HomeMy WebLinkAboutMinutesMeridian City Pre-Council Meeting
August 26, 2003
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Hawkins-Clark: It would require a lot of work.
Corrie: Actually it was just an update and I guess we could have a vote on it and
we could have a resolution.
Nary: I guess we could ask them if they'll just build half that bridge and then
eventually they will have to build the other half.
Corrie: Walk the plank.
De Weerd: Yeah but then what. They can stand on the bridge but -
Corrie: You can't get across.
Bird: You can't get across you just have to stay on the bridge.
(Inaudible discussion amongst Council members)
De Weerd: Well Mr. Mayor.
Corrie: Mrs. de Weerd.
De Weerd: I guess we just need to put our letter into ACHD and say return the
funds.
Nary: Second.
Corrie: Okay. Motion been made and seconded. The question has been called
for. I did hear you say question didn't I. All those in favor of the motion say aye.
Opposed no. All ayes motion carried. ACHD's letter will be coming.
MOTION CARRIED: ALL AYES.
Item 4. Discussion of Jefferson Wells report:
Corrie: Stacy.
Kilchenmann: Okay. Given time constraints for the Jefferson Wells report I'm
not going to go into a lengthy discussion about the purpose and the scope of the
audit. I think we've already discussed that. So I'm just going to briefly talk about
the conclusion of the audit and the management response to the specific findings
in the audit. I won't go through each one individually because that would be
lengthy. Basically the conclusion of the audit is that internal financial controls
existing in the utility billing system have been weak and some of the basic
controls that are missing are segregation of duties, lack of adequate
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August 26, 2003
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documentation for entries, and lack of review over entries and transactions that
were made into the system. There was also a security component of that audit
which pretty much came down to the same things that were lacking in the
financial system. There were no controls over who had access into the system,
everyone had access into the system. There was no segregation of duties over
who could perform specific functions and there was no review over reports to see
who actually had completed transactions. There was also some inherent
weaknesses in the Cacel billing system itself such as it doesn't take a transaction
with the individual who did it and it also allows people to void receipts which is
not common in most accounting systems. So the findings really dealt -there are
several findings and they all come back to those issues. In specifically just to
talk briefly about how we've addressed some of those finings. The auditors
prepared a really detailed process flow chart of every step that we go through in
the billing system. For example opening the mail, that was detailed out on where
the paper goes when we open the mail, who opens the mail, what individuals
open the mail. So I was able to take those flow charts and break them apart and
divide the duties between the five individuals in the Utility Billing Department. So
we can take that and that gives us just a process flow chart that I use to develop
new job descriptions that are in the process of being reviewed going through a
revaluation in the Human Resource Department. So we have been able to
achieve the segregation of duties that really is kind of the core of the problems
with the system. The problems with the documentation we have instituted some
procedures for example the Treasurer now reviews a computer print out of
receipts every month and she looks for that sequential order of the receipts. She
actually does go back to the hard document that was written for the customer
and she spot checks those to make sure that the receipts are in sequence and
that they agree to the computer generated report. If there are any voided
receipts which the way the system works there are times that you have to void a
receipt, for example if the system goes down it makes you void the receipt and
start over. So she would (inaudible) the documentation to back up any voided
receipts. We are doing as far as the adjustments that we make in the accounting
system, now that the Utility Billing System is under the accounting system we are
a lot more hard core I guess you could say about requiring documentation for
why adjustments are made, we require a printout of the customers account, we
require an explanation, if we don't like the explanation we look for further
documentation. So that has given us a lot more control over the billing
adjustments. One of the big factors in addition to the lack of financial controls, is
the work flow in the fact that we have kind of outgrown the once a month billing
process so that all the work came in in one weeks time or four days time which
meant that everybody participated in opening the mail. Everybody waited on the
front counter, everybody entered receipts. So we have finally completed the draft
of the billing ordinance, in addition to the landlord tenant agreements we'll also
allow us to split that billing apart and I think we have that scheduled to come
before you on September 9t". So that will help because we will have the work
flow spread out more evenly. We have assigned an individual to the front desk
and we are going to be assigning that person the cash drawer, we will actually
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August 26, 2003
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have two cash drawers and two people so that when the person goes to lunch
and so forth we will be responsible for balancing their cash drawer and then an
individual who does not enter receipts will make sure that the person balances
out at the end of day. We are waiting for correctional industries to come in and
work on the remodel of the front counter, they will give us two workstations but in
the meantime we will institute that control over the cash drawer. So that the
security items and the system were kind of broken on the actual computer
system were broken into high medium and low. All the high items have been
dealt with. Those are - I had Terry's list of them and I can't explain them as well
as he can but some of those items were just closing holes in the system where
people from the outside might have had access to it. Locking the database so
that only certain people can get into the database. That was kind of a crucial
thing because the way it was before any individual could get into the database
and I actually, even though I'm not a MUBS employee I probably could of gone in
through my computer and gotten into the database. So that's been locked.
