Item 4HCity of Southlake, Texas
M E M O R A N D U M
January 30, 2008
TO: Shana K. Yelverton, City Manager
FROM: Alison Ortowski, Assistant to the City Manager
Resolution No. 08-008, Establishing an Audit Committee and
SUBJECT:
Appointing Members to the Committee
Action Requested
: City Council approval of Resolution No. 08-008, establishing an
Audit Committee and appointing members to the committee.
Background
Information
: Endorsed by the Government Finance Officers Association (GFOA)
as a recommended practice since 1997, audit committees help to
enhance the financial statement auditor’s real and perceived
independence by providing a direct link between the auditor and the
governing body. Additionally, audit committees facilitate
communication between management, the auditors and the city
council. They also help to limit the reliance governing bodies place
on the technical expertise of the independent auditor as well as
serve to focus and document the government’s process for
managing the financial statement audit. As the City Council is
ultimately responsible for the proper stewardship of the public’s
funds and as the City Council has chosen “Accountability” as one of
the City’s five core values, establishing an Audit Committee
provides an added tool for responsibly managing these funds.
City staff surveyed eleven area benchmark cities to learn the
prevalence of audit committees in the area as well as the
composition, purpose and appointment process in those cities that
do have such a committee. Six out of the eleven cities surveyed do
have an audit committee: Bedford, Colleyville, Frisco, Grapevine,
Hurst and University Park. Of those six, four audit committees are
composed of three council members. The remaining two are
composed of two council members and ten citizens, respectively.
Additionally, Euless and Farmers Branch do not have formal audit
committees but do have council members attend meetings with the
auditors, and Euless also has an Investment Committee that
includes the Mayor as a member.
If established, the City of Southlake Audit Committee will be
composed of three council members appointed annually by the City
Shana K. Yelverton, City Manager
January 30, 2008
Page 2 of 2
Council during the regular appointment process of the City’s boards
and commissions. With regard to the proposed committee size, the
GFOA Audit Management Handbook states, “the committee must
be large enough to encompass the range of expertise needed to
properly advise the governing body but small enough to operate
efficiently and effectively.”
Audit Committee responsibilities will include:
a. Meeting with the external auditor prior to the annual audit to
discuss scope and issues
b. A review of the preliminary audit before the audit is
presented to the City Council
c. Any other matters as may be determined by the City Council
and/or Audit Committee
Financial
Considerations
: There are no financial considerations relating to this agenda item.
Financial Impact
: There is no financial impact relating to this agenda item.
Citizen Input /
Board Review
: Not Applicable
Legal Review
: Resolution 08-008 has been reviewed by the City Attorney.
Alternatives
: Not Applicable
Supporting
Documents
: Supporting documents include the following items:
Copy of Resolution No. 08-008, establishing an Audit
▪
Committee and appointing members to the committee
Staff
Recommendation
: City Council approval of Resolution No. 08-008, establishing an
Audit Committee and appointing members to the committee.
RESOLUTION NO. 08-008
A RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS, ESTABLISHING AN
AUDIT COMMITTEE AND APPOINTING MEMBERS TO THE COMMITTEE,
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS
, the City Council of the City of Southlake, Texas (the “City”) is ultimately
responsible for the stewardship of the City’s funds; and
WHEREAS,
an annual audit is required by the City Charter; and
WHEREAS
, it would be an enhancement to the City’s financial management to establish
an Audit Committee; and
WHEREAS
, the Government Finance Officers Association has made the establishment
of an audit committee a recommended best practice as a means of providing independent
review and oversight of a government’s financial reporting processes, internal controls and
independent auditors; and
WHEREAS
, this committee would be composed of three council members and their
responsibilities would include:
a. Meeting with the external auditor prior to audit to discuss scope and issues;
b. A review of the preliminary audit before the audit is presented to the City Council;
and
c. Any other matters as may be determined by the City Council and/or Audit
Committee
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE, TEXAS THAT:
Section 1.
An Audit Committee is hereby established.
Section 2.
The City Council hereby appoints the following council members to serve as
members of the Audit Committee. Appointments shall be made annually as a part of the regular
appointment process of the City’s boards and commissions.
1.
2.
3.
Section 3.
The City Council authorizes and directs that this action be made part of the City’s
permanent records.
Section 4.
This resolution shall become effective from and after the date of its passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS
th
ON THIS THE 5 DAY OF FEBRUARY 2008.
APPROVED:
Andy Wambsganss, Mayor
ATTEST:
Lori A. Payne, City Secretary