* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. WELL, GOOD EVENING. [Audit Committee Meeting on September 24, 2024.] [00:00:02] I'M ED MOORE, CHAIR OF THE AUDIT COMMITTEE, AND THIS IS THE AUDIT COMMITTEE. UH, MEETING, UH, TODAY IS SEPTEMBER 24TH. SEPTEMBER 24TH, AND IT IS 2:30 PM WE HAVE WITH US ALSO CHRIS OTT, WHO IS A MEMBER OF THE AUDIT COMMITTEE, ALONG WITH OUR CITY MANAGER, JUD REX, AND OUR AUDIT TEAM DIRECTOR JED JOHNSON. WE HAVE A HOST, , A HOST OF STAFF WITH US TODAY, AND WE JUST GLAD TO SEE ALL OF YOU. SO AT THIS POINT, WE'RE GOING TO BEGIN OUR MEETING WITH THE, UH, APPROVAL OF THE JUNE 26TH, 2024 MEETING MINUTES STARTING OUT. UM, IF EVERYONE HAS HAD OPPORTUNITY TO READ THOSE MINUTES, I WILL ENTERTAIN A MOTION TO APPROVE. MR. CHAIRMAN, I'D LIKE TO MAKE A MOTION THAT WE APPROVE THE MINUTES AS PRESENTED. OKAY. CAN'T FIND HIM. OKAY. WON'T, HE WON'T BE ABLE TO MAKE IT. I DID GET AHOLD OF HIM, BUT HE WON'T MAKE IT. HE WILL NOT BE ABLE TO MAKE IT. OKAY. DO WE NEED A BUT YOU DO HAVE A QUORUM. OKAY. WE DO HAVE A QUORUM. DO WE NEED A SECOND TO THIS? UH, MINUTES DO WELL SINCE HE MADE THE MOTION. YOU CAN. I'LL SECOND IT. OKAY. OKAY. SO MOVED. AND SECOND. ALL IN FAVOR? AYE. AYE. ALL OPPOSED? OKAY. THE NEXT ITEM ON THE AGENDA ARE THE PUBLIC COMMENTS. PERSONS WHO DESIRE TO ADDRESS THE COMMITTEE ON ANY ITEM ON THE AGENDA ARE ALLOW THREE MINUTES TO SPEAK. TESTIMONY MAY BE HELD UNTIL THE ITEM IS CONSIDERED OR GIVEN AT THE BEGINNING OF ANY COMMITTEE MEETING. INVITED TESTIMONY MAY ALSO OCCUR AT ANY TIME SUBJECT TO A REQUEST OF THE MEMBER OF THE COMMITTEE AND WITH THE APPROVAL OF THE COMMITTEE. CHAIRPERSON. UH, SECRETARY, DO WE HAVE ANYONE PUBLIC COMMENTS? OKAY. WE DO HAVE ONE. I DON'T THINK WE HAD ANYBODY SIGNED IN YET. DID WE? DO HAVE YES, SURE. WE'LL HAVE OUR TIME. ANY PUBLIC COMMENTS FROM ANYONE? YES. RIGHT HERE. OKAY. YOU MAY COME, YOU FILE SPEAKER CARD. OKAY. IF YOU WILL GIVE US YOUR NAME AND ADDRESS AND, UH, YOU MAY PROCEED. OKAY. HI, I'M BRENDA JACKSON AND I LIVE AT 55 0 9 SADDLEBACK ROAD IN GARLAND 7 5 0 4 3. I PRESENTED THIS TO THE ANIMAL SERVICES ADVISORY BOARD BEFORE, AND I'M SURE THAT THIS HOPEFULLY WILL BE ADDRESSED IN THE AUDIT COMMITTEE RESULTS. BUT I'VE BEEN MONITORING AND TRYING TO UNDERSTAND THE LIVE RELEASE RATE COMPUTATION, UM, FOR SEVERAL YEARS NOW. MY CONCERN FOR ACCURACY IS NOT NEW, AND IT DATES BACK TO EVEN WHEN THE PRIOR ANIMAL CONTROL MANAGER WAS OVERSEEING SHELTER OPERATIONS. IN FACT, THERE ARE A FEW STANDARDS THAT SHOULD BE USED. THERE'S AN OLDER ASAL ALARMER METHOD, THE ASER LIGHT METHOD, UH, AND THE A-S-P-C-A ALSO HAVE THEIR OWN LIVE RELEASE RATE COMPUTATION. MOST LIVE RELEASE RATE COMPUTATION ARE DERIVED FROM THE ANIMAL INTAKE COMING FROM THE FIELD AND OVER THE COUNTER. IN OTHER WORDS, EVERY ANIMAL THAT COMES INTO THE SHELTER IS CONSIDERED AN INTAKE AND ASSIGNED A SPECIES. THE LIVE RELEASE RATE IS ONLY COMPUTED AGAINST THE INTAKE OF CATS AND DOGS, WHICH ARE WHAT'S CONSIDERED THE DOMESTIC ANIMAL INTAKE. THE POSITIVE OUTCOMES THAT ARE ALLOWED ARE ANIMALS RECLAIMED BY OWNER ANIMALS ADOPTED EITHER ON SITE OR OFFSITE ANIMALS PULLED BY RESCUE GROUPS AND ANIMALS THAT LEAVE THE SHELTER ALIVE, WHICH IS TRANSFER IN OR TRANSFER OUT. NEGATIVE OUTCOMES ARE ANIMALS THAT DIED IN CARE AND ANIMALS THAT WERE HUMANELY EUTHANIZED. BUT JUST BECAUSE THEY WERE HUMANELY EUTHANIZED DOES NOT MEAN THEY'RE COUNTED AGAINST THE LIVE RELEASE RATE AS AN OWNED ANIMAL THAT'S SURRENDERED AND HUMANE EUTHANASIA IS REQUESTED, THAT ANIMAL IS ALSO EXCLUDED FROM THE DATA. THE ANIMAL IS CONSIDERED UNTREATABLE. IN OTHER WORDS, IT COMES IN WITH SEVERE HEAD TRAUMA, UH, PUNCTURED LUNGS, ET CETERA. OBVIOUSLY, IT CANNOT BE SAVED. SO THAT'S CONSIDERED A MEDICAL AND IT SHOULD NOT BE COUNTED AGAINST THE LIVE RELEASE RATE ON THE MONTHLY SERVICE, ON THE MONTHLY STATISTICS DASHBOARD REPORT. UM, AND I'VE GOT SOME EXAMPLES I CAN HAND OUT GARLAND. UM, I JUST, I CANNOT FIGURE OUT ELDER OR I CAN FIGURE OUT ELDER. WE'LL, WE'LL GET THOSE PASSED OUT FOR YOU. WE'LL GET THEM PASSED OUT FOR YOU. OKAY. THANK YOU. UM, BUT THEIR LIVE RELEASE RATE IS BEING COMPUTED FROM YES, THEIR LIVE RELEASE RATE IS BEING COMPUTED FROM, UM, ANIMALS COMING [00:05:01] INTO THE SHELTER AND THE ANIMALS EUTHANIZED, WHICH IS NOT THE WAY IT'S SUPPOSED TO BE COMPUTED. IT SHOULD BE COMPUTED DIFFERENTLY AND BASED UPON WHAT THEY EVEN HAVE ON THEIR WEBSITE. UM, THAT THE LIVE RELEASE RATE IS THE PERCENTAGE OF ANIMALS WHO LEAVE THE SHELTER THROUGH ADOPTION, RETURN TO OWNER OR REPLACEMENT WITH RESCUE PARTNERS. HOWEVER, FOR THE LAST SEVERAL MONTHS, THE DOMESTIC LIVE RELEASE RATE IS BEING COMPUTED FROM DOMESTIC ANIMALS HUMANELY EUTHANIZED DIVIDED BY THE DOMESTIC ANIMAL INTAKE. AND THAT'S NOT AN ACCEPTED METHODOLOGY FROM ANY OF THE, UM, LIVE RELEASE RATE REPORTS TO BE CONSIDERED A NO KILL SHELTER. THANK YOU. THANK YOU SO VERY MUCH FOR YOUR TESTIMONY. ARE THERE OTHERS WHO, ANY OTHERS WHO WOULD LIKE TO, UH, HAVE PUBLIC COMMENT? IF NOT, WE'RE GONNA GO AHEAD AND CLOSE THAT ITEM ON THE AGENDA ITEM FOR INDIVIDUAL CONSIDERATION. THIS POINT, WE'RE GONNA GO AHEAD AND TURN THE MEETING OVER TO OUR DIRECTOR OF AUDIT, JET CHAIRMAN. GOOD AFTERNOON COUNCIL COMMITTEE MEMBERS. GOOD AFTERNOON. UH, THE FIRST ITEM THAT WE'RE GONNA DISCUSS TODAY IS THE WEAVER AUDIT, THE FINANCIAL STATEMENT AUDIT FOR FISCALLY ATTORNEY 24. UH, WE'RE GLAD TO HAVE SARAH BACK. UH, SHE'S OUR PARTNER, WEAVER SERVICES, SO I'M GONNA TURN IT OVER TO HER. SHE'S GONNA GO OVER THE SCOPE OF THE AUDIT AND SOME OF THE GSP UPDATES AND OTHER RELEVANT MATTERS. YEAH. THANK YOU ALL FOR HAVING ME TODAY. UM, WE'RE ABOUT TO START THE FISCAL YEAR 2024 AUDIT. WE'VE DONE SOME INTERIM WORK, SO THIS IS MORE OF AN UPDATE ON HOW WE'RE DOING AS WELL AS THE PLAN PROCEDURES GOING FORWARD. SO I'LL DO AN INTRODUCTION AND GO THROUGH THE AUDIT PROCESS, TALK ABOUT THE INTERIM COMMUNICATIONS THAT WE'RE REQUIRED TO HAVE, AND THEN, UM, AS JED MENTIONED, TALK THROUGH SOME NEW ACCOUNTING PRONOUNCEMENTS THAT ARE ON THE WAY. IF YOU HAVE ANY CONCERNS, UH, I'M HERE TO ANSWER THOSE NOW OR WE CAN TOUCH BASE AFTER THE MEETING AS WELL. SO THIS IS OUR ORG CHART FOR THE AUDIT. AND WHAT I WANNA POINT OUT IS WE HAVE A NEW SENIOR MANAGER ON THE TEAM, JEFF WATA. HE HAS, UM, ABOUT 12 YEARS OF EXPERIENCE NOW. HE FOCUSES ON PUBLIC SECTOR ENTITIES, LARGE CITIES, AND, UM, HE'S ALSO IN OUR QUALITY CONTROL REVIEW GROUP. SO HE IS CONSTANTLY ANSWERING TECHNICAL QUESTIONS ACROSS THE FIRM AS WELL AS HAS A, A CLIENT PRACTICE AS WELL. SO, A REALLY GOOD ADDITION TO THE TEAM. WE'RE EXCITED TO HAVE HIM. UM, AND WE DID THIS JUST TO CHANGE, UH, THE EYES, AS THEY CALL IT, A FRESH SET OF EYES. SOMEONE ELSE INVOLVED IN THE AUDIT PLAN THAT HAS NEW IDEAS, UM, NEW, UM, YOU KNOW, AREAS TO FOCUS WHEN WE ALL DO OUR BRAINSTORMING AND LOOK THROUGH INFORMATION. UH, THE REST OF THE TEAM, KAYLEE HAW AND FRANCISCO MARQUEZ ARE ALSO ON THE TEAM AGAIN. AND THEN BRITTANY GEORGE IS THE