Apr 27, 2022 Audit and Finance Committee

[00:00:02]

IT IS 9:31 AM

[CALL TO ORDER]

UM, I'M ALISON ALTER AND I'M MAYOR PRO TEM AND CHAIR OF THE AUDIT AND FINANCE COMMITTEE.

AND I'M GOING TO CALL THIS MEETING TO ORDER ON THE DAYAS WITH ME, IS COUNCIL MEMBER FONTAS ON THE VIRTUAL DICE IS COUNCIL MEMBER KELLY.

UM, I BELIEVE THAT COUNCIL MEMBER TOVO WILL BE JOINING US AND COUNCIL MEMBER POOL WILL BE ABSENT.

UM, WE HAVE SEVERAL ITEMS THAT WE'RE GOING TO COVER TODAY, AND I WILL JUST REMIND FOLKS THAT WE, UM, HAVE OVERSIGHT OVER MANY DEPARTMENTS AND MANY PROCESSES, UM, NOT JUST, UM, THE MATERIAL THAT COMES BACK FROM THE AUDITOR, BUT ALSO FOR THE FINANCE DEPARTMENT, UM, AS WELL.

AND SO A BIG CHUNK OF WHAT WE'RE GOING TO TALK ABOUT TODAY ARE THE CAFFER AND THE SINGLE AUDIT.

I'M

[1. Approve the minutes of the Audit and Finance Committee meeting of March 30, 2022, and Special Called Audit and Finance Committee meeting of April 18, 2022]

DO I HAVE A MOTION TO APPROVE? UM, THE MINUTES MOVED BY A COUNCIL MEMBER FONTIS SECONDED BY COUNCIL MEMBER KELLY.

UM, ALL THOSE IN FAVOR, UNANIMOUS ON THE DYESS, UH, COUNCIL MEMBER, KELLEY COUNCIL MEMBER FIND AND MYSELF VOTING FOR COUNCIL MEMBER.

TOVA ARE YOU VOTING FOR THE MINUTES? APPROVING THE MINUTES IF YOU'RE ON.

THANK YOU.

OKAY, GREAT.

THANK YOU FOR JOINING US.

UM, OKAY, SO THE MINUTES ARE APPROVED UNANIMOUSLY WITH THE FOUR OF US WHO ARE HERE.

UM, THIS MORNING, NEXT ITEM UP IS ITEMS TWO, WHICH IS THE LOBBYIST COMPLIANCE.

AND I BELIEVE WE ARE GOING TO HEAR FROM THE AUDITOR'S OFFICE.

OH, I'M SORRY.

WE HAD NO ONE SIGNED UP AS OF 9:00 AM IS OKAY.

THANK YOU.

UH, LET ME JUST CLARIFY THIS WITH THE CLERK, BECAUSE I WASN'T GIVEN THAT INFORMATION.

MR. ROBINSON, SORRY.

OKAY.

[Public Communication: General]

NOT YOU MR. ROBBINS, BUT THE STAFF.

THANK YOU.

GO AHEAD, MR. ROBINS, YOU HAVE THREE MINUTES COUNSEL IN LATE MARCH, A COLUMN RAN IN THE AUSTIN AMERICAN STATESMAN POINTING OUT THAT INFORMATION RELATED TO UNDESERVING PARTICIPANTS IN AUSTIN'S CUSTOMER ASSISTANCE PROGRAM WAS NOW BEING HIDDEN SHORTLY AFTER IT WAS PUBLISHED.

I RECEIVED AN EMAIL FROM AN AUSTIN ENERGY CUSTOMER ECHOING MY RESEARCH, AND I WANT TO READ YOU PART OF IT.

QUOTE, THIS PAST WEEK I RECEIVED A LETTER FROM THE CITY OF BOSTON INFORMING ME THAT I'VE BEEN ENROLLED IN THE PROGRAM BECAUSE I RECEIVE OR SOMEONE IN MY HOUSEHOLD RECEIVES BENEFITS FROM ONE OF THE QUALIFYING PROGRAMS. I DO NOT RECEIVE ANY TYPE OF PUBLIC ASSISTANCE NOR DOES MY HUSBAND, THE ONLY OTHER HOUSEHOLD MEMBER, OUR INCOME ALSO FAR EXCEEDS THE AMOUNT THE CITY SUPPOSEDLY CONSIDERS ELO INCOME.

