§ 2-397. Audit committee established; powers and duties generally.

(a)

An audit committee is established pursuant to section 4.05 of the Charter. Subject to the limitations provided under the Charter, the audit committee is authorized to:

(1)

Consult with the internal auditor regarding technical issues and work to assure maximum coordination between the work of the internal auditor's office and the needs of the city commission and the mayor;

(2)

Coordinate the external audit efforts; and

(3)

Provide oversight over the systems of internal control.

(b)

Pursuant to section 4.05 of the Charter, the audit committee shall be comprised of five voting members; the mayor or mayor's designee, the president of the city commission, and three at-large members, who shall be appointed by the city commission. The at-large members shall be city residents with expertise in auditing, preferably internal or management auditing and at least two of whom shall be a certified public accountant or a certified internal auditor; appointments shall be staggered for terms of three years. The president of the commission shall be appointed as chairperson of the audit committee.

(c)

The finance director and city attorney, or their designees, and such other staff having technical knowledge as deemed necessary shall attend meetings and be advisors to the audit committee.

(d)

The audit committee shall meet at least quarterly or at the request of one or more of its members and be responsible for:

(1)

Providing oversight and general direction to the internal audit function by:

a.

Reviewing the internal auditor's annual audit plan and submitting the plan and the committee's recommendations to the city commission the first commission meeting in September of each year and reviewing and approving proposed amendments thereto;

b.

Reviewing and approving internal audit reports before the final audit report is issued;

c.

Transmitting internal audit reports to the city commission;

d.

Reporting to the city commission on problems or problem areas at such times as deemed appropriate;

e.

Monitoring follow-up on reported findings to assure corrective action is taken;

f.

Evaluating the findings and recommendations of the peer review required under section 2-402; and

g.

Reporting no less than annually to the city commission on the performance of the internal auditor and the effectiveness of the internal audit function.

(2)

Providing oversight of the city's external audit efforts by:

a.

Reviewing the management representation letter and determining through inquiry whether the independent auditors had problems in obtaining the letter;

b.

Reviewing and discussing with the external auditors their audit plan, specifically audit scope, timing of events, reports to be issued, and communications with the audit committee, including the engagement letter or contract;

c.

Reviewing the external auditor's management letter and recommending additional corrective action, if deemed necessary, to the mayor;

d.

Reporting to the city commission on the external auditor's activities at such times as deemed appropriate;

e.

Facilitating the coordination of activities between the external and internal auditing functions to minimize duplication of effort;

f.

Reviewing the external auditor's report on the city's financial statements, including opinions and other reports issued;

g.

Monitoring follow-up on reported findings to assure corrective action taken; and

h.

Discussing with the external auditors any issues and matters of concern to the auditors or to the committee.

(3)

Providing oversight for the systems of internal control by:

a.

Reviewing the external auditor's annual report on internal control over financial reporting and tests of the city's compliance with laws, regulations, contracts and grants;

b.

Reviewing management's responses to the external auditor's findings and recommendations on internal controls;

c.

Reviewing with management the controls over annual and interim financial reporting and the reports produced;

d.

Reviewing with management the information technology systems and related security and controls and monitoring new installations;

e.

Reviewing with management various financial, operating and compliance control components as determined necessary to ascertain such system is working as intended;

f.

Obtaining regular updates from management and the city attorney regarding compliance matters or issues; and

g.

Obtaining and reviewing such additional information as deemed necessary to evaluate internal controls regarding:

1.

Information systems environment;

2.

Reliability and integrity of financial and operational information;

3.

Effectiveness and efficiency of operations;

4.

Safeguarding of assets; and

5.

Compliance with laws, regulations and contracts.

(Code 1979, § 2-180)