HomeMy WebLinkAboutOctober 30, 1996 ,t‘of pcto
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*► Audit Committee Meeting
Minutes
Subject to Adoption
Present: Councillor Maurice Brenner- Chair
Mayor Arthurs
Councillor Enrico Pistritto
Councillor Sherry Senis
Tom Quinn, Executive Director Operations
Inga Berrey, Manager of Accounting/Payroll
Warren Hurren, Hurren, Flett, Sinclair, Chartered Accountants
Neil Sinclair, Hurren, Flett, Sinclair, Chartered Accountants
A meeting of the Audit Committee was held on October 30th, 1996 at 7:30 p.m. in
Meeting Room 1 of the Pickering Civic Complex. The following matters were discussed:
1. Audit Committee Report 96-1 -Recommendations
-see attached
Councillor Pistritto requested that a letter be forwarded by the Audit Committee to Ian
McCully questioning his availability to assist the Town in the Treasury Department.
The Audit Committee did not feel this was part of their mandate, but rather the
responsibility of the Council of the Town of Pickering.
2. Internal Audit Policy
A discussion took place with regards to the Internal Audit Policy and the reporting
procedures of the Internal Auditor.
It was concluded that the Internal Audit Policy could not be formally adopted
throughout the organization at this time and that no reporting constraints should be
placed on the Internal Auditor.
The Mayor, Deputy Treasurer, Internal Auditor and External Auditors will meet to
discuss the present needs of the Treasury Department.
3. Investment Portfolio
Mayor Arthurs will approach the Deputy Treasury with the sample investment policy
for his review and comments. This policy, along with the Town of Pickering
Investment Portfolio, will also be forwarded to Mr. Jack Gartley, Commissioner of
Finance for the Region of Durham, for his comments.
4. Investment Presentation
Presentations have been made to the Council of the Town of Pickering,by Scotia
McLeod and T. D. Evergreen regarding investments.
The Committee raised a concern with respect to the Town's current investments and
maturity dates being met. The Mayor assured the Committee that the Deputy
Treasurer is aware of and taking care of these issues.
5. Internal Memoranda for Discussion
The information distributed by the Manager of Accounting/Payroll was for information
purposes only.
6. Other Business
a. Councillor Senis requested that the budget format be revised to also include Actual
1995, Change in Dollars and Change by Percentage. The Manager of Information
Systems will be asked to review this request and advise if the Town's computer
system has a program that could filfill this request.
b. Councillor Pistritto advised that he has requested, for a number of years, a five
year forecast of Operating Budgets. He asked the feasibility of this request.
Councillor Pistritto also requested an inclusion in each departmental budget that
would outline what a department could do with an extra 10% budget and what
would be lost with a reduction of 10%.
The meeting adjourned at 10:00 p.m.
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, Attachment #1
�O�N OF p,C40
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AUDIT COMMITTEE RECOMMENDATIONS
1. The previous method used by Legal Services for petty cash in an account in the
name of an employee be changed to a corporate branch account with three signing
officers which allows any two of the three officers to sign.
2. A standard expense form be used by members of Council. The committee has
reviewed samples and is recommending that the form used by the Region of Durham
be implemented.
3. The existing practice of reviewing Reserve Accounts and Reserve Funds with
Council only during the budget process has resulted in a lack of understanding and
confusion on the part of Council. The committee recommends that Treasury review
changes to these areas with Council on a bi-monthly basis.
4. Prior to any final submission by staff to Council, sessions be held in September with
respect to the budget process and the expectations of Council.
5. Clear guidelines be established with respect to the presentation of the budget to
Council with ongoing communication follow-up by the appropriate senior
management team.
6. Information Services develop the appropriate software in consultation with the
Financial areas of the Town, for a Financial Information System as well as the
identification of the appropriate staff training needs that are required.
7. Preparation of the budget should not be the exclusive role of the Treasurer or any of
the existing Managers. The Treasurer and the Senior Managers should be resources.
An additional position should be dedicated to support the budget preparation and
monitoring to ensure the budget process is ongoing throughout the year.
