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HomeMy WebLinkAboutAudit Comm_03/09/2017Audit Committee Meeting Minutes March 9, 2017 Present: James Ragazzo, Michael DeSantis, Frank DelVecchio, Kiera O'Neil, and George Sommer, Also Present: John Stanbrook, Finance Director and Town Accountant; and Carrie Champagne; Mmut`es &erlc n Call to Order, Attendance, Opening remarks by Chairman/intro new minute p t Fl Chairman Ragazzo called Audit Committee meeting to order March 9, 2017 at 7:00pm in the MBC,,RAeeting Room. A quorum was present. Chairman Ragazzo thanked Mr. DelVecchio for introducing the use of Doodle to get meetings scheduled. He then introduced and welcomed the new scribe Carrie Champagne to the committee. He also shared the news of the passing of former committee member James Bazinet. Address Reorganization of Board Regarding Vice Chairman Position, Rescind and Revote Chairman Ragazzo stated it was necessary to discuss the Vice Chairman position of the Audit Committee. Mr. George Sommer needed to rescind this position after the December 15, 2016 meeting, because of a failure comply with the open meeting laws. Motion: To accept Mr. Sommer's rescinding of the Vice Chair Position. (DelVecchio/O'Neil) 4:0:1 Sommer abstains The committee then took nominations for the Vice Chairman position. Chairman Ragazzo nominated Mr. Sommer as Vice Chairman of the Audit Committee. There were no other nominations. Motion: To approve Mr. Sommer as the Vice Chairman of the Audit Committee Meeting through June 20, 2018. (O'Brien/DelVecchio) Passes 4:0:1 Sommer abstains Review and Approval of all Outstanding Minutes Chairman Ragazzo stated the need to approve all outstanding minutes. Motion: To approve the February 18, 2016 meeting minutes of the Audit Committee. (DelVecchio/O'Neil) Passes 4:0:1 Sommer Abstains Motion: To approve the June 2, 2016 meeting minutes of the Audit Committee. (Sommer/O'Neil) Discussion: Chairman Raggazo noted that this meeting including a presentation from Powers & Sullivan and at the meeting the audit plan was discussed. A meeting was scheduled for September to review the Electric Department and the CAFRA. Passes 3:0:2 DelVecchio and DeSantis abstains Motion: To approve the December 15, 2016 meeting minutes of the Audit Committee as written. (O'Neil/Sommer) Discussion: Mr. DelVecchio had an edit for the minutes for item #2. Minutes did not pass 0:5:0 Motion: To approve the December 15, 2016 meeting minutes of the Audit Committee as amended. (O'Neil/Sommer) Passes 4:0:1 Sommer Abstains Report by Chairman of Annual Meeting with Board of Selectmen Chairman Ragazzo stated that he attended a Board of Selectman meeting in February and provided the annual report to the board, as well as highlight items from the December 15th meeting. Mr. DelVecchio was in attendance as a member of the Board of Selectman, and not as a representative of the Audit Committee. Chairman Ragazzo then asked Mr. DelVecchio for his comments about the presentation and he answered that he thought it was thorough. Chairman Ragazzo continued in giving an overview of his meeting with the Board of Selectman noting that the Bristol County Retirement Board not providing financial information resulted in the committee not having their scheduled meetings in the fall of 2016 because there was no data. Chairman Ragazzo also suggested that the committee meet in July to reorganize. Review of Management Letters and Response/Action Plan with Mr. Stanbrook Chairman Ragazzo stated that part of the charge of the Audit Committee is to review management letters and Mr. Schoonveld had the strongest questions at the Board of Selectmen meeting. He then asked the committee to review the management response by the next meeting. He noted that he will be reporting back to the Board of Selectmen in the beginning of June. Review of progress chart of 2013 operational review by MLB, CPA LLP with Mr. Stanbrook Mr. Stanbrook explained the handout titled Town of Mansfield Operational Study Action Item Time Line as of 3/9/17. He stated that items in green have been done, items in yellow are in progress and items in red will not complete, and further noted that items required by the law take priority, and other items he does not have the authority to complete. Chairman Ragazzo asked when the selectmen receive this report. Mr. Stanbrook answered that he last sent an update in October and also provided the information to the Town Manager. Chairman Ragazzo stated that Mr. Ross should redistribute this information back to the Board of Selectmen. Chairman Ragazzo stated that implementation is key when it comes to studies like these. Mr. Stanbrook commented that it is time to do another study since the last one was completed two years ago and at that time it was overdue. The report also came at the cost of $45,000, and Mr. Sommer asked if Powers and Sullivan may be able to help with this study. Chairman Ragazzo asked Mr. Sommer to attend the Board of Selectman meeting in June and share his valuable perspective with the board. Review of Duties