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rcconunendations regarding the auditors review and evaluation of the systems of <br />internal control and accounting procedures. <br />D. It is expected that the auditor selected will be available throughout the year for <br />general consultation regarding matters of accounting. <br />E. If requested the external auditor may be required to meet with stall and two <br />Council Members to review the Management Letter and Audit. Attendance atone <br />Council meeting may also be requested. <br />F. The auditor is to complete the annual state controllers reports for both the City <br />and the Redevelopment Agency. <br />G. I~he auditor is required to perform an annual review of the City's Investment <br />Policy to determine compliance with applicable State and Federal laws. A report <br />is to be provided to the City on such compliance and, if applicable, <br />recommendations for changes in the Investment Policy document. <br />I I. Internal Audit Function <br />The City does not have an internal auditor. Within the constraints of available <br />stalling, the City attempts to maintain segregation of key duties and <br />responsibilities. llue to the lack of an internal audit function the auditors would <br />be responsible for conducting "opeational audits" of the Finance and <br />Management Services Department in addition to the regular annual audit. The <br />scope of the "operational audits" will be dctined by the Finance and Management <br />Services Department and would be limited to the parameters allowed to maintain <br />the auditors independence. A report from the auditors would be required giving <br />the scope of the "operational audit" work performed and recommendations the <br />City should implement to improve internal controls in the areas examined. The <br />first year the "operational audit" would cover accormts payables (including <br />housing assistant payments), purchasing and cash receipting and reconciliation. <br />The second year, treasury investments, utility billing and accounting functions <br />would be examined in detail. 'fhe third year, payroll and workers compensation <br />claims. <br />Working Paper Retention and Access to Working Papers <br />Working papers are to be retained for a period of five years and arc to be made <br />available (upon reasonable notice) to City staff as well as any third parties <br />authorized by the City. <br />io <br />