All right.

It's ten o'clock.

I guess we'll get ready to start.

Agenda item number one, call to order and roll call.

The January twelfth, two thousand and twenty six audit oversight committee meeting is called to order.

Will the city clerk call the role, please?

Chair Price.

Present.

Member Kircher.

Present.

Member Bruni.

Present.

Member Booker.

Present.

Member Kelly.

Present.

Thank you, Chair.

You have a quorum.

Thank you.

Moving on to agenda item number two, an announcement regarding compliance with open meeting law.

To the city clerk, has the meeting been noticed and posted in compliance with the open meeting law?

Yes, Chair has.

Agenda item number four.

For possible action to approve the final minutes by reference of the regular meeting of October 6, 2025.

Is there a motion for approval?

I move to approve.

There is a motion.

All in favor?

Aye.

Aye.

Any opposed?

Please post.

And the motion carries.

Moving on to agenda item number five.

Discussion for possible action regarding the election of chair and vice chair officers to the audit oversight committee for calendar year 2026.

Do I have a motion to elect someone as chair?

I'd like to make a motion to uh nominee.

Do we nominate or nominate Eric Price as chair?

Well, thank you.

I'll second that nomination.

All right.

So uh I guess do I accept?

I guess I say yes.

There's a motion to elect the member as chair.

All in favor?

Aye.

Aye.

Aye.

Any opposed?

Well, please post.

And the motion will carry.

Do I have a motion to elect someone as vice chair?

I would like to make a motion to nominate uh Merilyn Booker as vice chair if she is interested.

Are there any other motions?

Second that.

All right.

There's a motion to elect the member as vice chair.

All in favor?

Aye.

Aye.

Thank you.

Please post.

And the motion will carry.

We'll move on to agenda item number six.

Agenda item number six.

Discussion for possible action regarding audit of Las Vegas municipal court.

Witness fee funds.

James Burnett, senior internal auditor, will be discussing this audit.

Please go ahead, Mr.

Burnett.

Thank you.

Good morning.

My name is James Burnett, Senior Internal Auditor, and I'm here to discuss our audit of the Witness Fee Fund, which is a 4900 petty cash fund issued by the finance department and managed by the municipal court on behalf of the city attorney's office.

Now I understand that petty cash may seem minor, but it is one of the most vulnerable areas for theft or loss if proper internal controls are not in place.

In conducting this audit, we evaluated the adequacy of the internal controls surrounding the safeguarding and use of this fund.

Let's look at a real world example of petty cash fraud.

In 2015, a Nevada DMV employee in Las Vegas skimmed $11,000 from petty cash fund from petty cash by manipulating logs and an audit ultimately exposed the theft, resulting in termination and restitution.

Witnesses who appear before the municipal court are entitled to be paid a fee of $25 plus mileage for for travel to the courthouse based on their residential zip code.

To ensure that payments are only dispersed to those entitled to the payment, the court requires that a witness present their subpoena signed by a deputy city attorney to a municipal court cashier.

Upon presentation of the signed subpoena, the cashier verifies the information is correct and validates the identity of the witness against government issued ID and a listing of witnesses scheduled to appear.

All payments are made to witnesses.

All payments made to witnesses are recorded in the city's atlas receiving system.

And during your fiscal year ended June 30th, 2025, the municipal court processed 897 payments for a total amount dispersed of $34,070.

Our audit objectives were as follows.

Confirm the existence of the witness fee funds through an unannounced count and determine whether a signed custodian form exists for the funds.

Two, determine whether the witness fee funds are properly secured in accordance with city policy.

Determine whether the municipal court cashiers and accounting unit employees are following established department procedures.

Department and City Cash Handling Procedures for payment of the witness fees.

And determine whether municipal court cashier are properly reconciling the witness fee funds at the end of each day in accordance with department and city policy.

In completing our audit objectives, we completed an unannounced visit to the municipal court and confirmed the existence of the funds in the witness fee fund.

We also reviewed the daily process being followed by the cashiers and the county for the accuracy of the total of the witness fee funds, including cash on hand and replenishments in transit.

Additionally, we determine that the total amount of funds in the witness fee fund exceeds that which is needed in relation to recent activity.

