Audit Committee Meeting   11/25/2024

We'll go ahead and it's 11 o'clock on November 25th.

We'll go ahead and have all the audit committee meetings ordered.

My name is Jacob Sumner, Chief Financial Officer for the county.

And we'll start off with our roll call.

From the schools, school member Ellen Osborne.

Yes, hi.

Chief Operating Officer Rosalyn Smith.

including the Board of Supervisors, Ned Gallaway, also representing the Board of Supervisors, Jim Andrews, County Executive's Office, Jeff Richardson, and myself, Jacob Sumner, Chief Financial Officer.

All right, so today on our agenda and including the packet in front of you all, we'll be talking about three different items.

We have Megan and Addison from Brown & Edwards to go over our audit results, about 24 audit results.

And then we have Shenandra Usher, our Chief Financial Officer, who's gonna give us an update on our upcoming new financial system project that will be going live later this fiscal year.

And then lastly, we have Laura Andrake, our chief enterprise risk management and shared services who will be giving us our regular update on the fraud, waste, and abuse program.

So with that, we'll go ahead and get started.

Hello, I'm Megan Argenbright.

I'm a partner at Brown Edwards.

Addison Roeschley is a senior associate and he's gonna talk about the real important stuff.

And I'm gonna go over just kind of an overview of what we do have for you today and what we don't have for you.

So thanks for having us.

And thanks, I will say, you know, this is our second year doing the audit.

And so we first came out in June and the deadline is December 15th

Sunday, so December 16th.

And our plan, we will be done on time.

I'm very confident that we will be done on time.

But what we do not have for you today is a draft of the ACFR.

And so the numbers part of this, I'm not going to be going over.

But however, you guys kind of know the numbers part.

So I feel like the important part is how did the audit go?

What findings did we have?

What federal compliance did we test?

That sort of stuff.

So that's what we're going to go over.

I will say that even though we don't have a draft of the act for you, it is prepared.

It's been through one review.

But it's not all of our review processes.

It has to go through a second review and then also a whole quality control footing 250 pages.

So it's a pretty involved process.

process.

However, we do know we can say with a good amount of confidence that we're going to be issuing a clean opinion, unmodified opinion and all the financials.

And then that is the opinion that you want.

And so when we're presenting to the full board of supervisors on December 11th, we should have a final version for them and be able to say with a lot of confidence on paper that it was an unmodified opinion.

What we are going to go over is mostly the yellow book and compliance testing and reporting that we are required to do.

These are drafts.

I made that very clear by putting a giant draft watermark on them.

But we wanted you to have a paper copy so that you could follow along as we went over things.

They have not, again, not been through our full quality control process, but have been reviewed.

And we've gone over these comments with the finance team, and also included management's responses.

Those are updated.

with their comments on these particular comments.

So at any point, you can interrupt us and ask any questions.

Yeah, so the letter in front would be our yellow book letter or comments on government auditing standards.

The first page really covers the in relation to opinion or which financial statements we audited that kind of derived this page itself.

And then starting where it's report on internal control under financial reporting.

We don't actually dive into an audit of internal control itself.

We do kind of see a lot of those processes.

through reviewing financial statement balances, through going procedures that the APA has required of us to look at, but we don't actually design the audit to look at internal controls.

So it does kind of say there in one of the paragraphs that it's designed to notice some of the stuff, but not actually, we might not have seen everything.

And then starting with the very last paragraph on the bottom, it starts going over what we did see or kind of giving a little bit of forethought on what is to come.

So it does outline in that first part at the bottom in bold that we did see a material weakness.

I will jump into that in the future.

That's going to be with the schedule of findings and questions cost with everything you follow.

On the next page, there is another one.

That's going to be another comment relating to a significant efficiency.

Again, I will go over that as well.

and then a report on compliance and other matters, basically state procedures that are required of us to look at.

And in that instance, we didn't see anything this year for state commenting.

So that's great.

There will be a section for the county's response.

So we don't audit the county's response.

We do review them to kind of ensure that they're accurate.

