Resolution - 2019-31RESOLUTION 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.
WHEREAS, the City Council of the City of West Covina recognizes the importance of
transparency and accountability in the administration of public resources, and the City Council is
ultimately responsible for ensuring that the City of West Covina is meeting its internal control and
financial reporting responsibilities; and
WHEREAS, the City Council recognizes the importance of creating an Audit Committee
as it is considered a financial management best practice
WHEREAS, the formation of an Audit Committee will ensure regular and direct
communication between the City's independent auditors and the City Council and will further the
City Council's goals of transparency and accountability in the administration of public resources;
and
WHEREAS, the City Council established an Audit Committee with Resolution No. 2015-
73, changed the membership of the Audit Committee with Resolution No. 2016-40; and rescinded
and replaced Resolution No. 2016-40 with Resolution No. 2018-60; and
WHEREAS, the City Council now desires to rename the Audit Committee to the Finance
& Audit Committee; and
WHEREAS, the City Council now desires to expand and clarify the duties of the Finance
& Audit Committee; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA DOES RESOLVE AS FOLLOWS:
SECTION 1. FINANCE & AUDIT COMMITTEE RULES AND REGULATIONS
1. ESTABLISHMENT OF THE AUDIT & FINANCE COMMITTEE
The City Council ofthe City of West Covina hereby renames the previously established
City of West Covina Audit Committee as the Finance & Audit Committee.
2. PURPOSE
The Finance & Audit Committee's primary purpose is to assist the City Council
in discharging its responsibilities for the overall stewardship of the City's financial
affairs. This will include reviewing financial information; assessing the existence and
adequacy of accounting and internal control systems and related safeguards over the
City's assets; and overseeing the audit function.
3. MEMBERSHIP AND APPOINTMENT
The Audit Committee shall consist of seven members: the City Treasurer, two City
Council members, and four members of the public. The two City Council members
and the four members of the public will be appointed by the City Council. The City
Clerk shall post and advertise the public positions and vacancies as provided for all
other city commissions and committees.
4. COMPENSATION
Members of the Committee shall serve without compensation.
5. TERM OF MEMBERSHIP
The appointed members of the Committee shall be appointed for two (2) year terms
on a staggered basis, except for the initial appointment as provided herein. For the
initial appointments, one Council Member and one member of the public shall initially
be appointed to serve a one-year term in order to allow for the staggered terms
thereafter.
6. TIME AND PLACE OF MEETINGS
The Committee will meet at least quarterly and shall hold other meetings on an as
needed basis. All meetings of the Committee shall be held at the City of West Covina
City Hall located at 1444 W. Garvey Ave. in the City of West Covina.
7. CONFLICT OF INTEREST
All members of the Committee are subject to the requirements of the Conflict of
interest codes of the City of West Covina and Conflict of Interest laws of the State
of California.
8. DUTIES OF THE COMMITTEE
The role of the Committee is to augment management's accountability to the City
Council. The Committee achieves this goal by:
• Recommending the selection of the independent financial auditor for the financial
statement;
• 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 communications 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.
• Reviewing audit and financial consulting contracts proposed scope of work.
Making recommendations for changes in scope of work if needed;
• Reviewing actual revenue and expenditures compared to budget based on monthly
financial reports detailed by account. The finance staff is to provide the committee
with a monthly report to allow the finance department to develop accurate
projections;
• Reviewing projected revenue and expenditures compared to budgeted revenue and
expenditures;
• Reviewing the preliminary budget to determine if expected revenue or expenses
(e.g. litigation, equipment replacement) are budgeted in accordance with historical
trends;
• Reviewing if the following objectives are being met:
o Projected expenditures do not exceed budget;
o Projected revenue approximates budget;
o Projected revenue meets or exceeds projected expenditures;
o Timely budget adjustments are prepared for projected overdrafts in
expenditures;
o The City Council is informed in a timely fashion if revenue or expenditures that
deviate significantly from budget;
• Providing quarterly reports to the City Council on the financial and audit status of
the City;
• Reporting to the City Council if the committee believes either:
o It has found material financial information which it believes to be inaccurate or
untimely; or
o Projections will result in shortfalls in revenue, overdrafts in expenditures, or
deficits caused by spending more than is received;
• The committee ensuring that it does not make budget priority recommendations.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 71h day of May, 2019.
APPROVED AS TO FORM
54awaa+-�
Scott E. Porter
City Attorney
r;v�'• Johnsod
ATTEST
Carrie Gallagher �.
Assistant City Clerk `
ATTACHMENT NO. 2
West Covina
Responsibilities of the Finance & Audit Committee
Recommendation to the City Council by the Audit Committee
April 10, 2019
The responsibilities of the Audit Committee, to be renamed the Finance & Audit
Committee, will include the previously adopted responsibilities of the Audit Committee
with the following additions and changes:
1. Meet at least quarterly with additional meetings scheduled at the request of a
majority of the Finance & Audit Committee, the City Council, or the city staff.
2. Review audit and financial consulting contracts proposed scope of work. Make
recommendations for changes in scope of work if needed.
