The Finance and Audit Committee met to approve prior meeting minutes, consider recommendations to the full board regarding external auditor engagement, approve revisions to two financial policies, receive the internal audit report, and review financial performance metrics including cash reserves, investment compliance, and operating results. All actions were approved unanimously.
External Auditor Engagement (Forbus): Staff recommended engaging Forbus as the external auditor for the third consecutive year. The engagement is on an annual basis (not a three-year agreement) to allow flexibility. Forbus will perform the external audit, evaluate the PFC program, internal controls, and compliance, producing three to four opinions in two separate reports. A committee member expressed strong support for Forbus's past service. The motion to recommend Forbus to the full board passed unanimously.
Investment Policy Amendments: Staff presented minor wording changes and one substantive change: the authority discovered that a credit union account previously considered a pass-through account is actually a balance-holding account. To accommodate payroll automation, the authority will maintain approximately $100,000 in that account. The policy now includes a credit union leverage ratio disclosure (in place of tier one capital ratio) for monitoring credit union health. A tier one capital ratio for the Bank of New York was also added. The motion to approve modifications passed unanimously.
Debt Issuance Policy Amendment: The policy was revised to reduce the maximum useful life for debt-funded assets from 25 years to 20 years. This aligns the policy with actual practice for assets like boarding bridges, moving walkways, and baggage systems, which have 20-year lives. The motion passed unanimously.
Internal Audit Report (Maria): The internal auditor reported a single finding related to inventory tracking of disinfectant spray, noting the exceptional care taken by the storeroom manager. Overall audit results were clean. Additionally, ten IAA employees earned Six Sigma certification through a local woman-owned firm, including staff from procurement, audit, customer service, and concessions. The committee commended the detailed attention to operations.
Financial Performance Review: The director of finance reviewed key metrics:
Future Agenda Items: The committee discussed:
On the motion, all in favor say aye. Aye. Motion, the minutes have been approved. Um to the full board to um potentially utilize Forbus. Is anybody here from Forbus? No, I didn't ask Rick or anybody to come. This is the third year of the uh fee arrangement with Forbes, and um, so it was already a negotiated uh rate, stakehold, and the recommendation from staff to the finance and audit committee is to again engage Forbis. We don't enter into a three-year agreement so that each year we can bring forward if there was a desire to change. It would be late at this point to try to make that change. Um, and I see no reason to introduce that type of uh consideration at this point. As our as our external auditor to perform the external audit and then to evaluate the PFC program, our internal controls, and then correct compliance. There's three four opinions that they ultimately do at two separate uh complete reports. So motion to recommend for of us to meet that the second time, Brian. Under the category of discussion, I just want to say I'm a big fan of uh rec and forvus and the service they provided us over the years. So all in favor of the motion, say aye. Same sign or opposed motions adopted. Next is our investment policy, Robert. Yes, we have minor changes that uh, and there's only two policies that we'll be discussing today. This being the first, and what we have identified is just really focusing in the language on uh our objective. So you'll see that there's very few changes there. That's really wording. Um the substantive change is that uh in the last year we have determined that the authority has not only a it's not a pass-through administrative account with the uh first federal credit union, it's where the employees HSA balances are, but and it was described always as a pass-through account. We upgraded our payroll system, made automation happen that caused there to be a lot of discussion with the credit union, only to find out that it is a balance holding account. So that then was something we had to look. It had uh a balance in it that I didn't expect it to have, very small, but we have now incorporated having the appropriate review of uh having a balance account with a credit union, and what that is is that we're looking at the call report and the health of the credit union. So again, we don't anticipate having uh large balances there, but to take advantage of this automation and to make things more efficient, we are going to uh have and carry uh about a hundred thousand dollars in that account, and that way the automation from payroll barrels done, the input goes to the credit union and it's dispersed to the employees. We don't have wires and all the transfer of money happening with each payroll. It will create a fish. So, Robert, I think I can speak for the most of the committee in the same. We don't spend our day jobs looking at investment policies. Is there anything in here that you wouldn't just other than what you've just mentioned? Anything you think we ought to focus on? No, we actually take this policy really seriously. We'd also discuss it with fifth third. Fifth third is our investment uh manager broker. Um they handle, you know, when we do trades, uh federal positions and that. Um this aligns with state law, that is where I'd say 98% of what's here comes from, and there would be nothing else that uh would be something we feel needs to be addressed. You don't mind. So one of the language we inserted here in page seven, we included now this language for the credit union leverage report uh percentage, which if if we if you look at page 94, normally for compliance, we can see we tell you which which from our or or by or or bank or banks, it's under the tier one capital ratio, so so you can see are they are they above our target? Well, now a credit union doesn't have a tier one capital ratio. So they have this complex credit union lever ratio. So that's why we are adding this account, even though in June it only had 1300, but still we feel like okay, we need to put it in the policy, and we need to be disclosing this this ratio as well to you on on every time that we meet. It's a very small, it's a very small change. We also added the tier one capital ratio from the bank of New York as well. A motion to approve modifications to the investment policy. Second motion by second by Jeff to approve any discussion. All in favor of the motion, say aye. Aye. Anyone opposed, same sign. Motions adopted.