05-07-2019 - Item 21 - Amending The Duties of The Audit Committee- Mayor Pro Tem WuAGENDA ITEM NO. 21
AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
DATE:May 7, 2019
TO:Mayor and City Council
FROM:David Carmany
Interim City Manager
SUBJECT:AMENDING THE DUTIES OF THE AUDIT COMMITTEE - MAYOR PRO
TEM TONY WU
RECOMMENDATION:
The Audit Committee recommends that the City Council approve the following resolution:
RESOLUTION NO. 2019-31 - A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF WEST COVINA AMENDING THE NAME, PROCEDURES, RULES AND
REGULATIONS FOR THE AUDIT COMMITTEE.
BACKGROUND:
The City of West Covina's Audit Committee was established on October 6, 2015, by City Council
Resolution No. 2015-73. On May 17, 2016, the scope of duties was amended by City Council
Resolution No. 2016-40. On May 15, 2018, the City Council rescinded and replaced Resolution No.
2016-40 with Resolution No. 2018-60.
At the February 5, 2019, City Council Meeting, Mayor Pro Tem Wu requested that this item be
agendized for further discussion related to the Audit Committee being transformed into having more
duties and renaming the committee. The City Council referred the item to the Audit Committee for
input and recommendations. The Audit Committee held a Special Meeting on April 10, 2019, and
discussed the proposed duties of the Finance & Audit Committee for Council consideration.
DISCUSSION:
Currently, the Audit Committee's role is to augment management's accountability to the City
Council. The scope of duties includes the following:
•Recommending the selection of the independent financial auditor for the financial statement
audit;
•Monitoring the progress of the financial statement audit;
•Evaluating the results of the financial statement audit;
•Ensuring that any control weaknesses and legal compliance violations identified in the course
of the financial statement audit are promptly and effectively remedied;
•Serving as a direct communication link between the City Council and the independent auditor;
and
•Monitoring the adequacy of the City's internal control structure on an ongoing basis, such as
cash disbursements, cash receipting, treasury transactions, etc., as examined by the internal
audit function and the independent financial auditor.
The Audit Committee proposes to change its name to the Finance & Audit Committee and that its
scope of its duties would change. A detailed outline of proposed changes is included in Attachment
No. 2. In summary, the Audit Committee is recommending that the newly transformed Finance &
Audit Committee will provide oversight of the revenues and expenditures as it relates to coming in
line with the adopted annual budgets, provide quarterly reports to Council on its findings, meet more
regularly with Finance Department staff, and make recommendations to staff regarding auditing or
financial consulting services agreements.
LEGAL REVIEW:
The City Attorney reviewed and approved Resolution No. 2019-31 as to form.
OPTIONS:
The City Council has the following options:
1.Approve the Audit Committee's recommendation; or
2.Provide alternative recommendation.
Prepared by: Nikole Bresciani, Assistant City Manager/Public Services Director
Fiscal Impact
FISCAL IMPACT:
None.
Attachments
Attachment No. 1 - Resolution No. 2019-31
Attachment No. 2 - Audit Committee Recommended Duties
Attachment No. 3 - Resolution No. 2018-60