Employees have been locked out of modules that they don't use. So that was
another key component of that. The password policy has been instituted which is
really crucial for some of us its like this is a pain to have to do that but when you
have computers that are out in front and information that's as sensitive as MUBS
where people are wondering by their computers it was crucial that we had those
password controls. So that's been instituted citywide. We lockdown their
terminals -their terminals lockdown if it hasn't been in use for a certain amount
of time so that somebody can't walk by and say oh somebody's computer is up,
I'm going to go in and do transactions because that was another one of the
problems with the system was that transactions were done under peoples names
who were on vacation. So that was one of those high security controls. Some of
the controls - I mean the audit was done from the viewpoint if you were the CIA
what would be the highest level of security that you would have and obviously we
are not the CIA and we met on a middle ground of what can we do to still get our
job done efficiently but give us the maximum control. The final component of the
auditor, the third component of the audit dealt with suspected misappropriation of
funds. The auditor did go ahead and specifically pick a month, I think it was June
of 2001. Where he looked in detail, I mean detail at every transaction that
happened that day. He found that there were several red flags. It's something
that we think probably happened but we can't prove it happened and we can't
prove who did it. So the cost of continuing with trying to do that would be upward
of $25,000, it wouldn't be recoverable so I think the consensus was made that we
will just go on from where we are here. Again all those little problems or areas
that I've talked about were all in concert, they were all happening at one time.
Another thing away from just the strict technical computer and financial controls
that the audit discussed is the turn over and the supervision in the MUBS
Department. From now on like I said the job descriptions have been rewritten
and the minimum qualifications have been made fairly specific as to experience
that the individual will need to have. So I think that will up the skill level and the
experience level. In the future when there are interviews for positions I as well as
the MUBS person and Human Resource person will participate on the panel. I
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August 26, 2003
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think that will give us a little better hiring process. Then some managers will be
taken to improve the level and skills of the supervision. So that's kind of it in a
nutshell. Are there any questions?
Corrie: I will say one thing Stacy. You've done an excellent job with the report in
instigating new procedures and including the rewriting of job descriptions and
what we need to do in security and I think you've done an excellent job from what
I have heard so far and I've talked to them and also our attorney and you and I
commend you for that. I think we are going to have a little tighter security here
and (inaudible) what we need to do. So I thank you for that. Council any other
discussion or questions?
Bird: Very nice.
Corrie: I guess at this point we need a motion to accept the (inaudible) is that
right?
Bird: Mr. Mayor.
Corrie: Mr. Bird.
Bird: I move we assess the audit done by Jefferson Wells and make it a public
document now.
Nary: Second.
Corrie: Okay. Motion has been made and seconded. Is there any further
discussion? All those in favor say aye. Opposed no? Also we have a statement
that's ready for the press if they so desire and we are all ready to go. Thank you
Stacy.
Item 5. Discussion of Finance Report -Stacy Kilchenmann:
Corrie: On item number five is discussion of the Finance Report.
Kilchenmann: The only thing I was going to discuss here is I put in front of you
the amendment sheet that came in your financial statements and I highlighted
the bottom of it in yellow. We are getting ready, we want to have the amendment
to Will by the second. So by next week, so we are finalizing what we are going to
do to amend 2003. The items that are on here, there are a couple items we have
not yet discussed. One of them is for the Police Department, when they set up
the new building they purchased exercise equipment for an exercise room and
the treadmill that they purchased was actually a residential treadmill it was not a
commercial treadmill and it is no longer functional and actually what appears to
be shocking people when they use it. So they have looked at moving to a
commercial grade - it makes them go faster. They have looked at purchasing a