But that is what management has wished to say or wished to respond to these comments for.

So then we have the summary of compliance matters.

This will kind of go over the Code of Virginia requirements that we do look at, that we do audit the procedures that are outlined by the APA.

and then there's federal compliance matters which come from the federal government and kind of guide our single audit over federal award programs.

So I'll speak to the next page.

This, again, is another summary for the outcomes of them.

It's going to specify that we did express an unmodified opinion on the financial statements or the cleanest opinion that we can give.

It is going to say that there is a significant deficiency in material weakness, again, just to summarize those back up.

No instances of non-compliance material to the financial statements, which is great.

Pretty clean there.

and then from that part down nothing federal related that we had any concerns over no audit findings over any major programs and then it's going to list the three programs we test these are kind of subject to the amount of revenues that are reported year to year but also we do have to test every program if it needs type-a thresholds of anything this year was anything over 926 dollars 926 thousand dollars makes it a type-a program

So some of those we do test once every three years regardless of whatever revenues are reported as long as they're over that threshold.

Kind of getting to where there might be more questions.

If you want to ask on any of these, feel free to do so.

The financial statement audit comments that we do have.

So we did see a material weakness in capital asset reporting.

A lot of times when we see stuff like this, it's related to audit adjustments that we're proposing with capital assets due to the larger nature of them.

They tend to immediately almost become more material.

So we did propose a couple audit adjustments relating to balances either for entries that weren't recorded to capitalize a balance or removals of items that might have been duplicated twice.

There was some turnover unfortunately in that role and so some of that might have been kind of leading to it but then also looking at balances for prior years where other items might have been not recorded.

And then also looking at construction and progress costs, we did see some instances there where we thought maybe there could be a little bit more clarity or accurate reporting of balances.

That's kind of what we saw.

There's condition criteria, cause-effect kind of recommendation.

And so we did kind of give those with management kind of in consideration of new eyes over what that process will look like.

I will just say there's a lot of redundancy.

We are required.

This is not our wish to have criteria, condition, cause.

All of those things are required by the federal standards.

And so just know we weren't being redundant because we wanted to really get the point home.

It is unfortunate.

So if you do have any questions, I'll be happy to answer them.

It's for understanding.

So on 172, under criteria, you state with substantial impacts.

I'm just assuming that if we screw up and numbers are wrong, that's a substantial impact.

That would influence decision makers.

So knowing when things are like for capital assets in and of itself, knowing when things are placed in service, is a project done or not.

And if substantial can become if you don't place it in service, and it just sits, I'm trying not to talk with my

Countance, Lingo, but once you place something in service, you start depreciating it, right?

That's when you're using it.

You say, we'll have this for 10 years, 20 years, and you start using it.

If you don't do that, then you have a harder time knowing, okay, what kind of maintenance costs will I have?

How old are these, this equipment or these vehicles or this building?

What kind of maintenance do I have?

And then it could start impacting budgeting.

At the same time, or when do I need to replace this?

If I could add to that too.

Also another instance where we look at capital assets pretty heavily is when there is

New debt environments.

And that was certainly one this past year where there's new debt.

It's usually issued on behalf of specific capital projects.

So then we might look at specific projects more frequently, very similar to what a financial institution that's kind of overviewing those bonds might as well.

I'm trying to make sure I understand everything here.

The type A and type B you're saying

The actual amount of $926,000 kind of fluctuates year to year based on actual reported revenues.

So there might be instances where we have to test the type B program, but it's not very frequent, especially given

OMB did change their threshold.

Right now, the threshold is actually $750,000 or a percent of your revenues, whichever really expenditures, whichever is higher.

So that's how you guys are getting to the 926, right?

Because you guys have far more federal funds than you don't have that minimum, but it's going up to a million in FY26.

The impact on the testing, hard to say, because they didn't change the rule that you have to test it every three years.

But it could, any grants that fall between that $750 and $1 million could come off that list and not have to be tested every three years.