PARTNER OVER OUR IT ADVISORY GROUP. UM, WHAT WE DON'T MENTION IN HERE IS THAT WE ALSO HAVE THE SUPPORT OF THE INTERNAL AUDIT DEPARTMENT DURING THE AUDIT AS WELL. AND THEY, UM, HELP WITH A LOT OF OUR TESTING, UH, FOR THE TIMELINE. WE'RE HERE TODAY TO DO THE PRESENTATION AND WE'LL GET STARTED IN THE, ON THE AUDIT IN JANUARY AND FEBRUARY, THE FINAL, UM, 9 30, 20 24 NUMBERS. AND THAT'S WHEN WE'LL RECEIVE A TRIAL BALANCE FROM THE CITY AND START GOING THROUGH AND LOOKING AT THOSE BALANCES THAT ARE MATERIAL OR THAT HAVE A RISK OF BEING MATERIALLY MISSTATED. AND THAT'S WHEN OUR TESTING WILL BEGIN. RIGHT NOW IT'S INTERIM AND WE'RE WALKING THROUGH THE CONTROL PROCESSES THAT WERE HAPPENING, UH, DURING THE NINE 30 FISCAL YEAR AND INTERNAL CONTROL TESTING AND THINGS THAT CAN GET DONE BEFORE YEAR END. SO IT'S A RISK-BASED APPROACH, AND THAT MEANS THAT WE'RE GOING THROUGH THE MINUTES, WE'RE READING THE GRANT AGREEMENTS, DOCUMENTS, TALKING WITH STAFF, THE AUDIT COMMITTEE, UH, AND JUST FINDING OUT WHAT AREAS OF CONCERN ARE OUT THERE AND WHAT WE'RE AWARE OF FROM AN INDUSTRY PERSPECTIVE. AND THEN THAT'S HOW WE FOCUS OUR AUDIT. SO MANAGEMENT OVERRIDE OF CONTROLS IS, UM, TYPICALLY, UH, A, A SIGNIFICANT RISK. AND WHAT THAT IS, IS WHERE, UH, MANAGEMENT MIGHT HAVE THE ABILITY TO GO IN AND CREATE JOURNAL ENTRIES WITHOUT PROPER SUPPORT OR MAKE DECISIONS WITHOUT PROPER APPROVAL. AND, UM, AND BASICALLY OVERRIDE THE FINANCIAL STATEMENT CONTROLS TO MISSTATE THE FINANCIAL STATEMENTS. AND SO THAT'S ALWAYS A RISK, AND THAT'S WHERE WE'RE TESTING JOURNAL ENTRIES AND WE'RE LOOKING AT THAT THIRD PARTY SUPPORT ON, UM, ON CERTAIN TRANSACTIONS THAT ARE HAPPENING. THAT'S WHERE WE USE DATA ANALYTICS. THERE'S A LOT OF INFORMATION GOING IN AND OUT OF THE CITY, WHETHER IT'S RECEIPTS COMING IN OR EXPENDITURES GOING OUT. AND SO THAT'S WHERE DATA ANALYTICS HELPS WITH THAT TESTING AS WELL. UH, WE'LL LOOK AT UTILITY REVENUES, AND THAT'S ELECTRIC UTILITY, WATER UTILITY. UM, AND THEN PROPERTY TAXES, AND ESPECIALLY THE FEDERAL, UM, GRANTS. SO THE, [00:10:01] THE REVENUE AND EXPENDITURES RELATED TO, UM, THE GRANTS, OUR PROGRAMS. UM, SOME OF THE OTHER AREAS, CAPITAL PROJECTS GET A HIGH DEGREE OF FOCUS, PAYABLES, ACCRUALS. WE DON'T WANT LIABILITIES, LIABILITIES TO BE UNDERSTATED. UH, AND THEN VARIOUS COMPLIANCE REQUIREMENTS AS IT RELATES TO THE STATE REQUIREMENTS OVER PROCUREMENT AND FEDERAL PROCUREMENT RULES AS WELL. SO WE'VE DONE SOME INTERIM WORK ALREADY. WE'VE DONE SOME COMPLIANCE TESTING, THE PUBLIC FUNDS INVESTMENT ACT. WE'VE STARTED THE SINGLE AUDIT. UM, WE'VE GOT CAPITAL PROJECTS TESTING WALKTHROUGHS OF SIGNIFICANT CLASSES OF TRANSACTIONS. SO THAT'S WHERE WE'RE WALKING THROUGH THE PAYROLL PROCESS, THE RECEIPTS PROCESS, THE TAX RECEIPTS PROCESS, UTILITY RECEIPTS PROCESSES. SO THESE ARE SOME OF THE AREAS WHERE WHAT WE DO IS WE GET THE PROCEDURES FOR INTERNAL CONTROLS FROM MANAGEMENT FROM THOSE DEPARTMENTS, AND THEN WE WALK THROUGH AND MAKE SURE THAT THEY'RE OPERATING AS DESIGNED. UH, IT'S A HIGH LEVEL, IT'S NOT NEARLY AS DETAILED AS YOU GET FROM YOUR INTERNAL AUDIT, BUT WE'RE MAKING SURE THAT THOSE PROCESSES ARE IN PLACE SO THAT WE CAN DETERMINE THE EXTENT OF OUR SUBSTANTIVE TESTING. AND WE ALSO LOOK AT THE CENSUS DATA BECAUSE YOUR PENSION AND OPEP NUMBERS ARE, UM, ARE MATERIAL. SO SOME OF THE OTHER WORK WE'VE DONE, CASH, DISBURSEMENT, PAYROLL, DISBURSEMENTS, UM, AND THEN YOUR SINGLE AUDIT THIS YEAR. SO YOU'VE GOT YOUR HOUSING CHOICE VOUCHER PROGRAM THAT'S EXPECTED TO HAVE ABOUT $21 MILLION IN EXPENDITURES ON THE CFA THIS YEAR. SO, UM, THAT'S A MAJOR PROGRAM. CDBG, YOUR IMMUNIZATION GRANT, AND THEN YOUR, UM, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, UM, HAS BEEN A MAJOR PROGRAM AND WILL CONTINUE TO BE. UM, WE UTILIZE THE INTERNAL AUDIT DEPARTMENT, LIKE I MENTIONED, AND THAT'S FOR A LOT OF THE DISBURSEMENTS TESTING, PAYROLL TESTING. IT LOOKS LIKE A SHORTLIST, AND I REALLY APOLOGIZE FOR THAT. WHEN I WAS GOING THROUGH THE PRESENTATION, I WAS LIKE, WE SHOULD REALLY HAVE A SEPARATE SLIDE FOR YOU GUYS. THEY DO A LOT OF HELP WITH US WITH THE SINGLE AUDIT PAYROLL, UM, AND CASH DISBURSEMENT TESTS. AND SO WHAT THEY DO IS THEY GO THROUGH AND DO THE TESTING, AND THEN WE COME AND REPERFORM IT TO MAKE SURE THAT, UM, WE ALL AGREE WITH WHAT THE FINDINGS ARE OR, UM, THE PROCESSES THAT, UM, THAT THEY'VE IDENTIFIED THAT, UM, THAT ARE NOTABLE IN THE WORK PAPER. AND THEN AS I MENTIONED, THE DATA ANALYTICS. AND THAT'S WHERE WE'RE LOOKING AT THOSE JOURNAL ENTRIES BECAUSE THERE ARE SO MANY TRANSACTIONS GOING IN AND OUT, UM, EACH DAY AT THE CITY. SO THESE ARE THE REQUIRED COMMUNICATIONS, AND I'LL GO THROUGH THESE A LITTLE BIT QUICKER BECAUSE WE HAVE ALL MET ON THESE BEFORE. SO THE AUDITING STANDARDS, UM, HAVE NOT CHANGED IN A WAY THAT WOULD, UM, NEED TO BE BROUGHT TO YOUR ATTENTION. YOU KNOW, WE'RE STILL DOING THE AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS AND THE UNIFORM GUIDANCE. UM, WITH THE UNIFORM GUIDANCE, WE'RE DOING INTERNAL CONTROL TESTING AND ALSO ISSUING AN OPINION. SO WITH YOUR GENERALLY ACCEPTED AUDITING STANDARDS, WE'RE ISSUING AN OPINION OVER THE FINANCIAL STATEMENTS. AND THEN WITH THE UNIFORM GUIDANCE, IT'S AN OPINION ON THE SINGLE AUDIT AS WELL, THOSE MAJOR PROGRAMS THAT I MENTIONED. UH, WE ALSO DO AN IT CONTROL ASSESSMENT AS WE GO THROUGH, AND THAT'S WHERE THE IT ADVISORY PARTNER COMES INTO PLAY. I DON'T HAVE THE IT EXPERTISE, SO WE HAVE A SEPARATE GROUP AT WEAVER THAT FOCUSES ON IT, AND THEY GO THROUGH AND THEY CHECK THE, THE PROGRAM CHANGES, THE COMPUTER OPERATIONS, AND THEN ACCESS TO PROGRAMS AND DATA. SO SECURITY, PHYSICAL ACCESS AND MIGRATION. AND THESE ARE THE STANDARDS THAT JED MENTIONED EARLIER, JUST TO BRING TO YOUR ATTENTION. GASB 100 IS EFFECTIVE THIS YEAR. IT SHOULD NOT HAVE A BIG, UH, EFFECT ON YOUR FINANCIAL STATEMENTS. UM, IF ANYTHING, IT'S REALLY, UM, MORE TO CLARIFY SOME, UH, STANDARDS THAT PEOPLE WERE INTERPRETING DIFFERENTLY. SO IT REALLY JUST PUTS EVERYONE ON THE SAME PAGE AS TO HOW YOU TREAT AN ESTIMATE, HOW YOU TREAT AN ERROR, HOW YOU TREAT A CHANGE IN ACCOUNTING PRINCIPLE. SO NO MAJOR FINANCIAL STATEMENT IMPACT ON THAT ONE. SO THAT'S NICE. I'VE COME THE LAST FEW YEARS AND WE'VE HAD TO IMPLEMENT LEASES. WE'VE HAD TO IMPLEMENT SUBSCRIPTION BASED IT ARRANGEMENTS. IT'S BEEN A HUGE LIFT. UM, THE HUGE LIFT THIS YEAR, IT'S OBVIOUSLY THE SYSTEM IMPLEMENTATION AND OTHER THINGS THAT DON'T INVOLVE ACCOUNTING. SO, UM, AND THEN FOR NEXT YEAR, COMPENSATED ABSENCES IS, UM, A STANDARD THAT WILL BE IMPLEMENTED AND THAT COULD HAVE THE POTENTIAL TO INCREASE YOUR LIABILITIES, AND WE'LL EVALUATE THAT AND WORK THROUGH THAT THIS YEAR JUST TO MAKE SURE. UM, WE HAVE THAT READY FOR IMPLEMENTATION IN 2025. UM, THE CERTAIN RISKS DISCLOSURES REALLY JUST RELATED TO FINANCIAL STATEMENT DISCLOSURES. AND THEN IN 2026, SOME FINANCIAL REPORTING MODEL IMPROVEMENTS. AND SO THIS IS JUST SOME ITEMS THAT I'VE LISTED. IF YOU HAD