To address this, we recommend that management adjust the procedures procedures for being being procedures being performed by front counter operations to ensure daily reconciliations of the witness fees in total is completed.

Replenishment funds are added to the witness fee funds when received from the armored courier service.

That the correct general ledger is being used for recording payments.

Management should also evaluate alternative methods for storing and tracking witness fee funds to improve efficiency through automation while at the same time maintaining security and accountability.

Activity in the witness fee fund and if possible, a just cash being maintained in the act or to match activity.

We also found that the combination of the save is not being changed in accordance with city policy.

To address these findings, we recommend that management should terminate the count room access to individuals who should not have access and establish procedures for for periodically reviewing the badge access report to ensure that authorized employees have access.

Management should have the safe combination changed and begin tracking who has a safe combination and the dates when the combination was changed.

Finally, we found that municipal cashiers are following established procedures for paying witnesses.

However, municipal court accounting staff are not following certain established department procedures.

To address this finding, we recommend that municipal court management should ensure that accounting unit staff are performing audits and reconciliation of the witness fee funds as outlined in their departmental procedures.

Update and update the department procedures to accurately reflect their roles and responsibilities over the witness fee funds.

Thank you, Mr.

Burnett.

Are there any questions from any of the members?

Anyone seeing none.

Oh, there is.

I actually have one question.

I may have missed this.

Just want to confirm that when uh people are going in and out of the site, there's a log where they sign in that they went into the safe and at what time they went in on the date.

Or no.

James Burnett, senior internal auditor.

They do maintain a log of who accesses the safe.

The issue that we had with the safe was that uh per city policy it has to be changed periodically, and that they had not changed that safe.

Okay, great.

Well, this is a safe combination.

Great, thank you.

I have a motion.

I'll move to accept the report, Kara Kelly.

Aye.

Aye.

Opposed.

Microphone, the motion carries.

Thank you, Mr.

Burnett.

Agenda item number seven.

Discussion for possible action regarding the audit of human resources department, the employee separation process.

Nancy Cardoza, senior internal auditor will be discussing this audit.

Please go ahead, Ms.

Cardoza.

Thank you.

Good morning.

I'm Nancy Cardoza, Senior Internal Auditor, and I will be discussing the audit of human resources separation process.

The City of Las Vegas has approximately 3,700 active employees that fit into one of four categories.

There are our appointment of employees, including executives, classified employees, hourly employees, and elected employees.

During the calendar year of 2024, there were a total of 935 employees who separated from employment with the city.

In this chart, you may view approximately how many employees from each employee category type separated from the city.

As you can see, most employee separations happen with our hourly employees, such as parks and recs instructors, lifeguards, safety staff, and more.

In order to minimize these risks.

Two, determine whether final payments to separating employees are accurate and being made in accordance with Nevada revised state statutes, and that benefits are being terminated appropriately.

Three, determine whether electronic badge and system access are being appropriately terminated upon an employee's separation.

And lastly, determine whether procurement cards assigned to employees are being properly deactivated upon their separation with the city.

These were the key audit results to our objectives.

Firstly, we reviewed employee separation files for compliance for compliance with the city separation policy procedure and identified files with missing and incomplete documentation.

We also noted the need for improvements to the current separation clearance form that is used in the separation process and recommend HR improve the form and its related instructions in order to provide for greater reliability, uniformity, and consistency of the information that is provided to HR by the departments that complete the form.

HR should also consider creating a single separation form that can be used for all classifications of employees.

We also found that final payments to employees are being calculated correctly and that benefits are being terminated appropriately and in a timely manner.

As for the timing of when final payments were made, we noted the following.

HR management should also update the separation policy procedure to emphasize the importance of departments notifying HR in a timely manner about employee separations.

We also verified whether electronic badge access and active directory system access were appropriately and timely terminated.

We found that the innovation and technology department appropriately terminates badge and system access for separating employees.

However, during our audit, we identified that there are non-working hourly employees that typically retain their assigned badge and system access.

So, for example, a safekee employee will work for the school year, but then during the summer they may not work and are thus considered a non-working hourly employee.

Although this employee may indicate their intent to continue work once the summer is over, there is still the possibility that they may choose not to return.

