2012-02-15 Audit Committee Minutes

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Audit Committee Meeting February 15, 2012 The meeting convened at 7:10 p.m. in the Conference Room, 16 Lowell Street, Reading, Massachusetts. Present was Audit Committee Chair David Greenfield and members Camille Anthony, Lisa Gibbs (departed at 7:50pm), Steven Herrick and Phil Pacino (arrived 7:30pm). Absent was Chair Marsie West and member Chuck Robinson. Also present was Assistant Town Manager/Finance Director Bob LeLacheur. Mr. Herrick asked if the Auditors had any concerns arising from the recently completed FYI Audit, since he had to miss the previous meeting where it was reviewed. Mr. Greenfield said the auditors had no concerns and were quite satisfied. Ms. Anthony characterized their views that everything was flat, or maintained as compared to the previous year. Mr. Greenfield added that there were no new control issues. Ms. Anthony moved to accent the FY11 Audit Report as presented, seconded by Mr. Herrick, and approved by a 4 -0 vote (Mr. Pacino not present). Ms. Anthony asked about the formation of a Risk Subcommittee as proposed by Mr. Pacino at the previous meeting. She stated that Mr. Pacino pointed out that Reading had no formal policy for risk assessment, while some Towns do have such a policy. Ms. Anthony asked if the purpose of a risk assessment was to show areas of concern. For example, recently she learned that checks were accepted as payment for Depot/Compost stickers at the Police station, when for many years she had believed this was a `cash only' business. Mr. Greenfield pointed out that his profession is risk assessment and that the first question should be what risk program do you want? He suggested a good method was to ask each of the organization's entities to self - assess, and then to turn those results over to an independent outside group for an objective opinion. The final step was to then go back to the first question and determine what levels of risk needed to be watched. From his experience, overkill on too many small risks was a potential hazard, and attention was only worthy of the big risks. Ms. Anthony pointed out that with taxpayer money that point was toned down a bit, and Mr. Greenfield agreed. Ms. Anthony stated that the Audit Committee had no formal process to determine annually which areas to focus on. Mr. Herrick stated that a recent focus on the school lunch program brought about some changes that seemed to improve controls, and Ms. Gibbs added that this was true of several areas in the schools as Mary DeLai had improved controls over PTOs and athletic booster organizations as an example. Mr. Herrick asked about the formation of a subcommittee. After discussion, the group concluded that it was not necessary at this time. The group then had a discussion about the special emphasis for the next annual audit. Mr. Robinson had emailed his thoughts which included Ambulance billing, Recreation and All - day Kindergarten. Ms. West had also emailed her suggestions which included Town Manager's