Audit Advisory Committee - Regular Meeting

That

He wasn't present during roll call.

Got it.

So He then he zoomed in.

Alright. So he still gets credit as it were for participating. Right?

Absent is different.

Got it. Okay. Thank you then.

No. Any other corrections, additions that anyone would like to bring forward? If not, I'd entertain a motion to approve the, minutes of our 09/04/2025, audit advisory committee meeting. Do I hear a motion? Motion to approve. Motion to approve and a second?

Second.

Okay. So minutes of the 20, 09/04/2025 meeting is approved. And under old business, we want to talk about an update of our preparation for our upcoming audit. And Carol, could you kind of give us a little brief update on what we're doing so far? I'm just only the first we're only one month into the since the close of the fiscal year, but can you give us a little update?

So we are still in the process of closing year end and closing the books. So the focus is on year end, which does lead right into the preparation of the audit. We've received and we continue to receive requests for information for the materials that support the audit review from CLA. And a lot of them have a deadline due of 01/2031, but we're getting them anything that we have. We're uploading it so they have it sooner rather than later, so we're not waiting.

So and they don't get barraged with everything in. So the team is working to pull together the schedules and any of the information requests and getting over to CLA through their portal so that they have the work. I will be following up with Chris in the next week to sit down and go through with him some of the his view. I want to talk to him about the material weaknesses and the focus of this audit and if there's anything we need to address upfront before we really get into the nuts and bolts of the review. Okay.

Thank you, Carol. And the next agenda item is the One

clarifying question.

Go ahead, Carol. Go ahead.

You don't mind. And Carol, I'm confident based on some of our past discussions that you've had an opportunity to review the in particular, the most recent audit report. One of the weak I wouldn't not weaknesses from an audit report perspective, right, but sort of an area of reinforcement that I wanted to ask you about is, as you're uploading the documents, how are you feeling about the accuracy or the quality, I should say, about those documents?

So we are I'm reviewing them. And even when they say if it hasn't changed, just tell us it hasn't changed. We're looking at it, parsing out a lot of the narratives and the controls and really bolstering up a little bit more to give more context and color because some of the feedback we got was they were good, but they could be a little bit they need to be elevated a little bit more. So we are reviewing things before they're uploaded. And that's what I want to talk to Chris about too, that I want if you see something that is know, he thinks it needs a little bit more, let's get in front of it rather than having it become something else.

So And I'm doing it for my benefit too. I'll be very blunt because this is new to me as far as the city goes. I've done audits before. So if I'm reading it and have questions, I know the auditor is going to have questions. So that's where

To bolster it, you're actually talking about just improving the commentary The

commentary. Right.

Regarding certain lines.

Because a lot of the narratives needed work. It was the feedback that we got. And, you know, I'd like to see a process flow with it rather than you know? So I want a few things to support the narrative. Pictures help too. Great.

Any any other questions regarding that topic? Okay. And we'll move on. We had talked about, early on development of a time and action plan regarding our future future audits, And I had asked Elena to help us and work out a a timeline. And I know she's met with Chris Kessler, and then she's met with with Carol, and she's put together a time and action calendar. I think it's it's in your it's in your agenda. But would you review it for us, Elena?

Yes. So thank you for the opportunity to sort of get in one place in black and white the dates that we had discussed previously with Chris Kessler in our last meeting. So what you see here in the document that goes with Granicus 4709 is, as Chris shared with us and I confirmed with him a couple days ago The walk throughs are underway for October 2025. The target end date for com for the city to complete preparing its materials for CLA is by the end of this calendar year. It sounds like some of it might be okay to go to January.

What's very encouraging from my perspective, Carol, is exactly what you just shared with us is that you're reviewing the documents before they get uploaded. You're meeting with Chris. And so that's that is incredibly encouraging. That open back and forth is exactly, I think, what will take the performance on the audit to the where it needs to be. As you see here, field work would begin about mid January.

And again, this is just the sort of the normal cadence that would be expected. Assuming that all goes well, then CLA would begin its quality review about mid February. And that is about the point. And you see later shortly when we discuss the calendar, that is when CLA would like to provide an update to the committee. The game plan is for CLA to complete its audit fieldwork by the February with in order to support having a preliminary audit report ready for review with the committee on or about March 20, because then that would allow about ten or, let's say, a week and a half before the deadline for the ACFR to be filed and get the certificate, which also complies with the regulatory timeline of six months after the close of fiscal 2025.

The deadline for filing the report, as we are all acutely aware, is June 30. When I spoke with Chris, he shared with me that there is a regulatory matter where the regulator actually is there's actually a forty five day window. So not yes. The regulation is six thirty. The processes so it's not a CLA process.

It's more like the overall oh, the the standards. The accounting standards, I believe, is what would actually require that the report be filed with the auditor general and DFS forty five days after the end after the threethirty one deadline. That might be something I gotta get better at explaining the nuances there, but Chris pointed that out to me. In any event, 630, drop the pin, and we all take a quick breath because we return in August 2026 to start planning for the next audit. So our work is never done.

Very good. Thank you, Elena. So Can you go back? Yes. May I Sure. Absolutely. Go ahead. Go ahead, Daniel.

Oh, how do you do that?

And I say you push the button to request that speak, but that's okay.

Oh, thank you. It's a good thing to know. So real quick question. Sure. In terms of when at what point do we start reviewing the audit auditor, its proposal, its scope of work, and all of that, and make recommendations to city council? Is that in the August time frame? Or I would assume that happens before August quite a bit.

Yes. I know that oh gosh. July is so based on my purse so that is not actually the whole concept of reviewing the auditor statement of work. Dan, you've identified a very good bit of discipline that we need to make sure we put on the calendar as a committee. The it is I think we did it in the summertime, those of us who were interested in it. I provided some feedback to mister McNeese back in July, August reading the statement of work, adhering to the to the roles and responsibilities that we would have an opportunity to review that. So that's probably not as crisp as an answer as you're looking at.

No.

Can I suggest We can find out?

Maybe Yeah.

Maybe it's feedback from Carol, and then we put it on the calendar.

Yeah. Like when do we actually reengage them for the next fiscal year?

I have a statement of work that was reviewed in August 2025. So I think it is shortly after we drop, you know, put the pencils down for this audit, might have a month and it'd be August again of

Yes. So what happens if we wanted to change auditors? And it's hypothetical totally, but just in terms does that give you enough time that okay, we're going to make a change like they did two years ago. I mean, are you reviewing that and and making that recommendation to retain that auditor and giving yourself enough time if if the city council says, hey, we don't we wanna go back toward the old auditor. Which I don't

think If you go back to the old auditor, that would be easy. Right? Because they they know the city, we don't have to train them. But selecting a new auditor Yeah.

Exactly. And that's hypothetical, but just to be prepared so when we do make that review that you do have sufficient time.

I believe, if I'm not mistaken, we have a three year

It's three year contract.

Oh, it's a three year contract.

Three year contract. So basically, unless there's some reason, you know, that we need to terminate the agreement or the contract, we would we would stick with it. So Yeah. He's completed his first year audit, and so he's got basically two more years two more years of audit based on the contract and agreement that we have with CLA.

But we're we're still gonna have to make that review and

update the case. Review it. We should definitely review it, and and if there's any questions, you know, we can certainly bring forward to them.

Absolutely. Think that's that's one of

the Yeah.

Primary roles of the the committee Yeah. The audit committee.

I think Terry So

so just to clarify Sure. The evaluation of the auditors, we're looking at August for evaluation.