ANY ITEMS THAT YOU WANTED TO DISCUSS OR COMMUNICATE WITH ME, THAT'S REALLY, THE SLIDE IS MORE INFORMATIVE. IF THERE ARE CERTAIN MATTERS THAT YOU DO WANT TO DISCUSS WITH US OR REACH [00:15:01] OUT TO ME DIRECTLY, I'M HAPPY TO, UM, YOU KNOW, IF YOU'RE AWARE OF ANY FRAUD OR IF YOU HAVE CONCERNS, YOU KNOW, THIS IS, THESE ARE THE THINGS THAT, UM, YOU WOULD BRING TO OUR ATTENTION. WE, WE DO REPORT TO YOU, WE WORK WITH THE CITY TO GET THE AUDIT COMPLETED, BUT IF THERE IS ANYTHING THAT YOU HAVE OVER THE AUDIT THAT YOU WOULD LIKE US TO FOCUS ON, UM, I'M HERE TO, TO HELP. AND THAT'S THE PRESENTATION. I'M HERE FOR ANY QUESTIONS THAT YOU HAVE. OKAY. YOU'VE HEARD THE PRESENTATION. ARE THERE ANY QUESTIONS OR DISCUSSIONS AS RELATED TO THE AUDIT? NOT FROM ME AT THE MOMENT. IT'S, UH, LOOKS LIKE IT'S GOING TO BE THOROUGH AND LOOK FORWARD TO IT, UH, PROCEEDING. OKAY, JEN? UM, NO, I DON'T KNOW IF SARAH MENTIONED, SO THIS, THE REPORT WILL COME TO THE COMMITTEE IN MARCH. COME TO THE COMMITTEE IN MARCH. OKAY. YEAH, WE USUALLY ISSUE ABOUT THE EARLY MARCH AND THEN COME BACK AFTERWARDS AND GIVE YOU THE, THE RESULTS OF THE AUDIT WE'RE REQUIRED TO COMMUNICATE BEFORE THE AUDIT STARTS. SO THAT'S, THAT'S REALLY WHAT THIS INITIAL COMMUNICATION IS FOR. IT'S REQUIRED BY THE AUDITING STANDARDS. AND THEN AFTERWARDS, WE'LL COME BACK AND REPORT TO YOU THE, THE RESULTS. WELL, HAVING HEARD THESE REPORTS IN THE PAST, SEEMS TO ME ONCE AGAIN, YOU HAVE COME WITH A VERY THOROUGH VERY COMPREHENSIVE, UH, SET OF CHARGES THAT YOU'RE GOING TO BE, UH, BRINGING TO US AND CERTAINLY WILL KEEP US ON OUR TOES AND KEEP US, UH, HEADING STRAIGHT AND NARROW. SO THANK YOU SO VERY MUCH FOR YOUR PRESENTATION. THANK YOU. OKAY, WITH THAT, WE'LL GO TO ITEM B, WHICH IS ANIMAL SERVICES AUDIT. AGAIN, J CHAIRMAN, THANK YOU FOR, UH, ALLOWING MY TEAM TO GO OVER THIS AUDIT. I DO WANNA MENTION A FEW, FEW THINGS BEFORE I TURN THIS OVER TO ERIN AND VIN, WHO, WHO LED THIS AUDIT. UH, FIRST OF ALL, WHEN I WAS PREPARING THE FISCALLY A 24 AUDIT PLAN, UH, THIS AUDIT WAS REQUESTED BY COUNCILWOMAN MORRIS, UH, WHO IS PRESENT HERE TODAY. I DO WANNA, UH, APPRECIATE HER FOR REQUESTING THIS AUDIT AS WELL AS OUR ASSISTANT CITY MANAGER, PHIL ROOT HERE. AND UNFORTUNATELY, PHIL COULDN'T BE HERE. UM, SO, UH, THAT'S HOW THIS, THIS AUDIT ENDED UP BEING IN THE AUDIT PLAN. SO, UM, THEY REALLY CARED FOR US TO HAVE AN INDEPENDENT REVIEW OF THIS FUNCTION, AND THAT'S WHY THEY REQUESTED THIS. SO I VERY MUCH APPRECIATE THAT. UM, ALSO WANNA RECOGNIZE THE, THE TEAM ITSELF, UH, THE ANIMAL SHELTER TEAM. UH, I DO WANNA MENTION THAT OUR JUSTIN, UH, AND THEIR TEAM, THEY HAVE BEEN VERY OPEN. UM, WE HAD, UH, OPEN ACCESS TO THEIR SYSTEM. UM, THEIR FACILITY WAS OPEN FOR US TO DO WALKTHROUGHS. UM, PRETTY MUCH EVERY RECORD THAT WE REQUESTED, THEY PROVIDED THAT INFORMATION. SO I JUST WANNA, UH, CONGRATULATE THEM FOR BEING EXTREMELY TRANSPARENT AND OPEN FOR US TO DO OUR OWN INDEPENDENT OBJECTIVE AUDIT. THIRDLY, UM, WE HAD AN OPPORTUNITY TO VISIT WITH SOME OF OUR NON-FOR-PROFIT ORGANIZATION. I ALSO WANNA THANK THEM FOR THEIR TIME THAT THEY SPEND WITH US AND, AND EVERYTHING THAT THEY HAVE DONE FOR THE CITY. UM, SO I DO WANNA THANK THEM AS WELL. UM, AS YOU'RE AWARE, ANIMAL SHELTER OPERATION IS VERY COMPREHENSIVE. UH, OBVIOUSLY WE CAN BE THERE FOREVER, BUT WHEN WE DO AN AUDIT, WE DO A RISK BASED AUDIT. SO BASED ON THE RISK ASSESSMENT AND THE INITIAL PLANNING, WE HAVE FINALIZED ON THREE OBJECTIVES, AND THOSE WERE DETERMINED THE ACCURACY OF FEE ASSESSMENTS, VERIFY INTERNAL CONTROLS OVER FUNDS, INVENTORY MANAGEMENT, AND SYSTEM ACCESS. THIRDLY, WE WANTED TO DETERMINE THE ROLES IF ROLES AND RESPONSIBILITIES ARE CLEARLY ESTABLISHED BETWEEN THE CITY AND NON-FOR-PROFIT ORGANIZATIONS. UH, OUR SCOPE WAS MAINLY, UH, FROM MARCH OF 2020 THROUGH, THROUGH, UP UNTIL JUNE OF 2024, THAT THE REASON WAS, THAT'S WHEN WE MOVED TO THE NEW SHELTER. SO WE WANTED TO FOCUS ON THE CURRENT OPERATIONS. UH, AGAIN, UM, I DO WANT TO THANK THE CITY MANAGER FOR HIS SUPPORT, UH, AND HIS STAFF BECAUSE JET'S, UM, LEADERSHIP IS WHAT HELPS THE STAFF TO WORK WITH US. SO I DO WANT APPRECIATE JET FOR OPENING THAT DOOR FOR US. UM, WITH THAT, UH, ERIN LED THIS AUDIT AND SHE'S GONNA GO OVER SOME OF THE DETAILS, UH, OF HOW THE OPERATION WORKS, AND THEN J IS GONNA ADDRESS SOME OF THE FINDINGS AS WELL. THE, I DO WANNA INFORM YOU, THERE IS ONE OBSERVATIONS THAT WE DID, WHICH WE ARE NOT GONNA COVER AS PART OF THE GENERAL SESSION, UH, PER THE ATTORNEY'S ADVICE. WE WILL COVER THAT IN THE EXECUTIVE SESSION. SO, UM, JUST FYI ON THAT ONE. WITH THAT, I'M GONNA TURN IT OFF TO ERIN, AND SHE'S GONNA GO OVER THE PROCESS AND SOME OF THE OBSERVATIONS. ALL RIGHT. SO GARLAND ANIMAL SERVICES PLAYS A CRITICAL ROLE IN ENSURING BOTH PUBLIC SAFETY AND ANIMAL WE WELFARE FOR THE CITY. UM, THE DEPARTMENT [00:20:01] PRIMARILY FUNCTIONS OUT OF THE ANIMAL SHELTER, WHICH OPENED IT ITS DOORS IN FEBRUARY OF 2022. UM, IT'S CURRENTLY EQUIPPED TO CARE FOR NEARLY 8,000 IN ANIMALS ANNUALLY BASED ON OUR DATA. UH, THE CAPACITY FOR ANY GIVEN TIME IS ABOUT 360, UM, AND THEY HAVE ABOUT 30 BUDGETED EMPLOYEES AND CAN HAVE UP TO 10, UH, TEMPORARY EMPLOYEES. SO, UH, THEIR MISSIONS ACHIEVED THROUGH A COMPREHENSIVE SET OF SERVICES, WHICH INCLUDE, UM, ANIMAL SERVICES, INVESTIGATING ANIMAL BITES, INSPECTING ANIMAL NUANCES, INTERVENING IN ANIMAL ABUSE AND NEGLECT, PROMOTING RESPONSIBLE PET OWNERSHIP ADOPTION SERVICES, PET RECLAIM MICROCHIP, SPAY AND NEUTER VACCINES AND MEDICAL CARE, FOSTER PROGRAMS AND VOLUNTEER OPPORTUNITIES. UM, THEY'RE CURRENTLY PARTNERED WITH TWO NONPROFIT ORGANIZATIONS WHO SUPPORT ANIMAL SHELTER OPERATIONS, UH, CONNECT ANIMALS WITH FOSTER CARETAKERS AND OWNERS, AND PROVIDE NECESSARY MEDICAL TREATMENT OPERATION. KINDNESS PROVIDES SPAY AND NEUTER PROCEDURES THROUGH THEIR OWN MEDICAL STAFF TO GARLAND ANIMALS IN EXCHANGE FOR THE USE OF THE SHELTER'S MEDICAL SUITE TO TREAT AN EQUAL NUMBER OF NON GARLAND ANIMALS. THIS IS FUNDED BY FRIENDS OF RESCUE ANIMALS OR FROGS. UM, FROGS PROVIDES MANPOWER, FUNDING AND RESOURCES TO THE SHELTER. THE SHELTER'S VOLUNTEER OPPORTUNITY VOLUNTEER PROGRAM IS FACILITATED BY FRAUDS, UH, TO PROVIDE SERVICES SUCH AS DOG WALKING, PET FOSTERING, AND CAT CARE. YOU CAN GO TO THE SECOND FINDING. SO FOR THE FIRST OPPORTUNITY OF IMPROVEMENT, UM, IS REGARDING CASH CONTROLS. WE DID AN UNANNOUNCED CASH COUNT COUNT AT THE SHELTER. UM, WE REVIEWED TRANSACTION REPORTS, BANK STATEMENTS, SYSTEM ACCESS, ACCESS RIGHTS, AND CASH HANDLING AGREEMENTS. UM, WE LOOKED AT, UH, PAYMENTS FOR THE ENTIRE MONTH OF MARCH, AND WERE ABLE TO RECONCILE ALL PAYMENTS BETWEEN THE POINT OF SALE SYSTEM. UM, THE GENERAL LEDGER IN THE BANK STATEMENT, UM, THAT WAS ABOUT 123 TRANSACTIONS OR ABOUT A LITTLE OVER 10 K IN PAYMENTS. UM, THE FOLLOWING, UH, WERE PART OF OUR O OBSERVATIONS OR ISSUES. SO FIRST, WITH CASH SECURITY, ACCESS TO CASH AND CHECK PAYMENTS PENDING MANAGEMENT REVIEW AND DEPOSITS ARE NOT