Good morning.

Uh it's ten o'clock, so I guess we should get started.

I will uh click the gavel here.

Today is uh Monday, April twentieth, two thousand twenty-six.

It's ten AM, and this is the audit oversight committee meeting.

Agenda item number one call to order and roll call.

The April twentieth, twenty twenty-six audit oversight committee meeting is called to order.

Will the city clerk call the roll, please?

Chair Price.

Uh present.

Vice Chair Booker.

Present.

Member Kircher.

Present.

Member Brunei.

Excused.

Member Kelly.

Excused.

Thank you, Chair.

You have a quorum.

Thank you.

Agenda item number two, announcement regarding compliance with open meeting law.

City Clerk, has the meeting been noticed and posted in compliance with the open meeting law?

Yes, Chair, it has.

Thank you.

Moving on to agenda item number three, public comment.

Agenda item number three is public comment.

Comment during this portion of the agenda must be limited to matters on the agenda for action.

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

The amount of discussion as well as the amount of time any single speaker is allowed, maybe limited.

Is there anyone wishing to be heard at this time?

For possible action to reprove the final minutes by reference of the regular meeting of January twelfth, two thousand and twenty-six.

Brian Smith, City Auditor.

And we currently have one frozen position.

My previous position as internal audit section manager, and we have two vacant positions.

We've received authorization to underfill the two vacant positions, and we're moving forward with the recruitment on that at this time.

And that concludes my report.

Thank you.

Are there any questions from the members?

Seeing none, this item is a report only, and no motion is required.

We will now move on to item number six.

Agenda item number six, report by staff regarding current audits.

Brian Smith, City Auditor will give this report.

Please go ahead, Mr.

Smith.

Right.

Brian Smith, City Auditor.

We currently have three audits in process, including an audit of our information and technology and innovation and technology department and the management of mobile devices.

We also are looking at the public works facilities division, where we're looking at the management of our management and controls over tools, equipment, and supplies.

And the other audit that's in process is an audit of the municipal court, their management of bus passes, which are distributed to individuals involved in court programs.

And that concludes my report.

Thank you.

Are there any questions from the members?

No questions at this time.

This item is a report only, and no motion is required.

We will now move on to item number seven.

Agenda item number seven.

Reports by staff and discussion for possible action regarding an update on issued audit recommendations.

Brian Smith, City Auditor, will give this report.

Please go ahead, Mr.

Smith.

Thank you, Chair Price.

Brian Smith, City Auditor.

As you're aware, prior to the finalization of every audit report that we issue, city management provides us with a management action plan and an estimated date of completion for each audit recommendation.

These management responses are placed at the back of every audit report.

Upon release of an audit report, an audit recommendation is classified as not due.

Once an audit recommendations estimated date of completion that was provided to us by management passes, and the recommendation has not yet been verified by an auditor as having been addressed, the classification of the recommendation is changed to incomplete.

When a department alerts our office that they believe they have fully addressed an audit recommendation and are ready for us to review their work, the recommendation is identified as verification in process.

And once an audit recommendation has been verified by an auditor as having been addressed, the recommendation classification is then changed to complete.

Looking back over the past uh the past three fiscal years, our office has issued 60 audit recommendations.

As you can see from this table, city departments have already successfully completed 47 of these 60 recommendations.

We applaud the efforts of the city departments in addressing these recommendations and improving their operations.

I would now like to review through the outstanding audit recommendations with you, and the upcoming slides present paraphrased versions of the outstanding recommendations.

For your reference, the full recommendations can be found in your binders behind a tab divider.

So I'd like to start with uh FIRE and Rescue.

FIRE has completed five of six recommendations and has one recommendation that is not yet due.

By addressing our audit recommendations, FIRE has updated their controlled substance management policy, improved internal controls over the purchasing and receipt of controlled substances, and strengthened monitoring and reporting procedures over controlled substances.

The remaining recommendation asking the department to evaluate the feasibility of purchasing an automated controlled substance management system is not yet due.