And is there anything in the Capital Ads reporting

It wasn't tested last year, although it came out.

I mean, I'm trying to figure out how you discovered these weaknesses this year.

The best part about the compliance report is it covers all the things, right?

And it jumps back and forth.

So part A here, the summary of audit results, is pretty much all the things.

It has our financial statement audit, federal awards, and then state compliance.

And then part B is just about the financial statement audit.

So those items came up from procedures that we did on the financial statements themselves.

So we're still auditing all the numbers on the report we don't have for you today.

So that's where these came up was in our normal procedures of understanding controls and then also

And as it relates to kind of year-over-year procedures, we didn't change too much.

But as it relates to a difference in how we're reporting it, I will get to it.

But there is a part where we go over prior year comments as well and kind of what happened to them.

Were they resolved this year?

Did we see anything different?

We actually did have a comment last year, just some different things that we saw.

So I'll go over that.

But kind of when you look at something that's happening one or two years in a row is when we start maybe thinking there's a little bit more at hand there.

That's all.

I will go into the next one, revenue and expenditure recognition.

Again, there's quite a few paragraphs here.

I'll kind of gloss over them.

We did propose a couple of audit adjustments to record revenues and expenditures in the correct accounting period, or we didn't quite propose some base two on balances that we were seeing in testing.

Notably, most of them are surrounded in the grant process of just matching revenues to expenditures, both within the grant period, but also in the correct fiscal year that the audit covers.

So an award that I cover multiple years, you still have to have the revenues and expenditures in the same period.

And so that's kind of the meat and potatoes of what this comment was.

There were some other smaller transaction cycles where we did see that.

kind of stretching into capital assets and the timing of when those expenditures were actually recorded might impact when accounting goes in and records the capitalization of those assets.

So that's kind of the other thing that we didn't see there as well.

But most of it was, I would say, really around grant recognition and kind of the end of year true grips of that activity.

The next one is going to be major federal award program audit.

Pretty clean here.

There is nothing that we saw on the audit of the federal awards.

So not much to say about that one.

It was pretty clean.

That is with the three programs that we did test that were noted on that summary earlier.

And then lastly, findings for Commonwealth of Virginia or EPA procedures.

Again, nothing there.

So nothing to report on that one.

Then moving to the summary schedule prior audit findings.

There were a couple comments that we had in last year's act for and the attachments here that go with it.

So just a summary of it, we did see school grant reimbursements last year on a timeliness of some of their programs.

There have been some delays relating to implementation of new systems that were kind of extending when they could do their grant reimbursements.

So kind of under that current status there, we did note that the ones that we saw last year appeared to have improved and no longer applicable.

So that's a positive.

Kind of related to that earlier comment we did have though with revenue recognition.

We did see it in these specific grants, but it is possible that kind of because we saw it in one grant, we would say, well, maybe we could see it in another one.

So it could broadly define to this one, but nothing specific.

Getting to the capital asset reporting comment here, kind of as you were alluding to earlier, we did see some stuff relating to CIP expenditures last year that might have been missed.

So we did have a comment last year we had labeled it as a significant deficiency.

We kind of have three levels of what we can call a comment that we might see.

A controlled efficiency, which we usually don't include in this report, it's pretty minor, we just pass those comments to management.

a significant deficiency and then material weakness is really when we think that there's instances in place that or controls in place that aren't catching something or we see repeated activity where the controls haven't caught that that could really define what a material weakness is so last year we had it as a significant deficiency on that current year status comment we kind of bump it up to the material weakness and we recommend just reviewing the comments for the current year comment on capital assets

And then we had fiduciary fund reporting as well, which was a couple, it has the 84 requirements on funds that may not have been appropriately reported.

Last year we worked to get those all classified correctly.

So as such, that comment's no longer applicable.

And then we had nothing for federal award program audits last year, so that's great.

We did have two comments for Commonwealth of Virginia procedures outlined by the APA.

These can get pretty specific.

The APA kind of looks at some stuff a little more thoroughly than I would like, but because we're usually going through these processes, a lot of time they ask us as auditors to kind of tack these in with some stuff.