RESTRICTED TO MANAGEMENT. THE SAFE COMBINATIONS NOT CHANGED PERIODICALLY OR UPON STAFF CHANGES. THE CHANGE FUND IS NOT RECONCILED BY THE CASH CUSTODIAN ON A DAILY BASIS. ONE EMPLOYEE DID NOT HAVE A CASH HANDLING AGREEMENT ON FILE REGARDING DEPOSIT PREPARATION. THE FINAL REVIEWER OF DEPOSITS DOES NOT INDEPENDENTLY GENERATE A TRANSACTION REPORT TO VERIFY THE ACCURACY OF DEPOSITS REGARDING THE POINT OF SALE SYSTEM. EMPLOYEES DO NOT CONSISTENTLY LOG OFF COMPUTERS WHEN AWAY FROM THEIR WORKSTATIONS AND TRANSACTION REVISIONS ARE NOT REVIEWED BY MANAGEMENT. OUR RECOMMENDATION IS THAT MANAGEMENT SHOULD CONSIDER LIMITING THE NUMBER OF EMPLOYEES WHO HAVE ACCESS TO PAYMENTS PENDING REVIEW AND THE PREPARED DEPOSITS. ENSURE SAFE COMBINATIONS ARE CHANGED WHEN THERE'S A CHANGE IN CASH HANDLERS ENSURE THE CUSTODIAN PERFORMS AND DOCUMENTS DAILY RECONCILIATION OF CHANGE FUND AMOUNTS AND INVESTIGATES ANY DISCREPANCIES. ENSURE ALL CASH HANDLERS, SIGN A CASH CASH HANDLING AGREEMENT AND SUBMIT IT TO FINANCE TIMELY INDEPENDENTLY GENERATE SYSTEM REPORTS AND VERIFY DEPOSITS. VERIFY EMPLOYEES ARE LOCKING THEIR COMPUTERS WHEN LEAVING THEIR WORKSTATIONS AND IMPLEMENT A ROUTINE REVIEW OF TRANSACTION REVISIONS BY A SECOND PERSON WHO'S NOT INVOLVED IN THE PAYMENT TRANSACTIONS MANAGEMENT CONCURS AND THEIR ACTION PLANS ARE AS FOLLOWS. MANAGEMENT WILL PHASE OUT FIELD OFFICERS TO LIMIT THE NUMBER OF EMPLOYEES WHO HAVE ACCESS TO THE PAYMENTS PENDING REVIEW AND PREPARED DEPOSITS. THEY'LL ENSURE SAFE COMBINATIONS ARE CHANGED IN A TIMELY MANNER. WHEN THERE'S A CHANGE IN CASH HANDLERS, THEY'LL ENSURE THE CUSTODIAN PERFORMS AND DOCUMENTS DAILY RECONCILIATION OF CHANGE FUND AMOUNTS AND INVESTIGATES ANY DISCREPANCIES. UM, ENSURE THE MISSING CASH HANDLING AGREEMENT IS SUBMITTED, SUBMITTED TO FINANCE IMMEDIATELY AND IMPLEMENT A PERIODIC RECONCILIATION OF AGREEMENTS TO FINANCE. THEY'LL INDEPENDENTLY GENERATE THEIR OWN SYSTEM REPORTS TO VERIFY DEPOSITS PERIODICALLY. STAFF WORKSTATIONS WILL BE ROUTINELY MONITORED BY SUPERVISORS TO ENSURE THEY LOCK THEIR COMPUTERS WHEN LEAVING THEIR WORKSTATIONS. AND, UH, MANAGEMENT WILL IMPLEMENT A ROUTINE REVIEW OF TRANSACTION REVISIONS BY A SECOND PERSON WHO'S NOT INVOLVED IN THE PAYMENT TRANSACTIONS. AND THE IMPLEMENT IMPLEMENTATION DATE IS NOVEMBER 1ST. THE NEXT ISSUE IS REGARDING FEE ASSESSMENTS. SO WE SAMPLED 68 OF A LITTLE OVER 7,000 RECEIPTS OVER THE SCOPE OF THE AUDIT. SO FROM, UM, EARLY 2022 TO ABOUT MAY, 2024. UM, TO EVALUATE THE ACCURACY OF FEE ASSESSMENTS, UH, WE DISTRIBUTED THE SAMPLES, UH, EQUALLY OR PROPORTIONATELY ACROSS $0 TRANSACTIONS AND NON-ZERO DOLLAR TRANSACTIONS [00:25:01] BECAUSE WE KNOW DISCOUNTS AND WAIVERS ARE PROVIDED. UM, WE WANTED TO LOOK AT, UM, SPECIFICALLY WHY THEY'RE PROVIDED, UM, AND ANY SORT OF DOCUMENTATION WITH THAT. SO THE 68 RECEIPTS INCLUDED 127 INDIVIDUAL FEES. AMONG THOSE RECEIPTS, THEY WERE FOR VARIOUS SERVICES SUCH AS ADOPTION, MICROCHIPPING, IMPOUNDMENT, RABIES VACCINE QUARANTINE, DAILY HANDLING, AND OTHERS. WE FOUND THAT 82% OF SAMPLED FEES IN THE COUNT, NOT THE DOLLAR AMOUNT, WERE EITHER WAIVED OR DISCOUNTED. ADOPTION AND MICROCHIPPING SERVICES ACCOUNTED FOR 72% OF THE WAIVED FEES AND ADOPTION ALSO COUNTED, ACCOUNTED FOR 64% OF THE DISCOUNTS ISSUED. THIS IS PRIMARILY DUE TO PROMOTIONS SUCH AS FREE ADOPTIONS FOR CITY EMPLOYEES, MILITARY, VETERANS, ET CETERA, AS WELL AS ADOPTION EVENTS HOSTED BY THE SHELTER AND NONPROFIT PARTNER. SPECIFICALLY, WE OBSERVED THAT ALTHOUGH CASHIERS ARE INSTRUCTED TO OBTAIN APPROVAL FROM MANAGEMENT BEFORE APPLYING DISCOUNTS OR WAIVERS, THE POINT OF SALE SYSTEM ALLOWS THEM TO ISSUE DISCOUNTS OR WAIVERS WITHOUT REQUIRING SEC SECONDARY APPROVAL WITHIN THE SYSTEM. ADDITIONALLY, WHEN MANAGERIAL APPROVAL IS GRANTED, THERE'S NO FORMAL DOCUMENTATION OR RECORD OF IT EITHER IN THE POINT OF SALE SYSTEM OR EXTERNALLY TO VERIFY THAT APPROVAL WAS GIVEN. THERE'S NO PERIODIC REVIEW OF ISSUED DISCOUNTS OR WAIVERS BY MANAGEMENT TO DETERMINE IRREGULARITIES. DISCOUNTS AND WAIVERS ARE NOT RECORDED IN A STANDARDIZED MANNER IN THE POINT OF SALE SYSTEM. FOR EASE OF REPORTING, THE DEPARTMENT'S FEE POLICY IS OUTDATED AND IS NOT CONSISTENT WITH THE CURRENT ORDINANCE. FOR EXAMPLE, RABIES VACCINE WAS $15 IN THE POLICY, BUT IT'S $20 IN THE ORDINANCE. THE ORDINANCE IS SILENT ON GIVING THE DIRECTOR DISCRETION TO ISSUE DISCOUNTS AND WAIVERS. SO THAT'S, AGAIN, FREE ADOPTIONS FOR CITY EMPLOYEES, ET CETERA. OUR RECOMMENDATION IS THAT MANAGEMENT SHOULD REQUEST THE ORDINANCE BE UPDATED TO INCLUDE DIRECTOR'S DISCRETION AND ABILITY TO DELEGATE DISCRETION REGARDING THE ISSUANCE OF DISCOUNTS AND WAIVERS. UPDATE THE FEE POLICY TO STANDARDIZE THE ISSUANCE DOCUMENTATION AND REVIEW OF DISCOUNTS AND WAIVERS, AND UPDATE THE DEPARTMENT FEE POLICY TO MATCH THE ORDINANCE FEES MANAGEMENT CONCURS. AND WE'LL GO THROUGH THE FORMAL PROCESS OF REQUESTING DIRECTOR'S DISCRETION BE ADDED TO THE ORDINANCE. THEY WILL UPDATE THE FEE POLICY TO INCLUDE STANDARDIZED ISSUANCE, DOCUMENTATION, AND REVIEW PROCESS OF THE DISCOUNTS AND WAIVERS, AND ALSO TO REFLECT THE FEES IN THE ORDINANCE. AND THAT IMPLEMENTATION DATE IS DECEMBER 1ST, 2024. THE NEXT FINDINGS REGARDING FACILITY ACCESS. SO WE REVIEWED THE SHELTER ACCESS REPORT FOR THE SCOPE OF THE AUDIT TO DETERMINE IF ONLY AUTHORIZED PERSONNEL HAVE ACCESS. ALL INDIVIDUALS LISTED AS EMPLOYEES ON THE ROSTER WERE, UM, CONFIRMED THROUGH HRS RECORDS, BUT WE DID OBSERVE THAT, UM, ACCESS WAS NOT TERMINATED FOR FOUR UNRECOGNIZED VENDOR REP REPRESENTATIVES, THREE UNRECOGNIZED CONTRACTORS, AND TWO, JUST UNRECOGNIZED INDIVIDUALS WITHOUT ANY SORT OF CATEGORIZATION, UM, IN A TIMELY MANNER. AND OF 128 VOLUNTEERS LISTED ON THE ROSTER. 42 WERE NOT LISTED IN THE VOLUNTEER LIST PROVIDED BY THE SHELTER. OUR RECOMMENDATION IS THAT MANAGEMENT SHOULD REVIEW THE SHELTER ACCESS ROS ROSTER EACH MONTH AND TERMINATE THE UNIDENTIFIED NAMES WITHIN THE LIST IMMEDIATELY. MANAGEMENT CONCURS AND WILL COORDINATE WITH FACILITIES EACH MONTH TO UPDATE, UH, APPROPRIATE ACCESS AND WE'LL REQUEST TO TERMINATE THE UNRECOGNIZED NAMES IMMEDIATELY. OCTOBER 1ST IS THE IMPLEMENTATION DATE. ISSUE FIVE IS NON-PROFIT PARTNERS. AS AARON HAS MENTIONED BEFORE, UH, SHELTER PARTNERS WITH TWO NON-PROFIT ORGANIZATION, FRIENDS OF RESCUE ANIMALS AND OPERATION KINDNESS. THESE ORGANIZATIONS OFFER VALUABLE SUPPORT, INCLUDING VOLUNTEERS, MEDICAL SERVICE, AND OTHER BENEFICIAL RESOURCES TO THE SHELTER PER FRAUD. THE ORGANIZATION HAS PROVIDED OVER 11,000 HOURS OF VOLUNTEER WORK FROM SEPTEMBER 23RD, 2023 TO SEPTEMBER, 2024, WHICH INCLUDED OVER 7,000 HOURS TO DOG WALKING, CAT CARE, FOSTER CARE, UH, ADOPTION OPERATIONS, AND OFFSITE EVENTS, AND RELEASING NEUTERED, UH, COMMUNITY CATS AND ANIMAL TRANSPORT. THEY ALSO HAVE PROGRAMS LIKE BORROW A BUDDY AND RUN DOG INITIATIVES. FROG HAS ALSO CONTRIBUTED OVER $22,000 TOWARDS MEDICAL SUPPLIES, UH, MEDICAL SERVICES, SHELTER, ADOPTION, PROMOTIONS, AND TRANSPORT. ACCORDING