Okay.

Or I I'm that's kind of a question

Oh, okay.

As opposed to just talking about scope of service.

I don't know when you'd evaluate the auditors. The statement of work and scope of the audit was defined in in August 2025.

Okay. So we would have be correct. That was a question that I had about the evaluation of the auditors. It feels like the auditors have already been evaluated by the council at the last meeting. But but it has been the task of this advisory group to provide an evaluation of of the auditors. So I wasn't sure when that would actually occur.

If I could make a if I could offer here apparently, I have stared at the documents for too many times. But in the calendar, in the edited in the proposed calendar that is in the proposed updated roles and responsibilities Mhmm. We would cover off on external auditor performance evaluation as a committee in May. Okay. So I apologize. I had promptly forgotten everything I had stared at for the last several months.

So we have a prepared Oh, I committee meeting calendar. So we'll go over that. We're gonna we'll go over that a little bit later on in the meeting. So that would be covered then. Thomas, your your light's on.

Yes.

Questions? Thank you. You know, what what I think I'd like to see added because in the last audit, some of the feedback was not enough information was getting back to the city council.

Mhmm.

So I think in here, there's gotta be some loop back so city council members are kept in the loop unless they have their own cadence separate from us with contact with the auditors. So I I think somehow we need to make sure the city council is not surprised and that there's a loop back on here, the general findings that the auditors coming up with.

Good good suggestion. Yes. Good suggestion.

Think that's a great suggestion. I think that that was one of the big problems with this audit was transparency. I think there were some counselors who did talk with the auditor and maybe assumed that somebody else would bring that transparency to the council as a whole, and it just didn't happen. So I I totally agree.

Yeah. That's a good good suggestion. And communication throughout the whole process is very important, and we didn't have really good good line of communication.

If I we'll be talking about the proposed rule updated rules and responsibilities. I think we have an opportunity to sort of beef up that part in there. So I agree with you.

Okay. Thank you. Any other comments on our time and action calendar? We'll we'll talk about it more as we go forward. The next on our agenda is is a review of our objectives and responsibilities of the committee.

And what we said several meetings ago, this committee was caught on laying dormant for a long while and it's been our our goal, I should say, this committee to be much more involved and much more active in in the whole audit audit process. So the the the actual objectives and responsibility, the original version was goes back to 2019. And it it was pretty good, but it needed some some fine tuning and corrections. So, I asked Elena if she would, do us the honor of going through it and revising it and updating it so that we have a much more clear set of objectives and responsibilities. So having said that, and I think I complimented Elena earlier that she's done a fantastic job.

We appreciate because this was hard work and a lot of time put into it. So I'm gonna turn it over to Elena. And did you wanna go through on the red line? How did you wanna how did you wanna present it to

I'm what I would suggest is I first orient you to how why is there a clean and why is there a red line? And then hit some of the major themes be and then I wouldn't go line by line unless folks really want to drain every single line. And as we hit the themes, maybe that's the point at which we could talk about if the language, as proposed, addresses is did it hit the mark? Is it missing something? I have zero pride in authorship.

I abandoned that in my first job after college when I was working on federal contracts. So I have no feelings about this document. I just want to make sure that it is thorough. So as we think about what is the goal, the goal in its ideals ideally is that we I would challenge us to get to a place on this on the document by the end of this meeting where we have approved it as is or approved as amended, whatever amendments we might have, so that then the city council it would be then forwarded to the city council to review in an appropriate setting and so that we can indeed embrace our responsibilities and provide the citizens comfort and encouragement that that we are doing what the city council intends and what the what the citizens would intend. Does that sound so?

I'll start with the overview. Why two documents? Some people like red lines. Some people like reading a document after it's been edited but without red lines. I'm I'm people process information differently.

Red line.

Yes. We all like the red line. Yes. Exactly. Question. We're to question. About about

the

advisory committee. This is so it modernizes the it proposes to modernize the scope of the committee, given where given the changes in our overall environment here. And it's not dissimilar to what I did a little bit of research, not dissimilar to what we see in other cities, whether they might be here in Florida or, for example, several cities in Texas have an audit and finance advisory committee. Dan, certainly, feedback on that would be would be helpful with a fresh set of eyes. Second, as for sub point one a to that is that this I I was incredibly I am grateful to Sharon, to mister Kessler, and to Carol for everyone's feedback to get this to this point.

Listened quite a bit, as you all may be aware, to the city council feedback, whether in these meetings or in city council meetings, to incorporate that proposed expansion and modernization of the committee. That is why we would now have a section called financial performance insights. So as Carol as Carol sort of beefs up whether it's dashboards or see, here you go, counselor Greg, dashboards. Can I can I get a high five on that one? Dashboards, monthly metrics, monthly reporting quarterly, whatever those are, for those to be shared with us in addition to the council to be able to provide some insights on that.

Because it seems my opinion seems like it's one thing for us to to participate on the audit process, but ostensibly through the audit process, we get visibility to financial statements, albeit at the very end. This is our opportunity now to engage in that far more in a far more detailed manner, again, to offer insights and guidance. You will also see point number three under that responsive to the concept of at the request of the city council that the committee would serve as a resource to provide insights to external experts who may lead efficiency review initiatives. So that's point number two or point 1a to that. You will also see under the external auditors section on the red lines, it used to be that this would meet three times a year.

The committee would meet three times a year, proposing to make that at least five times a year aligning to the typical audit timeline. The calendar later on lays all that out. I'll get to the calendar shortly. The risk management section, so point number three. Risk management section was well, it was not as well structured.

I think, Tom, you have some expertise in enterprise risk. And it was it was a little bit inscrutable was probably the best way I would describe it. So I inquired of Mr. McNeese, and he was just as confused as I was on the topic. So I took the power of the pen and just put in your standard risk management, made that much more crisp as to what is expected in an enterprise risk management function.

I know, Terry, when we were in the last meeting, you had inquired as to what's risk management. You and I also have the other kind of risk management experience in the health care environment. So like I said, power the pen, took more of an enterprise risk management approach to make it more precise. Wrapping up before we get to my showing you how the calendar might align. We with Joan's help under the other matters, we just sort of this wasn't a change overall of the intent of the committee.

Rather, it's fine tuning it to make sure that we are clear in the roles and responsibilities that what the term limits are. I proposed also here more precision on the concept of financial literacy. So I offered the example when Joan and I were emailing back and forth. My 21 year old son is financially literate. He is probably not qualified to sit on this committee.

Perhaps he will be one day. So I proposed some just a little bit more precision on financial acumen, expertise in running a business or financial reporting controls and risk management. So before we talk about the implications for meetings, can I ask if there's any feedback from the committee members on the major themes that I attempted to hit here?

I think that is an excellent job.

Excellent. Yeah. I second.

Any any other feedback?

Am I excellent job. Thank you. You. A plus.

The only thing I could add as chair is that I'm gonna take credit for appointing to do this job because I don't know of anybody who could have done it better. She has done an outstanding job, and her her work is appreciated by the committee. So thank you again, Helena.

Well You can go ahead.

For the privilege of of the opportunity to weigh in on this. Now earlier in the meeting, we did talk about are we is there enough precision on the concept of evaluating the external auditors in connection with the audit? So Dan, is there on financial reporting point three, again, not to drain every word because I'm sure the public who's watching this is wondering if they're going to have to go through all these pages. But is that strong enough, or should it be if you take a step back and you think about your own experience in this area, does it need is there are there any suggested amendments to this?

