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HomeMy WebLinkAboutFebruary 7, 2006 AUDIT COMMITTEE MEETING MINUTES Tuesday, February 7,2006 4:00 PM PRESENT: Mayor David Ryan, Chair COMMITTEE MEMBERS: Councillor Brenner Councillor McLean ALSO PRESENT: 1. J. Quinn D. Bentley G. Paterson K. Senior J. Hansall R. Michaud - Chief Administrative Officer - City Clerk - Director, Corporate Services & Treasurer - Manager, Accounting Services - Manager, Internal Audit & Control - Executive Assistant GUESTS: P. Jesty, Deloitte & Touche P. Colavecchio, Deloitte & Touche ABSENT: Councillor Ashe The Committee proceeded without a quorum and recommendations were approved pending ratification. (I) INTRODUCTION OF MANAGER. INTERNAL AUDIT & CONTROL Gil Paterson introduced and welcomed James Hansall as the City's Manager, Internal Audit & Control. (II) ADOPTION OF MINUTES Moved by Councillor Brenner - 1 - AUDIT COMMITTEE MEETING MINUTES Tuesday, February 7,2006 4:00 PM That the minutes of the meeting held on Monday, July 25, 2005, be adopted, as amended. CARRIED (III) MATTERS FOR CONSIDERATION 1. Audit Plan for Year Ending December 31,2005 Presentation by Auditor An overview of the new auditing standards and harmonization of Canadian auditing standards with international auditing standards, resulting in changes for all audits, in particular as it relates to the areas such as the assessment of risk, fraud and error and internal control. Ms. Colavecchio indicated that in developing the audit plan, a number of areas of focus were identified. They are: - Liabilities Reserve and Reserve Funds Revenue - Clerks Department Investment in Veridian Corporation Management Estimates Year-end cut-off Public Sector Accounting (PSAB) Standards Each area of focus includes details about the issue and the response. She further noted that a 4th column would be added to include comments. Fraud and error continues to be identified as an audit focus area in 2005. Auditors are to address this by holding discussions with Management within and outside of Finance and discussions with the Audit Committee. Procedures are also designed to identify specific Fraud and Error Risk Factors such as pressures/incentives, attitudes/rationalization and opportu n ity. The 2005 ISA standards expanded audit requirements to annually review internal controls. Some significant changes impacting the audit include documentation and substantiation. The approach will be done in two phases: . Design and Implementation of Controls - 2 - AUDIT COMMITTEE MEETING MINUTES Tuesday, February 7,2006 4:00 PM . Operating Effectiveness of Controls This method allows the auditor to assess risk for each business cycle. The proposed audit fees were reviewed and discussed and it was noted that approximately 10% has been added on to the total amount to reflect increased responsibilities and work requirements. Councillor McLean enquired what the additional fees were based on. Pina advised that the fees include an inflation factor as per the proposed document and the other fees are for the additional work required to meet the new Accounting and Assurance Standards and the Harmonization of Audit Approach with international standards relating to the requirements to test the design and implementation of internal controls over all financial accounting cycles as well as entity level controls. Councillor Brenner enquired if the rate increase was consistent to the other rate increases in area municipalities. Pinna advised that the rate percentage is consistent but the dollar amount may be more or less based on the organization. Mayor Ryan enquired if staff has reviewed these recommendations. Mr. Paterson advised that staff have reviewed the proposed changes and fees and are comfortable with the recommendations. Councillor Brenner asked if the increase in fee has been taken into consideration for the 2006 budget. Mr. Paterson confirmed that the new rates are reflected in the 2006 budget documents. Moved by Councillor Mclean That the Audit Plan for Year Ending December 31,2005 be approved. CARRIED 2. Interim Audit Update - Auditor's Interim Manaqement Comments and Manaqement's Response Confidential Memorandum from Deloitte & Touche LLP was presented under separate cover. - 3 - AUDIT COMMITTEE MEETING MINUTES Tuesday, February 7,2006 4:00 PM Moved by Councillor Brenner That the confidential report with respect to the Auditor's Interim Management Comments and Management's response be received. CARRIED (IV) REPORTS 1. Director, Corporate Services & Treasurer, CS 11-06 Re: Clerks Division Revenue Cycle Review Moved by Councillor McLean THAT Report No. CS 11-06 of the Director, Corporate Services & Treasurer be received for information. CARRIED (V) OTHER BUSINESS 1. Letter from MMAH advising of May 31,2006, Filing Requirements for FIR and Performance Measures Moved by Councillor McLean That the correspondence from the Ministry of Municipal Affairs & Housing with respect to the filing requires for FIR and Performance Measures be received. CARRIED (VI) ADJOURNMENT The meeting adjourned at 4:35 pm. - 4 -