TO OPERATION KINDNESS, THE ORGANIZATION PROVIDES FREE SURGERIES ON THE FIRST FRIDAY OF EVERY MONTH AND FREE VACCINE ON THE FIRST SATURDAY OF EVERY MONTH AT THE SHELTER. OPERATION KINDNESS ALSO CONDUCTS FREE DOOR-TO-DOOR MICROCHIPPING WITHIN GARLAND AND SUPPLIES SHELTER WITH MEDICAL PROFESSIONALS WHEN REQUESTED. WHILE THESE ORGANIZATIONS PROVIDE GREAT AND BENEFICIAL SERVICE, [00:30:01] WE OBSERVED A FEW THINGS, UH, TWO THINGS ACTUALLY. FIRST, UH, SHELTER DOES NOT HAVE A FORMAL, UH, MOU WITH THE NONPROFIT ORGANIZATIONS THAT CLEARLY COMMUNICATES AND THE PARTNERSHIP OBJECTIVES, EXPECTATIONS ASSIGNED RESPONSIBILITIES, UH, AND COMMUNICATION MECHANISMS. SECONDLY, UM, CURRENTLY SHELTER REQUIRES VOLUNTEERS TO VOLUNTEERS TO SIGN A LIABILITY WAIVER. AND FRAUD REQUIRES VOLUNTEERS TO SIGN A POLICY, BUT VOLUNTEERS ARE NOT PROVIDED FORMAL POLICIES, DETAILING EXPECTED CONDUCT DUTIES, ACCESS, REPORTING, SOCIAL MEDIA ACTIVITIES, UM, SPECIFIC TO THE SHELTER. HERE ARE SOME REASONS WHY WE THINK IT'S IMPORTANT. UM, IT'S BECAUSE, UH, DEFERRING EXPECTATIONS, CONFLICTS AND INEFFICIENCIES COULD RESULT UNDERMINING ANY COLLABORATIVE EFFORTS. MIS UNDERSTANDING MISALIGNED CONTRIBUTIONS AND UNMET OBLIGATIONS POTENTIALLY, UH, COMPROMISES THE EFFECTIVENESS OF THE PARTNERSHIP. VOLUNTEERS MAY UNKNOWINGLY ENGAGE IN UNPROFESSIONAL BEHAVIOR, WHICH COULD NEGATIVELY IMPACT SHELTER'S REPUTATION, RELATIONSHIPS WITH STAKEHOLDERS, AS WELL AS REDUCE THE QUALITY OF SERVICES PROVIDED. UM, VOLUNTEERS WITHOUT CLEAR INSTRUCTION AND EXPECTATIONS MAY EXPERIENCE CONFUSION, FRUSTRATION, OR A SENSE OF BEING OVERWHELMED, WHICH COULD LEAD TO DECREASED ENGAGEMENT, LOWER MORALE, AND HIGHER TURNOVER. UH, ULTIMATELY AFFECTING SHELTER'S ABILITY TO MEET ITS OBJECTIVES. UH, WE RECOMMEND THAT, UH, MANAGEMENT SHOULD CONSIDER FORMALIZING THE RELATIONSHIP WITH THE NONPROFIT ORGANIZATIONS WITH AN MYU, UH, DEVELOP AND IMPLEMENT A VOLUNTEER POLICY SPECIFICALLY FOR THE SHELTER THAT HAS CLEAR GUIDELINES ON WORKPLACE EXPECTATIONS, UM, SUCH AS CONDUCT DUTIES, SOCIAL MEDIA ACTIVITIES, ET CETERA. UH, AND THEY CAN BE USED FOR DIFFERENT ORGANIZATIONS AS NECESSARY. MANAGEMENT RESPONSES WAS CONCUR. UH, THEIR ACTION PLAN WAS, MANAGEMENT WILL ESTABLISH AN MOU WITH OPERATION KINDNESS AND FROST THAT IS STANDARD WITH THE OTHER SHELTERS. UH, MANAGEMENT WILL RETAIN COPIES OF FROST VOLUNTEERS POLICY AND CONSULT WITH THE CITY ATTORNEY'S OFFICE FOR ANY ADDITIONAL CONSIDERATION. THE IMPLEMENTATION DATE IS DECEMBER 1ST, 2024. ANY QUESTIONS? OKAY. YOU'VE HEARD THE PRESENTATION. UH, ANY QUESTION OR DISCUSSION? WELL, WELL, THAT, THAT'S A LOT TO TAKE IN THREE AND A HALF MAN YEARS OF VOLUNTEER HOURS GOES IN, INTO, UH, GOES INTO THIS ORGANIZATION. IT'S VERY IMPRESSIVE. IT'S, UH, IT'S, UH, QUITE A LOT OF MOVING PIECES. BUT, UH, MOU, THAT'S ME. UH, MEMORANDUM, MEMORANDUM OF UNDERSTANDING. YES, THAT'S CORRECT. YES, SIR. OKAY. JUST WANNA MAKE SURE I THANK YOU, UH, JUST KIND OF DRINKING IT ALL IN. THANK YOU. THANK YOU. THANK YOU VERY MUCH. I'M, I'M VERY, UH, SATISFIED WITH WHAT I'VE HEARD, AND THAT IS THAT YOU'VE DONE THE REAL WORK OF, UH, IDENTIFYING MANY OF THE CONCERNS THAT WE ALL VERY MUCH AWARE OF, UH, WANT TO EXPRESS APPRECIATION TO, UM, PAST COUNCIL MEMBER, UH, DEBORAH MORRIS FOR, UH, BRINGING THIS AUDIT BEFORE US. AND, UH, BASED ON ALL THAT I HAVE HEARD HERE, THE CONCERNS HAVE BEEN IDENTIFIED, BUT MORE IMPORTANTLY, THE TRANSPARENCY OF THOSE CONCERNS. AND THAT IS, IT JUST, YOU DIDN'T LEAVE OUT ANYTHING, YOU JUST PUT IT ALL IN THERE. THIS IS WHAT IT IS. AND THAT'S REALLY WHAT I THINK AN AUDIT IS REALLY ALL ABOUT. AND THAT IS HELPING US NOT TO NECESSARILY IDENTIFY PEOPLE AND PERSONS, BUT TO IDENTIFY THE CONCERNS, TO BE ABLE TO DEAL WITH THOSE CONCERNS IN SUCH A MANNER THAT WE CAN GO FORWARD EFFECTIVELY. AND SO, AS A RESULT OF THAT, THE LAST THING IS THE RECOMMENDATIONS. THE RECOMMENDATIONS, AS FAR AS I CAN SEE, ARE VERY CONSISTENT. THEY SHOULD TAKE CARE OF THE PROBLEMS, AND WE HAVE A CURRENT CURRENTS FROM THE MANAGEMENT. SO AS A RESULT OF THOSE, I THINK THAT YOU'VE DONE A VERY ACCURATE, VERY ADEQUATE, UH, JOB. UH, I SEE, UH, MITCH, UH, BATES STANDING OVER HERE TO MY LEFT. SO LET ME, UH, EASE ON OPEN AND BRING HIM IN. COME ON. MITCH , UH, IF I CAN, MR. CHAIRMAN, AGAIN, I JUST WANTED TO, UH, THANK THE TEAM, THANK THE AUDIT TEAM, OF COURSE, ART AND JUSTIN AND THEIR TEAM FOR THIS. AND I THINK WHAT WE'VE SEEN HERE WITH THIS AUDIT OF THE THINGS THAT WE'VE GONE THROUGH AND DISCUSSED SO FAR, THE VAST, VAST MAJORITY OF THESE ARE, IF NOT ALMOST ALL OF THEM, ARE PROCESS, PROCEDURE, DOCUMENTATION TYPES, ISSUES, THINGS THAT CAN HELP US MITIGATE POTENTIAL RISKS THAT IS OUT THERE, LIMITING THE NUMBER OF ACCESS, MAKING SURE EVERYBODY'S GOT THEIR COMPUTERS LOCKED DOWN. WE WORK WITH THAT THROUGHOUT THE CITY, TRYING TO MAKE SURE THAT WE DO THAT KIND OF THING. UH, A LOT OF THINGS WE DO ON THE FEE WAIVERS AND THOSE KINDS OF THINGS, THOSE ARE THE THINGS THAT ART AND I AND PHIL AND OTHERS HAVE DISCUSSED, THE CITY MANAGER [00:35:01] HAVE DISCUSSED. WE WAIVE FEES OFTENTIMES WHEN THE SHELTER'S FULL, WE'RE GONNA WAIVE FEES. WE DON'T NORMALLY WAIVE FEES ALL THE TIME, BUT ADOPTION FEES AND THINGS LIKE THAT. SO, BUT THE ISSUE HERE IS MAKING SURE WE HAVE THAT DOCUMENTATION IN THERE. IT MITIGATES ANY POTENTIAL RISK OF SOMEONE TAKING FUNDS IF YOU DIDN'T KNOW WHERE THE, YOU KNOW, THAT WE WAIVE THE FEES AND THAT KIND OF THING. SO HAVING THOSE POLICIES, HAVING THOSE PROCEDURES UPDATED, YOU KNOW, TYING IN WHAT, WHAT THOSE ARE MAKING THOSE DECISIONS, EACH OF THESE THINGS WILL HELP US GET BETTER. UH, I JUST WANTED TO STATE THAT THEY'RE, THEY'RE DOING ART AND TEAM ARE DOING A GREAT JOB. THEY'RE IN GREAT SHAPE. THIS WILL MAKE THEM BETTER. YES, SIR. THANK YOU, MITCH. THANK YOU SO VERY MUCH. AND I DO WANT TO ALSO, UH, ECHO, UM, THE, UH, SENTIMENTS OF OUR, OF OUR DIRECTOR, AND THAT IS TO THOSE PARTNERING, THOSE ORGANIZATIONS THAT ARE PARTNERING WITH US PRESENTLY, UH, TO MAKE THE PROGRAM MUCH MORE EFFECTIVE. WE THANK THEM ALSO FOR THE WORK THAT THEY'RE DOING. WITH THAT, DO WE HAVE ANY OTHER DISCUSSION OR COMMENT? ARE YOU PRETTY COMPLETE WITH YOUR PATIENT? YES, SIR. THANK YOU SO VERY MUCH. OKAY, LET'S NOW MOVE TO, UM, ITEM C, GP AND L LEAD STREET LIGHT CONVERSION AUDIT. MR. CHAIRMAN, UH, CHAIRMAN, UM, THIS IS ABOUT THE G-P-N-L-L-E-D STREETLIGHT CONVERSION AUDIT. UH, IF MY UNDERSTANDING IS CORRECT, THIS EFFORT OR THE INITIATIVE, UM, STARTED WITH COUNCILMAN WILLIAMS, UH, A NUMBER OF YEARS AGO. I THINK HE, HE, HE'S THE ONE WHO BROUGHT IT TO OUR ATTENTION. UM, SO WE JUST WANTED TO MAKE SURE, UH, YOU KNOW, I THINK THAT DISCUSSION HAPPENED IN 2016 AND WE STARTED IMPLEMENTING THIS, THIS EFFORT IN 2018. NUMBER ONE. UH, WE WANTED TO MAKE SURE IF THE COST AND THE TIMELINESS FOR COMPLETION OF THE STREET LED CONVERSION PROJECT WAS WITHIN THE ORIGINAL SCOPE. AND OBVIOUSLY, YOU KNOW, COVID HAPPENED IN BETWEEN, SO I'M SURE THAT PLAYED A