June 22, 2004 Minutes (FY2003-04)

[Guest sullinss]

Proceedings of the Audit Committee

District No. 2, Yellowstone County

Billings, Montana

 

June 22, 2004

 

Chair Jane McCracken called the Audit Committee to order at 12:00 p.m. on Tuesday, June 22, 2004, in Room 216 of the Lincoln Center. Committee members in attendance were Jane McCracken, Conrad Stroebe, Dick Fellows, Mike Dimich, K. Dale Getz, and Deborah Long. Also in attendance were Ted Brewer, District Clerk Thomas Harper, and Eide Bailly Auditor Sarah Collins.

 

Review of Timeline for Audit FY2003-2004

 

The Business Manager is leaving the District at the end of June. Discussion was held how this personnel change may affect audit work, how to approach issues that may arise during the audit, and what plans the District made to carry through with year-end requirements.

 

Deborah Long stated as a result of conversation with Superintendent Svee, to maintain current audit timelines, the District engaged Olness & Associates for services to provide continuity within the District and make sure the processes of June 30th year-end financials, Trustees Report, and the 2004-05 budget are done correctly and completed on a timely basis. Olness & Associates will provide leadership and oversight in this area. The Business Office staff will continue with their year-end procedures; and the Superintendent will have ultimate responsibility after June 30th until the new Business Manager is hired. Eide Bailly’s contact on timing issues will be Olness & Associates. Olness & Associates will be available on an “as needed basis” in July and will spend more time on-site in August and September.

 

Sarah stated compliance testing on enrollment and grant work is scheduled to start the week of July 19. Field work is scheduled to start September 20th and will take approximately two weeks to complete. Once field work begins, the auditors generally update the Audit Committee Chair on a weekly basis and leave the responsibility to the Chair to communicate with the rest of the Committee and to decide if a Committee meeting is necessary.

 

The District’s Internal Auditor will be involved with the audit, as they report directly to the Board. Thomas Harper’s assignment as District Clerk expires on August 15. The Business Manager, rather than the District Clerk, will have responsibility for the audit; however, job responsibilities are somewhat fluid until these positions are filled.

 

Committee membership was discussed. The Charter calls for three trustees and at least two members of the public. The Committee would like to add a third community member. The Chair will ask Peter Gesuale if he will serve as interim community member until September.

 

Last year, Jane McCracken a community member, served as Chair of the Committee. This is the only standing committee that functions with a community member as Chair rather than a Trustee. The Committee needs to decide if they wish to continue to have a community member as Chair or elect a Trustee member as Chair. The Committee decided a community member as Chair adds a degree of independence and credibility to the audit process. Deborah stated a community member is not protected under Board legal liability. The Chair will refer this to our counsel for direction.

 

Jane asked if we need to modify our charter to include the District Clerk/Internal Auditor as a committee member; or, if the committee would like them to attend and/or report to the committee as a non-member. Dick Fellows stated the Audit Committee needs to be very independent to enhance the process; and, audit independence is a very strict provision of the Sarbanes-Oxley Act of 2002. The Charter states “Each member shall be free of any relationship that, in the judgment of the Board of Trustees, would interfere with the exercise of his or her independent judgment.” The Committee concludes the District Clerk/Internal Auditor should not be an Audit Committee member, but rather, to act as an advisor to the Board as does the Business Manager.

 

John Jacobsen of Eide Bailly can possibly provide a short overview on the Sarbanes-Oxley Act of 2002 at the next Audit Committee meeting.

 

There being no further business, the meeting was adjourned at 12:37 p.m.

 

 

 

 

Jane McCracken, Chair

 

 

 

 

Sherrill Sullins, Recorder