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2018, 12-17 Special MINUTES City of Spokane Valley Special Council Meeting Monday, December 17,2018 2:30 p.m. City of Spokane Valley City Hall,211d Floor Conference Room,N212 10210 E. Sprague Ave., Spokane Valley, Washington Attendance: Spokane Valley Council Staff Mayor Higgins Mark Calhoun, City Manager Deputy Mayor Haley John Hohman, Deputy City Manager Councilmember Thompson Cary Driskell, City Attorney Councilmember Woodard Erik Lamb, Deputy City Attorney Mike Stone, Parks &Rec Director Absent: John Whitehead, Human Resources Mgr Councilrnember Peetz Dan Duffy, Accounting Manager Councilmember Wick Karla White, Accounting Technician Councilmember Wood Jon Lakey, Accountant, budget Analyst Christine Bainbridge, City Clerk Others in Attendance: State Auditors: Weston Fink, Assistant Audit Manager;Nick Howard, Audit Lead Approximately two members from the public Mayor Higgins called the meeting to order at 2:30 p.m. City Clerk Bainbridge called the roll. All Councilmembers were present except Councilmembers Peetz, Wick and Wood. It was moved by Councihnember Thompson, seconded and unanimously agreed to excuse those absent Councilmembers. City Manager Calhoun explained he is stepping in as Finance Director Taylor is out ill today;he mentioned that this is the last touch with the state auditor as part of the 2017 audit,and today we will review the results of the Accountability Audit for 2017. Mr. Fink introduced Mr. Howard, who then went over the material contained in the Exit Conference including page 1 of what they publish, the audit highlights, recommendations not included in the audit, which items he said are considered `housekeeping.' Mr. Howard also mentioned the audit cost, as shown on page two of the report.Mr.Fink went over the material on page 2 and 3,and noted this is a clean opinion, with no findings, and no management letter; that page 3 includes a list of the areas examined during the audit, and page 4 explains where those reports can be found on the state auditor's webpage. There were no questions and Mr. Calhoun extended thanks to Finance Director Taylor and her department, and thanks to the auditors. It was moved by Deputy Mayor Haley, seconded and unanimously agreed to adjourn. The meeting adjourned at 2:43 p.m. c><1/ / I i - Mitrigio .... A ES . 41 L.R. Higgins, 1 .r 1,1- )---/I\i•--i- J5_447L - is,........________ Christine Bainbridge, City Clerk Special Council Meeting, State Auditors: 12/17/2018 Page 1 of 1 Approved by Council: 01/08/2019 "viv `Lt'`''°'`��'�°����'�� Office of the Washington State Auditor C' ' 46 7)S %%`4°V '6t/ Pat McCarthy Exit Conference: City of Spokane Valley The Office of the Washington State Auditor's vision is increased trust in government. Our mission is to provide citizens with independence and transparent examinations of how state and local governments use public funds, and develop strategies that make government more efficient and effective. The purpose of this meeting is to share the results of your audit and our draft reporting. We value and appreciate your participation. Audit Reports We will publish the following reports: • Accountability audit for January 1, 2017 through December 31, 2017 - see draft report, Audit Highlights • City personnel were easy to work with, which ensured that the audit progressed smoothly. • Chelsie Taylor,Dan Duffey, and the Finance Department worked hard to ensure audit staff had everything they needed to perform their job duties,which creates a great working relationship between the City and our Office. Recommendations not included in the Audit Reports Exit Items We have provided exit recommendations for management's consideration.Exit items address control deficiencies or non-compliance with laws or regulation that have an insignificant or immaterial effect on the entity, or errors with an immaterial effect on the financial statements. Exit items are not referenced in the audit report. Finalizing Your Audit Report Publication Audit reports are published on our website and distributed via e-mail in an electronic .pdf file. We also offer a subscription service that allows you to be notified by email when audit reports are released or posted to our website. You can sign up for this convenient service at: https://portal.sao.wa.gov/saoportal/Login.aspx Management Representation Letter We have included a copy of representations requested of City management. 