ROLE. UH, WE'LL, WE'LL GET TO THAT ONE. WE ALSO WANTED TO MAKE SURE, UH, BILLING ACCURACY AND WARRANTIES PROVIDER ARE IN ACCORDANCE WITH TERMS AND CONDITION OF THE AGREEMENTS. FOR THE MOST PART, UH, WE OUTSOURCED, UM, THIS EFFORT TO, UM, TWO OR THREE THIRD PARTY VENDORS, AND SO WE WANTED TO MAKE SURE THAT THEY WERE IN COMPLIANCE WITH THOSE AGREEMENTS. THIRDLY, WE ALSO WANTED TO VERIFY THE ACCURACY OF INVENTORY ISSUED BY THE WAREHOUSE, THE CITY WAREHOUSE, AND BY COMPARING THEM TO THE NUMBER OF ITEMS INSTALLED BY THE CONTRACTOR. UM, SO THAT, THOSE WERE THE THREE OBJECTIVES. THE SCOPE OF THE AUDIT WENT BACK ALL THE WAY FROM THE INITIATION. UM, I DO WANNA RECOGNIZE THE GPNO TEAM AS WELL, ESPECIALLY JONAS WHITEHEAD, OUR DISTRIBUTION DIRECTOR. HE KNEW THIS AUDIT WAS COMING, SO HE ACTUALLY, UM, YOU'LL SEE THAT HERE. HE ACTUALLY HAD PRETTY MUCH ALL THE PROCESSES, THE DOCUMENTATION IN PERFECT CONDITION. SO HE WAS READY FOR US. AND SO THANK THANKS, THANKS FOR HIM, UH, FOR, FOR, FOR DOING THAT. AND OF COURSE, JOE WAS VERY COOPERATIVE AS WELL DURING THIS AUDIT. UM, ZACH LED THE AUDIT, AND, UM, PATRICIA ACTUALLY, UH, CONDUCTED THE QUALITY REVIEW, UH, AS PART OF THIS AUDIT. UM, ZACH IS GONNA GO OVER HIGH LEVEL HOW, UH, HOW MANY POLLS THAT WE HAD TO REPLACE AND HOW WE DID IT, AND KIND OF GO THROUGH THE PROCESS. AND HE'S GOT SOME COOL GRAPHS IN THERE AS WELL. THEN HE'S, WE HAVE ONE OBSERVATION, THEN HE'S GONNA COVER THAT AS WELL. THANK YOU, JED. UH, SO JUST TO GIVE A A BRIEF BACKGROUND, UH, THE CITY OF GARLAND'S, LED, UH, STREETLIGHT CONVERSION PROJECT APPROVED BY COUNCIL IN 2016 REPRESENTS A MAJOR UPGRADE TO THE CITY'S INFRASTRUCTURE. UH, THE PROJECT FOCUSED ON, UM, REPLACING ROUGHLY 14,000 HIGH PRESSURE SODIUM OR HPS ILLUMINATORS WITH ENERGY EFFICIENT LEDS OR LIGHT EMITTING DIODES. UM, ALTHOUGH ALL THE LIGHTS WERE CHANGED TO LED, SOME OF THE POLES THAT WERE STILL IN GOOD SHAPE WERE LEFT IN PLACE. UM, ADDITIONALLY, SOME NEIGHBORHOODS HAD PAID FOR SPECIAL LIGHTING FIXTURES IN THE PAST, AND THOSE WERE KEPT IN PLACE AND WERE, UH, JUST CONVERTED TO LED. SO PER, UH, GP AND L, THE PROJECT COST WAS APPROXIMATELY 9.3 MILLION, UH, WHICH IS WITHIN THE ORIGINAL BUDGET. AND YOU CAN SEE A GRAPH THERE THAT KIND OF SPLITS THAT COST UP THROUGH THE FISCAL YEARS. UH, ONE OF THE KEY MOTIVATIONS BEHIND THE PROJECT IS THE SUBSTANTIAL ECONOMIC BENEFIT. THE LED LIGHTS OFFER. UH, THIS SHIFT IS EXPECTED TO REDUCE ENERGY CONSUMPTION BY AS MUCH AS 70%, WHICH PROVIDES SIGNIFICANT SAVINGS TO THE CITY. UH, ADDITIONALLY, LEDS HAVE LOWER MAINTENANCE COSTS DUE TO THEIR LONGER LIFESPAN, WHICH WILL FURTHER CONTRIBUTE TO REDUCING THE OVERALL EXPENDITURE RELATED TO STREET LINE MAINTENANCE. UH, THE PROJECT WAS FINISHED ROUGHLY EIGHT MONTHS AFTER THE ANTICIPATED COMPLETION DATE DUE TO SUPPLY CHAIN ISSUES AND RESOURCE ALLOCATION. UH, THREE PRIMARY CONTACT, UH, CONTRACTORS WERE USED TO INSTALL A PROJECT [00:40:01] WORKING ALONGSIDE GP AND L INSPECTORS TO ENSURE CONSTRUCTION STANDARDS WERE BEING MET. THE INITIAL SCOPE OF THE PROJECT INCLUDED THE INSTALLATION AND PROGRAMMING OF NODES, UM, THAT WENT ON TOP OF EACH OF THE CITY STREETLIGHTS, WHICH ALONGSIDE THEIR OPERATION MANAGEMENT SYSTEM WOULD IMMEDIATELY NOTIFY CREWS OF LED STREETLIGHT OUTAGES OR ISSUES. HOWEVER, UH, THE NOTIFICATION PROGRAM WAS ULTIMATELY NOT UTILIZED DUE TO FIRST TECHNICAL ISSUES, AND THEN THE EVENTUAL BUSINESS CLOSURE OF THE SOFTWARE PROVIDER. UH, THESE DEVICES ARE STILL BEING USED AS LIGHT SENSORS TURNING THE STREET LIGHTS OFF AND ON AT DAWN AND DUSK. UH, SO THERE'S A, A BREAKDOWN OF THE TIME PERIOD THAT WE USED THE THREE MAIN VENDORS, AS WELL AS THE AMOUNT THAT THEY WERE PAID, AS WELL AS A FEW SMALL VENDORS IN THE AMOUNT THAT WE PAID THEM. SO I'LL DIRECT YOU TO SEE THE LED CONVERSION PROCESS FLOW CHART THAT WE HAVE THERE, UH, THE PRETTY PICTURES THAT JED SPOKE ABOUT. UM, SO I'LL JUST BRIEFLY WALK Y'ALL THROUGH THAT. SO, TO START OFF, UH, THE PROJECT GPNL WILL ISSUE A SERVICE REQUEST TO THE CONTRACTOR, UH, INCLUDING THE LOCATIONS AND THE PULL TYPES, UH, TO INSTALL, WHICH WILL INCLUDE THOSE, UH, CONSTRUCTION STANDARDS. AT THE SAME TIME, GPNL SENDS A LIST OF ITEMS TO THE WAREHOUSE, UH, TO GET READY FOR THE PICKUP OF THE, BY THE CONTRACTOR. NEXT, THE CONTRACTOR PICKS UP THE NEEDED MATERIALS AFTER THEY RECEIVE THE SERVICE REQUEST, AND THE CONTRACTOR COMPLETES THE LED CONVERSION FOR THE WORK SITES LISTED ON THAT SERVICE REQUEST. AFTER THE WORK IS COMPLETED, GPNL INSPECTS AND APPROVES THIS, UH, THE WORK TO ENSURE IT MEETS THE CITY'S CONSTRUCTION STANDARDS. AND THEN THE CONTRACTOR SENDS GPNL AND INVOICE, WHICH IS RECONCILED AND APPROVED BEFORE PAYMENT. THIS ISN'T GONNA BE ON THERE. UM, SO A FEW THINGS THAT WE DID AS A PART OF OUR TESTING. UH, WE DID CHECK RANDOM LOCATIONS WITHIN THE CITY, UM, WITHIN EACH COUNCIL DISTRICT TO, UH, ENSURE THAT THE PROJECT WAS COMPLETED CITYWIDE. UM, WE STARTED THIS OFF WITH GOOGLE MAPS, JUST LOOKING UP AT STREETLIGHTS ALL ACROSS THE CITY TO MAKE SURE, AND THEN WE FURTHER WENT ONSITE JUST TO ENSURE IF ANYTHING CAME UP. SO DURING THE SEARCH, WE DID FIND A LOCATION WITHIN CITY LIMITS THAT WERE NOT UPGRADED TO LEDS. UM, THE LIGHTS AND ELECTRICITY IN THIS SPECIFIC AREA ARE ACTUALLY NOT SERVICED BY GPL, THEY'RE SERVICED BY A THIRD PAR OR A SEPARATE COMPANY. SO ADDITIONALLY, UH, WE REVIEWED A SAMPLE OF CONTRACTOR INVOICES AND THEY REVEALED THAT THE RATES AND QUANTITIES BILLED MATCH THE CONTRACTUAL RATES AND SERVICE REQUEST QUANTITIES. ADDITIONALLY, ALL REQUIRED INFORMATION, INCLUDING SERVICE REQUEST AND CONTRACT NUMBERS, AS WELL AS LINE ITEM DESCRIPTIONS WITH CONSTRUCTION STANDARDS WERE INCLUDED ON ALL THE INVOICES. LASTLY, A RECONCILIATION BETWEEN THE NUMBER OF POLLS ISSUED PER THE CITY'S FINANCE SYSTEM ENTERED BY WAREHOUSE STAFF. AND THE NUMBER OF POLLS INSTALLED PER GP L'S WORK ORDER SYSTEM MATCHED WITHIN A REASONABLE AMOUNT. SO WE DID COME ACROSS ONE OPPORTUNITY FOR IMPROVEMENT, UH, WHICH HAS TO DO WITH THE MATERIAL WARRANTY REPLACEMENT PROCESS. DURING THE SCOPE OF THE AUDIT, THE CITY WAS RESPONSIBLE FOR ORDERING, STORING, AND MANAGING THE INVENTORY RELATED TO THE PROJECT. THESE ITEMS WERE SOURCED FROM VARIOUS DISTRIBUTORS AND HAVE MATERIAL AND WORKMANSHIP WARRANTIES UP TO 120 MONTHS, UH, PER GPNL AND WAREHOUSE STAFF, THE CURRENT MATERIAL WARRANTY REPLACEMENT PROJECT, UH, PROCESS IS AS FOLLOWS. UH, YOU CAN SEE THE 1, 2, 3, 4, 5, UM, HERE BELOW. AND I'LL JUST WALK YOU THROUGH, UH, DEFINING WHAT THOSE STEPS MEAN. SO FIRST, A DEFECTIVE ITEM IS IDENTIFIED. SECOND, THE DEFECTIVE ITEM IS PLACED ON A PALLET AND GPNL STORAGE. THIRD, ONCE THE PALLET IS FULL OF DEFECTIVE ITEMS, THE PALLET IS TRANSPORTED TO THE WAREHOUSE. THE WAREHOUSE STAFF, UH, WAREHOUSE STAFF THEN CONTACTS THE DISTRIBUTOR LETTING THEM KNOW OF THE DEFECTIVE ITEMS. AND LASTLY, THE DISTRIBUTOR COMES TO THE WAREHOUSE AND REPLACES THE DEFECTIVE ITEMS WITH NEW ONES. ACCORDING TO GPNL AND WAREHOUSE