So considering this is still in the not due classification, um I did not request that fire be in attendance today, but uh they have been consistently in touch with me, letting me know their efforts to address their recommendations.

And so we'll move on to the next department.

The next department I'd like to discuss is community development.

In our audit of their business licensing compliance section, we provided 10 recommendations.

They've completed eight recommendations and have two that are incomplete.

With the completed recommendations, business licensing improved their internal performance metrics, begin sharing some of their performance metrics online, uh, improve their coordination with fire prevention staff in completing their four-plex inspections and improve their process for controlling and reviewing system access permissions.

I'd now like to invite a representative from the department to give you an update on their efforts to address the remaining two recommendations.

Thank you, Mr.

Smith.

Uh a representative from community development is present and would like to provide an update to the department's efforts to address these remaining recommendations.

Hello.

Good morning, Darcy Adalby Heard, Business Licensing Manager.

How are you?

Well, thank you.

All right.

So these two uh final recommendations, they are in process.

Um we did develop a um a plan on how to look at our collections.

So so the um the two recommendations are documenting our compliance fines and uh fees in the collection process and addressing um uh improved procedures to turn determine when the fines should be assessed and go to collections.

So um our system is in the process of being worked on.

We've been working with IT.

We have the uh process improvement plan laid out.

It's um uh looking like in the end of May, we should be able to start testing that.

So right now we're just waiting for development, then we can start testing, and hopefully, we can get that rolled out before uh the end of the year.

Wonderful, thank you.

Uh yeah, if there's any questions from the members.

I have a question.

Thank you for the update.

I'm just wondering, I guess maybe the process between the audit department and then the department being audited.

So I don't know whether it just it's taken, I don't know whether there is kind of um collaboration to sort of figure out when is a reasonable based on the information at the time, a reasonable time to impose kind of a deadline for getting the recommendations done.

And if you know it just it's taken longer to upload and test the system, or if we didn't know it was going to take that long to begin with.

So I was just kind of wondering about the process if that makes sense.

Let me just mention one thing.

Uh Brian Smith City Auditor.

So as we're doing these audits and asking the department for their responses and an estimate data completion, their dates, they truly are estimates because sometimes as they get into the weeds of how to address these recommendations, they're unplanned for uh situations.

And so it is just an estimate, and it's kind of a a deadline for them to work towards.

Um, but and and as we're working with departments, we we typically ask them to be conservative in their estimates because based on past experiment experience with departments, there are a lot of departments that want to say, hey, we're gonna get that done right away.

So we're gonna you know make it two months from now.

But uh Darcy has been great to work with, she's keeping us continually informed of uh their progress, and you know, it's just we ask for an estimate, and uh yeah, sometimes it like they're working through IT issues, so those are things that are unplanned for um I'm just gonna echo exactly what he said.

Uh the process has been really good also working with audit in that they give us the recommendations.

Um we look at what we think we can actually accomplish, and we do give like a deadline where we think we can get it done, and then at the times when we find, oh, wait, there's a little bit more, we'll let them know.

But that kind of works.

Thank you.

I would imagine most of these recommendations usually involve IT, they involve sometimes budgets and constraints on budgets, and when you put all those factors together, it's kind of a moving target, and it's hard to hit that on the nail on the head.

You know, and as long as we're moving forward and recommendations aren't outstanding for extensive periods of time and we're aware of it and tracking it.

Um, you know, we appreciate your efforts given the complexity of everything that it entails.

It's not just one department, it's a whole host of departments having to work together and time together.

So thank you.

Does anyone have any questions?

Any more questions?

Okay.

Seeing none, I guess we will proceed to the next department.

Thank you so much.

All right, uh, proceeding to the next department.

Go ahead, please, Mr.

Smith.

All right, Brian Smith, City Auditor.

The next department I'd like to discuss is the municipal court.

In our audit of the court's witness fee fund process, we provided six recommendations.

One of those recommendations has been completed.