I SUSPECT THE CITY OF AUSTIN CROSS MATCHES THEIR CUSTOMERS WITH DATA FROM TEXAS HEALTH AND HUMAN SERVICES COMMISSION TO IDENTIFY MEDICAID, CHIP SSI, ET CETERA, RECIPIENTS.

I AM A QUOTE AUTHORIZED REPRESENTATIVE UNQUOTE FOR MY BROTHER WHO LIVES IN ANOTHER CITY.

AND WHO DO, WHO DOES NOT RECEIPT AND SHAMIE WHO DOES RECEIVE PUBLIC ASSISTANCE AND AUTHORIZED REPRESENTATIVES SIMPLY ASSIST SOMEONE IN APPLYING FOR BENEFITS AND SHOULD NOT BE INCLUDED IN TRANSMITTED DATA.

THE CITY USES TO IDENTIFY THEIR IDENTIFY BENEFICIARIES OF PUBLIC ASSISTANCE.

THIS SOUNDS LIKE A SYSTEMATIC PROBLEM THAT SHOULD BE FIXED TO ENSURE ASSISTANCE IS TARGETED TO PEOPLE WHO REALLY NEED IT.

I'LL STOP THE QUOTE COUNSEL, HOW MANY HUNDREDS OR THOUSANDS OF CAP ENROLLEES ARE IN A SIMILAR SITUATION? AUTOMATIC ENROLLMENT IS NOT SOME FOOLPROOF GOLD STANDARD FOR SOCIAL SERVICE PROGRAMS. IT IS A TOOL THAT CAN WASTE CONSIDERABLE SUMS OF MONEY IF NOT PROPERLY USED.

AND IN THIS CASE AUSTIN'S CUSTOMER ASSISTANCE PROGRAM, UH, IN THE CASE OF AUSTIN'S CAP PROGRAM, IT HAS PROBABLY WASTED MILLIONS OF DOLLARS OVER THE COURSE OF YEARS THAT COULD HAVE AIDED PEOPLE WHO REALLY NEEDED IT.

I AM AGAIN ASKING YOU TO CHANGE THE CAP ENROLLMENT SYSTEM TO ONE THAT IS COMPLETELY INCOME VERIFIED.

THIS IS WHAT IS DONE IN LARGE PUBLIC UTILITY ASSISTANCE PROGRAMS RUN

[00:05:01]

BOTH OF THESE PROGRAMS HAVE ROBUST PARTICIPATION COMPARABLE TO AUSTIN.

I'LL CONCLUDE BY SAYING YOU HAVE AN AUDIT DEPARTMENT, YOU HAVE SMART AIDS IN YOUR OFFICES.

ASK THEM TO VERIFY WHAT I JUST TOLD YOU ABOUT SAN ANTONIO AND SACRAMENTO.

YOU'LL FIND THAT I'M CORRECT.

THANK YOU.

THANK YOU, MR. ROBBINS.

UM,

[2. Discussion and possible action regarding the lobbyist compliance audit]

SO I'LL MOVE OUT OF THE WAY UH, HI, GOOD MORNING.

UM, SO AS COREY MENTIONED, MY NAME IS ANDREW SCOGGIN AND I WAS THE AUDITOR IN CHARGE OF THIS PROJECT.

UH, PATRICK IS HERE WITH US TOO, AS OUR STAFF FROM THE LAW DEPARTMENT, UH, IN THE CITY CLERK'S OFFICE.

UM, SO FIRST, UH, ON THE NEXT SLIDE, PLEASE, UH, SOME BACKGROUND ON OUR WORK, UH, IN THIS AREA.

SO AS COREY MENTIONED, A CITY CODE REQUIRES THAT OUR OFFICE TO REGULAR AUDITS CHECKING THE COMPLIANCE OF LOBBYISTS, UH, REGISTRATION ACTIVITY FILINGS.

THIS IS THE THIRD TIME WE'VE DONE, UH, ONE OF THESE AUDITS.

AND THE LAST TIME THAT WE DID THIS, WE PROPOSE DOING IT AGAIN WITHIN A YEAR AFTER A NEW ELECTRONIC ELECTRONIC FILING SYSTEM, UH, WAS IMPLEMENTED, UH, IN THAT HAPPENED LAST SUMMER.

UH, THIS IS ALSO, UH, THE FIRST TIME THAT WE'VE DONE THIS AUDIT SINCE THE PANDEMIC.