8. An "approved tender amount" column be added to the summary sheet of the
contract payment certificate.
9. Payment certificates for approval should include copies of all summary sheets.
10. The capital project costing system must be reviewed. Reports should be prepared
monthly and reviewed analytically to compare costs to date to estimated costs to
complete to the total cost of the project.
11. Public Works costing records should be compared to records maintained by
Treasury on a regular basis.
12. Procedures in Treasury must be improved to eliminate overpayment by comparing
current payment certificates to prior payment certificates.
13. Treasury should review the capital project costing reports prepared by Public Works
regularly to evaluate required funding and project status.
14. Policies be established requiring that when errors are discovered that all parties are
informed promptly. Such policies must include notification to the Solicitor, Senior
Management, External Auditor, Internal Auditor, Audit Committee, and Council.
tiLr
- 2 -
15. The function of Treasury be restructured to a full "Finance Department'. The role
of the Finance Department would be to oversee and co-ordinate all financial
management for the Town.
16. The Town's investment policies be reviewed in the context of a full `Finance
Department',with a view to a shared/joint approval process.
17. Council be provided three times per year with an update on the Town's investment
status.
18. Treasury staff reintroduce the"Accounts Payable Sub Ledger".
•
� ,• Attachment #2
INTERNAL AUDIT POLICY
•
I. Policy
•
The Corporation of the Town of Pickering will maintain an internal audit function to
provide audit services to Council and to management.
li. Purpose of the Policy
The main purpose of the internal audit policy is to provide reasonable assurance to
Council and to management that;
• 1. financial management controls are satisfactory or improvements are implemented
where necessary;
• 2. financial resources are managed effectively and efficiently;
3. financial activities re carried out in compliance with the applicable legislation,
policies and procedures; and
4. financial management reporting systems and processes needed to provide
accountability are satisfactory.
III. Organizational Independence of the Internal Auditor
The internal auditor has complete independence in order to permit the rendering of
impartial and unbiased judgments essential to proper audit conduct.
This is achieved through;
1. independent reporting -- the internal auditor reports as necessary to the senior
Financial Officer, Audit Committee, Council, the external auditor or any one or
more of them; and
2. unrestricted access -- the internal auditor has generally unrestricted access to
records, documents, personnel and facilities in carrying out his or her
responsibilities.
W.Responsibilities under the Policy
1. The internal auditor is responsible for;
a) developing an internal audit plan to provide adequate internal audit
coverage for the Town;
b) conducting internal audit work in accordance with acceptable
standards
c) conducting planned internal audit projects, reporting to the Audit
Committee of Council and to management the conclusion, findings
and recommendations on a timely basis after each audit;
d) making effective and efficient use of resources to provide quality
internal audit services;
i •
2
e) reporting to Council through the Audit Committee on a regular basis
the activities of the internal audit function and audit observations;
f) advising management on issues respecting audit, risks, control and
compliance, especially at the design stage of systems and program
development;
g) acting as a liaison between the Corporation and its external auditors,
and providing assistance to its external auditors; •
h) monitoring implementation of approved corrective action in response
to internal or external audit reports; and
i) carrying out special assignments as directed by the Audit Committee
of Council or the senior Financial Officer.
2. The senior Financial Officer is responsible for:
a). ensuring that the Corporation has an internal audit program that
follows this Policy;and
b) providing the necessary support and independence for the internal
audit function. •
3. Each member of senior management (i.e. department head) is responsible
for:
a) providing full co-operation to the internal auditor to enable the
auditor's responsibilities to be carried out;
b) keeping the internal auditor apprised of major system changes risks
and fraud cases, actual or potential, in his or her area of responsibility; •
c) considering audit reports and providing written responses to them
within 30 days, including corrective action taken or planned, regarding
the audit issues with an implementation timetable; and
d) implementing approved corrective action within the committed
timetable, and reporting through the internal auditor to the Audit
• Committee of Council or to the senior Financial Officer, as necessary
on the status of implementation. •
•
J:1COI5091POLICY