09-17-2002 Special Called Regular Meeting

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• CJ Audit Committee Meeting Minutes -September 17, 2002 -Page 2 report from the City Secretary's Office under the Texas Public Information Act. With that, Mr. Tiller was introduced. Councilmember Warren requested to speak prior to Mr. Tiller speaking. Mr. Warren requested it be noted, for the record, that with exception of hiring Mr. Tiller, according to the hiring process; any other action that has went on with the auditor, Mr. Warren had no part of. Mr. Tiller distributed copies of the draft audit report to Council; outlining and walking through the mechanical organization of the report; then describing how they went about performing their work in compiling the report. On reviewing the report, they added some detail. Before Tab 1, you'll see the transmittal letter. Immediately following Tab 1, you will see our written report. Behind Tab 2, you will see a dollar summary of transactions we reviewed during this engagement; explanations of headings and notations that will help you walk through the detail schedules that are attached in the back; and analysis of transactions in summary form, which will be explained. Tabs 3-10 will be detailed transaction schedules, by credit card holder, for the entire audit period, approximately 68 months. Mr. Tiller explained how they tried to understand the needs in terms of this engagement, and fashioned their engagement letter with 10 points in the letter. Once the letter was performed, we basically went through Chairperson Engelken to request and obtain all information, in fairness to all parties involved. Our review began primarily with looking at all of the statements from Accounts Payable that were used to make payment for American Express and Visa Bank Card bills during the audit period. Those, from the accounting standpoint, are your beginning source documents for this type of engagement and as our beginning database. We have looked at what was paid, listed out every transaction, and looked at the documentation behind the statements. From there, we requested certain accounting information; looking at different types of transactions as they possibly interfaced with the credit card system, travel reimbursement forms and information. We looked at numerous documents the City uses that may interface with the credit card process. Once we reviewed all that information and had some understanding of the transactions that had transpired, we questioned and interviewed fifteen non-card holder employees in an attempt to understand the process. We approached this process beginning in reverse order and worked up to the point of the accounting chain, to the point of purchase. Ultimately, we interviewed all six of current credit card holders to gain an understanding of what was developing in the system and how the paper flow and the approval process for these expenditures were occurring. You will see in the report a description of this process, as we saw it as a result of those procedures. After we completed the interviews, we requested (again through Mr. Engelken) all credit card holders to provide us additional support/information/calendars, anything of support to add additional documentation to these transactions. This will be explained as we move further in the report.