Your specifically point three?

Yeah. Financial reporting Yeah. Point three.

Well, some of this well, I was actually focused on some of these things that were saying, and I'm looking at risk management, for example. By the way, do think this is very good and complete and great job. Thank you for committing the time and effort to doing this. You did a great job. Things like where it says the AFAC will provide city management well reasoned insights. Something like that I would even soften because I don't know whether we will have better insights or not, but if we do that's great. So maybe changing some instead of will may provide city management while reasoned insights when applicable.

Okay.

You know things like that. Just in terms of the language where there's a little more so it's not hard coded that we will do something where there may not be a reason to do something. It could be just

Good feedback.

And that's just the style that's written in which is fine but if we can a couple spots like that. In terms of we'll serve as a resource to provide insights to external experts who lead efficiency review. Yeah. Or or do you change insights into like opinions or provide, you know, because I don't Are we gonna be providing advice or are we gonna be or insights or are we just gonna recommend?

I like recommendations. Is recommendations broad enough?

Yeah. Reform and and or recommend.

I think our role is to recommend. Okay.

It is. It's just see, that's the one thing you have to be very careful. I mean, city city council hires management.

Mhmm.

Okay, so we have a city manager and he's got to run the business, he's got to run the city. We're providing an oversight role and reviewing information and making observations and making and providing those observations and potential recommendations to city council, they make the decision. We're not so we don't want to be involved in the management of the

Right. You

know? And I don't wanna tell the city what to do. I wanna tell city council this is sort of what we think. Here's the information. We would recommend this. You decide. Because that's their respond they're elected to do that. We we we're not elected officials. We're we're here to support city council.

I like that. Okay.

So I don't know if that gives any ideas. Is. The wording.

Is very helpful. So I think then there's a couple of places, if I building on that, Dan, under financial performance insights, I think it would be under item two where we say provide well reasoned and financially sound recommendations as opposed to insights.

Sound recommendations. Yeah.

Under item

And take out advice too.

Yes. Okay. Got it. Okay. Under item three in the same section, AFAC shall serve as a resource to provide recommendations and observations to external experts. Does that sound right?

Yep.

Okay.

Yes. And going back to two. I would say you had taken out sound insights insights and and advice. Right?

Well, I what I had suggested, but we can come back.

Replace insights and advice with recommendations.

Recommendations. So financially sound recommendations to city management and city council. Is that right?

Yeah. On possible

Uh-huh. On possible recommendations.

Got it.

No. No. No. On possible opportunities

Uh-huh.

Got it.

To improve.

Got it. Perfect.

Because there may or may not be opportunities to prove you.

That's

I don't know. That's a very good point. If Carol comes back to us and says I have found this in my eleventh day, know, there's these opportunities and informs us and we're the conduit back to city council.

Great.

All right. And then I'd like to end three. We'll review all relevant financial reports, that's perfect. But what are we

So then that would feed into Item two, which is the financial so Item one is we get to review it. Item two under Financial Performance Insights is to where we provide well reasoned and financially sound recommendations, blah blah blah, on possible opportunities to improve the city's financial performance.

Okay. That makes sense.

So that's that's good.

It's a it's not a one way. Right? It's the two way Yeah. Conversation.

That's that's perfect. Yeah. This this is the biggest change, I believe

Yes.

On the in the document. So and then the question we're gonna have to ask Carol is, you know, and that gets to the schedule on what exactly are we gonna review and when is it gonna be available, etcetera. And are we doing double does the city council get the exact same thing, presentations? And are we doing double duty? Or is it just the extra set of eyes?

Well, I would love to get Carol's feedback. How do you feel about this? What do you think? Feelings aren't that's what you think.

So financial data is financial data. And we will be building out reporting packages and different views. I was intended on working with the council because I've meeting one on one with them, and they have some specific requests on how they'd like to see the financial information. I have no problem sharing what we're building to get additional input to help improve the reporting, improve the commentary. But we'll be building it.

What we provide right now is very level snapshot, one page dashboard, and some financial data around code enforcement. I'd like to see a more robust reporting package, and we'll be building it out. I have no problem at all sharing it with the committee to get your feedback, get your input, but I will also be working with the counselors to see that it meets their needs. So if you have

So it's just real basic, a one page?

Right now it's a one pager on the funds.

So you okay. So there's not like a

quarterly that's That's done quarterly.

Budget prior year comparison.

That that is. It's and it's provided quarterly. It's it's a snapshot.

Okay.

Yep. But the plan, once we get my goals, year end audit, start monthly reporting. Those are the short term goals, and that's that's got to be built out.

Okay. Terry, did you have anything?

Yeah. Carol, you I'm sorry. Carol, you indicated there is a quarterly report.

It's a quarterly dashboard that's provided to the council. Yes.

Okay. Okay. I think I do you know when that came through? I think I saw that there were quarterly reports that were provided, like, two of them at the same time for the first and second quarter, and they were reported at one of the May meetings.

It that's quite possible because they on on a lag. I can look that up for you when the last report went out.

Because I was wondering if that's similar to the template that you're looking at.

It is. That's what I'm talking about. And we'll probably keep that as a base because people are used to that. But we'll be augmenting and building out the reporting so it's a little more robust and provide some explanations. And you can see some trending, see how you're doing versus budget, see how you're doing year over year, and provide some commentary from the business lines, from the funds.

Right.

Go ahead.

Yes. Just I'm trying to understand number three, when you're saying resource to provide insights to external exports. Could you explain that a little bit?

Yes. So what I was offering there is that we are now we have we have evolved certainly as a country and even here as a state to an environment where there are extraordinarily interested parties, whether they are at the state, whether they might be citizens who want to engage experts to examine the finances or to weigh in and come in to the city and help identify opportunities for improving the efficiencies.

So potential could be regulatory, could be consultants, it could be

Yes. I left

that third pretty parties.

Yes. So and what I had heard loud and clear from previous city council meetings and from a couple of our own meetings here was feedback from the city councilors of, hey, you know what? We've got seven experts on this audit formerly known as, I hope, Audit Advisory Committee. Why would we not engage them in some way to raise their hands when they see things that might be helpful for these kinds of efforts, whether it's Department of Government Efficiency at the at the state level or, like I said, others who have demonstrated an interest in improving the efficiency of how the city runs.

Okay. So in this sentence, when we're saying to provide insights, it would be of the work that's being done externally. I'm trying to

fully So so as edited now, it would read to provide recommendations and observations to external experts who lead efficiency review initiatives. So we replaced insights with recommendations and observations. So here's a good example.

We're providing I'm just wondering who the information we're providing recommendations to the consultants that are

Good point. So we would not go directly. Okay. So to the point you raised or tell me Yeah. We're not actually processing.

Consultants what to do. We're paying them to tell us what to do. Right? Or is it like generating observations and review of external external experts and provide feedback to city council?

So that is so maybe that's where I should be doing some as I'm thinking through this out loud, I think we I need to do some fine tuning here. So certainly, there's the there's the staff. So anchoring back to the concept of the staff does the work. The the city council does governance. We do our work at the direction of city council. So as we identify something, and I'm gonna give you an example in a in a second, then it seems like we in the event of an efficiency review initiative from an external party

Okay.

Then I guess my intent, if I were to edit it properly, get this out of my head, is the concept of we're gonna see things in the financial statements that we might recommend, therefore, to the city council to draw or to to Carol to draw the to provide to the efficiency review body as, hey, did you look here's an here's an example of something we've identified that might need some improved efficiency. Let me give you an example. As a private citizen, I have thirty years of experience running health plans. So when I was looking through the budget for 2026, I was fascinated by the increase in the medical health plan rate. And then I dug further, and I realized, oh, wait a second.

