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HomeMy WebLinkAbout3. Village Code Amendment - Audit CommitteeVillage of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: FINANCE DIRECTOR DATE: SEPTEMBER 19, 2012 SUBJECT: AMENDMENT TO CHAPTER 5 OF THE VILLAGE CODE — AUDIT COMMITTEE PURPOSE: To present for the Board's consideration an ordinance amending Chapter 5 of the Village Code. BACKGROUND: Ordinance 5510, approved September 6, 2005 established an audit committee of the Village of Mount Prospect. The purpose of the audit committee is to further enhance the independence of the auditor by providing a direct link between the auditor, the corporate authorities and village management. The committee is advisory in nature and intended to assist the corporate authorities in obtaining and monitoring the village's annual audit to ensure a fair and accurate presentation of the village's financial statements. DISCUSSION: Several revisions to Chapter 5 of the village code are being recommended with respect to the governance and administration of the audit committee. Material changes appear in the committee purpose and committee membership sections of the code along with the process for selecting the committee chair. Revisions made to Section 17.101, creation and purpose, are intended to illustrate the oversight nature of the committee. One central purpose of the committee will be to focus on assessing compliance with existing policies and procedures and the adequacy of internal controls. The makeup of the committee listed in Section 17.102, membership, has been revised to reflect the Finance Director becoming an ex- officio member to be replaced on the committee by a second member of the board of trustees. Also changed in this section is the process for selecting committee chair. The chair will now be selected by all members of the committee where previously the committee chair was identified in code to be the village president. Other minor changes were made to Chapter 5, Section 17 for a more consistent read with other sections of the code dealing with boards and commissions. I:\Audit\Audit Committee \2012 \Village Code Amendment - Audit Committee.docx Village Code Amendment — Chapter 5 September 19, 2012 Page 2 RECOMMENDATION: It is recommended the Village Board approve the attached ordinance amending Chapter 5 of the Village Code. David O. Erb Finance Director I:\Audit\Audit Committee \2012 \Village Code Amendment - Audit Committee.docx ORDINANCE NO AN ORDINANCE AMENDING CHAPTER 5 OF THE VILLAGE CODE OF THE VILLAGE OF MOUNT PROSPECT REGARDING THE AUDIT COMMITTEE BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS, ACTING IN THE EXERCISE OF THEIR HOME RULE POWERS: SECTION 1 : Article XVII, entitled "Audit Committee," of Chapter 5, Boards and Commissions, of the Village Code of the Village of Mount Prospect is deleted in its entirety and a new Article XVII, "Audit Committee," inserted, to be and read as follows: Article XVII, AUDIT COMMITTEE 5.1701. CREATION AND PURPOSE: There is hereby established an audit committee of the village of mount prospect. The purpose of the audit committee is to further enhance an auditor's independence by providing a link between the auditor and the village president and board of trustees. The committee is advisory in nature and assists management and the village president and board of trustees to ensure a fair and accurate presentation of the village's financial statements. The Committee shall also be responsible for audit selection, oversight of the annual audit and oversight of internal controls. 5.1702. MEMBERSHIP: A. There shall be 5 voting members of the audit committee. All members shall be residents of the village, except the director of finance, who shall serve as an ex- officio member. The voting members, who shall be appointed by the village president Nvith the advice and consent of the board of trustees, shall consist of the folloNving: 1. Two (2) members of the board of trustees; 2. One (1) member of the finance commission; and 3. Two (2) residents -at- large. B. Every two years at the first meeting of the calendar year, a chair shall be elected by the members of the committee. The chair shall serve no more than two consecutive terms as chair. C. Each member of this committee shall serve for a term of four (4) years, or until a successor is appointed and qualified. Terms may be adjusted by the village president and board of trustees to assure no more than 3 terms end in any particular year. In the event that a member of the audit committee is an elected official who fails to retain a seat on the Board of Trustees, the committee position shall be vacated and another member of the board of trustees shall be appointed to serve any remaining portion of the term. 5.1703. ORGANIZATION: A. Immediately upon its organization, the audit committee shall select from its membership a vice chair and a secretary. The persons so selected shall serve for terms of two (2) years, and may be reselected to the same position. 293609_1 B. The committee shall adopt rules for the conduct of its meetings and shall keep written minutes of all meetings and other procedures. Robert's Rules of Order shall govern the conduct of the meetings to the extent that parliamentary issues are not addressed by anv rules, Nvhich may be adopted by the committee. C. All meetings of the committee shall be public and its minutes shall be available for examination in the office of the village clerk during regular business hours. 5.1704. DUTIES AND RESPONSIBILITIES: In advising and assisting the village president and board of trustees, the audit committee shall have the folloNving duties: A. Selection of an independent auditor. Results of a competitive RFP process Nvill be brought to the audit committee for discussion and recommendation to the village president and board of trustees. B. Oversight of the village's fraud risk assessment program. Guidelines for monitoring compliance are included in the Statement of Auditing Standards No. 99 entitled — "Consideration of Fraud in a Financial Statement Audit ". C. Oversight of the annual audit to include 1) an update on pre -audit conference, 2) a status report on progress of annual audit, and 3) the results and findings of the final audit report. D. Present annually to the village president and board of trustees and management a written report on its activities in discharging its duties and responsibilities set forth in this Section. . 5.1705. MEETINGS: A. The audit committee shall meet at least twice a Near. Its meeting schedule Nvill correspond to Village staffs Nvork on the annual audit. Notices and the conduct of its meetings Nvill be in accordance Nvith the open meetings act. The chair may call for special meetings as needed. 293609_1 2 SECTION 2 : This Ordinance shall be in full force and effect from and after its passage, approval and publication in pamphlet form in the manner provided by law. AYES: NAYS: ABSENT: PASSED and APPROVED this day of 2012. Irvana K. Willcs, Village President ATTEST: Lisa Angell, Village Cleric 293609_1