UH, SO WE ALSO WANTED TO LOOK AT HOW CITY CODE HANDLES THE REPORTING, UH, VIRTUAL MEETINGS BY LOBBYISTS.

UH, SO ON THE NEXT SLIDE, PLEASE, UH, WE HAD ONE FINDING IN OUR REPORT, UH, AS WELL AS AN ADDITIONAL OBSERVATION THAT I'LL DISCUSS LATER ON VIRTUAL MEETINGS.

OUR FINDING HERE, UH, IS ON THE COMPLIANCE CHECKING THAT'S REQUIRED BY CODE.

UH, AND AS IT SAYS HERE, UH, SAMPLED LLAMBIAS FILINGS WERE LARGELY COMPLIANT WITH CITY CODE CITY CODE REQUIREMENTS.

UH, THOUGH WE IDENTIFY AN ISSUE RELATED TO LATE FEES FOR ONE LOBBYIST.

UH, THIS PARTICULAR LOBBYIST HAD FILED HER REPORT 44 DAYS LATE AND SHOULD HAVE BEEN ASSIGNED FIVE LATE FEES, BUT WAS ONLY GIVEN THREE, UH, CITY CLERK'S OFFICE STAFF ATTRIBUTED THIS TO TECHNICAL ISSUES THAT PREVENTED THEM FROM ISSUING THE CORRECT NUMBER.

STAFF ALSO SAID THAT, UH, LATE FEES ARE ISSUED MANUALLY AND THAT THEY WILL CONTINUE TO DO THIS TO AVOID TECHNICAL ISSUES WITH THE FILING SYSTEM.

UH, WE PLAN TO FOLLOW UP ON THIS, UH, IN ANY FUTURE, UH, LOBBYIST AUDIT AND THEN ON THE NEXT SLIDE.

UM, SO WE ALSO HAD AN ADDITIONAL OBSERVATION, UH, WHICH HERE ON THE SIDE, UH, SAYS THAT AUSTIN CITY CODE ONLY REQUIRES THAT LOBBYIST REPORT IN-PERSON MEETINGS WITH CITY OFFICIALS AND ALSO THE CITY IS NOT USING CONSISTENT METHODS TO TRACK LOBBYISTS TO MEETINGS.

UM, SO IF YOU'LL GO INTO THE, UH, THE NEXT SLIDE, PLEASE.

UH, SO THIS SECTION OF CITY CODE ADDRESSES THE REQUIREMENT THAT LOBBYISTS REPORT MEETINGS WITH CITY OFFICIALS, UH, TO READ ONLY A PORTION THAT'S ON HERE, A PERSON WHO COMMUNICATES IN PERSON WITH THE CITY OFFICIAL FOR COMPENSATION DURING A SCHEDULED MEETING, SHALL DISCLOSE IN WRITING TO THE CITY DEPARTMENT OR OFFICE.

AND ACCORDING TO A LOT DEPARTMENT STAFF, THIS MEANS THAT CODE DOES NOT REQUIRE LOBBYISTS TO REPORT VIRTUAL MEETINGS.

UH, NEXT SLIDE, PLEASE.

UH, WE WANTED TO LEARN WHAT THE CITY WAS DOING TO COLLECT INFORMATION ON VIRTUAL MEETINGS, WITHOUT THERE BEING A REPORTING REQUIREMENT FOR LOBBYISTS.

UH, WE REACHED OUT TO THREE DEPARTMENTS AND ALSO RECEIVED INFORMATION FROM NINE COUNCIL OFFICES.

WE FOUND THAT THERE ISN'T ONE, THAT THERE IS NOT ONE CENTRAL STRATEGY BEING USED.

UH, SOME ARE USING AN ELECTRONIC FORM, UH, LIKE THE ONE SHOWN ON THIS SLIDE HERE ON THE BOTTOM, RIGHT? UH, AND THIS IS ACCESSED THROUGH A LINK IN AN EMAIL SIGNATURE, UH, THAT'S, THAT'S SHOWN ABOVE THAT.

UH, SOME OFFICES WERE USING THEIR ELECTRONIC CALENDARS TO MAINTAIN INFORMATION ON VIRTUAL MEETINGS WITH LOBBYISTS.

OUR OFFICE HAS PREVIOUSLY HIGHLIGHTED HIGHLIGHTED OPPORTUNITIES FOR IMPROVING THE COLLECTION OF LOBBYISTS, MEANING INFORMATION.