And by addressing this particular recommendation, the court has improved the security over the uh safe that is that is being used for the witness fee funds.

A representative uh from the municipal municipal court is in attendance, and uh to give you an update on their efforts to address the remaining uh five recommendations.

Thank you, Mr.

Smith.

A representative from the municipal court will present uh an update to the department's efforts to address these remaining recommendations.

Thank you, and if you would please introduce yourself, good morning, Hans Jessup, court administrator.

All right, uh so a couple of things is as Mr.

Smith indicated.

We have uh completed a couple of things, and we're working on completing most of the other things, in fact, all the other things that we have.

Some of the the difficulty we have, as you mentioned, uh chair uh previously, uh getting IT involved, uh shifting some of uh staff and priorities, and then going through the process of updating policies and procedures, um, take a little bit of time.

Uh I wish it wouldn't take as much time, and we could just uh enact things, but I think the process is important to make sure that we do things the right way as well.

So, as it relates to um I'm I'm looking at the points here.

Would you like me to address each point one by one there?

Or I mean, if you'd like to take some information.

If you have some information and like to just give us a brief update on them, that would be great.

Thank you.

Yeah, so uh as far as a couple different things.

Number one, uh, just to give you some perspective, our municipal court has increased filings by almost a hundred percent in the last two years.

So one of the audit findings before was we had too much cash on hand for witness fee funds.

While we agree still that that is an assessment, what we are looking at is okay, this increased caseload is also increased the amount of witness fee funds that we have done.

So we're looking at that a little bit closer and saying, do we need to reduce as much as we were initially planning on doing it because of of the increased caseload?

Um so we're looking into that aspect.

Uh one of the things that we also had was access to our cash room uh and inappropriate access by members who didn't need to have uh access to that cash room.

Really, all court employees uh for the most part had access to that.

So we've gone through the process of eliminating court employees and and doing that to just supervisors.

However, there's additional people that are also on there.

For instance, every member of DPS is allowed access to that room, partly for safety processes and procedures, but we're looking into whether that's appropriate giving this situation that we have municipal court marshals at the courthouse that would be responsible for providing the safety and security.

And so working with DPS and identifying those types of changes and making sure that that works is important as well.

So those are some of the things that we're working for and working through.

Um, but we hope to have this resolved within the next couple of months and uh have everything satisfied.

Great, thank you.

I would imagine a hundred percent increase in the number of cases would be hard to uh forecast and budget for and to plan for.

Um, and if that increase continues year over year, it's it's very significant.

So I can imagine it would be difficult.

Thank you.

Um does any anyone have any questions?

Hi, uh question for you on this.

Given that you have five recommendations that you're still working on.

Are there any concerns about significant loss during the time frame you're working through?

No, we're we're to answer your question.

No, I don't believe there is.

Um, from my standpoint, I'll I'll let uh Mr.

Smith speak to it as well.

Um but the we're fully aware of it, so our staff are actively working and making sure that we're enacting good policies and keeping close eye on things.

Um obviously, like access to the cash room for some people is still there.

However, those are DPS, they're not typically at the courthouse.

So anybody new to the courthouse, that would be an odd thing to see, and people would ask questions.

So uh those types of things are things I don't think put us at that type of risk.

Yeah, Brian Smith, City Auditor.

No, I don't believe there is uh significant risk of loss here, but I think that first recommendation 1.1, that is gonna be the one that will address the the weaknesses that we saw in the procedures in the way that the funds were being the funds in transit were being well the total fund, the way that was being reconciled on a daily basis, because it didn't take into consideration funds in transit, and so there wasn't a daily reconciliation to the total of the fund.

Um but I I believe there have already been some changes to that front counter procedure um to address that.

Um but I I believe there have already been some changes to that front counter procedure um to address that and there were some inefficiencies also in how that was being done, and I believe that's being addressed.

This is a very manual process that didn't need to be so manual.

Yeah.

And let me just mention once again, uh let's see, how long have you been court administrator?

One one year, just over one year.

