Council watches fraud‑risk video, discusses creating an internal audit plan

The Hurricane City Council viewed a short presentation on fraud risk and discussed whether the city should adopt a formal internal audit plan.

A recorded presentation shown during the meeting described the three components of the fraud triangle—pressure, opportunity and rationalization—and argued that organizations must design internal controls to reduce opportunity. After the video, council members and staff said the city already performs many internal control activities, but some councilmembers said they had not seen a formal internal audit plan before.

“Opportunity is the only broad triangle component entirely within management's control and must be present for fraud to occur,” the training stated in the recorded material. A councilmember asked whether the city performs internal audits in addition to external audits. Dayton and other staff said external auditors review internal controls when they conduct audits; staff added the city is working toward a standard internal audit plan and that internal reviews are already being conducted periodically.

Councilmembers noted the benefits of an organized, risk‑based internal audit plan and requested staff review statutory requirements and best practices so the governing body can confirm compliance and determine whether a formal plan should be adopted.