Departments that typically have these types of non-working hourly employees do not communicate with IT about them, as there is currently no policy or procedure to address badge and system access for these types of employees.

As such, these employees continue to have badge access to city buildings and systems until they formally notify their department of their separation and IT is notified.

This creates a potential risk exposure for the city that needs to be evaluated and addressed by IT and HR.

We recommend HR management work with IT to evaluate what measures can be taken to reduce the risk associated with non-working hourly employees, retaining their badge and system access.

This could include having departments evaluate which employees should have their badge or system access temporarily deactivated or deactivating access for all non-working hourly employees.

Lastly, we performed a review of procurement cards and identified three ex-employees whose P cards were still active.

This was due to PCART staff not being notified of employee separations and incomplete documented procedures on the return of PCARTs to finance upon an employee separation.

Although these P cards were active, we did verify that the cards had not been used by the employees since their separation date with the city.

We also notified finance of this finding and the cards were subsequently deactivated.

Additionally, finance is now receiving email alerts for separating employees.

We recommend that HR management should update their separation policy procedure and separation clearance form to include requirements that departments notify finance about separating employees with P cards and that those cards be returned to finance prior to separation.

We also recommend that finance management should update the procurement card policy procedure to include instructions to be followed by employees with P cards and their supervisors when separating from the city.

I'd like to thank HR, finance and IT management and staff for their help and support during our audit.

I'm happy to answer any questions you may have.

Additionally there are HR representatives who can also answer any questions.

Thank you, Ms.

Cardoza.

Are there any questions from the members seeing one?

Thank you.

I don't I don't know if this is best directed to you or to HR.

So I have read read it and read the process.

One of the things that um that I wanted to clarify is when we separate someone we don't physically take their I understand the part about the people who are seasonal but when we separate someone else don't we physically take their badge Nancy Cardo is a senior internal auditor.

It might not always be the case an employee might not show up when their separation date occurs so we may not collect it.

Got it got it and are all separations required to be required to give prior notification to HR.

So uh departments usually Nancy Cardo is a senior internal auditor departments do have to notify HR typically of a separation.

And is that for both appointed and classified employees hi good morning Sue Brown Human Resources director um notification is um of course recommended and preferred but we do not always get notification when an employee separates especially in the case of um hourly employees sometimes they just do a no show no call and after a while they're separated right okay so it's usually that those are usually the times when the paperwork isn't as efficiently filled out moved through the process perhaps when there's an intentional separation I'm assuming so if I'm wrong please correct me that you're right your assumption is correct um most of the time the um separations that are not timely are the hourly employees because their schedules fluctuate sometimes we think that they're coming back but then after a while they don't come back okay all right thank you so much you're welcome I also have a question member Booker um with respect to the termination following up on the previous question if there are uh final payments that are due to terminate employees is there a requirement that they turn in their badge or whatever other property they have of the city prior to getting that final payment that is the process normally but sometimes um as mentioned they are there are administrative separations where they do not come back and in those cases we simply deactivate their badges and we are unable to collect the badge itself I had a brief question on the badges are they mostly for access to city buildings or I'm sure the different badges have different uh authorities connected with them a lot of these hourly employees I'm assuming it mainly it's just access to the building or or there are other accesses which present audit risks greater than than that Nancy Cardozo senior internal auditor um we discussed that this with IT and typically access is going to vary from employee to employee so some may have access to city hall to all floors or some may just have access to a community center it will depend on the employee storage areas or they may also have access to certain storage areas as well and I would assume it's difficult on these hourlies because there's so many and like you said they turn over no call no show you just don't know until you finally find out that they're not coming back and then as long as that's handled in a timely manner it's you know kind of the the best that you can do with limited information so all right thank you very much does anyone else have any more questions seeing none may I have a motion to approve the report Kara Kelly I'll move to approve thank you is there a uh no we don't need a second all in favor aye aye those opposed saying none uh please post and the motion will carry and thank you Ms.

Moving on to agenda item number eight, a report by staff, report by staff regarding current audits and outstanding recommendations.

Brian Smith, City Auditor will give this report.

Please go ahead, Mr.

Smith.