They're using Cigna. And so as I started to dig into this, based on my own experience, I called I sent an email over to Casey, and I said, I would love to learn more about this process because they I'd love to look. Do you have utilization information? How did you go through the process of selecting Cigna for year two through this broker? Because after I've looked at the data that Casey shared with me, I was I think that there's some opportunities to improve what the city might be going after in the next plan year.

So efficiency, opportunity, possible opportunity to improve how much the city spends for the health plans of the employees without quite possibly having to increase the the employee's responsibility. So I have that experience.

Yeah. I'm That's great

that Yeah. Because I went straight to the health value. Yeah. And so I think each of us has you know, Terry, that might be another area that you might be able to opine on. You've also got excellent experience in operational rigor. And when you look at a number, right, you know how to say, okay, that doesn't look right. So does that answer I wanted to I suggested a broad statement in there. I don't want to overreach and start reporting up to the state. That's a whole other there's a process for that. I don't want to overstep that.

Yeah. I understand that specific example. I'm just wondering how broad brushed it because, for insurance things I like don't have that expert. You do have to rely on external brokers and things like that but I know the example at the country club they just reduced their just by changing brokers, they were able to dramatically reduce their premium because the information provided to the Lloyds of London was not very And just updating it resulted in lower premiums.

And then I think of someone like Tom, who's got the enterprise risk experience. He might identify something in the financial statements, where if there is an efficiency review that's conducted here on at the city, Tom I would my intent is to provide a framework under which Tom would under which the city council would say to the committee, you guys look at this stuff anyways. Can you can you help with this process? Help weigh in. And we would provide our weighed in recommendations and observations to the appropriate person. To your point, should not maybe it's not directly to the external expert unless city council wants us to.

Yeah.

But

Well, maybe just include city council and experts then.

Not to city council.

Experts in management or may

Management. Okay. Okay.

Yeah.

Exactly.

I mean, and we're we're just saying recommendations, observations to experts, city council on potential. That makes it probably a little more all encompassing.

Yeah. I don't wanna yes. We should get it in there. We don't wanna sound mealy mouthed, but I think that the way that we're editing this is gonna is gonna get us to a level of precision

Mhmm.

That that I think we're all seeking, just trying to read minds and all that stuff and responding to the feedback we've received so far.

So could you read number three? Okay. Yes.

I'm gonna attempt to. Okay. Get the pen. Here's the purple pen. At the request of city council, the AFAC shall serve as a resource to provide opinions sorry, to provide recommendations and observations to city council and city management as applicable related to external as related to efficiency review initiatives led by external experts.

It's perfect. Very good.

Okay.

Wow. Good wordsmithing.

Yes. On the fly.

On the fly.

Well, I think that's we have to do it this way. Right?

Yeah. Exactly. No. But I think that this has been an incredibly valuable discussion right there. That's the where we are changing the scope, and we are wanting to be helpful. That's what I keep coming back to. We just wanna be helpful.

Correct. That's why we're here. Yeah.

And unfortunately,

we have to do we can't do this through email or that. So except for for the audience, thank you for Thank

you for the privilege.

Dealing with a

Well, this is

editing process.

This is

a can I also suggest coming back to the concept that a couple of us here noted in the course of this meeting also today, the concept of improved transparency along the process of the audit? And so what I had put over here under external auditors, I probab well, that's that. Hold on a second. I had something here where I thought it would be helpful, and perhaps I've forgotten about where I put it, where the chair so would be providing feedback to the city. Oh, there it is.

There. K. If I could give myself a couple of seconds to find where I had intended to put in the concept of the chair communicating with the city council.

I think External audits three? Yeah.

I have three of them.

External auditors?

Yes. Okay. Let me see here. Auditors, participate in management. I've got it early. Oh, okay. So there's that. But there also needs to be I had intended for the to capture the concept of the chair would ah, there it is. Okay. Page at the bottom of red line, page four.

Yep. The chairperson of the AFAC will make recommendations to the city council. And so the chair would also would, in that arena, the language there that is actually unchanged, not changed a lot at all from the 2019 vintage document, the concept of giving the presentation on the status of weaknesses or deficiencies, give a presentation on the on the results of the audit and as requested to the city council. So that upwards communication. If does that need any more precision to provide the committee comfort that we've got the lines of communication open upwards on the audit.

I think as requested is perfect because it says we'll make presentations. If they don't want a presentation, they're not gonna ask them. And then you but it's open. Right? I think you're just on under number two. I think that works perfect.

Other matters number two.

Correct. Because that covers a, b, and c. Okay.

So

as we continue, so what does this all culminate in? This all culminates in towards the end of the document, a new calendar, which we'll talk about in a second. Just philosophically, the calendar goes to the concept of what's what happens if we bring this all together in one in in a year? And this is a typical calendar is what is laid out here at red line page five. So it would be, at minimum, about six six one two three four five.

Sorry. Five at a minimum, five meetings. It would include an auditor update, so via email, to finance director and to the chair if something in December. And if that inspires a meeting, well, then we'll all put on we'll all get in the cars and come over here and have a meeting to discuss what was discovered in the course of that quick December email update. So again, let me correct.

Five meetings, one email, but that is a minimum. It could very well be that through the process of orienting ourselves to the financial statements, the financial reporting, Carol might suggest, hey, listen, committee, we all need to get together in the sunshine to have a discussion about this. But it does mean more frequent meetings. It does also provide this intends to provide a framework so that we're not waiting for the email or for the phone call to say, hey, it's time to schedule a meeting. We would we know the cadence by which we would meet at a minimum, just like we do for other boards or committees that we might sit on in other arenas.

So let me pause there. Does that help orient to what's going on here on this document, on the proposed updated document?

I think five meetings is reasonable and more if necessary. That's what we have.

I was just gonna ask about what in terms of the email December, I was I just in my notes, put just combine November and December into December, like early December, like the December, something like that. It just seems like and then the questions that I would have to the to the finance director would be when our preliminary year end financials gonna be complete, do you have enough time is, you know, sixty days the right number, sixty plus a few days, the right number. And then that would be my my only observation because it just seems like you could combine these two.

Yeah. I that's that's excellent feedback. I did check with the external auditor because I pulled in his feedback to create this as well as Sharon Dangle's feedback. And we are grateful for Sharon for the work that she took on during the interim. And so that's and I I inquired of Chris, should we combine? And he thought it would be very helpful if he gave an email update on how things are progressing. And I think that the November auditor update was intended to say, okay, this is what this is how we're doing. You know, we got this calendar. We're are we working? Are we delivering in it or not?

And I and year end financials, at least based on the discussion that Sharon and I had about a month and a half ago, that November kind of hit it about right. But I could be wrong. So your feedback, Carol, would be helpful for us to figure out, do we just crunch November and December together?

Year end financials will be done processing some of the larger stuff through the system in mid November, but we'll have to then go back and look at everything and make sure everything is closed out. So November, December crunch together would give us the time to get the information that you want or need and would also give Chris time to look at what he's seen to date from us.

How do people feel about the Thanksgiving to year end run up?

Want to That's why you have your window. Early December.

It's got to be

done December.

December. It almost begs Yeah. For

begs for December, doesn't it?

It does. Yeah. Okay.