1 Audit Cost At the entrance conference, we estimated the cost of the accountability audit to be $29,000 plus travel costs, and actual audit costs will approximate that amount. Your Next Scheduled Audit Your next audit is scheduled to be conducted in 2019 and will cover the following general areas: • Accountability for Public Resources • Financial Statement • Federal Programs The estimated cost in total for the next audit based on current rates is $86,000 plus travel expenses. This preliminary estimate is provided as a budgeting tool and not a guarantee of final cost. Working Together to Improve Government Audit Survey When your report is released you will receive an audit survey from us. We value your opinions on our audit services and hope you provide feedback. Local Government Support Team This team provides support services to local governments through technical assistance, comparative statistics, training, and tools to help prevent and detect a loss of public funds. Our website and client portal offers many resources, including a client Help Desk that answers auditing and accounting questions. Additionally this team assists with the online filing of your financial statements. Performance Center The Performance Center is a resource for local governments that need to solve problems, reduce costs, and improve the value of their services to citizens. The Center offers training and tools to help local governments improve performance and effectiveness. Questions? Please contact us with any questions about information in this document or related audit reports. Kelly Collins, CPA, Director of Local Audit, (360) 902-0091,Kellv.Collinst''isao.wa.gov Brandi Pritchard, CFE, Assistant Director of Local Audit, (360) 489-4591, Sadie.ArmiioAsao.wa.gov Brad White, CPA, Program/Audit Manager, (509) 329-3701 ext. 127 or Bradlev.D.White(a,sao.wa.gov Weston Fink, CPA, Assistant Audit Manager / Audit Lead, (509) 329-3701 ext. 120 or Weston.fink r( sao.wa.gov 2 0 0 u AUDIT RESULTS ro This report describes the overall results and conclusions for the areas we examined. In those selected areas, City operations complied with applicable state laws, regulations, and its own policies, and provided adequate controls over the safeguarding of public resources. About the audit This report contains the results of our independent accountability audit of the City of Spokane 411 Valley from January 1, 2017 through December 31,2017. Management is responsible for ensuring compliance and adequate safeguarding of public resources from fraud, loss or abuse. This includes the design, implementation and maintenance of internal controls relevant to these objectives. 0 This audit was conducted under the authority of RCW 93.09.260,which requires the Office of the u0i State Auditor to examine the financial affairs of all local governments. Our audit involved performing procedures to obtain evidence about the City's uses of public resources, compliance Po, with state laws and regulations and its own policies and procedures,and internal controls over such matters. In keeping with general auditing practices, we do not examine every transaction, activity or area. Instead, based on our risk assessment for the year ended December 31, 2017, the areas examined were those representing the highest risk of fraud, loss, abuse, or noncompliance. The following areas were examined during this audit period: • Small and attractive assets—inventory and asset tracking • Payroll—overtime approvals • Self-insurance—unemployment compensation • Financial condition and fiscal sustainability W • Cash receipting, franchise fees, and donations receipted by the City • State grants—review of reported expenditures and compliance with grant requirements M a • Travel reimbursements—compliance with City policy, tested reimbursements for employees 1g 3 0 1" RELATED REPORTS 0 Financial Our opinion on the City's financial statements and compliance with federal grant program requirements is provided in a separate report,which includes the City's financial statements, That report is available on our website, http:l/portal.sao.wa.gov/ReportSearch. F 2 IN Federal grant programs a We evaluated internal controls and tested compliance with the federal program requirements, as applicable, for the City's major federal program, which is listed in the Schedule of Findings and Questioned Costs section of the separate financial statement and single audit report, That report is available on our website,http:l/portaLsao.wa.gov/ReportSearch. 