Thank you, Chair Price.

Brian Smith, City Auditor.

Uh, first of all, I'd like to uh wish everybody a happy new year, and also I'd like to personally thank all of you for your participation on this audit oversight committee, especially our citizen members.

I appreciate the sacrifices you make to uh be a part of this committee.

So thank you.

And congratulations on your appointments today.

Um, the city auditor's office, our projects right now.

We're uh we're working on bringing to a close an audit of the oversight of mobile communication devices, and that involves our IT department.

Um we also just initiated an audit in public works of the facilities division.

We're still scoping that project out and uh learning more about the facilities division and everything they do and evaluating where we can provide the most value in our audit.

Um, also we are going to be doing a performance audit as was outlined when I presented our audit plan earlier in the year in the fiscal year in the municipal court.

It's been a long time since we've done any kind of performance audit over in the municipal court, and so we're currently working with management on that and once again scoping out where we can provide some value.

And so those are our audit projects.

Um, and of course, along with our audit projects, we're involved with the follow-up of our previously issued audit recommendations.

And in our last meeting, there was a request that we bring to the committee every meeting a status update on all outstanding recommendations.

And typically in the past, we've had departments come every other meeting, and we've done a review of all incomplete recommendations.

So I haven't asked the departments to to be here today, but just wanted to give you an update of where things stand.

Um so uh as you can see on this slide, um, out of the six outstanding recommendations, three are not due, as the estimated completion date provided to us by management has not yet passed.

And as for the other three, community development is currently working with IT in addressing the recommendations, but they've experienced some delays.

They're trying to automate some processes, and um are experiencing some delays in in doing so as they work with IT to do that.

Ummunity development has been great in keeping in touch with us, keeping us apprised of their progress in addressing the recommendations.

And just as a reminder, these dates that you see here on the slide, those are dates that they were estimated dates that were provided to us by management as to when they expected that they would be able to uh address the recommendation.

Um so that concludes my report on our current projects.

Brian, um do you is there any time where the uh outstanding outstanding items that need to be addressed?

Have you had experience where they're not being addressed in a in a what you would describe as timely?

Yes, Brian Smith, City Auditor.

We have experienced that with certain departments, and that's one of the values that the audit committee provides to our office.

And so that seems to be very helpful in pushing departments to address these recommendations in a timely manner.

We haven't had that recently, but we certainly have had that in the past.

And sometimes it's not the fault of the department, sometimes it's uh the IT issues.

Um sometimes the recommendation, um there are just things that can't be anticipated sometimes that will show up.

And do you find and if I may, thank you, Mr.

Chairman.

Do you find that in those instances?

Um you work in partnership with the department to explore alternative solutions.

Brian Smith City Auditor, yes.

Definitely.

Sometimes when we issue a recommendation, we don't necessarily know how the department's going to address all the details of how they're gonna address it, and when they get into addressing the recommendation, things may change.

They may have a different an alternative approach that'll still address the the recommendation that'll um address the the control uh internal control weakness.

So to reiterate what I I hear you saying is there's opportunities for the the departments in their leadership to inform you that an alternative method may be more realistic or make more sense based on their intimate knowledge of of how that works in their department.

Right, Brian Smith City Auditor, yes indeed.

We in fact after we issue these reports, we're working hand in hand with these departments, keeping in touch with them.

Sometimes they need us to explain better what our expectations are.

Sometimes we can't capture those expectations in the way we word that recommendation.

We try and explain that with exit conferences before a report is issued, but uh it's really a collaborative effort.

And uh, you know, we for example with policies and procedures.

We'll have departments give us draft policies and procedures, we'll review through them, give them input, and um and we encourage that.

And so we appreciate it it really is a team effort to address these audit recommendations.

And in the event, in what sounds like an unlikely event, but in the event there is not agreement between a finding or recommendation and the uh department's perspective.

How is that remedied?

That's a good question because we have encountered that periodically, but typically before a report is released, we like to come to some kind of consensus.

It's very rare that we issue a report with a recommendation where there's a true disagreement in that recommendation.

We have had that, very rare, um, where we as the auditors have had to say, you know, we believe this is what needs to happen, and the department may say, you know, we don't agree with that.