STAFF, SEVERAL WARRANTY REPLACEMENTS OCCURRED DURING THE PROJECT. HOWEVER, NO RECORD OF THE DEFECTIVE ITEMS REQUESTED FOR REPLACEMENT, INCLUDING ITEM INFORMATION OR QUANTITIES WERE RETAINED BY GPNL OR WAREHOUSE STAFF, NOR WERE ANY OF THE COMMUNICATIONS RETAINED. UH, BEGINNING OCTOBER 1ST, 2024, THE CITY WILL OUTSOURCE THE WAREHOUSE FUNCTION, AND IT'S IMPORTANT TO ENSURE THAT THE WAREHOUSE, UM, SORRY THAT THE WARRANTIES AND ANY COMMUNICATION OF THIS IS, UH, MAINTAINED IN THE FUTURE. SO THE CAUSE OF THIS, UM, IS THAT PRIORITIZATION WAS GIVEN TO PROJECT COMPLETION, NOT NECESSARILY DEVELOPING WARRANTY TRACKING PROCESSES. POTENTIAL EFFECT IS THAT WITHOUT PROPER TRACKING, ALL DEFECTIVE ITEMS MIGHT NOT BE REPLACED WITHIN THE WARRANTY TIMEFRAME THAT WERE ALLOTTED. IA RECOMMENDS THAT GP AND L SHOULD DEVELOP AND DOCUMENT A FORMAL, UH, PROCESS TO PROPERLY TRACK THE TYPE QUANTITY AND RELEVANT COMMUNICATIONS REGARDING WARRANTY REPLACEMENT. MANAGEMENT CONCURS AND HAS AN ACTION PLAN THAT THEY WILL DEVELOP A FORMAL WARRANTY REPLACEMENT PROCESS WITH A NEW WAREHOUSE SERVICES VENDOR BY DECEMBER, 2024. AND THAT'S IT. THANK YOU. SOUNDS PRETTY SIMPLE. THIRD RUN TO THE POINT. , [00:45:01] ANY QUESTIONS, DISCUSSIONS? WELL, 14,000 LIGHT FIXTURES. THAT'S A LOT OF LIGHT BULBS. YES, JONAS DID, DID WE, UH, YIELD A SIGNIFICANT IMPROVE SAVINGS AND, UH, AND ELECTRICITY, UH, AS THIS PROJECT, UH, WAS JUST FINISHING UP TOWARDS THE BEGINNING OF OUR AUDIT. WE DIDN'T NECESSARILY LOOK AT, UM, ANY COST SAVINGS YET, BUT I'M SURE, UM, WE'LL SEE THAT IN THE FUTURE. VERY GOOD. THANK YOU. I CAN SAY AESTHETICALLY, I HAVE TWO ON MY STREET AND I LOVE THEM. YES. MATTER OF FACT, THE COMMUNITY REALLY, UH, APPRECIATES IT. SO WITH THAT, UH, ANY OTHER COMMENTS? NO, JUST WANNA THANK THE MANAGEMENT FOR WORKING WITH US. UH, EVEN THOUGH THE REPORT ONLY HAS ONE OBSERVATION, UH, RIGHT. UM, WE DID LOOK INTO A LOT OF STUFF AND THEY DID A VERY GOOD JOB IN KEEPING EVERYTHING DOCUMENTED AND IN SHAPE. SO, UM, NO, I JUST WANNA THANK THEM, CHAIRMAN. OKAY. THANK YOU SO VERY MUCH FOR YOUR SERVICE. AND I'M, I'M, I'M WORKING ON NAMES ZACH AND PATRICIA. THANK YOU SO VERY MUCH FOR YOUR, OF COURSE. YEAH, VERY GOOD. OKAY, WITH THAT ITEM D, FISCAL YEAR OF 2025, AUDIT PLAN CHAIRMAN, THAT WILL BE ME. UH, UM, SO FOR THE PAST FEW, FEW MONTHS, UH, I'VE BEEN WORKING TO DEVELOP THIS AUDIT PLAN AND, UM, THIS IS, THIS AUDIT PLAN WAS DEVELOPED, UM, AFTER SEVERAL DISCUSSION, UM, WITH JAD, UH, AS WELL AS, UM, SOME OF THE COMMITTEE MEMBERS. AND I DID SEND EMAILS TO COUNCIL FOR ANY REQUEST THAT COUNCIL MAY HAVE, AS WELL AS THE SENIOR MANAGING DIRECTORS, UH, WITH THE CITY. UH, WITH THAT, I WOULD LIKE TO PROPOSE THIS AUDIT THERE FOR THE UPCOMING, UM, FISCAL, FISCAL YEAR FOR YOU ALL'S CONSIDERATION AND APPROVAL. I WILL JUST QUICKLY GO OVER THESE AUDITS WITH YOU. UM, NUMBER ONE, THE ENGINEERING FEE ASSESSMENT AND COLLECTION. THIS IS ONE AREA THAT WE HAVEN'T BEEN. UM, SO WE WANT, WANT TO ENSURE THAT THE FEES ARE COLLECTED IN ACCORDANCE WITH THE ORDINANCES AND ALL FUNDS ARE ACCOUNTED FOR. SECONDLY, UM, LAST YEAR WE DID AN AUDIT ON THE CITY IT NETWORK SECURITY, AND JARED REQUESTED THAT WE EXPAND THE SCOPE TO INCLUDE GPNL AS PART OF THIS YEAR'S AUDIT PLAN. SO WE ARE ACTUALLY, UH, LOOKING AT, ON THE GPNL SIDE JUST TO ENSURE THAT, YOU KNOW, UM, WE HAVE GOOD CONTROLS IN PLACE, AS YOU'RE AWARE, IT RISK, IT'S, IT'S, IT'S AN ONGOING RISK. UM, SO, UM, THAT IS THE REASON WE WILL, AS PART OF THIS, WE'LL LOOK AT GENERAL CONTROLS, FIVE SWITCHES, FOUR FIREWALLS, THREE SERVER CONFIGURATION, AND OFFICE 365. UH, THE REQUEST I HAVE ALREADY INITIATED ON THIS ONE. SO MY GOAL IS TO GET THIS AUDIT GOING, UM, BY OCTOBER 1ST, AND HOPEFULLY WE'LL HAVE THIS, THE RESULTS BY THE NEXT AUDIT COMMITTEE MEETING. THE NEXT ITEM IS THE CONTRACT MANAGEMENT. OBTAIN A SAMPLE OF CITY CONTRACTS WITH THIRD PARTIES TO DETERMINE ADEQUATE CONTROL EXIST OVER CONTRACT MANAGEMENT, INCLUDING COMPLIANCE MONITORING, PERFORMANCE MONITORING, AND PAYMENT MONITORING. NEXT ITEM IS THE NEIGHBORHOOD VITALITY GRANT. UM, THIS IS ANOTHER AREA THAT THE AUDIT, UM, IN THE PAST, UH, HAVEN'T LOOKED AT IT. AND I KNOW RECENTLY ITSELF, UH, THE CITY COUNCIL, UH, WENT THROUGH THIS, UH, THIS FUNDING OPTION AS WELL. I'M NOT AWARE OF ANY INAPPROPRIATENESS. THIS IS JUST TO ENSURE THAT GRANTS ARE APPROVED AND DISTRIBUTED IN ACCORDANCE WITH GUIDELINES APPROVED BY THE CITY COUNCIL. UH, THE NEXT ITEM IS THE CITYWIDE CASH COUNT. WE TOOK A BREAK THIS DURING THIS PAST YEAR. UH, THIS WILL BE AN UNANNOUNCED CASH COUNT THROUGHOUT THE CITY, JUST TO MAKE SURE, UH, OUR RESOURCES ARE, ARE ASSETS ARE, UM, ACCOUNTED FOR AND SECURED, AND ALSO EVERYBODY'S CONDUCTING THE BUSINESS IN ACCORDANCE WITH THE CITY DIRECTIVES, FINANCIAL DIRECTIVES, AND ET CETERA. NEXT ITEM IS THE CONTROL SUBSTANCES EVALUATE INTERNAL CONTROLS OVER THE ACQUISITION, DISTRIBUTION, TRANSFER INTERVENTION, DISPOSITION AND PAYMENT PROCESSES OF CONTROL SUBSTANCES. THIS WILL BE MAINLY FOCUSED AT THE FIRE DEPARTMENT. NEXT ITEM IS THE WASTEWATER AGREEMENT. UM, A NUMBER OF YEARS AGO, WE HAVE DONE THIS AUDIT, BUT IT'S BEEN AT LEAST 10 YEARS SINCE WE LOOKED AT IT. UM, SO AS YOU'RE AWARE, WE HAVE WASTEWATER TREATMENT AGREEMENTS WITH CITY OF DALLAS RICHARDSON ROLL AT SAXE AND SUNNYVALE. JUST WANNA MAKE SURE THAT OUR MONTHLY BILLING IS PERFORMED WITH THE MOST CURRENT AND ACCURATE DATA AND PROPERLY CALCULATED AS WELL AS PAYMENTS ARE RECEIVED IN A TIMELY MANNER. IN THIS CASE, WE ARE PROVIDING THE SERVICE, SO WE'RE SUPPOSED TO BE RECEIVING, UH, FUNDS FROM THEM. NEXT ITEM IS AT THE SANITATION DEPARTMENT. COMMERCIAL SERVICES AGREEMENT. VERIFY SANITATION PROVIDES ALL WASTE AND RECYCLING [00:50:01] SERVICES AND GENERATES BILL TO ITS COMMERCIAL CUSTOMERS IN ACCORDANCE WITH TAMS AND CONDITION LISTED IN THE AGREEMENTS. UM, AS YOU'RE AWARE, WE HAVE ROLL OF CONTAINERS, DUMPSTER, UM, THAT WE PROVIDE, UM, TO BUSINESSES, COMMERCIAL, UM, CUSTOMERS. SO WE JUST WANTED TO MAKE SURE, UM, THAT IS, THEY ARE, WE ARE BILLING AND THEY'RE PROVIDING PAYMENTS IN ACCORDANCE WITH OUR TERMS REVENUE RECOVERY EFFORTS. I EVALUATE THE EFFECTIVENESS OF SERIES REVENUE RECOVERY DEPARTMENT. UM, THEY MAINLY FOCUS ON COURT COMPLIANCE, UH, ABATEMENT, LIENS, ACTUARIAL MEDIATION. UM, THEY ALSO, UH, VERY, UM, TRACKS ENGINEERING SIDEWALK PAYMENTS AS WELL AS, UH, UM, THEY MANAGE THE EMS CONTRACT EVEN AS REVENUE BUILDING CONTRACT. SO WE'LL LOOK AT THAT FIRE WHEEL GOLF COURSE OPERATIONS VERIFY IF FIRE WHEEL GOLF COURSE IS IN COMPLIANCE WITH THE TEXAS ALCOHOLIC BEVERAGE COMMISSION'S RULES AND REGULATIONS, EVALUATE INTERNAL CONTROLS OVER THE GOLF COURSES FOR TOURNAMENT OPERATIONS. UM, SO, UM, IT'S BEEN A WHILE SINCE WE'VE LOOKED AT THOSE AS WELL. LASTLY, BUILDING INSPECTION AUDIT. CHAIRMAN MOORE, YOU REQUESTED THIS AUDIT. SO ASSESS MANAGEMENT CONTROLS OVER BILLING AND COLLECTION OF FEES. THE TWO AUDITS THAT ARE IN PROGRESS RIGHT NOW, UH, MAINLY THE PARKING