AUDIT DEPARTMENTS VISION Maintain an efficient approach to

AUDIT DEPARTMENT’S VISION Ø Maintain an efficient approach to the overall audit process. Ø To provide an independent and objective perspective to an accountable government. Ø Provide efficient and effective audits and look for ways to help improve controls and processes at the City. 2

TOP THREE PRIORITES Ø To conduct quality audits. Ø Provide timely and consistent audit follow-ups with Management. Ø To promote awareness of the Fraud Hotline. 3

TOP THREE PERFORMANCE MEASURES Ø Completed Audits Ø Reporting the Status of Management Action Plans Ø Implemented Ø Past due, action taken Ø Past due, no action taken Ø Fraud Calls Investigated 4

Discuss any proposed changes to positions (new 1 position, deleted position, salary adjustments, title change, etc. ). The Audit Department is requesting the addition of a Senior Auditor position. I am also requesting a salary adjustment for the Audit Manager position to be consistent with her current audit responsibilities. 5

1 a) Specify the last time any changes were done for any of the above. Ø In FY 18, the Staff Auditor position was upgraded to a Senior Auditor. 6

2 Discuss the $225. 3 K budgeted in Professional Fees (across both the General and Water Sewer Funds). a) Specify the vendor name, duration of the contract, and how long the City has been doing business with this vendor. Ø Belfint, Lyons & Shuman (BLS), FY 15 - FY 17 CAFR & Single Audit - $129 K (General Fund) and $60 K (Water Fund). Contract was extended for an additional two years starting with the FY 18 audit at $189 K per year. Ø Vendor to be determined, one time contract for the audit of Franchise fees - $24 K. Ø Integrity Staffing, FY 15 - FY 17, Office Assistance through City contract for temporary services - $12, 335 annually. 7

3 Discuss the tentative Audit Plan for FY 2019. a) Specify number of audits planned versus completed for FY 18, and the number of audits that will be carried over to FY 19. Ø In FY 18 we planned to complete 14 audits and 4 carryovers from FY 17. Ten audits have been completed and one has been deferred by functional area. The Audit Review Committee approved four audits being carried forward to FY 19, due to staffing limitations. 8

3 b) Specify number of audits performed by an outside firm for FY 18, and planned for FY 19, with correlating costs. Ø BLS performed the FY 17 CAFR and Single Audit in FY 18 and it cost our department $183 K. They will also be conducting the FY 18 CAFR and Single Audit in FY 19 for $189 K. Ø In FY 19, we plan to acquire the services of an outside firm to conduct Franchise Audits - $24 K (Proposal received reflects a cost of $18 K per audit plus travel). 9

c) Specify the frequency for follow up on past audits to ensure departments comply. 3 Ø Audits risk ranked a four will be audited within a year to ensure the action plans have been implemented (Refer to the next page for risk rankings). Ø The other audits will be on a 3 -5 year cycle. 10

Rating Definitions: 3 Strong Controls The control environment and supporting business process are strong. No issues were noted during the review. Controlled Effectively The control environment and supporting business processes are controlled effectively. No significant issues were noted during the review. Some improvement opportunities may have been noted and left with management. These improvements are not considered significant enough to impair the integrity or effectiveness of the operations. Controlled - Improvement Required The control environment and supporting business processes are acceptable, but requires improvement due to one or more identified deficiencies that may impair the integrity or effectiveness of the operations. Recommendations and action plans were developed with management during the review, along with action plan timelines and defined management roles/responsibilities to support the implementation. Significant Improvement Required The control environment and supporting business processes require significant improvement. One or more significant issues or deficiencies were identified that could impact the integrity and effectiveness of operations. Actions should be taken by management to put in place corrective controls – i. e. policies, procedures, processes, etc. Recommendations and action plans were developed with management during the review, along with action plan timelines and defined management roles/responsibilities to support the implementation. A follow up review will be conducted within six months of the original review. 11

4 Discuss the planned use of $31. 4 k budgeted between Travel and Memberships & Registrations account categories, up $6. 2 k. ØThe estimate for budgeted Travel, Membership and Registrations is based on adding an additional Senior Auditor to our staff. 12

4 The travel is based on satisfying continuing professional education requirements. ØThe Institute of Internal Audit. ØAssociation of Local Government Auditors. ØVarious trainings with Delaware Society of CPAs and the local chapter of the Association of Government Accountants. ØCertifications held by current Staff include: ØCertified Internal Auditor (1) ØCertified Government Audit Professional (2) 13

Discuss the City’s Risk Assessment Plan process. 5 ØUtilizing a survey questionnaire and interviews with leadership, we plan to quantify the responses and use a weighted average of the responses received from Management, in order to determine our audit universe for FY 19. 14

6 Discuss how the City’s Fraud Hotline is being marketed. ØThe Fraud Hotline has been posted on the City’s intranet and internet sites. ØPamphlets were posted on various floors throughout the year. ØDuring International Fraud Awareness week it is advertised on WITN. ØFraud Hotline pens and literature have been distributed in the lobby of the City/County Building. 15

7 Provide FY 19 proposed organizational chart with the total number of employees (i. e. permanent, temporary, contract, vacancies). 16

Office Assistance Temp. Senior Audit Manager Senior Auditor CITY AUDITOR Senior Auditor 17

Fraud Hotline 18

Questions ? 19

Thank You! 20