IF IT WERE STORED IN A CENTRAL PLACE, LIKE AN ONLINE DATABASE, THIS WOULD ALLOW FOR BETTER ANALYSIS AND IMPROVE TRANSPARENCY.

[00:10:03]

UH, THE STATE OF TEXAS TREATS IN-PERSON AND VIRTUAL MEETINGS, THE SAME FOR REPORTING PURPOSES.

UM, BUT LOBBYISTS DO NOT HAVE TO REPORT, UH, MEETINGS AND LESS SPECIFIC SPENDING THRESHOLDS ARE MET.

AND IF AUSTIN WANTED TO REQUIRE THE REPORTING OF VIRTUAL MEETINGS, UH, THIS WOULD REQUIRE A CHANGE IN CITY CODE.

UH, SO IF YOU GO TO THE NEXT SLIDE, PLEASE, UH, WE DIDN'T DID NOT ISSUE ANY RECOMMENDATIONS, UH, AS PART OF OUR AUDITS.

UH, SO THAT'S THE END OF OUR PRESENTATION.

UM, BUT WE'RE HAPPY TO ANSWER ANY QUESTIONS.

THANK YOU.

UM, SO IT'S MY UNDERSTANDING THAT, UM, AS PART OF THE WORK THAT THE AUDITOR, UM, IS PUTTING TOGETHER FOR CITY COUNCIL, FOR HER ANNUAL PLAN, SHE'S INCLUDED A GOAL OF MOVING FORWARD WITH SOME CHANGES TO THE LOBBYIST, UM, PROCESS.

AND I KNOW THAT THE HOT, OUR VICE CHAIR COUNCIL MEMBER POOL, WHO WAS INSTRUMENTAL IN INSTITUTING THIS PROCESS IN THE FIRST PLACE, UM, SHE AND HER STAFF WILL BE WORKING WITH MS. STOKES ON THAT.

I THINK IT'S HELPFUL TO HAVE THAT, UM, HISTORY, UM, ENGAGED WITH THAT.

AND, AND CLEARLY ONE OF THE FIRST STEPS WOULD BE, UM, SOME SORT OF CHANGE RELATED TO, UM, THE VIRTUAL MEETINGS.

UH, YOU DIDN'T TALK ABOUT IT, BUT I'D ALSO LIKE US TO FIGURE OUT HOW WE, HOW WE GET AT THE FOLKS WHO ARE NOT REGISTERING TO LOBBY, UM, THE, THE SYSTEM RIGHT NOW, HAS YOU AUDITING THOSE WHO HAVE REGISTERED? UM, AND SO THERE'S A CHALLENGE ABOUT THOSE WHO HAVEN'T REGISTERED AND, AND HOW, HOW WE, HOW WE, UM, HANDLE THAT.

UM, AND IT MAY BE THAT WE NEED TO DO SOME OF THIS IN STAGES.

LIKE THERE MAY BE PIECES THAT TAKE A LONGER TIME AND WE MAY DECIDE WE WANT TO, UM, MAKE THE CHANGE FOR THE VIRTUAL MEETINGS, UH, SOONER COLLEAGUES.

DOES ANYONE HAVE ANY QUESTIONS OR OTHER COMMENTS COUNCIL MEMBER FINDS US AND THEN COUNCIL MEMBER TOVA YES.

I JUST HAD A QUICK QUESTION FOR THE STAFF THAT REPORTS, OR DOES THE, UM, ADMINISTERS THE LATE FEES MANUALLY.

HOW LONG DOES THAT TAKE ON AVERAGE? AND IS IT SOMETHING THAT THEY GO LIKE, DO THEY GET NOTIFIED THAT A REPORT WAS NOT SUBMITTED OR DO THEY HAVE TO GO IN AND TAKE A LOOK AT THE LIST AND CROSS CHECK TO SEE WHICH REPORTS WERE SUBMITTED? YEAH, SO I'M STANDING HERE FROM, FROM THE CLERK'S OFFICE AND, AND THEY, THEY MIGHT BE BETTER EQUIPPED TO, TO ANSWER, UM, THE SPECIFICS OF THAT QUESTION.

OKAY.

AND THEN, UM, ALSO RELATED HOW MUCH ARE THE LATE FEES? SO LATE, LATE FEES ARE $50.