ENFORCEMENT OFFICE ENFORCEMENT AUDIT, UM, WORKING WITH THE CITY MARSHAL'S OFFICE, UM, THEY'VE BEEN EXTREMELY COOPERATIVE AND IN FACT THEY'RE, THEY PRETTY MUCH ARE PROVIDING ALL THE INFORMATIONS THAT WE NEED, SO IT IS GOING WELL. UM, SO WE JUST WANNA MAKE SURE THAT IF SERVICES PROVIDED AND PRO PAYMENTS PROCESS BY THIRD PARTY ARE IN COMPLIANCE WITH CONTRACT TERMS AND CONDITIONS, EVALUATE THE EFFECTIVENESS OF PROGRAM ADMINISTRATION BY CD STAFF. PORTHOLE REPAIR OPERATIONS, WE HAVEN'T QUITE STARTED THAT ONE. MY HOPE IS TO GET THAT THING GOING IN THE NEXT FEW WEEKS. BASICALLY ANALYZE THE EFFECTIVENESS AND EFFICIENCY OF CURRENT PORTHOLE REPAIR PROCESSES AND DETERMINE THE ACCURACY AND RELIABILITY OF KEY PERFORMANCE METRICS. THERE ARE A FEW AUDIT FOLLOW UPS ALSO, UM, THAT I PUT IN HERE. J AND I SPOKE, UM, IN DEPTH ABOUT, UH, TACKLING A LOT OF PRIOR AUDITS. UH, IN FACT, WE'RE STILL WORKING THROUGH SOME OF THE LOGISTICS ON THAT ONE. UM, IN, IN SOME OF OUR AGREEMENTS ARE IN, IN CERTAIN INSTANCES, JET'S TEAM WILL BRING THE REPORT, UH, TO THE COUNCIL, UH, AND GIVE, GIVE AN UPDATE ON, UH, ON THE RECOMMENDATIONS AND, AND ACTION PLANS. IN OTHER CASES, WE WILL PERFORM SOME OF THE AUDIT, BUT WE ARE STILL WORKING TOGETHER IN FINALIZING THOSE, UH, PROCUREMENT CONTRACT, PROCUREMENT AUDIT FOLLOW UP. THIS IS ONE OF THE ONES THAT COUNCILMAN WILLIAMS REQUESTED. HE REQUESTED THIS AUDIT INITIALLY. HE JUST WANTED TO, UM, SEE WHERE WE ARE ON THAT ONE. THIS IS NOT THE ENTIRE CONTRACT PROCUREMENT. HIS FOCUS WAS MAINLY ON ANYTHING THAT WE PROCURED BETWEEN THREE AND $50,000. SO WE'LL BRING THAT BACK TO THE COUNCIL RISK MANAGEMENT LIABILITY CLAIMS PROCESS. WE DID AN AUDIT A FEW YEARS AGO. I KNOW THERE HAS BEEN A LOT OF TURNOVER IN THAT DEPARTMENT. IT IS UNDER A NEW MANAGEMENT, SO WE'LL, WE'LL FOLLOW UP JUST TO MAKE SURE I FEEL VERY GOOD ABOUT THAT. AUDIT STREETS CONCRETE RECYCLING FACILITY LEASE AGREEMENT. AS YOU'RE AWARE, WE, WE OUTSOURCED THIS. UM, THE, THE LAND IS OWNED BY THE CITY. UH, WE HAD A FEW FINDINGS LAST, LAST TIME WHEN WE DID THE AUDIT. UM, WE'RE SUPPOSED TO GET 50,000 TONS OF CRUSHED CONCRETE, UH, FOR OUR OWN USAGE AND SOME OF THE ROYALTY PAYMENTS AND STUFF LIKE THAT. SO WE HAD A FEW RECOMMENDATIONS BACK THEN, BUT WE'RE JUST GONNA DO A FOLLOW UP ON THAT ONE TO MAKE SURE WE'RE GOOD WITH THAT ONE. ECONOMIC DEVELOPMENT, THIS AUDIT, UH, WAS ACTUALLY REQUESTED BY THE ADMINISTRATION, THE PRIOR ADMINISTRATION. SO, BUT JED WAS HERE WHEN WE ISSUED THE REPORT TOWARDS THE END. SO WE JUST THOUGHT OF LOOKING AT THAT INCENTIVE, UH, PROCESSES RIGHT NOW. IT'S BEEN A FEW YEARS ON TOP OF THAT, AS WE NORMALLY DO. UH, WE WILL PROVIDE EXTERNAL AUDIT ASSISTANCE, FREE FUEL INVENTORY IF WE HAVE TIME, AND, YOU KNOW, WE MANAGE THE CITY'S FRAUD, WASTE, AND ABUSE HOTLINE. SO ANY INVESTIGATIONS OR SPECIAL PROJECTS. UM, ONE THING THAT I DIDN'T PUT IN HERE, UH, IF EVERYTHING GOES WELL AS PLANNED, UH, WE WILL GO THROUGH THE PEER REVIEW AS WELL IN THE EARLY PART OF, UH, THIS COMING FISCAL YEAR. UM, SO THAT IS WHAT I HAVE. I KNOW IT'S FULLY LOADED. UH, PLEASE KNOW THAT IT'S A LOT OF AUDITS. HOPEFULLY WE'LL GET TO ALL OF 'EM. BUT, UH, I'LL BE HAPPY IF WE CAN AT LEAST TACKLE, UH, 80% OF THOSE. UH, I USUALLY PUT, UH, MORE THAN WHAT WE CAN, WE CAN HANDLE JUST IN CASE THINGS CAN HAPPEN. AND, UM, YOU KNOW, MAYBE WE NEED TO DELAY ONE AUDIT, SO WE'LL HAVE AT LEAST ANOTHER AUDIT AND, AND THIS IS A, UM, PLAN THAT CAN BE CHANGED IN THE FUTURE AS WELL. SO WITH THAT, UH, JI DON'T KNOW IF YOU HAVE ANYTHING ELSE TO ADD TO IT. THANKS. UM, [00:55:01] YEAH, I WAS JUST GONNA ADD, THANKS, JED. UM, I KNOW JED REF REFERENCED, UH, SOME WORK THAT WE'RE DOING ON PAST AUDITS AND, AND REALLY WHERE THAT STARTED FROM COMMITTEE MEMBERS IS THAT, UH, IT'S OUT OF A DESIRE TO MAKE SURE THAT THINGS THAT WE'VE MANAGEMENT HAS COMMITTED TO DO, THAT WE FOLLOW THROUGH ON THOSE AND, AND MAKE SURE THAT THEY ARE INDEED COMPLETE. AND SO, UM, WE'VE BEEN LOOKING REALLY AT THE PAST 10 YEARS WORTH OF AUDITS, WHICH IS A LOT. I MEAN, JUST THE, LOOKING AT THE AUDIT PLAN FOR NEXT YEAR, THERE'S A DOZEN GIVE OR TAKE AUDITS. THERE YOU GO BACK 10 YEARS, YOU KNOW, YOU'RE TALKING A HUNDRED PLUS, UM, AUDITS. AND SO, UH, I'VE BEEN GOING THROUGH THOSE WITH OUR TEAM. JED'S LOOKED AT IT AND WE'VE HAD SOME CONVERSATIONS ABOUT HOW BEST TO APPROACH THAT. UH, AND I THINK IT'S GONNA BREAK DOWN TO, UM, UH, HIS TEAM LOOKING AT SOME, US LOOKING AT SOME MANAGEMENT, REVIEWING, UM, SOME OF THOSE PAST AUDITS AGAIN, JUST TO MAKE SURE THAT WE'VE TRULY BROUGHT THOSE TO CLOSURE AND COMPLETION AND THAT, UH, THAT WE CAN SORT OF MOVE ON FROM THOSE AND, AND KEEP MOVING FORWARD. SO, UM, WE'RE GONNA HAVE, HAVE JED TRY TO TAP THE BRAKES AS MUCH AS POSSIBLE UNTIL WE GET GET THROUGH ALL THOSE, BECAUSE IF WE KEEP PILING ON, THEN, UH, MY CONCERN IS THAT WE'RE REALLY NOT ABLE TO GO INTO EACH OF THESE AUDITS WITH THE QUALITY THAT WOULD, THAT I EXPECT FROM MY TEAM IN TERMS OF FOLLOW UP AND, AND COMPLETION. SO, UH, JUST WANTING TO, UH, BRING SOME CLOSURE TO THOSE PAST ONES AND MAKE SURE THAT WE DID WHAT WE SAID WE WERE GONNA DO. SO, APPRECIATE JED WORKING THROUGH THE DETAILS OF THAT WITH ME, AND I WAS GLAD TO HEAR THAT. UH, SOME OF THESE AUDITS WILL NOT NECESSARILY BE COMPLETE THOROUGH, YOU KNOW, AUDITS, GOOD FOLLOW UPS, WHEREBY YOU BRING BACK JUST THE DATA THAT'S NECESSARILY NEEDED SO THE COUNCIL CAN HEAR IT, UNDERSTAND WHAT HAS TAKEN PLACE AND KNOW THAT WE'RE CURRENT. SO I, I LIKE THAT APPROACH ALSO. AND IT SOUNDS TO ME LIKE THE AUDIT COMMITTEE, UH, AUDIT TEAM IS GONNA BE VERY BUSY THIS NEXT YEAR. , THAT'S A LOT HERE. SO, UH, COUNCIL MO, IT'S A SIGNIFICANT AND AMBITIOUS AUDIT PLAN THAT'S, UH, YOU KNOW, IF YOU GET 80% OF THAT DONE, I MEAN, WOW. SO HATS OFF TO YOU ALL FOR THAT. UH, IT'S GONNA BE VERY INTERESTING TO SEE HOW THE FOLLOW UPS, UH, COME THROUGH. 'CAUSE I KNOW THAT THE, THAT, UH, THERE'S A LOT OF CONCURRENCE ON A LOT OF DIFFERENT PROJECTS AND JUST BC INTERESTING TO SEE HOW ALL THAT IS PANNED OUT OVER TIME. SO, THANK YOU. OKAY, CHAIRMAN, CHAIRMAN, IF I MAKE IT A CONSENSUS, UM, WITH THIS AUDIT PLAN BETWEEN YOU TWO, UH, IF YOU APPROVE THIS, WE'LL TAKE YOU TO THE COUNCIL. YES, I, I DEFINITELY, YES SIR. LET'S TAKE IT FORWARD. CITY MANAGER. YOU GOOD? YEAH. OKAY. THANK YOU SO VERY MUCH FOR THE REPORT. AND AT THIS TIME WE'RE GOING TO MOVE OUR, LET ME MAKE SURE FIRST, IS THERE ANYTHING ELSE ON, ALRIGHT, MOVE OUR SESSIONS NOW INTO EXECUTIVE SESSION. NOTICE THE AUDIT COMMITTEE WILL ADJOURN INTO EXECUTIVE SESSION PURSUANT TO SECTIONS 5 5, 1 0.0 7 6 5 5 1 0.089 AND 5 5 1 0.07, ONE OF THE TEXAS GOVERNMENT CODE TO DELIBERATE OR DISCUSS MATTERS RELATED TO THE SECURITY OF THE ANIMAL SERVICES FACILITY AND OPERATIONS AND ATTORNEY-CLIENT COMMUNICATIONS RELATED TO THE SAME. I'M SHOWING 3 28 PRESENTLY, UH, 3 28 38. WHY DON'T WE GET BACK HERE AT, UH, THREE 40? IS THAT THREE 40? THREE 40. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.