of Committee According to Town Bylaws Chairman Ragazzo moved the discussion to the Town Bylaws to review the charge of the Audit Committee. The first item is to establish a relationship and oversee the work of the independent auditor, to which the committee has accomplished with Powers and Sullivan. Item number two is the review of the management letters which is a work in progress and the committee is addressing as noted in agenda item above. The third item that the audit committee is responsible for is to review and monitor the Town's financial reports, reporting processes and internal controls. Chairman Ragazzo commented that the committee is not reviewing financials monthly or quarterly, but rather looking at year end statements. Mr. Stanbrook brought several reports as examples and stated that the Town Manager receives about twenty five other reports. The reports are not classified as financial statements, but are a comparison of budget to actual. Mr. DeSantis suggested that committee could review the minutes of all committees including Finance Committee to ensure that other committees are reviewing the data. Ms. O'Neil stated the school committee does not review financial data as a committee. Mr. DelVecchio commented that Mr. Stanbrook provides monthly financial reports and is present at the Board of Selectman meeting to answer questions about the budget if necessary. Chairman Ragazzo then stated that it appears it would be a duplication of efforts and resources to review this information in depth. Mr. Sommer noted that the internal control piece is something that can be worked on in FY18 and the committee may be able to help Mr. Stanbrook by reviewing draft reports and provide feedback. Chairman Ragazzo also noted that the town does not have an internal framework and Mr. Stanbrook noted that regional school districts do; Mr. DelVecchio also commented that if regional school districts have them there is enough combined expertise on the audit committee to adapt it to the needs of the town. Create Action Plan for Bylaws Needing Committee Compliance etc. --The discussion then moved to the responsibilities of the audit committee which involves establishing a confidential process to receive and investigate complaints. Chairman Ragazzo noted that at the last meeting Mr. Nelligan commented that othertowns have established fraud hotlines. Mr. DelVecchio suggested completing research, and noted he was surprised other towns have done this. Chairman Ragazzo also commented that in a discussion with the chief of police many residents in the town have experienced fraud, especially elderly citizens. Mr. Sommer commented that historically in the corporate world there is an independent party that would take the calls and send reports to Human Resources (HR). In the town HR reports to the Town Manager so it was suggested that it would make sense if reports were sent to HR, Town Council and the Audit Committee so that the information could be seen and addressed. The committee then agreed that this should be discussed with Powers and Sullivan for their recommendation. Possible Review of Town and Electric Dept. Quarter 12017 Internal Financial Statements Chairman Ragazzo asked if the Finance Committee looked at the electric departments financial reports. Mr. Stanbrook answered he does not believe they do. Mr. DelVecchio answered that the Board of Selectman receives a financial report at least monthly from the electric department. Chairman Ragazzo stated there is no need to further address this item. Other items not known 48 hours prior to meeting No discussion or items Scheduling of next meeting Chairman Ragazzo has scheduled the next Audit Committee meetings for April 13, 2017 and May 11, 2017 at 7pm in MBC meeting room. He noted that the auditors will be attending the May meeting. Mr. Sommer stated he needs to be present at the meeting but has a conflict with the May meeting. It is proposed to move the meeting to May 18, 2017. Chairman Ragazzo will check with Mr. Nelligan for his availability for May 18tH Adjournment Motion: To adjourn the March 9, 2017 Audit Committee meeting at 8:15pm (DelVecchio/Sommer) F ;0? .�- Girl Minutes Clerk Signatbrt�_/'_ Documents Used in this Meeting: Date y/► 3 ,Z Date Town of Mansfield Operational Study Action Item Time Line as of 3/9/17 Town of Mansfield FY 16 and Prior Management Letter Comments and Responses as of 3/9/16 Town of Mansfield Finance Director FY17 Budget Narrative through January Town of Mansfield FY17 Budget Snapshot Cover Sheet through January Town of Mansfield FY17 Budget Snapshot General Fund Revenue Comparisons through January Town of Mansfield FY17 Budget Snapshot General Fund Expenditures Comparisons through January Town of Mansfield Sewer Enterprise Comparisons as of 1/31/17 Town of Mansfield Water Enterprise Comparisons as of 1/31/17 Town of Mansfield Airport Enterprise Comparisons as of 1/31/17 Town of Mansfield Parking Enterprise Comparisons as of 1/31/17 Town of Mansfield FY16-FY17 Balance Sheet Account Comparison for General Fund as of 1/31/17