And in their response, of course, in every audit report, management has their opportunity to explain whether they support or not support our recommendations.

But uh my whole career with the city, I think we've had to agree to disagree maybe once or twice.

Um we try and work that out before the report is released.

All right, thank you very much.

Seeing no further questions, uh this item is report only, and no motion is required.

So we will move on to item number nine.

Agenda item number nine.

Report by staff regarding current staffing.

Brian Smith, City Auditor, will give this report.

Please go ahead, Mr.

Smith.

Thank you, Chair Price.

Brian Smith City Auditor.

Over the past few months, we've lost a couple staff from our office.

Uh Joe Thromeberry took a there was a great job opportunity that was presented to him, and he left.

And I want to acknowledge Joe's contributions to our office.

He actually sat on the audit oversight committee for over six years, and then he came on board within our office for a few years.

And he was with his uh fraud investigation background, he was very instrumental in helping us implement the fraud hotline.

And so I uh I thank Joe for his efforts and uh uh his help over the years.

Also, we lost Bonnie Mosick after 29 years at the city when I was just a young whippersnapper coming into the city auditor's office.

She was the first person I encountered and has been a great has contributed so much to her office, and it's it's certainly a loss, but we're so happy that uh she has finally made the decision to retire and wish her the best in her retirement.

So as you can see, our org chart here, we're down to a small group.

We've got four people right now, and uh my previous position as internal audit section manager is currently frozen due to budget issues, and then uh we I have received authorization from the city's position justification committee to underfill the two vacant positions, and by doing so, we can meet the requested decrements that are going to be required of the departments this year.

And so my intent is to open up a recruitment for an internal auditor two to fill Joe's position, and then uh a management analyst one for Bonnie's position.

And uh that concludes my report.

Thank you, Mr.

Smith.

Are there any questions from the members?

Thank you.

Kara Kelly for the record.

I'm sure by the next meeting I won't have nearly this is the new girl.

These are the new girl questions.

Brian, will you explain your status as acting city auditor?

I don't think I understand that.

No, I messed up there.

Oh, I always saw that too.

It's like, what?

I didn't even notice that.

All right.

Never mind then.

Thank you.

Thank you for pointing that out.

I just uh at least I better I better check and make sure that's a fish.

Yeah.

Um just a follow-up.

Uh it is a small department, and you have had uh, like you said, approval to underfill some of the positions.

Um, as we saw in the previous audit reports with petty cash and with human resources and with everything that internal audit does, it's it's such a critical position and department within the organization to prevent loss, to prevent problems before they happen, to fix procedures before something goes wrong, to catch something that's not happening, fix it so that it doesn't develop bigger.

We mentioned in petty cash, it seems like a small amount, but small thefts lead to bigger thefts if they're not controlled.

If you look in the public service safety department, they're always looking to fix, you know, get rid of graffiti before it turns into blight.

Everything is to prevent and with the small size of the staff, and I've always been just amazed with you know, a billion dollar budget, you know, nearly 4,000 employees, how such a small staff can do such a comprehensive job of keeping the city out of trouble through proper controls.

So you're you're underfilling these positions, and that's and that's great, you're gonna get some back.

Your position, your former position is still frozen.

Is it I know the city is having some challenges with their budgets and things have to be tightened up, but when looking at the which departments and which resources need to be made available, we with with underfilling some of these positions and not having a sizable enough internal audit staff, what other risks are is the city um subjecting itself to is the staffing comparable from what you've seen to other municipalities.

Do you have any benchmarking to show you know the size of the city and and the size of your staff versus other comparable uh municipalities because sometimes when something happens and you look back and you're like, well, we didn't have enough officers, we didn't have enough fire uh uh uh uh uh uh people.

So, you know, it's one of those things like we want to make sure that the audit department is adequately staffed to address the city's needs and and and are we doing that.

Brian Smith City Auditor.

Um, of course, we we would always like to have additional auditors.

Uh we I believe in the importance of auditors and the role that we play.

Um I think by filling these positions, that will be certainly be a step in the right direction.

So far as benchmarks to other agencies, North Las Vegas has no internal audit department or audit department.