UM, AND THEN EVERY 10 DAYS, UM, IF THEY'RE STILL LATE, ANOTHER $50 FEES ASSESSED, UM, AND IT'S UP TO A CUMULATIVE, UH, $500.

AND IS THAT PRETTY CONSISTENT WITH SAN ANTONIO AND OTHER CITIES? UM, THAT, THAT WASN'T SOMETHING THAT, THAT WE HAD LOOKED AT AS PART OF THIS AUDIT.

OKAY.

THANK YOU.

BECAUSE A MEMBER OF GOD, GOOD.

HI ERICA BRADY, DEPUTY CITY CLERK.

UM, THE LATE FEES ARE ISSUED, UH, THE VERY NEXT DAY AFTER, UM, UM, AFTER THE, THE, THE THEY'RE DUE.

SO, SO THE SYSTEM AUTOMATICALLY ISSUES, OR I GUESS YOU, YOU HAVE STAFF GOING IN AND, AND ADMINISTERING THE LATE FEES, RIGHT? SO WE ISSUE THE LATE FEES THROUGH THE E-FILING SYSTEM.

SORRY, WE, WE ACTUALLY HAVE LIKE THIS GLOBAL EVENT THAT TRACKS LIKE THE REPORTS THAT WE'RE MISSING.

SO THE NEXT DAY AFTER THIRD YEAR, WE DO, UM, LOOK AT THE LIST AND THAT AT THAT MOMENT WE ACTUALLY ISSUE THE LATE FEES.

THAT TECHNICAL ISSUES THAT WE HAD, UM, WAS WHEN WE WERE LAUNCHING THE VIOLENCE SYSTEM, UM, THIS IS SOMETHING THAT HAS BEEN ADDRESSED.

UM, SO FOR EXAMPLE, THIS TIME AROUND, WE HAVE ONE LOBBYIST THAT HAS NOT SUBMITTED THE REPORT YET.

THEY HAVE ALREADY RECEIVED TWO LATE FEES.

UM, THE LAST, THE SECOND LATE FEE WAS ACTUALLY DUE, UM, BECAUSE THIS CALENDAR, UM, FACE INSTEAD OF LIKE BUSINESS DAYS, WE ACTUALLY WENT IN ON SATURDAY AND WE ISSUE THE LATE FEE.

UM, SO THAT WAY WE COULD ACTUALLY DO IT.

OKAY.

YES.

THANK YOU.

SO I THINK IT WOULD BE WISE TO, TO CLOSE THAT GAP AS SOON AS POSSIBLE.

AND SO I, I HOPE, UM, MAYOR PRO TEM, IT SOUNDED LIKE

[00:15:01]

AND I THINK THAT'S GREAT.

UM, THIS IS SOMETHING WE COULD ACCOMPLISH IN, IN ONE COUNCIL MEETING.

IF, IF THE COUNCIL MEMBER WHO'S SPONSORING, IT JUST BRINGS FORWARD AN ORDINANCE CHANGE.

AND I WOULD SUGGEST THAT WE LEAVE IT TO THAT.

WE ALSO INCLUDE PHONE MEETINGS IF THEY'RE SCHEDULED MEETINGS, THAT'S, THAT'S BEEN KIND OF OUR PRACTICE IN MY OFFICE.

IF IT'S A SCHEDULED MEETING, I E NOT AN IMPROMPTU PHONE CALL.

UM, BUT IF IT'S A SCHEDULED MEETING, EITHER BY PHONE OR VIRTUAL, THAT WE'LL COLLECT, UM, THE LOBBYISTS INFORMATION.

AND SO I WOULD SUGGEST THAT WE, AGAIN, WE CLOSE THE LOOP ON BOTH OF THOSE AS SOON AS POSSIBLE, ESPECIALLY GIVEN THE NUMBER OF, OF, UM, VIRTUAL MEETINGS THAT WE'RE ALL NOW HAVING.

AND SO I WILL, I WILL REACH OUT TO COUNCIL MEMBER PAUL'S OFFICE AND SEE IF THAT'S WHAT HER INTENT IS.

UM, I AGREE WITH YOU THAT SOME OF THESE THINGS MAY TAKE A LITTLE BIT LONGER TO, TO FIX, BUT AGAIN, I THINK THAT'S A VERY QUICK FIX.

I DO LIKE THE IDEA AND I, OUR CITY CLERK RAISED THIS OF HAVING A DATABASE THAT'S MORE ACCESSIBLE AND EASIER TO SEARCH SO THAT THE PUBLIC REALLY CAN TELL, YOU KNOW, HOW OFTEN PARTICULAR LOBBYISTS ARE MEETING WITH COUNCIL.