So last year, there was a comment relating to social services, where there is some information security policies that kind of has been maintained and updated appropriately.

We saw that last year, gave a comment on it.

This year, we went back to do the testing.

They had responded to that.

So as such, it's no longer applicable.

And then the annual school report comment would be the last one from last year.

We have to look at the annual school report submission that gets submitted to the Department of Education.

There's some things that they want us to verify over that.

Mostly the accuracy of revenues and expenditures that are submitted.

Last year it wasn't submitted by the time we concluded the audit, so we had a comment that it had not been submitted at the audit date.

So on 172 under the capital asset report, the recommendation.

So this would have been launched.

Yes.

So last year's comment was geared towards we saw projects in CIP that have been completed and not necessarily placed in service and so being accurate on the time that those are placed in service and depreciation expense begins on those projects.

Capital assets kind of hard from an accounting perspective when

A lot of what governmental accounting is geared towards is budget accuracy and ensuring that the board is appropriately responding to or approving the budget and results are accurately reported there with that as well.

So capital asset accounting kind of exists outside of that process and it's kind of a challenge for the accounting team because

They're receiving information only at the expenditure detail level.

And so those balances aren't necessarily given the same amount of controls in the same way that other transactions might be just when you make a payment or record an expenditure revenue when it comes in.

So our recommendation last year was if you can bridge that gap almost between accounting

and get them more involved with project managers or get them more involved with those who are going over the budget and looking at you know a five or six year trajectory on which plans are coming in or which new projects might be in service or you know planned for in the future that could be a positive.

another department that you could look at that would be treasury because they're kind of the ones that are going out and looking at debt management and which debt is going to be covering largely capital projects and so that can be helpful as well if they're looking at specific expenditures on the debt management side is the accounting team also kind of aligning the capitalization of certain projects in a way that is not only easily identifiable for the accounting perspective but also kind of consistent with both sides of that

so that's kind of what the comment is geared towards when we word it that way is like you can bring others into that equation it kind of gives a little bit more accuracy just out of having a counting look at those balances because they're only really aware of what they've seen being spent be spent or received in a certain year not necessarily what everybody else might be looking at so your comment about treasury is what you meant by performed by departments outside of the

Jacob, do you have any, like if it's project management to account?

I guess I'm just, I got to tell you something.

I got to work hard with speaking audits when you all show up.

So for me, I'm thinking, all right, there's a project manager over a project.

I don't know if they're doing monthly reviews to say where are we at to communicate something to accounting or if they even noted.

And then vice versa on the way back.

So I'm just trying to

Yeah, so we do have regular conversations with the project managers, and particularly OMB, as we're looking at the capital budgets and how we're utilizing those funds throughout the year.

That's really where historically our focus has been on.

And I think it was relevant, particularly from the previous year's audit, that accounting was not a part of that conversation included in there, or included in the types of updates on projects that were talked about in those meetings.

Thank you.

I'll also add, not to overcomplicate it, but sometimes there are projects that are then abandoned, right?

So you start looking at things and you put it in CIP because it's supposed to be a future project.

And sometimes, and this didn't happen here, I'm saying it's one of those things that on the other hand, not just to place it in service, but when it's like, okay, we're going to go a different direction and then you need to take that off your capital asset.

It doesn't have future value for you anymore.

Right.

And two, with the capital projects, there's kind of this like curve almost on it.

It starts off small, and then you hit about 20% of the way through that project as you're working through it, and costs tick up really quick.

And from the accounting perspective, it's really easy to see those contractor applications come in for a million or $2 million at a time.

And then as it gets towards the end, it tapers back down and things get

You know, pretty small as far as the transactions that come in.

Maybe you're doing a blue tape walkthrough or something.

At that point, you're really not paying much anymore.

And so from the accounting perspective, there's not much that they see at that point.

And that's kind of when a project at CIP can almost get forgotten about.