So I've uh really appreciated Hans and his support of our office and his uh uh willingness to share with us potential audit audits to that we could do and where we can provide some value to the municipal court.

And as you're aware, as I already mentioned, we are involved with another audit within the municipal court related to the bus passes, and we worked with hands in in coming up with that uh that idea for an audit.

That's an area that he had some concerns about, and so we're looking into that.

So I appreciate hands help.

Thank you.

Does anyone have any more questions?

No, yes, if I could.

Um just uh this is a more on the process of um marking something complete.

Um so it sounds like you know, when the recommendations are um are given.

Um it's you know broken down by category as well, but um, you know, kind of the more important things kind of fall to the top.

So safety and security sounds like it was, you know, kind of top of uh top of list, which was um completed, and then outside of that, um, what is the it sounds like when recommendations are given, they're already um you know applied, like you're already thinking of them, how to introduce them and how to implement them as well.

Um, and then after that, you know, policies and procedures fall in place, you know, you have to um you know finalize the SOPs.

Um so when is something like actually considered completed rather than just in process?

Brian Smith City Auditor, thank you for the question.

Good question.

Um, with every audit recommendation, when the department believes that they have fully addressed that recommendation, we ask them to let us know.

Now, a lot most departments, as they're working through addressing the recommendations, they're continually in touch with us and asking us what our expectations are to identify the recommendation as complete.

But every audit recommendation, we essentially come out and do like a mini audit on each recommendation to confirm that what we requested to be corrected or improvements that we requested be made have actually been been made.

And so, yeah, that's in fact sometimes the follow-up process can take some time because we need to take a sample of transactions to confirm that controls have been implemented.

That's what we'll be doing with that first recommendation related to the front counter operations.

We'll need to go back and look at a period of time to make sure that they've appropriately addressed the recommendation.

Does that address your question?

Okay.

Thank you.

Thank you both.

I it is um it's I like to see, and it and that's what's so wonderful about the internal audit department here and the city operations, is that the internal department audit department serves a purpose to to help to be of service to each department.

And I've said it before, but a lot of times people look at internal audit as an adversary, as someone trying to find what are you doing wrong, I'm gonna find it out, you know.

But the reality is internal audit as well as legal and finance, everyone's position is to prevent something happening to keep us out of trouble, to minimize risk.

So working in that partnership is very important, and I appreciate that the audit department and every department in the city have that type of relationship where it's not adversarial, but it's it's complementary.

We're all looking to improve operations, reduce risks, or we can have more successful operations.

So I just I always mention it in every meeting because I I really appreciate it.

I've seen in other organizations where internal audit and the departments are are uh opposing each other, and it shouldn't be that way.

You know, we're all part of the same team to prevent any uh thing from happening so that someone from the outside doesn't come in and find it, we find it first and fix it.

So we appreciate all the efforts to continue to do that and move it forward.

So thank you, thank you very much.

Um I guess we can uh then proceed to the next department, Mr.

Smith, when you are ready.

Thank you so much.

All right, the next department I'd like to discuss is human resources.

And in our audit of the employee separation process, we provided six recommendations, and two of those recommendations have already been completed.

And by addressing these two recommendations, HR improved the clarity of the pro the clarity of the primary form that is used by departments for processing out employees, and by doing so enhancing the consistency and reliability of the information collected.

HR has four remaining recommendations.

And Sue Brown, director of HR, is here to give you an update on their efforts to address these remaining recommendations.

Thank you.

Well, Mr.

Smith already introduced you, but you can introduce yourself and we'll see if we have any questions.

All four recommendations are primarily related to the separation process and updating the separation policy and procedure.

In working through that, we found out that, of course, as mentioned before, we're working with IT, we're working with finance and payroll, and we're working with the departments with a lot of hourly employees, primarily YDSI and Parks Rec and Cultural Affairs, to make sure that the changes that we're making are not really seriously impacting their business needs.

So we're working through all of those concerns.