And then one other thing though, you we'll still get it. So to understand the December, were just basically saying Chris is going to provide us with CLA is going to provide us with an email update on their status. We'll still get that.

Yeah. And he could do it at any time. That's the brilliance of this. Yeah.

So if we're gonna actually have a physical meeting

Yeah.

Yeah, I would say December, just combine them.

Okay. Perfect. And I think that Martin.

Martin here. We we were looking at December 4, Thursday, December 4 or Friday the fifth. I don't know when this room is available. Is Martin still still with us here somewhere?

I think it's the fourth.

What day were you saying?

The fourth? Fourth is Thursday. Right? The fourth or fifth. Both work for me.

Yeah. I teach on Tuesday, Thursdays in Fort Myers. So

How about the fifth?

Oh, that's November. December. Oh, yeah. The fifth is perfect.

Okay.

For me, I don't know. Everyone else is

I think a lot of our

meetings Oh, and most

of the Yeah. Whether the room's available.

Yeah. That lot of our meeting schedule depends on on whether the room is available.

Martin just said preferably the fourth, the room's available.

Daniel, are you available on the fourth? Or is that one of the

Friday's booked.

Friday's booked? Okay.

Of December.

Well, if we do it at at nine to eleven, then I have to just get I have to hard I'm running out at eleven. Yeah. So I can do do it.

Okay. So let's say 09:00.

Nine a oh, look at us. We're already

On December 4. Being

so efficient.

Okay. What do we

Good. Okay. So we're gonna crunch. I will amend the proposal here to put November, December together. Target the December. This becomes then the calendar by which we work. You'll note that in the far right column, I tried to map back to the objectives of the of the committee so that we have clarity of why are we getting together. Oh, okay. We're getting together because this meeting addresses the following objectives. And it appears that just by some miracle that it hit every single objective virtually at every single meeting. So that's also a good sign. That was not hardwired that way. It just happened.

Great. Excellent. Just to make sure I

might have missed something. When we updated financial performance to remove sound insights and advice with recommendations on, we should do the same thing in risk management because we say the same thing, right? We'll provide city manager well reasons, so it should also be recommendations on possible opportunities to improve.

Okay. So

I think we said

This is why I love your expertise, Tom, as a knowing risk management. I'm the edit that I'm going to put in is the AFAC may provide city management well reasoned insights when applicable into major risks that could affect finances, operations, blah blah blah, along with suggestions as opposed to writing, you know, along with maybe suggestions on

Observations. Policies

on policies and procedures

That's good.

To manage those risks

Good.

So that city management may.

Yeah.

Got it.

They may.

Look at that. Hey. The purple pen has been used. Alright. So, mister chair, may I make a motion?

You may.

I move that we approve let me make sure I get this right. That we approve that the redone Audit and Finance Advisory Committee objectives and responsibilities document as amended during the course of this discussion and then send it to city council for their review and consideration.

We have a motion on the floor. Do we have a second? Motion. Motion. Daniel second. You want let's do a roll call on on this because it's a pretty important

This is a moment. Issue.

Member of Montana?

Agree.

Member Casthole?

Agree.

Vice chair McFan?

Yes.

Member Sommerfeld?

Yes.

And and chair Siegel?

Yes.

We did it. Exo excellent work. I I I knew that we had the right person in charge of doing this. So and thank you for all your input, Daniel and and Yes. Thomas and also Terry.

Grafting in the sun.

And so so so far I'm I'm I'm batting a thousand on on my comment that we have an outstanding committee here of smart people that know their business. And I I really appreciate that. So So and then I don't know what the process will be as far as getting on an agenda at some future council meeting, but we got time to work that out. And and I would be happy along with along with you, Elena, to present this to the city council.

Okay.

And yeah. I think one of the biggest things that is that we're chain actually changing the name of the of the committee to audit and finance advisory committee. So we're adding a word finance in there too, which I mean makes this committee it's a much more appropriate name for this committee. So that's really important. Okay. So moving on, under new business. We talked about the proposed committee calendar. So we have a date for the next meeting, and then we can work on future meetings after that. So that's

May I work, Carol, with you on and with Martin and Jill on what the suggested dates for the rest of the year so that we can start getting them out there and get feedback?

I've already started to work based on the old calendar with Martin. So we do have some times targeted. We can still move it around. But Martin is aware that we're going to meet on a more than three times a year cadence. And so I've got some ranges of dates and times already. They may not fit, but more than happy to work with you on that.

I'm so

glad you're here. We do have to be mindful that we don't abuse her time. Right? She has given us two hours today instead of doing her job. And then like

I'm I'm looking at this as this is gonna help. So so I'm looking forward to working with you.

Like the year end. I'm sorry. For the year end financials, you need about sixty days. What about quarterly? Hopefully, once you get your reporting package, it'll be forty five days after the quarter end or

That would be that's not what I'm used to where I come from. It's usually sooner. I just have to get a handle on how the data flows here. But if we can get on to a more a monthly cadence, quarters should be

Easier. Easier. Yeah. So a thirty day.

Yeah. I would hope. Thirty days, even where I came from, seemed like a long time. But it's going to take a while to get to that. But that is the goal, to get the information out. So you use the term sunlight for other reasons, but it just helps us as we move through the year to understand what's going on.

Perfect. Thank you.

All right.

Okay. So next item. I'm not sure what the year '24 audit IT observation update would entail or what that discussion is. Does anybody want to comment on that?

Jose, would you like for me to kick Good that

morning, members. Jose Duran, IT Director. I have met with at least one member of the committee prior to this meeting to review some of the findings and address some questions. Because of the sensitive information on the report, I'm limited in some of the information that I can share in a public setting. But I do welcome meeting with any of you if you require more specifics.

With that said, I can confirm that six of the seven findings have been fully resolved. The remaining item requires some coordination with our financial software provider to obtain a specific report that they were requesting. Awaiting their response and that remaining item is more of a process documentation, not a security related item. With that the audit came in at a time when we were in the process of swapping out several critical pieces of IT equipment and we're a small team that supports a little over 200 employees 20 fourseven. Ultimately we were given thirty nine business days to create or compile 35 individual documents, some detailing many of our IT processes and unfortunately we weren't given an opportunity to respond to some of the concerns in the report before it was published.

I'm the committee member who met with Jose and with Mike. I obtained a copy of the seven observations from the audit and reviewed them and then sat down. And as so there were seven observations. Six of the seven have been addressed. One is work in process.

The audit that we are kicking off right now will include a testing of those of the fix of did the city address those adequately and the usual end to end review of controls and processes around IT. I am not an IT expert. That's what I'm we're gonna let I'm gonna let the the auditors do their magic. And, well, magic is really a flipped term. There is a lot of science and structure to testing out the IT IT controls.

And for some of us, it looks like, wow. That's it looks easy. I am I am my questions were addressed is what it boils down to without being an IT expert, and I would expect the audit would test all of that and then some.

So I have some cybersecurity experience. I'm certainly not an expert. I did call Chris. He had already spoken to you, and so he said, I'd rather not have the conversation a second time. I do think there's certain things we can't say, but I would be concerned about confidentiality, integrity, and availability of our data, The data of the city, the data of the city's residents, and whether it's in transit, in in use, or in storage. And at the level of encryption, I have no idea what the city's doing. But those are all the critical things that would need to be addressed from a cybersecurity perspective. And I recognize this forum is not the right forum. So I guess I'm gonna give you a call. We'll have a conversation.

Okay. Definitely.