It does seem like in most cases, material is in the material weeks and significantly deficient that a lot of the fixes and communication are between the different areas.

Yeah, it's kind of all of those things with

We kind of look at the whole picture when determining that, right?

And so, and part of that is like, if we hadn't come in to audit, do we think material errors would have happened?

And the answer is probably yes.

I don't think that we're ending with material errors, right?

But we did have to send the capital assets information back a couple of times.

And so just making sure it's right.

So it was a prior comment.

And again, like you'll see, I mean, it was not in a great situation this year with staffing.

And that was out of everybody's control.

And so it's unfortunate.

But that is part of what is your whole control environment?

What is the plan, the backup plan?

And that's part of it.

So we do kind of try to look at all of the things.

And the process is there.

conversation.

I have, Jackson and I have like, let's get some data on how many school divisions are not meeting this.

It seems like that's something that, you know, if it was just Albemarle, then that's a different thing.

But if a lot of school divisions are having issues hitting them, that would be an easy fight away and support fight between the SBA.

And if you look at the state code as it outlines kind of that requirement on that submission and how the APA outlines the requirement of us to look at it historically they've always said that that report in state code should be submitted by September 15th this is actually the first year it kind of changed and they said it should be submitted by the deadline so I think it's not really an indicator that they're also looking at it that way but on our end that kind of does give the appearance of like

Well, the December 15th deadline of the localities, like it all kind of goes together.

So if you move back other deadlines, and we did move back the locality transmittals, right, which is not even a word we ever even talk about in our presentation, but we take our big report and put it in Excel for the state.

And so

It's essentially the locality equivalent of the annual school report are the transmittals.

That deadline used to be November 30th.

I don't want to age myself, but I feel like it was not that long ago, but I brought that up at a meeting on Friday and everybody was like, oh, it's as long as I've been here.

But when I started for sure, it was November 30th and the localities lobbied to get it moved to December 15th.

because with the Thanksgiving holiday, it was always a disaster.

It was a disaster.

And so December 15th is great.

However, we still have to present to every localities governing body by December 31st.

And so

There's, right, so every time we move a deadline back, it kind of just creates this other issue.

So the localities still have this 12-15 deadline.

I don't think it's ever going to get, I don't think it's going to get later than that, because then the data is already six months old, like the information, and so if they move the ASR back, is that going to impact

because the revenue and expenses that are in the ASR need to be reflected correctly in the locality report.

So I don't know.

This isn't all that to say, but our procedure is not so much to test that it's turned in timely.

Our procedure is to make sure that it is accurate.

So the only reason we had a finding for it last year is because we couldn't verify accuracy and now we can.

So to us, if you turn it in September 30th versus

November 15th, that's fine.

You won't hear a peep out of us if you turn it in by November 15th and we have it and we can test the accuracy.

Anybody else for Megan Radisson?

All right.

Thank you all.

Thank you, Jacob.

Good morning, everyone.

This flyer, y'all should have copies, is to introduce our new and upcoming financial management system, which is Tyler ERP.

Many of you may already be familiar with this system.

For your awareness, Tyler will completely replace our current Great Plains, which is our financial system of record, and ePro,

which is our purchasing system that we use to integrate with Great Plains.

It'll completely replace both of those systems with a purchasing and procurement front end that will be unified with the financial and accounting back end.

So if you'll take a look at the left column of the flyer, you'll see some of the enhancements that should help us in the future have a cleaner audit.

Starting with purchasing and procurement, there's a greater integration of purchase cards into our system that will allow

allow for easier purchase order liquidation and a true linkage of purchase card expenditures without any manual intervention.

Currently, this is a manual process that will be eliminated with the new system.

By moving this to a single system, errors and issues with importing receipts, account codes, and securitization errors will be eliminated.

We'll scroll down to the reporting feature.

Oh, another highlight I like to highlight on that section, my apologies.

Additionally, all expenditure documentation can be pulled from one place.

Right now, things are located in various spaces.

We'll have one central repository for the collection of all the expenditure information for accountants or anyone else who have reviewed when it's time to sample for the audit.

