Clean Water Services outlines plan for independent audit committee; board hears timeline and membership proposals

Clean Water Services Chief Financial Officer Kathy Leader told the Washington County Board of Commissioners that the utility will form an independent audit committee to provide oversight of financial accounting, reporting, internal controls and compliance.

The audit committee, Leader said, will act as a liaison among the board of directors, management and the utility's independent auditors and will participate in auditor selection and review corrective-action responses to management comments. "The audit committee . . . serves as that liaison between the independent auditors, the board, and management," Leader said.

The committee is intended to focus on the utility's specific accounting and operational issues, Leader said, noting Clean Water Services currently participates in Washington County's audit but that the county's audit covers a broader set of programs. She also told the board that last year's Clean Water Services audit was delayed while the county completed its work, which she described as one reason for establishing a separate utility-focused committee.

Leader described a proposed structure of three or five voting members (an odd number), one appointed board member and two to four community voting members; two nonvoting members would include the CFO and a planned senior compliance auditor when that position is established. She said the committee would typically meet twice yearly: once before auditors begin field work and once after the audit to review results.

Board discussion centered on quorum and member qualifications. One commissioner suggested defining a minimum of two community members and up to four, with a quorum comprising one board member and two community members so meetings would be clear to reschedule if the quorum could not be met. Commissioners asked that community members be residents of Washington County, independent from the district (not employees of the district), and not have direct financial ties to the district through contracting relationships.

Leader said the district plans to seek a mix of members, ideally professionals with audit or financial reporting experience balanced with at least one lay member to broaden perspectives. Commissioners suggested clarifying in the application materials the kinds of business or budget experience that would be considered suitable and recommended including examples for prospective applicants.

Terms and timeline: Leader proposed three-year terms with initial staggered terms so one member rotates off each year, volunteer (unpaid) service, and a term limit of no more than three three-year terms. She outlined a schedule for the board: draft bylaws to be presented March 4; applications open March 7 through March 21; applicant review and recommendations presented in a work session on April 15; board appointments May 20; and a first audit-committee meeting targeted in early June.

What happens next: the board did not take a formal vote during the briefing. Staff will return on March 4 with draft bylaws, open the application period in early March and present recommended appointments in April for action in May.

Proper names mentioned in the meeting: Clean Water Services; Washington County; Government Finance Officers Association.