are audited every other year as part of the annual
external audit and presented to City Council).
Vice Mayor Aldama asked about the purchasing card (p -card) portion of Procurement
and how that would be audited. Mr. Kingery stated that a p -card audit will be conducted
in FY22 and will begin very soon. It will be a "traditional" audit in the sense of compiling
statistics (number of cardholders, cards, reviewers/approvers, etc.) and testing a sample
of transactions for compliance with policy. The most recent p -card audit was performed
in FY19; the hope for this and subsequent years was to have p -cards and several other
audits moved to a continuous monitoring model using analytics and Robotic Process
Automation (RPA) technology. Mr. Kingery has done some initial research to determine
available options for obtaining audit scripts in a move towards continuous monitoring.
This will require additional funding, which is part of the IIAP FY23 supplemental budget
request.
The remaining proposed FY23 audits for IIAP include: a review of the Glendale Airport
related to leases, rates and charges, and compliance with Federal Aviation
Administration regulations; the triennial Agreed Upon Procedures (AUP) audit of the
City's Courts as required by the Arizona Supreme Court; and, an audit of the Police
Department's current Property Evidence facilities and policies, practices, and procedures
in preparation of the planning and construction for a new evidence/lab facility already
approved by City Council. This will be a "before" audit to determine potential gaps and
needs the Police may currently face, with an "after' audit to be performed at the new
facility once it's been in operation for a couple years or so. Vice Mayor (and Chair)
Aldama appreciated this approach; City Manager Phelps stated that some of the issues
faced now might be due to the current built environment limiting the extent of what our
Police can do in-house. By incorporating needed design elements into a new facility, the
City should be able to manage and maintain its property evidence more effectively and
efficiently. Chairperson Aldama commented on the size and capabilities of the facilities
for the City of Phoenix and he and Mr. Phelps agreed that we need to include for the new
facility all the special considerations (such as refrigerated or cooled storage) to ensure
proper preservation of evidence.
With no further questions or comments, Chair Aldama asked for a motion to approve the
FY23 audit plan as presented. Councilmember Hugh motioned to approve the FY23
audit plan. Member Avalos made the second. Motion carried unanimously.
9. FY22 AUDIT PLAN
Mr. Kingery provided the status of the audits scheduled for IIAP on the FY22 audit plan
(Moss Adams provided an update on the contracted audits during Executive Session).
The p -card audit previously discussed is about to begin as well as the Telecommuting
Policy and Compliance audit. Possible scope for that audit will include analysis of
available data related to productivity before and during the pandemic with some
departments working remotely, along with overall policy compliance. Both the Cash
Management and Payroll Process audits will be pushed back until we can get some
analytics and robotics in place as discussed earlier with continuous monitoring. Both of
these audits were completed in the 18 -month audit plan that just ended; the p -card audit
has not been done since FY19, which is why that will occur now. There were no
additional questions or comments.
10. STATUS UPDATE OF AUDIT COMMITTEE GOALS
Mr. Kingery reviewed the goals that were approved by the Audit Committee during the
September 8, 2021 meeting. The goals are: 1) developing a work plan for
implementation of an Independent Internal Audit Program (IIAP) quality assurance and
improvement program in preparation for a peer review in FY24, and 2) monitoring
remediation of outstanding recommendations from prior audits to ensure they are fully
implemented by June 30, 2022. Mr. Kingery stated that he has been in contact with the
auditor from the City of Surprise, who is about to undergo their second peer review. Mr.
Kingery has been invited to sit in on the preliminary planning meetings between the
Surprise auditor and the peer review team to learn the process.
For the second goal, Mr. Kingery noted that the number of findings still outstanding had
gone from the original count of 80+ to approximately a dozen as of today. Other than a
few findings that cannot be closed out until new systems are implemented in FY23, the
remaining items have been addressed with the intent of closing them out prior to FY22
year-end. Updates to the status of both goals will be provided at the next Audit
Committee meeting. There was no further discussion on this agenda item.
11. COMMITTEE COMMENTS AND SUGGESTIONS
There were no additional questions, comments, or suggestions.
12. NEXT MEETING
The next regularly scheduled meeting of the Audit Committee will be on Thursday, June
2, 2022, at 2:00 p.m. All committee members agreed on that date/time. Chairman
Aldama asked for the record to include that Councilmember Malnar had an excused
absence from today's meeting .
13. ADJOURNMENT
Chairman Aldama asked for a motion to adjourn the meeting. Councilmember Hugh
motioned to adjourn at 2:50 p.m. Member Avalos made the second. Motion carried
unanimously.
The Audit Committee meeting minutes of March 3, 2022 were submitted and
approved this 1st d y of June 2022.
Michael Kingery
Independent Internal Au it Program Manager