On the reporting component, reporting will be greatly enhanced and any document connected to in any way

to any of our processes or procedures to include bids, contracts, requisitions, purchase orders, invoices and checks will be linked for easy access and verification by our accountants and also our auditors.

We should be able to provide read-only access if they like that so that they can actually go into our system to be able to review information.

There are large improvements underway to ensure that capital assets are easier to track and account for

such as an automatic review process that looks at purchases in a particular account codes and dollar thresholds and forwards them directly to an accountant for review.

So this should be an automatic process that will flag information so that the accountants can review the information so that we'll know whether or not we need to capitalize an asset and put it into the asset management module for the new system.

If we take a look at the right-hand side of the flyer, these are some key dates that have elapsed.

These are some key dates related to the project timeline.

If you notice, the first date has already elapsed.

This is our system procurement, July 2023 through December 2023.

Our go-live date is set for April 1, but in the meantime, we're currently in the phase of the implementation of the ERP system.

That started in January of 2024, and it will conclude in April of 2025.

To go live date, we'll be reaching out, doing some training, communicating to our partners and making sure that everyone is aware of the new system and how to use the new system.

As mentioned, April 1st will be our go live date.

And then we'll work on post deployment support from April 2025 through July 2020.

So these are some of the features that we wanted to highlight to you all.

That should help improve our financial reporting for the future and improve our consistency year over year as we continue to have audit and have our audit report.

I'd like to highlight that there's been a lot of staff that has worked diligently to include our partners, our partnership with schools on this project.

It's taken a lot of hours to get it to the stage where we're currently in and we are currently ahead of schedule.

So that's great news.

Looking forward to the implementation.

and just very appreciative for the staff that we have that's able to help us mitigate some of the risks that we face with our current system so that things will be better in the future.

Are there any questions?

Oh, I'd also like to highlight our lead on the project, which is Dennis Click.

He's one of our deputy controller.

It sounds like that you think the implementation's going positively.

It sounds like a self-wagging is what's fitting this issue of the asset build-out.

You were probably explaining the last one when I was writing my note on that.

So that is going to be a component of the system that will show our additions or subtractions or depreciation calculations.

It's going to be like a

A repository for information related to the assets that are in the module.

It will not feed directly into the ledger or the trial balance, but it's a repository that an accountant can go to to verify information.

And is the self-flagging programmed in there by a department?

Like I'm thinking of the staffing issue.

If I come in and I have to put my own self-flag in for a project and then I'm gone, the next person coming in might not.

To a certain degree, yes and no.

So is flagged by the account code that's used and the dollar threshold?

So as long as the account code, which will be entered by an individual, is correct, it will be flagged.

We're having several training courses and classes to ensure that individuals know which account codes to use as it relates to these purchases.

So that will take place on the front end of the system when the item is actually procured to ensure that the proper account code is put in the system so that it will be flagged in the process.

Is there a way that

I don't think this one will have that type of capabilities as far as the coordination and communication effort that we need to have with project managers and those that work through the budget and the debt related to it.

But one of the good things is in the

Having at least the consolidated information is a good start.

So we know where we need to have those conversations with project managers and those that are on projects.

Yeah.

And there's a lot of things.

We have a lot of other clients that use the same software.

And some of the things, it's meant for governments.

And so it's meant to capture the things that you're trying to capture and have those processes in place.

Optimistic.

It does make our lives a little bit more challenging, usually, in that first audit year with the new system.

We're definitely learning the new process, and almost other people are also learning that process.

With us, can we ask questions a little bit differently, usually, than an accounting head might?

So it does kind of create some

Problems in the future that we're looking at structuring into the audit, just as far as like communication and timelines.

And it could be interesting for FY25's audit, just because April 1, April 1 is, you know, later in the fiscal year.

So I don't know, there's still gonna be heavy lift.

It's a whole heavier lift, because you guys are gonna be almost doubling up on efforts, but yeah.

So I see that the self flagging helps with the capital piece.