I I found the conversation to be very helpful. Having worked at a Fortune five company that was that had a significant breach over a year ago. And by statistically speaking, half of every person in this room and every half of the people who are listening were affected by the change health care breach, which inspired my intense interest in that particular topic. So that was I found Jose to be welcoming of the discussion. And I think, Tom, it would be for any of us here.

If you've got any interest in that topic, you can we can I think it's a good opportunity to apply our own knowledge, because I'm not going to have three sixty degree knowledge? You might not either, Tom or Terry. But we've got to get to a point of comfort of understanding, hey, this was the this is what it meant. This is what's been done. And is that adequate based on what we've all lived with?

And I think one of the things that comes up in in regards to IT and actually a lot of other operational processes is the ability to go back and follow-up. And so once these changes are put into place, what reassurance do we have? What mechanism do we have to be able to monitor and determine, you know, six months later that we're still doing the same thing, that we're still doing it correctly. That's kind of a a key secondary to once you resolve or or put into place processes that you think will resolve the problem. How do you then go back and make sure that you're really doing that?

Mhmm. Absolutely.

Because I believe we had policies in place in the city that we weren't following. Yeah.

I I have a question, regarding the IT. In a couple of my meetings with Sharon prior to her leaving, we talked about the past audit and difficulties we had with the grant accounting. And she indicated that we have software that would make our job much easier, but we were not taking advantage of it because we didn't have anybody who could input that information into the program that's available to us. Is that something that's going to be ongoing or is that something we can correct or I'm not sure what we can do to resolve that problem.

As far as the software, we may already have it. Outside of that, I would assume fall under finance to find someone to actually input that data.

Training.

In training. Yeah, definitely.

So we need somebody that's got as experienced in grant accounting and trained on it. Your conversation with Sharon, I'm just guessing that that software is in our platform, Tyler, Tyler Munis. And we probably haven't used it yet. We haven't. But we are relying on a contractor to help us with the grant accounting and tracking. She's the former controller for the city. It would be nice to bring it in house. But right now, we just don't have the capacity to take that on.

So Carol, I think that Sharon did indicate that it was Tyler Munis. But it sounds like Tyler Munis is something that we're using for other processes in the city.

We use Tyler Munis for payroll. We use it for the financial statements. It's used

Code enforcement.

Benefits.

Code enforcement and our

It is a broad ranging platform.

So when the audit was occurring, it seems we talked about this a little bit earlier. This isn't solely a financial deficiency. And I think our outside auditor made it clear at the time that that this is operational breakdown. And so when you reference Tyler Munis and so many departments being involved in that, is Tyler Munis new? I know you're new, so maybe you don't know how new it is.

It's my opinion that it's not new. It's used by a lot of municipalities. That it is the way Sharon explained it to me, it's the preferred.

Yeah, it's one of the number one software companies as far as government.

Yes, as Gina indicated, looking at grants and managing grants through Tyler Munis and payroll. I believe there were breakdowns in in payroll in in change status change activities. The the bank reconciliations were another area, and I I don't know if that has any Tyler Munis involvement. But bank reconciliations needed a plan of correction as well. Debt service and duplicate payments were also breakdowns.

And probably the thing that I'm most concerned about at this point in time is the grants and having I know there was a grant spreadsheet, but it sounds like it was not comprehensive to what what needed to be tracked. There is a policy and procedure manual that Sharon had referenced was going to be developed, and that I assumed was what was going to be the response to the AG and and submitted by the September deadline. At the council meeting of September 22, I think, the council approved what I considered to be a a superficial plan of correction because Sharon had indicated at that time that they still had not developed the manual, and they'd hoped to have it put together by September 30. So this committee I I would look at this committee to be a committee that would review what was submitted as the plan of correction. I know it's after the fact, but that it might be helpful to us to review it to determine if there are suggestions for processes moving forward.

Does that make sense?

I think that makes sense. Is that Carol, is that something something you're open to?

I'm open to it just to get your feedback and your input. Then we have to deal in reality on implementation.

Well, implementation goes to another conversation superficially that we have had, and that is Sharon indicated you don't have enough staff. And I I go back to history of a couple years ago when finance out of, I think, all departments, finance was cut in FTE. So where we're sitting now may be reflective of an action that was taken that probably shouldn't have been taken. So the in in this most recent budget, there was no approval of an additional finance person. There was for public works.

And, certainly, public works has a lot of grants, but they're not they're not the grant management department or shouldn't be because public works has you know, fire department has a lot of other departments have grants beyond public works. So, so I'm concerned about this the structure of the organizational chart, I guess, and where that will put you in terms of being able to manage some of these things. Even though I think Tyler Munis, if it was used efficiently or effectively, would be make your job easier. So are there things that we might be able to know in regards to this process that you're trying to figure out in ten days? In ten

days. Casey's asked me to come back just high level. The volume of work that flows through finance, excluding grants, it's a big it's a volume. So right now, the demand exceeds the capacity of the team. We're also looking at the capabilities of the team. And that's going to take some time as I understand how the work flows through the team, the requirements, the controls we need to have in place and start to build out. We want to build out financials. It's not something that the team's done. The finance director, the prior finance director probably did all of that. So it's going to take some time.

But just throwing a person in when we're still trying to get steady our may not help. We have to do the assessment, figure out if the workflow is right, do we have the right people in the right place, and then figure out where it's best to add. I don't want to bring I will acknowledge right now the feeling is we probably could use one person. I would argue there's an opportunity cost for not having a grant person herding everything in and working directly with the departments to make sure everything is there and we're taking advantage of the funding to the extent that we can. But to bring somebody in right now when we're still trying to write some of the audit findings doesn't make sense.

Really want to make sure we have the right structure in place.

Do you have all of your budgeted positions filled now?

No. Sharon has to be hired. We have a requisition open for Sharon's role, the controller. And I have three candidates that I'll be speaking with next week.

Thank you. You're welcome.

Well, you, everybody. Well, Carol, we'll leave that in your capable hands to determine what kind of staffing needs you'll have going forward.

Perfect. So

next on our agenda is staff communications. We have been communicating with the staff. So is there any further staff communications that needs to be discussed? If not, city council communications, anybody, one of our city councilors have something to say?

Good morning. Bonita Schwann, city councilor. I wanna thank you all for your service and particularly your leadership today that you've all shown. And Elena, thank you for spending so much time on that. I will be more than happy at our next city council meeting, which is Monday, to ask you to be put on the future agenda for the chair and vice chair to bring forward these recommendations.

Great.

That's all I got. Thank you.

Thank you. Thank you, Beniga.

If you don't mind before we move on, during the objectives and responsibilities, we mentioned government efficiency several times. And I think the city did receive the state's re redoge letter and that we responded. Should we shouldn't should we have and should we now review that? Just a question.

Hi. I was wondering. I I think the city manager indicated that it's about nine months ago that the information was requested. So the question that I have is, we get any feedback regarding the information that we sent?

So if Carol, could we ask that you maybe send a check with Mike McNeese on, has anything changed since the last meeting on getting feedback back from Doge? And maybe the second piece of that is, would Mike be would you and Mike be willing to share the information with us that was provided to Doge? Is that really I

have no problem asking Mike when when I see. Thank

you. Councilor Gray.

Good morning. Steven Gray. I love the culture of this committee. I I'm dead serious. The professionalism of what you're doing, it oozes integrity, and you're setting a a great example for how we should be running professionally. A lot of conversations. So I just I know a lot of hard work's been done here. I just want to acknowledge for me, greatly appreciate it. I just love the way you're going at it. Just a couple of throwaway comments. I'm intrigued that hopefully your committee would be interested in doing a year end review when we have a financial statement. So you're just ended at 09:30. What were the learnings? What were the insights? What was the understanding?

