Okay.

We're going to call the meeting to order of the audit advisory committee at 702 on August 24th.

And as we have in the past, we're going to go around the room and say your name and your who you represent for our recording.

So I'm Dina Infield and I'm the chair of the audit advisory committee.

I'm a citizen member.

Rainey Pogue, citizen member.

Amanda Strange, Director of Internal Audit.

Katie Flores, Forvis Mazars.

And I'm David Coleman with Forbes Mazars as well.

Neil Martin, board representative.

Christina Git Savas, Board of Directors.

Levon Morton, citizen member.

Okay.

Thanks everybody for being here.

We're here to discuss the Parrot Island Agreed Upon Procedures Report.

And everyone should have the updated draft of that.

Couple of things I'd like to just say before we get into the update.

So we're going to go through the updated draft.

So wanted to make everyone aware of that.

And then before we kind of start going over the agreed upon procedures, I wanted to just clarify a couple of things related to just from an educational standpoint as CPA, the what an agreed upon procedures is versus an audit.

Since we have Forvus Mazars here and our auditors and the persons that are doing this report, I thought it was good to just get on record and kind of clarify the difference in those.

So I'm happy to kind of talk about that a little bit.

David, do you want to say anything on that?

Yeah, uh absolutely.

So the difference between an audit and an agreed upon procedures is an audit, we are defined by what the standards tell us to do.

So, you know, auditing standards, GAP, which is GASBY or FASBY.

So what we do is we apply a materiality threshold to an audit and we audit in accordance with those standards.

So I think when we were discussing this initially, um it was your opinion that an agreed upon procedure would be better off because you have more flexibility in what you want a firm to do.

So how an agreed upon procedure works is you write procedures or someone from management in this case Amanda took the first stab at directing writing the procedures.

I think we discussed them uh with the audit committee as well, got your input on them, and then we list we we have a defined in this case it was three or four pages worth of procedures.

The good thing about an agreed upon procedures in something like this is you can define your scope.

So, you know, if we were to do an audit, the scope might have been $30,000 just based upon materiality thresholds or or something like that.

With an agreed upon group procedure, you can define what your scope is and what you exactly what you want us to go do.

So that's what we did.

Um that's the primary differences.

We're not issuing an audit opinion to whether or not an entity's financial statements are in accordance with GAAP.

So that's how we do an audit.

So we I was gonna say just so it's fair to say that you're performing audit procedures.

But you're performing an audit procedures on a subset of what might be a complete set of financial statements.

That's right.

Is that a fairly fair way to say it?

That is correct.

There that we are we the way that the procedures that the procedures were written where they could have been audit procedures, okay.

So but but there's certain things that you probably didn't want to pay us to do with with with Parrot Island.

So you you had kind of in your mind what you wanted us to do as an audit firm as auditors, and then you tell us to go do it.

So yes the procedures that we were that we applied to these to the financial statements oh go ahead can can we feel comfortable that the results that we see here are indicative of their operating proceed like if we see a problem here we can we can say uh Parrot Island has a problem in this particular area that they need to resolve or we need to get some extra clarification on.

Yeah so if if so for instance we we can talk about them in a minute but you hired us to go and do this and we had findings on that so those findings you can take those findings and interpret them how you want and go and and do follow-up okay action on that.

Okay.

But the the the main deal is is when we do an audit we issue an audit opinion of whether or not the financial statements are materially correct in accordance with GAAP generally accepted accounting principles.

Well and and I just want to add examples of the kinds of things we might ask for would be for them to change procedures to avoid maybe some of these differences in in the month between one set of their records and another set of their records or to provide more information in their monthly reports.

So just enhance what we get or improve their procedures.

Those could be two possible outcomes of this kind of an audit when when you take into account the fact that there's no indication here that there was any improper financial activities to try to not use the word um and or or in you didn't audit for this you never do missing funds that are just obvious the there's no evidence that but again you you don't do audits to find those things but right and and and the way that the procedures were designed I think they were designed to to pop for for the report to pop out things that that you all might be interested in.

Okay.

There's some things that we do on an audit that you don't really care about.

And and the way that they agreed upon procedures were what we what was we tried to accomplish with Amanda is to really look at the things that the committee and the board cared about does that make sense kind of and I would also add to that some of you know when David talks about scopes and materiality some of these procedures were directly written to find a one dollar difference because those things were so important to the board and their understanding of these financial statements whereas if it was an audit of a financial statements there would be that low level of materiality that would not have been covered down to the exact dollar amount.

So that was one major benefit that was there for the agreed upon procedures that were not there for an audit of the financial statements.

Right.

So I think what what you all were or what um what Amanda what we were thinking is you could really hone down the procedures and write them in a manner that you got the information that you really wanted instead of things that you did not really want that you might get from a financial statement audit.

But as LeBon stated a lot of the we're auditors right that we we we don't we we think like auditors so the procedures are written I mean in a way that an auditor would write them so there's some you know like we did a cer I think a search for unrecorded liabilities that that's stuff we do during an audit procedure.

Now if if a if a check was was paid late or something like that that's might not we might not care as much about that during an audit but we did when we were doing an agreed upon procedure because you ask us to report on it.