SPECIAL FEATURE: Review of Approved Meeting Minutes Audit, Finance and Enterprise Committee Meeting 25 June 2020

The last of six meetings for the month of August

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Mesa operates under a charter form of government with citizens electing a mayor and six councilmembers to set policy for the City.
Mesa's councilmembers serve terms of four-years, with three members being elected every two years. The mayor is elected at-large every four years. The mayor and council are elected on a non-partisan basis. The vice mayor is selected by the City Council.
The Mesa City Council believes that its people, not leaders, are what makes a City great and actively works to encourage citizen participation in the decision-making process. Whether it is through neighborhood meetings, advisory boards and committees, telephone calls and letters, or email, the Mesa City Council sets policies based on the input and needs of its citizens.

Mayor John Giles
Vice Mayor Mark Freeman District 1	Councilmember Jeremy Whittaker District 2	Councilmember Francisco Heredia District 3
Councilmember Jen Duff District 4	Councilmember David Luna District 5	Councilmember Kevin Thompson District 6

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STUDY SESSION VIRTUAL PLATFORM Mon 08.31.2020 @ 5:15 PM
Council Study Session Notice: To decrease COVID-19 exposure, the City Council Chambers is closed, but public viewing and input on the items are available electronically.   Members of the City Council will appear electronically for this meeting, via a video conferencing platform, and the live meeting will be accessible via broadcast and telephonically. 
Because of the current public health emergency, the City Council Chambers is closed for Council study sessions.
However, the live meeting may be watched on local cable Mesa channel 11, online at Mesa11.com/live, www.youtube.com/user/cityofmesa11/live, or https://www.facebook.com/CityofMesa, 
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listened to by calling 888-788-0099 or 877-853-5247 (toll free) using meeting ID 5301232921 and following the prompts.   
For any difficulties accessing this meeting, please call 480-644-2099
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Roll Call
1 Review and discuss items on the agenda for the August 31, 2020 regular Council meeting. 2 Acknowledge receipt of minutes of various boards and committees.
20-0881
Audit, Finance and Enterprise Committee meeting held on June 25, 2020. 2-a
3 Current events summary including meetings and conferences attended.
4 Scheduling of meetings.
Item 2-a Meeting Detail:

File #:

20-0881

Type:

Minutes

Status:

Agenda Ready

In control:

City Council Study Session

On agenda:

8/31/2020

Title:

Audit, Finance and Enterprise Committee meeting held on June 25, 2020.

Attachments:

1. June 25, 2020 CFN

AUDIT, FINANCE & ENTERPRISE COMMITTEE 
June 25, 2020  
The Audit, Finance & Enterprise Committee of the City of Mesa met via a virtual format streamed into the lower level meeting room of the Council Chambers, 57 East 1st Street, on June 25, 2020, at 9:23 a.m. 

COMMITTEE PRESENT  
Jennifer Duff, Chairperson*
Mark Freeman*
David Luna*   
STAFF PRESENT   
Michael Kennington
Dee Ann Mickelsen
Jim Smith 
(*Committeemembers participated in the meeting through the use of video conference equipment.) 
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BLOGGER NOTE: exhibits and attachments are Power Point slides in pages 7-38
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Chairperson Duff conducted a roll call. 
1-a. Hear a presentation and discuss the following audits: 

1. Transient Lodging Tax 
Mr. Lisitano said the audit consisted of interviewing City of Mesa and Visit Mesa personnel
> to review contracts and statutes to identify the requirements and performance expectations,
> to  review the revenue distribution to confirm compliance,
> to perform tests of TLT expenditures
> and analyzed the performance measures used for reliability and effectiveness. 
(See Page 5 of Attachment 1)

2. Citywide Cash Funds (Continuous) 
(See Pages 10 through 12 of Attachment 1)

3. Annual Credit Card Security Review
See Pages 14 through 17 of Attachment 1)

4. Procurement Card Program (Follow-Up Review)
(See Page 21 of Attachment 1) 
In response to a question from Committeemember Freeman regarding how often there is a credit card discrepancy where an employee must reimburse the City, Mr. Lisitano stated there were a few incidents where that came up in the audit, but it was not common. 
He expressed the importance of staying on top of reimbursements because that is how fraud occurs.   
Chairperson Duff commented on an instance when she has accidently charged a service using the wrong card.   
Mr. Lisitano confirmed that similar situations came up in the audit where an employee forgot to ensure the correct card was being charged and reiterated the need for approvers and reviewers to carefully reconcile those items. 