And for me, personally, I I'm still confused, and I'll admit that I'm I'm I'm still learning accounting skills. It would appear that our budget for 2025 was potentially favorable to the tune of 1,000,007. I don't know where that money goes. I don't know if it goes into the unsigned general fund. I I am curious. So and and the next thing I love this car I I really mean, I love the conversations that's happened this morning. This is the professionalism I adore. Every department should be communicating what it needs to run its business correctly. So I really love the conversation that was had. This is what it takes to execute and implement what's needed.

For me personally, I've been told previously everything was running right. We were staffed appropriately. There were no deficiencies. That's that seems to be so I am I always find it's incumbent upon management to say, this is what I need to do my job well. The other point that I loved hearing was this question about whether it's a subject matter expert or or where you would send advice to the council.

The real sport in life is learning how to ask the right questions. And so if there are things that you identify in your process and say, here's a question we got, and it's relevant to all the insight we have. So it's not telling anybody go find a consultant or go do this. Just let's figure out how to get the questions answered and what it takes to do that. If we're committed to drilling down to getting the questions answered the way we need, we can get a level of insight that's powerfully understanding for all of us.

The framing of this meeting and the culture is outstanding. I do have one dream and it's unreasonable. I'm just another voice or voter in the community. I would love to see this committee come to the point where they're willing to step up and affirm the financial integrity that we have in place for the community. The community needs to understand there's one difference between having shortcomings and working on improvements, story of life.

The world's getting more complicated. So the the key is if in all of your great diligence and your confidence, you say, you know what? There's things we can do better, but we feel like we've got a good handle on things, it'll be a powerful message to everybody, I think. I'm not sure you're gonna be willing or able to do that, but that's one of the things that haunts me because I'm still not at end of job in understanding a number of things that I think are relevant. With that last point, we're in a complicated world.

I love the health care conversation. Subject matter experts are becoming more essential as the complexity of today's worlds grow. So, Elena, the conversation that you presented and what you know about the health care system, I live with this on the board of a company. I'm out of Missouri. We're always trying to chase what are the best answers for our employees, etcetera.

We just need to know when we need to find outside advice and perspective so we don't have to chase our tail, and we do not have to have redundant conversations. One of the things I heard this morning that drives me nuts, we're wasting an inordinate amount of time on redundant conversations. I don't know how to improve our efficiency. But if you guys ask the questions, I don't need to, as an example. And I really not waste anybody's time, but I can't tell you that what you're doing and how you're doing it to set an example to this community. Thank you.

Thank you. Thank you, consulate consulate Gray. Appreciate those comments. Are there any public comments? We have one member of the public.

Who's been very patient, I'll add.

Dennis Bartolucci, Marco Island. First of all, you know, the city's 28 years old, and I feel like it's a kid that was living in the basement, and now it's got a job and actually starting to act like an adult. And so I compliment, Carol, what I've heard from you. I compliment you folks. I'm very impressed. I think it's a sign of progress, and it gives me great hope for the future of the city. A couple of things. One, I came across a budget document from 2022. I believe it went to the council in June 2021. I was impressed by it.

It had a lot of detail. It was a very nicely presented document. I don't recall seeing anything like that more recently. I would encourage you if you have any spare time, take a look. Sure you could find it in the city records.

And I think you'll also say wow lot of information I would encourage our counselors here as well to take a look because it answered a lot of questions for me about that time frame, and it'd be nice to have that kind of information. Now a couple of couple of things about the auditor. You mentioned auditor performance. In my opinion, as an outsider, just looking at it from the outside and having some knowledge of what auditor performance actually is, I would say, if you rate if you rate, and I don't know if you will or you won't, but if you do, don't be afraid to be a little harsh because in my opinion, that might be warranted and it'll be good for everyone. Right?

Clear the air. I mean, what an auditor does in 50 other cities doesn't matter. What they do here matters. If they have bad things that they do that they get away with, don't let it happen here. It you know, it that last thought it was was a mess and I'm not sure I can blame it all on Gil. I really don't think that that it was all his fault. By the way, Gil was trying to arrange a a meeting of this group in May. By the way, if that had happened, a lot of the surprise element would have been gone. This whole the whole flow of the city's government over the last six months would have been different. But you guys couldn't well, not you.

The committee couldn't arrange a quorum, and so that never happened. So, you know, one little thing leads to another leads to another. Point being, you're doing an important job. You've signed up to do it well. You've organized yourselves well, And and I compliment you on it. I'm so encouraged by what you're doing. I would be mindful of things that the auditor would be willing to do and want to do that are not part of the audit. Those would be extra extra work. Right? Not related to the audit.

In the public world, there's a lot of attention on independence and the auditors are very limited in what they could do. And, you know, since 2002 or something like that, Sarbanes Oxley, those were good changes for independence purposes. I'm not really familiar with the rules for government, but please don't let the auditor, you know, start getting into all kinds of other stuff. It would be a good idea to have a second accounting firm as a resource to the city. And I think it would be good for you to think on that and suggest that, because, you know, you wanna you wanna keep the auditor doing audit work and you're gonna have other accounting questions and you're gonna need other help.

Use another firm. By the way, if you use another firm, you also create familiarity. So that if in the future you need to make a change, you've got a pony in the stable. That would be something that I would encourage you to do. I understand from looking at the bulk purchase order document that was approved by the council about ten days or so ago that these lights drive people crazy, by the way, that with regard to CLA, the number of $124,000 which exceeds the proposed audit fee and the single audit fees as well.

It exceeds both. It includes money for the auditor to prepare the annual report. I don't know how that works. In the public world, you would never have an auditor preparing your report. I'm familiar with in, you know, private companies and places where you don't have those rules.

They do what they call write up work. And in some cases, they end up auditing their own work, which is like not auditing at all. Just be mindful of what the auditor is doing that's not related to the audit that might compromise their independence. And I know that it's a way for them to make up some of the lost money on a very low audit fee. You know, those things are very competitive and they're very low, so they look to make it up.

But just be careful where they make it up. On the topic of IT security and cybersecurity, I would encourage you to focus a lot of attention on that because there's no end to the problems that that that come from that area, and it's a very difficult area. And you may need more expertise than the current auditor has, But I would encourage you to do that because if we get a problem there, the city is going be locked up pretty hard and it's going to be bad news. And I don't mean just look bad, it's going to be bad. And small small entities tend not to be very sophisticated, just the nature of the beast.

They also tend to be good targets. So there's that. If you were encouraged to ever think about special procedures as in something more than the basic vanilla audit, which by the way doesn't really go to any level of detail, you know what I mean, with materiality and all the rest. The audit is like a thin layer of butter on a piece of toast. It's not a pound of butter.

So don't be afraid to ask for special procedures or to encourage the council to ask for those. For example, our water business is a substantial business. Frankly, it's bigger than the operations of the city itself. If I look at assets and debt and revenue and all the rest. And I'll be honest with you, I I don't think the audit goes very deep into that. And I think it would be good for someone to do that because I think that's, you know, in my opinion, I think it's an area of focus and it might be a fertile area. I think that's about it. If Steven were chairing this, he'd have told me I was out of time. So I'll that. Thank you.

Thank you.

You're doing great.

