Clean Water Services proposes independent audit committee; bylaws, applications set this spring

Kathy Leader, chief financial officer for Clean Water Services, told the Washington County Board of Commissioners during a Jan. 16 work session that Clean Water Services plans to form an independent audit committee to provide oversight of the utility’s accounting, reporting and internal controls and to serve as a liaison among the board, management and external auditors.

The audit committee, Leader said, would "be the board's agent in assuring the independence of Clean Water Services' external auditors, the integrity of management, and the adequacy of disclosure." She said the committee would meet twice a year — once before auditors begin interim field work and once after the audit is completed to review findings and management responses.

Why it matters: Clean Water Services participates in Washington County’s audit committee now, but staff said the county-wide committee covers many programs and not the utility’s specific operations. Leader told the board that last year the Clean Water Services audit was delayed by Washington County even though Clean Water Services’ materials were ready; she said that experience helped motivate creating a focused, utility-specific oversight body.

Under the plan outlined to the board, the audit committee would help develop criteria for the district’s request for proposals for external audit services and participate in selecting the auditor. Clean Water Services conducts an RFP for independent auditors every five years; staff said the committee would contribute to that selection process and make a recommendation to the board for final approval.

Leader described the proposed membership and governance rules: the committee would have an odd number of voting members (3 or 5), including one appointed position from the Clean Water Services board of directors and the remaining voting seats held by community members who meet independence criteria (reside in Washington County, are not district employees and do not have direct business or financial relationships with the district). The committee would also include two nonvoting members: the CFO and (potentially) a senior compliance auditor from the district’s new internal compliance audit program.

Staff said members would serve three-year, staggered terms, would be volunteers (no compensation), and the board would appoint members. Leader said the committee’s duties would include reviewing audit results, overseeing corrective-action plans for audit findings, and participating in auditor selection. Board members suggested adding a maximum term limit (three three-year terms was proposed) and ensuring a practical quorum requirement so meetings are not routinely rescheduled if community members are absent. One suggested quorum formula was a four-member committee with a minimum quorum of one board member plus two community members.

Board members discussed candidate qualifications. Leader said Clean Water Services would seek professionals with audit or financial reporting experience but that one community seat could be a layperson with relevant business acumen. Board members suggested clarifying the application to help candidates self‑identify experience.

Next steps: Leader said Clean Water Services will bring committee bylaws to the board for adoption on March 4; open applications March 7–21; present recommended appointments at an April 15 work session; and have the board appoint members on May 20. Staff said the audit committee’s first meeting with newly appointed members is planned for early June (target dates discussed included June 1–13).