I THINK THAT'S REALLY IN KEEPING WITH THE SPIRIT OF, OF THE LOBBYIST REGULATIONS.

AND, UH, LET'S SEE, THERE WAS ONE OTHER THING, UM, MIRROR PER TIME, YOU MENTIONED TRYING TO INCORPORATE FOLKS WHO REALLY SHOULD BE REGISTERED AS LOBBYISTS.

AND I GUESS I WOULD LIKE TO ASK OUR CITY AUDITOR WHAT YOU WOULD NEED, WHAT YOU WOULD NEED, UM, IN TERMS OF INFRASTRUCTURE OR DIRECTION FROM COUNTY TO DO THAT.

FOR EXAMPLE, IF WE, IF WE HAD INDIVIDUALS WHO WE BELIEVED OUGHT TO BE LOBBYISTS, YOU KNOW, COULD WE SEND THEM, COULD YOU SET UP A PROCESS OR WOULD IT BE MORE APPROPRIATE THROUGH THE CITY CLERK WHERE WE SET UP A PROCESS? I GUESS IT WOULD BE MORE APPROPRIATE THROUGH THE CITY CLERK WHERE WE SET UP A PROCESS WHERE COUNCIL OFFICES, OR MEMBERS OF THE PUBLIC COULD SAY, HEY, THIS, THIS INDIVIDUAL APPEARS REGULARLY ON BEHALF OF DIFFERENT, DIFFERENT DEVELOPERS AND REALLY SHOULD BE REGISTERED AS A LOBBYIST AND IS NOT, I THINK THAT'S THE, UM, I REALLY APPRECIATE THAT.

AND THAT'S BEEN SOMETHING WE'VE BEEN DEALING WITH IS, YOU KNOW, AS AUDITORS, WE DON'T JUST WANT TO AUDIT COMPLIANCE OF THE PEOPLE WHO ARE VOLUNTARILY COMPLIANT.

WE WANT TO KNOW WHO'S NOT VOLUNTARILY COMPLIANT.

I THINK THE CHALLENGE HAS BEEN THE WAY THAT IT'S TRACKED, YOU KNOW, SOMETIMES ON A PIECE OF PAPER, SOMETIMES ON INDIVIDUAL OFFICES CALENDARS, UM, SOME DEPARTMENTS ARE GETTING MORE SOPHISTICATED AS, AS THIS REQUIREMENT HAS GONE ON AND AS WE'VE TRANSITIONED TO A MORE VIRTUAL ENVIRONMENT.

SO I TH I THINK A CENTRALIZED SYSTEM, AND WE'VE MENTIONED THIS IN THE LAST COUPLE OF REPORTS, I THINK A CENTRALIZED SYSTEM WHERE THAT DATA IS AVAILABLE WOULD MAKE IT A LOT EASIER FOR US, UM, TO REALLY ANALYZE, YOU KNOW, WE HAVE INFORMATION ON WHO APPEARS REGULARLY IN FRONT OF COUNCIL, BUT WE DON'T HAVE SOMETHING TO COMPARE THAT TO.

AND SO THAT WOULD BE, THAT'S KIND OF THE MISSING PIECE IS, IS A CENTRALIZED TRACKING SYSTEM FOR COUNCIL OFFICES AND CITY DEPARTMENTS THAT INTERFACE REGULARLY, UM, WITH LOBBYISTS, I THINK THAT'S IMPORTANT, BUT WE ALSO HAVE, YOU KNOW, WE KNOW WHO APPEARS REGULARLY BEFORE COUNCIL AND WE CAN, OR PLANNING COMMISSION, AND WE CAN CROSS CHECK THAT WITH A LOBBYIST LIST AND THERE DEFINITELY ARE SOME GAPS.

AND SO WHEN THOSE GAPS ARE NOTED, WE NEED A PROCESS FOR BEING ABLE TO SAY, HEY, THIS INDIVIDUAL REALLY SHOULD BE REGISTERED.

I AGREE.

OR I'M NOT SURE TO WHOM I WOULD RAISE THAT.

AND WHETHER YOU NEED, WHETHER YOU OR THE CLERK NEEDS DIRECTION TO KIND OF SET UP A PROCESS WHERE WE, WHERE WE HAVE THE ABILITY TO DO THAT, TO HAVE SOME FOLLOW-UP WITH THAT INDIVIDUAL.