Thank you for your comment. Yeah. Appreciate it. Well, we already set up a meeting date, our next meeting, December 4. And then we can work on future meeting dates. And proposed agenda and topics for the next meeting is kind of outlined in our little spreadsheet that we have of what we'll discuss on December 4, the external auditors and financial reporting and controls, etcetera, risk management. So are there any other items that we should discuss at our next meeting that you want to add to the agenda?

Terry, did you have interest in following up on processes?

I do. But I'm not sure which ones. I hear you. I think and I don't know if Carol has a a view on this or not. One of the areas that I think is is like a fundamental is, is staffing, is payroll and staffing, and kind of an organizational view, because we know there are organizational deficiencies. So and I think we have a new HR person. Yes. So this is a good opportunity starting tomorrow. I know.

I she started. I'm meeting her tomorrow.

Oh, you're meeting her tomorrow. Okay. I would meet with you except I can't talk to you. Well,

that's a good question. Right? What what's happening, I think, is we're having multiple conversations with the same people independently, and then that takes more of their time. Are we not allowed let's say, I schedule a meeting with Jose. I like to say, whoever is interested should join. Can we not do that?

So, Carol, I know you and I were we were sort of playing around on this a couple weeks ago.

So before I joined this meeting today, Joan gave me a little tutorial and said, any questions about the Sunshine Laws, I should not opine and that I should send you to her, the city clerk. So that's the answer I can give you today. But I would like to comment on Diana. We will be working closely because she administers the benefits and all of the compensation. We run the payroll system.

She recently went through her training on tylamunis and looked at some of the functionality. And there are automated processes for things that we're doing manually that will eliminate risk. So we'll be working closely on those to make sure that we take advantage of that. One example would be when somebody wants to change their contribution to their, for lack of a term, Thrift Plan. They do it on a piece of paper. It gets submitted. That gets manually entered by the payroll coordinator. They should be able to do that directly in Tyler. So we need to get trained on that. So it eliminates the risk where if our payroll coordinator puts in 30% versus 3%.

And it will create some capacity. That's an efficiency. So those are some of the things that Diana has identified. And since we're both new, we sort of have to work through it since we share one end of each part of the payroll process. So I'm looking forward to that. So more to come. I think you'll enjoy meeting with her. She's gonna be great for the city.

To Tom's point of each of us trying to meet with someone, I totally agree. Unfortunately, the Sunshine Law is so limiting. But it may be that we should talk about a system Mhmm. Where one of us would meet and either be a reporter of our findings, or we one of us meet and then determine that we bring that person here. Maybe the HR person can can kind of put something together based upon our interests.

I will add that to you.

So if I met with the HR person and and got an idea of things that are challenging for her and the issues that we've seen, maybe then it's a matter of bringing her here and having her share with us what it is that have been her challenges and what things she's doing to resolve them. And then we keep the the sunshine open. I I agree. I think we really have a problem with individuals meeting with individuals. It looks like we're all going in the closet, And that's not the purpose of what we want to do. We want people to know what's going on.

When we organize these meetings, are we doing them through Joan?

Yes. Yes. Or or through with Jill's help too. Carol's help.

Jill. Okay.

You know, I I'm I'm just thinking that it might be a good idea to have Joan come to the next meeting and let's talk about the Sunshine Law because what what can or can't we do? For instance, if we're putting together an agenda, would it be wrong for me to call Elena and say, we're not making decisions that that would affect the city. We're making a decision on what should be on the agenda. Would that not be legitimate that we can do that?

Legitimate, but she would say don't do it because She might. She might.

So but what what can we do that would be within the scope of the law that we can communicate with one another that would make our life easier because it's so difficult They they have to. One another. Know, I know the city council's got the same problem where you can't talk to one another. But there may be some things we can talk about that would be within the the scope of the law. So if we can have Joan come and maybe ask her questions. She seems to be our authority on that. And I'd like to, you know I'd like to discuss that

with her. I like the idea of Teri's idea of organizing. So you make an appointment

Mhmm.

To discuss something, anyone else makes that same recommendation, she says, no, someone else is doing it, they take notes and they share it during this meeting. It's at least not burdening staff with with the same questions.

I'm I'm not going to opine on sunshine, but one of the questions I would have in that spirit because I think you I think I'm going to do a yes and here is that it would be even more efficient if I could, after a meeting, let's say, with Jose, or after my question of curiosity about benefits, for me to send a one way communication to Carol and Joan about my findings. Like, this is what I found.

And they

can figure it And then perhaps they do a one way from there to the whole committee all at once, will everyone be cc'd. That way, we don't have to wait until we get together in four or six weeks, but everyone is up to speed. Would that be something I I'm happy to send a note to Joan. You

know, I think what the difficulty would be is if you would have, let's say, an opinion in there Uh-huh. That would try to influence us that's not under the sunshine.

Okay. And and

I think that's one of the issues with it because it it would have to be all factual, I guess.

Yes.

Right. I bet I could do it all factual.

So so Jill is actually putting together the agenda and then she passed it by me for approval. So if you have some of the things that we talked about now, if you would pass that information on to Jill, including maybe asking Joan if she would have the time to come to the next meeting so that when we do put together the agenda for the next meeting, we're all on the same page.

And here's a here's a suggestion for some homework in this in this in the spirit of we all got blind spots, but we've all got areas of expertise. If we were to, in advance of the next meeting, potentially send an email to Joan and Jill, we could create for the next meeting, we could actually have a document that says, what are your areas of expertise? That if you were to look at a financial statement, what would you look Or where do you think you could add value so that we could begin to develop that repository of subject matter expertise?

I like that.

Now, we all know how to we've all run businesses. And that would not be a black and white that's the only thing you can opine on. But honest, I would feel remiss if I hadn't looked at the budget and said, this is interesting on the medical costs, on the benefits. Would we have any interest in creating a short list of subject matter expertise? Does anyone feel compelled? I think it's

Good about a good points.

I

think that makes sense. I feel like my expertise operationally can fit into all of those Absolutely. And we all So Yeah. It it's hard to say this is the area that I think I'd be most effective in. You know, I look at payroll and and staffing and I look at contracts which are Yes. Also another issue that we haven't really even touched on. Grants, of course, in health care, we deal with grants a lot.

I want Dan to make sure we don't fall below double a minus.

There you go.

Right? And it's critical. Credit rating.

That's for sure. Well, that's okay.

And I think that's important.

So it doesn't become like that's the only thing we do. But if someone were to raise their hands say, gosh, what do you think of should we go look at again, I'm just using medical benefits as an example because that's the first thing I always look at on any financial

It's where you're

Yeah.

That's what

my brain is, right? So perhaps but yes, like you, I go look at the metrics. And I always say, hey, so how do we measure the performance of the FTEs, of the company, of the do we have are the are we authorizations or claims? Are we what's the day's claims pay? All that stuff, that's important. Those are metrics. Just an idea of what's the first thing you look at. It's not a closed end thing.

And I'm a balance sheet guy and we never have a chance to look at the balance sheet. I'm not sure the city council looks at the balance sheet.

Bet you're excited we might actually get to look at one.

Yeah. Than at the year end at the year end audit. So, yeah. Anyway, really good discussion today and I don't know that we have a need for any other committee communications unless someone has something that you wanna add to the meeting. And if not, I would ask for a motion to adjourn this meeting because we're supposed to be out here by eleven, so we're fifteen minutes ahead of schedule. Yeah. I have a motion to adjourn.

Motion to

And a second. So, all in favor? Aye. Meeting is adjourned. Thank

you.