3. Review actual revenue and expenditures compared to budget based on monthly
financial reports detailed by account. A monthly report is also produced by the
Finance Department in order to develop accurate projections.
4. Review projected revenue and expenditures compared to budget.
5. Review the preliminary budget to determine if expected revenue or expenses [e.g.
litigation, equipment replacement] are budgeted in accordance with historical
trends.
6. Review if the following objectives are being met:
• Projected expenditures do not exceed budget
• Projected revenue approximates budget
• Projected revenue meets or exceeds projected expenditures
• Timely budget adjustments are prepared for projected overdrafts in
expenditures
• The City Council is informed in a timely fashion if revenue or expenditures
deviates significantly from budget
7. Provide quarterly reports to the City Council on the financial and audit status of
the City.
8. The Finance & Audit Committee does not make budget priority recommendations.
9. The committee's final responsibility is to report to the City Council if it finds that
published financial information is believed to be inaccurate, not timely, or if
projections will result in shortfalls in revenue, overdrafts in expenditures, or
deficits caused by spending more than is received.
ATTACHMENT NO.3
RESOLUTION NO. 2018-60
A RESOLUTION OF TIIE CITY COUNCIL OF THE CITY OF NEST
COVINA REPLACING RESOLUTION NO. 2016-40 AMENDING THE
PROCEDURES, RULES AND REGULATIONS FOR THE AUDIT
COMMITTEE.
WHEREAS, the City Council of the City of West Covina recognizes the importance of
transparency and accountability in the administration of public resources, and the City Council is
ultimately responsible for ensuring that the City of West Covina is.meeting its internal control and
financial reporting responsibilities; and
WHEREAS, the City Council recognizes the importance of creating an Audit Committee
as it is considered a financial management best practice; and
WHEREAS, the formation of an Audit Committee will ensure regular and direct
communication between the City's independent auditors and the City Council and will further the
City Courtcil's goals of transparency and accountability in the administration of public resources;
and
WHEREAS, the City Council established an Audit Committee with Resolution No. 2015-
73; Changed the membership of the Audit Committee with Resolution No. 2016-40; and
WHEREAS, the City Council now desires to add two additional Community Members to
the Audit Committee.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West .
Covina as follows:
SECTION .1: AUDIT COMMITTEE RULES AND REGULATIONS
1. ESTABLISHMENT OF THE AUDIT COMMITTEE
The City Council of the City of West Covina hereby establishes the City of West Covina
Audit Committee.
2. PURPOSE
The Audit Cornmittee's primary purpose is to assist the City Council in discharging its
responsibilities for the overall stewardship of -'the City's financial affairs. This will include
reviewing financial information; ascertaining the existence and adequacy of accounting
and internal control systems and related safeguards over the City's assets; and overseeing;
the audit function.
3. MEMBERSHIP AND APPOINTMENT
The Audit Committee shall consist of seven members_ the City Treasurer. two City Council
members; and four members of the public. The two City Council members and the four
members of the public will be appointed by the City Council. The City Clerk shall post and
advertise the public positions and vacancies as provided for all other city commissions and
committees.
4. COMPENSATION
Members of the Committee shall serve without compensation.
5. TERM OF MEMBERSHIP
The appointed members of the Committee shall be appointed for two (2) year terms on a
staggered basis, except for the initial appointment as provided herein. For the initial
appointments, one Council Member and one member of the public shall initially be
appointed to serve a one-year term in order to allow for the staggered terms thereafter.
G. TIME AND PLACE OF MEETINGS
The Committee will meet at least once annually and shall hold other meetings on an as
needed basis. All meetings of the Committee shal l be held at the City of West Covina City
Hall located at 1444 W. Garvey Ave. in the City of West Covina.
7. CONFLICT OF INTEREST
All members of the Committee are subject to the requirements of the Conflict of Interest
codes of the City of West Covina and Conflict of Interest laws of the State of California.
8. DUTIES OFF THE COMMITTEE
The role of the Committee is to augment management's accountability to the City Council.
The Committee achieves this goal by:
• 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 effectivcly remedied;
• Serving as a direct communications 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.
SECTION 2. That the City Clerk shall certify to the passage and adoption of the
resolution.
PASSED, APPROVED AND ADOPTED this 15`h day of May, 2018.
W7IK�
Mayor
APPROVED AS TO FORM: ATTEST:
Kimberly Ha# Barlow Nickolas S. Lewis
City Attorney City Clerk
I, HEREBY CERTIFY that the foregoing resolution was duly adopted by the City
Council of the City of Nest Covina, California, at a regular meeting thereof on the 1511 day of
May, 2018 by the following vote of the City Council:
AYF_.S: Toma, Warshaw, Wu, Johnson, Spence
NOES: None
ABSENT: None -
ABSTAIN: None i
Nickolas'S. Lei;ri ) .
City Clerk r` -
I, HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council of the
City of West Covina, California, at a regular meeting thereof on the 71h day of May, 2019 by the
following vote of the City Council:
AYES: Castellanos, Lopez-Viado, Shewmaker, Wu, Johnson
NOES:
None
ABSENT:
None
ABSTAIN:
None
i
Carrie Gallagher, CMC
Assistant City Clerk