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Council approves annual fraud risk assessment; auditors flagged internal-control items for follow-up
Summary
Council approved the city’s annual fraud risk assessment as completed by Bruce Banks. Staff and council discussed recurring internal-control items — training hours, internal audit function, and internal financial expertise — and asked staff to follow up before year-end and coordinate with the external auditor.
The council approved the city’s annual fraud risk assessment, which the auditor Bruce Banks prepared to satisfy state reporting requirements. The assessment rates the city’s fraud risk as moderate, and staff and the auditor highlighted specific internal-control areas for ongoing improvement.
Staff and council discussed three recurring areas flagged in the assessment: whether at least one member of city management obtains 40 hours per year of finance/accounting training; the presence of an internal-audit function or committee; and the availability of licensed accounting expertise within the management team. Council members asked staff to inventory qualified local candidates and to explore whether existing staff or contracted personnel could meet the training and oversight requirements.
The city’s auditor told the council the assessment is part of the annual audit cycle and recommended addressing the flagged items promptly; the auditor also said the state requires the paperwork for its schedule and that completing the assessment allows the audit to proceed to final reporting.
Council action: A council motion to approve the fraud risk assessment as completed by the auditor carried by recorded vote (the transcript records the motion, a second and a yes vote). Council asked staff to coordinate follow-up steps with the auditor and present a plan for addressing training and internal-audit gaps.
Next steps: Staff will inventory internal training, contact local certified public accountants about potential advisory roles, and return to council with a proposed internal-control improvement plan timed to the audit schedule.