5. . Development Services Fees and Charges
Follow-Up Review
(See Page 23 of Attachment 1)
In response to a question posed by Committee member Freeman regarding whether the City lost money from the fee discrepancy,
Mr. Lisitano stated the item pertained to sewer or water; and if he is recalling correctly, the difference was under $3,000.

1-b. Hear a presentation, discuss, and provide a recommendation on the proposed Audit Plan for FY 2020/21.  
Mr. Lisitano displayed a PowerPoint presentation and gave an overview of the proposed Fiscal Year (FY) 2021 Audit Plan.
(See Attachment 2)   

Mr. Lisitano stated currently the four audits in process are
1 Fire and Medical for transport services and billing,
2 Engineering for Construction Manager at Risk (CMAR) projects,
3 Engineering for Capital Improvement Projects (CIP), and
4.Police for the Photo Safety Program. 
He added the audits are expected to be finished shortly and will be presented at the next Council meeting.

(See Page 3 of Attachment 2) 

Mr. Lisitano explained the new audits for the upcoming year will be looking at the procurement process for Business Services/Purchasing
(See Page 4 of Attachment 2)
> . . . Lisitano highlighted the audit for the Police Department to ensure effective controls are in place to manage City building suite access to prevent unauthorized access to City facilities. 
> He explained the audit pertaining to Falcon Field leases will be to determine whether effective controls are in place to ensure revenues are accurately calculated, recorded, and collected to prevent or detect errs, fraud, waste or abuse. 
> He pointed out the largest revenue sources for Falcon Field are the hangar rentals and land leases. 
> He reported the Fleet audit is to make sure effective controls are in place over parts management, ensuring compliance with policies and other applicable requirements. 
(See Page 5 of Attachment 2)   

Mr. Lisitano stated follow-up reviews will be conducted for:
> the jail services contract for the Police Department,

> the Convention Center revenues for PRCF,

> the claims administration contract for Human Resources/Employee Benefits,
 
> the Transient Lodging Tax. 
(See Page 6 of Attachment 2)    
 
Mr. Lisitano indicated other Audit activities include the Citywide cash handling audits and PCI DSS review that occur every year, although some things will change due to the fact that many collection sites are closed;
fraud and ethics hotline investigations;

consulting; and unscheduled audits requested by the City Manager or City Council. 
(See Page 7 of Attachment 2)  

In response to a question from Committee member Luna regarding whether there are enough staff to handle the workload, Mr. Lisitano indicated he is always willing to accept more staff.  He mentioned there have been no layoffs in the Audit Department; however, there is one open position that has not been filled. 
He commented that he scaled back on the number of audits in the proposed audit plan to ensure staff will be able to catch up.     



Committee member Freeman requested a presentation on future bond payments that the City could possibly pay off early.    
Deputy City Manager and Chief Financial Officer Michael Kennington agreed to present a future agenda item that targets the possibility of refunding outstanding bonds.
In response to a question posed by Chairperson Duff, Mr. Kennington clarified refunding would include bonds that have a higher rate than what is available in the market today. 
He mentioned currently there are several 2010 issuances that are callable. 
He verified a future presentation can be presented to the committee.  

Chairperson Duff thanked staff for the presentation. 
In [sic It) was moved by Committee member Luna, seconded by Committee member Freeman that the proposed Audit Plan for 2020/2021 be forwarded to the full Council for discussion and consideration.

Committee member Freeman asked for an update on how the decrease in sales tax revenue has impacted the City over the last year.   
Mr. Kennington stated he would supply an update.   _________________________________________________________________________