Carson City Audit Committee Meeting - May 12, 2026

The Audit Committee of Carson City convened on May 12, 2026, at 9:30 AM. Chair Shudy called the meeting to order with a quorum present (Chair Shudy, Vice Chair Lambin, Member Duke, Member Scalia, and Member Stack). The meeting addressed progress on prior audit findings, the fiscal year 2026 audit work program, and a discussion on proposed internal audit topics for fiscal year 2027. No public comments were received.

Consent Calendar

• None. Routine approvals were handled as action items.

Public Comments & Testimony

• No members of the public provided comment. The public was invited but none were present.

Discussion Items

• Audit Findings Tracking Report – Recommendations for Closure: CFO Sherry Russell Benaboo presented three items from the audit findings tracking report:
  • Payroll Processing Assessment (Item 1): A policy was finalized and entered into PolicyTech, establishing detailed payroll procedures, staff roles, timelines, and timesheet submission rules. The completion was recommended for closure.
  • Purchasing and Contracts Management Review: Completed early (original deadline June 30, 2026). The purchasing policy was updated, and training sessions were held—25 participants on March 17 and 13 participants on March 24. A Teams group was created for better communication. Closure recommended.
  • Asset Management Review: CFO Russell Benaboo requested an extension to the May 21 meeting because she had intended to bring deleted capital assets for 2025 along with the CIP plan for synergy, but forgot due to budget workload. She will present the deletions at the May 21 budget meeting. No action required on the deletion itself; it is a policy notification.
• Fiscal Year 2026 Audit Work Program Update and Fraud, Waste, and Abuse Hotline Activity: Audit Manager Audrey Donovan reported zero hotline reports received. The internal audit plan is nearly complete: the risk assessment update and public guardian engagement are in progress and will be read out at the next meeting. About $20,000 remains to be invoiced, which will bring spending to the budgeted amount.
• Proposed Internal Audit Services for Fiscal Year 2027 – Risk Assessment Discussion: Kathy Villemar and Audrey Donovan presented six potential audit topics based on a risk assessment update: cybersecurity penetration testing, benefits compliance, fire department overtime, franchise fee review, building department review, and human and health services (HHS) billing process review. Committee members discussed priorities:
  • Chair Shudy supported cybersecurity and fire department overtime as top priorities, and suggested deferring the building department review to next year due to its newness.
  • Member Duke noted the cybersecurity threat landscape (attacks up almost tenfold) and the importance of HHS billing given recent headlines.
  • CFO Russell Benaboo provided background: fire department overtime audit last done in 2019, and code categories were implemented but need verification; cybersecurity penetration testing was last performed nearly sixty years ago (per transcript); benefits compliance testing was done six to seven years ago; franchise fees and HHS billing have never been internally audited; HHS billing was recently brought back in-house.
  • The committee agreed to prioritize cybersecurity penetration testing, fire department overtime assessment, and franchise fee review for FY27. HHS billing and building department review were deemed more appropriate for FY28 due to timing and current transition. The annual internal audit budget is $110,000, and each engagement is estimated at $25,000–$35,000 (average $30,000), which limits the number to roughly three.
• Consideration of Next Meeting Date: The previously scheduled June 9 meeting conflicted with Chair Shudy’s travel. The committee tentatively agreed to June 16, pending confirmation from all members.

Key Outcomes

• Motion to Close Audit Findings: A motion was made and seconded to recommend to the Board of Supervisors closure of the payroll processing and purchasing/contracts management items based on the corrections noted. The motion passed unanimously (all five members voting aye). The asset management review item was granted an extension to the May 21 budget meeting.
• Direction for FY27 Audit Plan: The committee directed staff to bring a finalized audit plan and risk assessment to the next meeting (tentatively June 16) that includes cybersecurity penetration testing, fire department overtime assessment, and franchise fee review as the top three priorities. HHS billing and building department review will be considered for FY28.
• Next Meeting Date: Tentatively set for June 16, 2026, subject to committee availability.