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HomeMy WebLinkAbout2013-1-22Minutes for January 22, 2013, adopted May 21 pMTU� max• rc.�� Town of Nantucket Audit Committee �ogPo`O1 www.nantucket- ma.gov RECEIVED MINUTES 1125 Tuesday, January 22,2013 NANTUCKET TOWN CLERK 4 Fairgrounds Road, Training Room — 9:00 a.m. Staff: Libby Gibson, Town Manager; Gregg Tivnan, Assistant Town Manager; Deb Weiner, Finance; Elizabeth Brown, Tax Collector; Debbie Dilworth, Assessor; Diane O'Neil, Procurement Officer; Bob Dickinson, Assistant Town Accountant; Martin Anguelov, Budget Analyst; Terry Norton Town Minutes Taker Attending Members: Matt Mulcahy (acting chair), Rick Atherton Absent Members: Patty Roggeveen Public: None Mulcahy called to order at 9:00 a.m. PUBLIC 1 1. None I? - I lold Gibson — Subcommittee, made up of Ms Gibson, Ms Larivee & Ms O'Neil (Mr. Atherton could not attend), met to review the RFPs; received two: Powers and Sullivan & MLBCPA of Cape Cod. MLBCPA did not meet the minimum criteria of the submittal and has to be rejected. Atherton — Asked if this is par for the course, if Powers and Sullivan is the only group that does this. Gibson — There are several companies that do this type of work. Several Towns use Powers and Sullivan. Mulcahy — Asked if the bidding could be reopened to allow more responses. Gibson — Said it could be done but would push it out to March or April, which might make it difficult for the audit company to start work in July. Mulcahy — Suggested the option of going with a one year contract with Powers and Sullivan. Atherton — Change is healthy and that would take the Town back to no change. Asked if someone else from Powers and Sullivan would be the lead participant. Gibson — Powers and Sullivan in the RFP suggested that and have proposed another lead person. Atherton — Asked about the risk of delaying. O'Neil — Have the option of reopening the RFP process but it is time consuming. Gibson — If the RFP process were reopened this week could have it possibly by the end of February. Discussion regarding timing. Mulcahy — Have two options: do another one -year contract with the one bidder or re -issue the RFP in hopes of getting more bidders. Gibson — Advised against a one -year contract, especially as the RFP states three- years. Discussion about holding a meeting on Tuesday, January 29 at 9:15 a.m. at the Town Building Conference Room to allow Ms Roggeveen and Ms Larivee to speak to the subject. Page 1 of 3 Held to allow Ms Larivee to speak to the subject and for phone hook up with Powers and Sullivan. Atherton — In terns of the Management Letter itself, asked about Material Weaknesses comment about the Town deferred implementation of one of the items. Gibson — Has talked a bit to other Town Managers; it seems a little unusual for individual department heads to sign off on a monthly review of budget; it is very time consuming to go through every budget and sign off that every expenditure is correct. Looking for a quicker way to do that through MUNIS. Weiner — Explained how expenditures are tracked and assigned an account number. Atherton — Would like to know that the department heads are ensuring invoice payments are being charged against the right accounts. Mulcahy — It is readily available to see that on MUNIS. Weiner — Assured department heads are looking at the invoices. Other staff input the actual invoices. Atherton — Asked if there was an approval process for unidentified cash adjustments and are they write - offs. Weiner — Explained and stated these are not write offs. Mulcahy — Airport capital funds are unresolved, asked how close that is to being resolved. Dickinson — Very close to being resolved. Atherton — Asked about the Town policy for securing funding for contracts before signing. Gibson — It is an internal Town policy that a department should not enter into contract without funding in place. There can be flexibility in this policy especially in the case of borrowing that we know will happen. Weiner — It should be handled on a case -by -case basis. Mulcahy — Asked if other departments are facing similar potential problems as the Airport. Dickinson — Only the Airport has grant funding to such a magnitude. Explained different types of required proof of funding for different situations. Atherton — Fraud risk assessment in three locations: asked which three those are. Gibson — Department of Public Works, Airport and Human Resources. Another three will be selected once these three are complete. Atherton — Unsupported liability balances, it states "errors were caused by computer glitches"; asked what that means. Weiner— Stated that sometimes during updates, computer errors occur. Atherton — Review of Management Letter for the Airport and the Water Company, asked if those letters go through their commissions. Gibson — They should; but never have seen one specific for them. Let the record reflect that there were no comments to add or remove to the Town's response to the Management Letter. Mulcahy — Hold to endorse next week. Atherton — Asked about the accounts payable and payroll processing activities removed from treasurer and reassign to the comptroller. Mulcahy — There was also a recommendation to decentralize payroll to individual departments. Gibson — That has not occurred. Need to better understand what responsibilities would become new to individual departments. Haven't yet had the chance to focus on this. Weiner — Stated that she and Ms Larivee are having a meeting with Jen Erichsen of the Police Department; they are using a POS transfer system that transfers all information into MUNIS. Looking at that process rather than having each department putting time into payroll. Atherton — Asked about Airport cash of $11M and was looking for a separate schedule or summary breakdown. Page 2 of 3 Minutes for January 22, 2013, adopted May 21 Dickinson — Will forward that information to the committee members. Most of the cash is reserved for capital projects. Atherton — In the Town Audit, the capital project fund is separate; that is not done in the Airport Audit. Dickinson - They me treated as one in the Airport audit. It is not listed separately on the Audit for any Enterprise Fund. Only in the General Ledger is there a separately identified fund for capital projects. Mulcahy — Asked how much of this Airport cash is DOR certified. Dickinson — That is a different number. DOR certified free cash does not include any cash reserved for Capital Fund Projects or Grant money reserved. Atherton — Comment: for someone on the outside reading this, there are still a fair amount of comments and material weaknesses. This committee assumes those are getting finalized in the next five to nine months so that they don't occur next year. The nature of management responses to auditors are always that we are going to fix them. Part of the challenge is to know that they are fixed before the next audit starts. Mulcahy — Asked for a regular update on the Audit Committee agenda of how the Town is progressing in regards to weaknesses. January 29, 2013, 9:15 at Town Building Conference Topics: RFP and endorsement of Management Letter. Motion to Adjourn: 9:44 a.m. Submitted by: Terry L. Norton Page 3 of 3