CC RES 2013-082 RESOLUTION NO. 2013-82
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO
PALOS VERDES APPROVING ESTABLISHING A STANDING AUDIT
COMMITTEE.
WHEREAS, in June 2013, the Los Angeles County Civil Grand Jury released its
2012-13 Civil Grand Jury Report, including an investigative report on Fiscal Health,
Governance, Financial Management and Compensation for the Cities within Los Angeles
County; and
WHEREAS, a recommendation of the Civil Grand Jury Report was for each city in
Los Angeles County to formally establish an audit committee as a best practice to provide
independent review of the city's financial reporting process, internal controls, and
independent auditors; and
WHEREAS, since 2008 the Mayor of the City of Rancho Palos Verdes has
appointed an ad-hoc subcommittee of the City Council to serve as the Audit Committee;
and
WHEREAS, on December 17, 2013, the City Council reviewed the staff report and
the City Council Policy titled "Audit Committee";
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES HEREBY FINDS, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. The City hereby establishes a Standing Audit Committee, comprised
of two council members appointed annually by the Mayor
Section 2. The City hereby approves the City Council Policy titled "Audit
Committee", which is attached hereto, and incorporated herein by this reference, that
defines the responsibilities of the City's Audit Committee.
PASSED, APPROVED AND ADOPTED THIS 17th d • I ember.
i.
pMayor
ATTEST:
/ / Ii !/
City Clerk
State of California )
County of Los Angeles ) ss
City of Rancho Palos Verdes )
I, Carla Morreale, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2013-82 was duly and regularly passed and adopted by the said
City Council at a regular meeting thereof held on December 17, 2013.
/ 1 /
City Clerk
CITY COUNCIL POLICY
CITY OF RANCHO PALOS VERDES
NUMBER: 44
DATE ADOPTED/AMENDED: December 17, 2013
SUBJECT: Audit Committee
PURPOSE
The Audit Committee will serve the City of Rancho Palos Verdes to provide review
and oversight of independent audit of the City's financial statements. The Audit
Committee shall report all findings to the City Council.
COMPOSITION, QUALIFICATIONS AND COMPENSATION
The Audit Committee is established as a subcommittee of the City Council,
comprised of two members of the City Council, annually appointed by the Mayor.
If the Audit Committee does not have a member that is technically qualified to
properly review the City's financial statements, the Committee may elect to retain
the services of a third-party professional, such as a Certified Public Accountant
with experience serving local government. The City's independent financial
statement auditor(s) shall report directly to the Audit Committee. Members of the
Audit Committee do not receive compensation, nor will be eligible for
reimbursement.
SCOPE OF RESPONSIBILITIES
The scope of responsibilities are summarized as follows:
1) Make a recommendation regarding selection of the City's independent
financial statement auditor during the procurement process. Typically, the
City issues a new contract for independent audit services every 3 to 5 years.
2) Meet with the independent auditor at least twice during each annual
engagement, including an audit planning meeting and an exit interview.
3) Analyze and report to the City Council any significant findings of the annual
audit and possibly make recommendations regarding such findings.
4) Provide findings, if any, to the City Council regarding the following reports:
a. City's Comprehensive Annual Financial Report (CAFR);
b. Separately issued financial statements of the Improvement Authority;
c. Internal Control report prepared by the independent auditor;
d. Single Audit Report for federal financial assistance (if applicable);
and
e. Management Letter prepared by the independent auditor, and
management's response (if applicable).
5) Any other tasks assigned by the City Council
Annual Report to the City Council
After reviewing the City's CAFR, the Audit Committee shall make a report of its
findings, if any, to the City Council. In its annual report, the Audit Committee shall
specifically state whether it has discussed the financial statements with
management and the independent auditors.
Reports of Financial Malfeasance
If the City receives any reports of financial malfeasance, such as those from an
internal whistleblower or those from an outside party, the report shall be forwarded
to the Audit Committee for consideration. If the report is found to be credible, the
Audit Committee shall retain an independent third party with sufficient expertise to
conduct an investigation. Upon completion of the investigation, the Audit
Committee shall report its findings directly to the City Council and offer
recommended action.
MEETINGS
The City of Rancho Palos Verdes Audit Committee shall meet at minimum semi-
annually (one planning meeting and one exit meeting) with the City's independent
auditor. The Audit Committee shall schedule further meetings as they see fit. The
meetings of the City of Rancho Palos Verdes Audit Committee shall be subject to
the Ralph M. Brown Act.
Glimpse
Resolution No. 2013-82
Attachment
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