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Charter commission debates adding internal auditor; members favor permissive option over immediate hire
Summary
Commissioners reviewed benchmarking and cost estimates for an internal auditor on March 24 and discussed a permissive charter option that would allow, but not require, the city to establish an internal auditor or finance commission.
The Kyle City Charter Review Commission spent a substantial portion of its March 24 meeting discussing whether the city should add an internal auditor position or function to the charter.
City Attorney Amy Elkhorn Reed presented benchmarking comparing Kyle City peers and statewide data. Reed said only Austin and San Antonio among the city's listed peers have a charter-mandated internal auditor; some other cities use internal auditors while others rely on contracted or independent auditors. She reported that, based on the benchmarked cities, a staffed internal-audit office typically includes at least two people and that a single full-time internal auditor’s salary and benefits could approach $200,000 annually, with additional staff adding roughly $100,000 per position.
Reed outlined three options for the commission: keep the current independent external auditor (and rely on subsection E of the existing charter provision to have that auditor perform special projects), add a mandatory internal auditor appointed by city council, or add permissive language to the charter allowing (but not requiring) the council or city manager to hire an internal auditor in the future. Reed noted that any internal auditor requirement would be additive to the existing independent annual audit.
Commissioners voiced concerns about cost and about the appropriate reporting line. Several commissioners said they favored a permissive approach that would allow the city to add an internal auditor later if the council determines it is necessary, rather than creating an immediate, mandatory department-level position. One commissioner said the independent auditor could be used for council-requested special audits as an interim compromise. Another commissioner recommended creating a finance or audit commission to advise council and potentially request audits; commissioners discussed whether such a committee should be established by charter or by ordinance and cautioned that charter provisions are harder to amend.
No motion to add a mandatory internal auditor to the charter was recorded in the transcript. Commissioners asked staff to draft permissive language (option 3) and to benchmark audit-committee models for future meetings, including whether a finance/audit commission should be a council subcommittee, an independent panel or created by ordinance.
Speakers discussed potential duties of an internal auditor (fraud detection, internal controls review, performance audits) and the benefit of separate independent and internal audit functions: the independent auditor typically performs the annual financial audit, while an internal auditor would pursue more frequent management, performance and special-project reviews.
The commission did not vote to require an internal auditor during the March 24 meeting; staff will return draft language and benchmarking for subsequent consideration.
