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CHUCK ENGELKEN, CHAIR <br />Councilmember District 2 <br />DARYL LEONARD <br />Councilmember District 3 <br />TOMMY MOSER <br />Councilmember District 4 <br />JOHN ZEMANEK <br />Councilmember At -Large A <br />Alternate Member 1 <br />JAY MARTIN <br />Councilmember District 5 <br />Alternate Member 2 <br />MINUTES OF MEETING OF FISCAL AFFAIRS COMMITTEE <br />AUGUST 15, 2011 <br />The Fiscal Affairs Committee met on August 15, 2011, at 5:00 p.m. in the La Porte City Hall Council <br />Chambers, 604 West Fairmont Parkway, La Porte, Texas, to consider the following items of business: <br />1. Call to Order <br />Chairman Chuck Engelken called the meeting to order at 5:00 p.m. Committee Members present <br />were Councilmember Daryl Leonard; Councilmember Tommy Moser; and Councilmember Jay <br />Martin, Alternate Member 2. Absent: Councilmember John Zemanek, Alternate Member 1. <br />Councilmember Dottie Kaminski attended the meeting. <br />2. Approve and sign the engagement letters from Null - Lairson for the City of La Porte and La <br />Porte Area Water Authority — M. Dolby <br />Finance Director Michael Dolby and Tom Pedersen with Null - Lairson discussed engagement letters <br />for the City of La Porte and the La Porte Water Authority. The Committee was informed the La <br />Porte Development Corporation would be included as a part of the City audit processes utilizing <br />random sampling. If the Committee desires an additional audit of the La Porte Development <br />Corporation, a separate engagement letter would be required. <br />Chairman Engelken advised Mr. Dolby the Committee does want a full audit of the La Porte <br />Development Corporation transactions for the past two years, and a separate engagement letter <br />would be needed. The Committee will meet August 22 at 5:00 p.m. to approve an additional <br />engagement letter for the La Porte Development Corporation. <br />Committee Member Leonard questioned Mr. Pederson on how random samplings are determined. <br />Mr. Pederson responded the population is determined with a random number generator being <br />applied to the population. The firm is also required, as part of the audit, to form judgments on <br />transactions that come up during an audit were in compliance with state laws and regulations. <br />Committee Member Moser questioned if an opinion or findings would be expressed after the audit. <br />Mr. Pederson responded an opinion would be expressed, but the firm does not provide an opinion <br />on internal controls. It will provide an opinion on management comments and findings. Mr. <br />Pederson informed the Committee that the firm is required to report any instances of <br />non - compliance during an audit. <br />Chairman Engelken questioned if the water loss during water main breaks would be tested. Mr. <br />Pederson responded the firm would audit water consumption in utility billings and perform an <br />analytical type of review. <br />Page 1 of 2 <br />August 15, 2011, Fiscal Affairs Committee Minutes <br />