We have sent an initial draft of the separation policy to internal audit, and they have also provided us with some updates and feedback.

We're about 90% done, so I'm anticipating probably another month or so, and we'll be able to wrap this up.

Wonderful, thank you.

Does anyone have any questions?

Seeing none.

Is there a motion?

No, I apologize that I'm on the wrong page.

Um thank you.

Um I guess we can proceed to the next department.

Thank you.

All right, Brian Smith City Auditor.

Once again, I'd like to thank Sue Brown for her her help and her working uh working with us in in addressing those recommendations.

You know, like I mentioned, some of these recommendations it may look simple, but uh sometimes they can be very complex to address, especially when you're dealing with like a department like HR that deals with so many well, all of the city departments, and it it takes time to address these recommendations.

And you know, over in my experience, there have been times where departments have just they've been pushing just to get a recommendation completed just to satisfy our office, satisfy the audit committee, but it's more important that they address the recommendation fully, that they address it correctly rather than just pushing to meet that estimated date of completion.

And so I appreciate it when departments say, you know, Brian, we we just aren't going to be able to meet that estimated date of completion.

We didn't realize that it was going to take this and this and this to do.

So it's more important that it be done done correctly.

Yeah, yeah.

Also, as she had mentioned, uh, the effect in this particular of all the hourly employees and the just the number of them.

And on the internal audit side, we want to make sure that our uh procedures are not um too onerous on the departments that that it there's a fine balance between compliance and overdoing it and creating an undue burden on these departments and on these individuals, especially the hourlies that come and go seasonally, and um we don't want to I don't want to use the word overregulate.

You know, we don't want to make the procedures uh so challenging that while they're ironclad, they make it difficult for all the departments.

So I can see how finding that balance is important and speed is important, but accuracy uh is more important than speed.

Thank you very much.

Brian Smith, City Auditor.

Um, exactly.

And with with all of our with as you know, with internal controls, you always have to weigh the cost and benefit of those controls.

And so even as we uh create our audit recommendations, we have to evaluate that too, because sometimes it just doesn't make sense to have too burdensome of controls.

Um doesn't outweigh the the cost.

Um the last department I'd like to discuss is finance, and we provided one recommendation to finance as a as a part of our audit of the employee separation process.

So sometimes we have recommendations to other departments outside of the main department that we're auditing.

And this recommendation is not yet due, but the due date is in a couple weeks.

Um, this recommendation requested that finance update the P Card policy to address the process to be followed when process processing out a separating employee with a P Card.

Um finance has completed the policy update, and we they actually requested our input on that draft PCARD policy.

We provided that input, and they've submitted it to the Office of Government and Community Affairs for sending it through the formal approval process.

And so that's happening right now, and I anticipate that that uh that policy will be finalized very soon.

Um again, we appreciate finance's work in updating their policy to help ensure that all P cards are appropriately uh deactivated upon an employee's separation.

That's kind of important, isn't it?

Um and that concludes my report.

Thank you, Mr.

Smith.

Are there any questions from the members?

Anyone?

Anyone?

Seeing none, may I have a motion?

Motion to approve.

Are we just doing a motion to uh is there a motion required on this?

It says here on the thing, but uh, do we have an emotion required on that?

Excuse me to approve to accept a report.

Okay.

Second.

Uh all in favor?

Aye.

Aye.

All right.

Please post, and the motion will carry.

Let's move on to item number eight.

Agenda item number eight.

Discussion regarding topics for future agenda items.

Comments made during this portion of the agenda by individual members shall refer solely to 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.

No discussion regarding the substance of any such proposed topic shall occur, and no action shall be taken.

Does anyone have suggestions regarding for future agenda item topics?

Seeing none at this time, we will move on to item number nine.

Agenda item number nine 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?

No one has come in since the beginning of the meeting.

So I'll close the citizens' participation and we will move on to agenda item number 10.

Agenda item number 10, adjournment.

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

And with that, the meeting is adjourned.

Thank you.

All right, 29 minutes.