0 00 4 0 w INFORMATION ABOUT THE CITY V 0 The City of Spokane Valley was incorporated on March 31, 2003, and currently serves approximately 95,000 Spokane County residents. It provides an array of services including building inspection, street improvement and maintenance, parks and recreation, stormwater management, solid waste disposal, and general administrative services. The City also owns and operates CenterPlace, an event facility, 11 parks and three pools. For many of its services the City contracts with Spokane County including law enforcement, prosecution, public defense, District . Court, emergency management and animal control. An elected, seven-member Council governs the City under a Council-Manager form of government. The Council appoints one member to serve as Mayor and another member to serve 0 as Deputy Mayor. In addition, the Council appoints a City Manager to oversee the City's daily operations as well as its 89.25 FTEs. For fiscal year 2017, the City operated on an annual budget of approximately $77,36 million. 0 Contact information related to this report 0 Address: City of Spokane Valley • 10210 E. Sprague Avenue Spokane Valley City Hall Spokane Valley, WA 99206 Contact: Chelsie Taylor,Finance Director Telephone: 509-720-5040 Website: www.spokanevalley.org Information current as of report publish date. Audit history You ,can find current and past audit reports for the City of Spokane Valley at http://portal.sao.wa.gov/ReportSearch. P 5 FINANCE DEPARTMENT Sokane Clielsle Taylor,CPA,Finance Director ,aop valley 10210 E Sprague Avenue♦ Spokane Valley WA 99206 Phone: (509)720-5000 ♦ Fax: (509)720-5075 ♦ www.spokanevalley.org • December 5, 2018 Spokane Valley City Council. City of Spokane Valley 10210 E Sprague Ave Spokane, WA 99206 To the Washington State Auditor's Office: We are providing this letter in connection with your audit of City of Spokane Valley for the period from January 1,2017 through December 31,2017. Representations are in relation to • matters existing during or subsequent to the audit period up to the date of this letter. Certain representations in this letter are described as being limited to matters that are significant or material. Information is considered significant or material if it is probable that it would change or influence the judgment of a reasonable person. We confirm, to the best of our knowledge and belief, having made appropriate inquires to be able to provide our representations,the following representations made to you during your audit.If we subsequently discover information that would change our representations related to this period, we will notify you in a timely manner. General Representations: 1. We have provided you with unrestricted access to people you wished to speak with and made available requested and relevant information of which we are aware, including: a. Financial records and related data. b. Minutes of the meetings of the governing body or summaries of actions of recent meetings for which minutes have not yet been prepared. c. Other internal or external audits, examinations, investigations or studies that might concern the objectives of the audit and the corrective action taken to address significant findings and recommendations. d. Communications from regulatory agencies, government representatives or others concerning possible material noncompliance,deficiencies in internal control or other • matters that might concern the objectives of the audit. e. Related party relationships and transactions. f. Results of our internal assessment of business risks and risks related to financial reporting, compliance and fraud. 6 2. We acknowledge our responsibility for compliance with requirements related to confidentiality of certain information, such as HIPAA requirements,and have notified you whenever records or data containing information subject to any confidentiality requirements were made available. 3. We acknowledge our responsibility for compliance with applicable laws, regulations, contracts and grant agreements. 4. We have identified and disclosed all laws,regulations,contracts and grant agreements that could have a direct and material effect on the determination of financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds. S. We have complied with all material aspects of laws, regulations, contracts and grant agreements. 6. We acknowledge our responsibility for establishing and maintaining effective internal controls over compliance with applicable laws and regulations and safeguarding of public resources,including controls to prevent and detect fraud. 7. We have established adequate procedures and controls to safeguard public resources and ensure compliance with applicable Iaws and regulations. 8. We have no knowledge of any fraud, allegations of fraud or suspected fraud involving management, employees or others. 9. In accordance with RCW 43.09.200, all material events and transactions have been properly recorded in the financial records. it.} Mark Calhoun Chelsie Taylor City Manager Finance Director 7