You again may have been saying this and I was thinking something else.

But how does it help with the grant piece being one year versus another year?

I think that the biggest component will be the reporting.

Right now, not only do we have

multiple systems, we have E-Pro, we have GP, but getting reports across those two systems is very manual and labor intensive.

With a fully integrated system like Tyler, you'll have all that all in one, but you also have access to the reports that can see across all those modules, all those systems, and that will be the easiest part.

Running the reports will, right now,

I would say it's very difficult to get an on-demand report out of our current system and current structure, but with Tyler, anybody that has access to the financial system will always run an on-demand report at any time.

Thank you.

I did just want to take a moment to thank all the folks that have been a part of this project.

This has been a long process to get where we are, but we're moving towards user acceptance testing and towards training.

There's been a lot of effort and partnership on documenting processes, looking at our data, looking at our systems, I think schools for their partnership and working through

areas where schools integrates and has most of their transactions in the financial system.

And then also as for Subaru housing members particularly, this is a result of the core systems modernization project.

And you expect to see a lot of efficiencies, a lot of better reporting and access reporting as a result of this.

Just as a side note, I would think it would be of interest if you're tracking it when the implementation happens.

Like, I get it.

At the report now, it's real time intensive to get an on-demand report.

It might be a nice little anecdotal bit of info to know how much time is saved once the system's up being used properly.

Just to justify.

We budget for things, we put them in place, we don't always do a good job of telling the story of what the savings were or the efficiencies are after they're realized.

And I think what we'll see more is our staff is a

An integral part of the process in the current system because there's a manual nature to those elements with the new ERP that is automated.

And so we have the ability to then focus their efforts in other areas.

All right.

We'll move on to our last item on the agenda.

Thank you.

Thanks for allowing me to present today.

This is the third report since the inception of this Broadway Sin Abuse program.

There is a paragraph here on the background.

We started this in January of 2023.

The Board of Supervisors has staggered this program.

And so each audit committee meeting presents the results from the prior meeting.

There is a little verbiage here about the process and procedure.

There's essentially

Four ways that someone can report alleged abuse, fraud, or waste.

And so the process involves the risk management team.

And then if it's deemed as a substantial issue, we'll turn that over to the internal person.

If the person is within the community, we'll turn that over to the appropriate officials for further investigation.

Since the last

audit committee meeting there's been three complaints reported two of those were general in nature and did not have much substantial information to actually investigate it's important

to know that this is an anonymous system.

And so if we're not given the person's information, it's very difficult to follow up and ask questions and gather more information.

So two of those were closed because of limited information.

The one there, number two, the employee payroll abuse, that was a phone call from a business in the community.

And we took internal steps to conduct an investigation.

Individual went through the disciplinary process of their organization.

The report has been closed with no further action.

So those are the three actual reports.

And then I wanted to highlight for this committee's awareness, there were some steps that were put in place by the Office of Investment and Dam Management, which is formerly known as Treasury.

They implemented a feature on our bank account called positive pay.

And so we intercepted two fraudulent checks that were a total of $17,402 that would have possibly otherwise been cashed had we not had this positive pay in place.

And so that was incorporated last July.

Yes.

So just moving around the spaces, I noticed the posters are still there.

But you're right.

There could be a reminder.

I would propose we do that kind of on the anniversary, maybe in January, the first start.

They were.

They were checks.

They were actual valid checks.

The information was correct, but the person had switched the payee's name.

And so when it went through the bank, essentially, the bank does a verification for us now.

And so the payee and the amount match.

That's all if there's no other questions.

This is indicative of the system working, and so I'm really excited that there were only a few items to report.

Thank you, Laura.

That's all the items we have on the agenda for today.

Just wanted to circle back on the audit.

Just a reminder, the final financial statements were presented to the board of supervisors at their meeting on December 11th.

Megan will also be there to accompany Shenandra in that presentation.

But the formal results, and let me just talk about compliance today, compliance items, but the formal results will be, and the numbers will be right at the end.

Thank you.