Um Henderson, they have let's see.

I think that they're at six or seven right now.

And uh so that's pretty good size, I think, for for Henderson.

Of course, the county has a very large uh internal audit shop.

Um I'm not sure what they're up to now, but I think they're up to maybe 14 or 15 auditors, of course.

The county is a lot more complex of an organization.

Yeah, I just know from in background in the casino business, you know, you have a st you have a station casino is approximately has about the same revenue as the city of Las Vegas.

I know they do different audits over there with gaming and everything, but uh you know they got like 15 people over there.

Right.

And so um you guys do an amazing job with the staff that you have, always have since since I've been on the committee.

And so uh just as a committee, you know, want to ensure that the resources are there so that uh you know the job can get done properly.

Uh you guys just do a lot with what you have, and you continue to do so, but you know, you can burn out if you don't have enough people to get it done.

So I just I just wanted to see what the benchmarks were.

Thank you.

Well, uh, Chair Price, Brian Smith City Auditor.

It just shows how important it is, you know, we as city auditors office, we need we need to work with the city management team and managers and supervisors in making sure that internal controls are being followed.

You know, we can't do it all by ourselves.

We can't we can't uh we can only get to so many departments in a year and look at their controls.

So it's so important that the city manager's team that they're continually focused on this and making sure that policies and procedures are updated, that employees are being trained, that there's the proper oversight of transactions.

And I do know Susan Helstley is here, our chief financial officer.

And you know, she understands the importance of audit and also the role of finance and in her role as CFO to make sure this is happening.

And uh, we have a great relationship.

I've had the chance to work with Susan on updating policies and procedures, and uh so it it definitely is a team effort.

And yeah, we as city auditor's office cannot, we can't do it all.

But we do need the buy in from upper management on the need to be uh reviewing internal controls and making sure they're they're in place.

Thank you.

And I think that's why it does work so well, because everybody works so well together.

It's a difficult situation, but everybody does work so well together, and it makes it makes it easier.

So thank you.

Uh, if there are any additional questions before this item is report only, and no motion is required.

We will now move on to item number ten.

Agenda item number ten.

There will be a closed session.

A closed meeting is called in accordance with NRS two forty-one oh one five four C to receive information from the city auditor about an existing litigation.

The audit oversight committee is now in recess for the closed session.

And that's what we'll do.

We're back.

To agenda item number twelve is citizen participation.

Public comment during this portion of the agenda must be limited to matters within the jurisdiction of the committee.

No subject may be acted upon by the committee unless that subject is on the agenda and is scheduled for action.

If you wish to be heard, come forward and give your name for the record.

The amount of discussion on any single subject, as well as the amount of time any single speaker is allowed, may be limited.

Agenda item eleven.

Comments made during this portion of the agenda by individual members shall refer solely to the proposals for future agenda items, and any discussion shall be limited to whether or not such proposed items are within the purview of the committee, and or whether such proposed items shall be placed on a future agenda.

If we weren't to go into session, private session again, to have an opportunity for public comment before we go into private session, and then an opportunity for public comment afterward.

Yes, I believe that uh we could do that.

I think for this particular committee that we because if you have people who uh citizens who take their time to come, I would hate to have them have to wait through private briefing like they just did for us to come back, particularly since we can't act on it anyway.

And then even if we have to have it at the end right before, then that's fine, then we'll do another one.

Um but I that's my recommendation.

Thank you.

Does anyone else have any suggestions or recommendations at the time?

Seeing none at this moment, we'll move on to item number 12.

Again, item number 12 is citizen participation.

Public comment during this portion of the agenda must be limited to matters within the jurisdiction of the committee.

No subject may be acted upon by the committee unless that subject is on the agenda and is scheduled for action.

If you wish to be heard, come forward and give your name for the record.

The amount of discussion on any single subject as well as the amount of time any single speaker is allowed may be limited.

Is there anyone wishing to be heard at this time?

Seeing none, I'll close the citizens' participation and move on to item number 13.

Agenda item number 13, adjournment.

The next audit oversight committee meeting is scheduled for Monday, April 20th, 2026.

And with that, this meeting is adjourned.

Thank you.

Welcome, Mr.

Chairman.