I THINK WE WERE JUST TALKING ABOUT THIS INTERNALLY, AND I THINK THE BEST WAY TO HANDLE THAT IS KIND OF A COMPLAINT BASIS.

SO IF SOMEBODY FEELS LIKE THERE'S A LOBBYIST AND THEY'RE NOT REGISTERED, THEY SHOULD SUBMIT THAT.

AND I THINK MY OFFICE, YOU KNOW, WE TRIAGED ALL SORTS OF THINGS THAT COME INTO US, UM, THROUGH OUR HOTLINE.

AND SO I THINK THAT'S A GREAT PLACE, EVEN IF IT'S NOT SOMETHING THAT WE WOULD HANDLE AS FRAUD, WASTE AND ABUSE, WHICH IS REALLY ARE, YOU KNOW, WHAT OUR, OUR HOTLINE IS DESIGNED FOR.

WE CAN STILL, UM, CREATE A PROCESS TO MAKE SURE THOSE THINGS END UP IN THE RIGHT PLACE AND THOSE FOLKS GET REGISTERED WELL.

THAT'S GREAT.

SO IT SOUNDS LIKE YOU DON'T NEED FURTHER DIRECTION TO BE ABLE TO DO THAT, THAT OUR EXISTING PROCESS ALLOWS FOR IT.

AND, AND IF MEMBERS OF THE PUBLIC OR MEMBERS OF COUNCIL, UM, ARE AWARE OF INDIVIDUALS WHO ARE NOT REGISTERED, WE CAN JUST, WE CAN SEND THOSE INDIVIDUALS NAMES ONTO YOU.

ABSOLUTELY WONDERFUL.

THANK YOU VERY MUCH.

I THINK THAT MIGHT NEED TO BE MADE MORE APPARENT TO FOLKS AND EVEN BE SHARED WITH THE COUNCIL OFFICES ABOUT HOW YOU DO THAT AND WHAT THAT, WHAT THE PROCESS IS.

IF YOU HAVE, IF YOU HAVE CONCERNS, AND I KNOW THAT WE'RE ALL DOING IT SLIGHTLY DIFFERENTLY, BUT YOU KNOW, LIKE WE'RE DOING IT ELECTRONICALLY.

AND, YOU KNOW, I DON'T, I DON'T KNOW IF IT'S A WHOLE ONE HAVEN'T EXAMINED IT ENOUGH TO KNOW IT'S ALL ONE SYSTEM WHERE IT'S ALL GOING INTO THE SAME PLACE IN THE SAME FORMAT OR NOT.

UM, IT SEEMS LIKE, YOU KNOW, YOU OUGHT TO BE ABLE TO,

[00:20:01]

AND THEN OBVIOUSLY THE HOUSING AND PLANNING AND, AND SOME OTHER DEPARTMENTS ALSO REGULARLY, UM, ARE SUBJECT TO LOBBYISTS COMING.

RIGHT.

AND I WOULD SAY FROM MY OFFICE'S PERSPECTIVE, UM, WE THINK THAT THAT MAKES A LOT OF SENSE AND IT WOULD MAKE OUR JOB EASIER.

UM, IT'S PROBABLY NOT US TO IMPLEMENT THE SYSTEM, BUT THEN AT THE SAME TIME, WE DO HAVE THE COMPLAINT OPTION AVAILABLE.

SO IF YOU HAVE CONCERNS OR, OR ISSUES, UM, PLEASE SEND THEM TO US.

AND WE WILL, UH, DO SOME PROMOTING OF THAT OPTION WITH THE COUNCIL OFFICES AND THE KEY DEPARTMENT.

OKAY.

SO DO WE NEED TO TAKE ACTION TO ACCEPT THIS REPORT OR ANYTHING? UM, YOU CAN, BUT IT DOESN'T HAVE, SO IT IS NOT NECESSARILY.

OKAY.

SO THEN, UM, I DON'T THINK WE'LL TAKE A MOTION TO ACCEPT THE REPORT SINCE IT'S NOT NECESSARY.

UM, AND I WILL JUST REMIND FOLKS THAT, UM, THE VICE CHAIR POOL, UM, AND HER STAFF HAVE AGREED TO TAKE THE NEXT STEPS ON THIS, WORKING WITH THE AUDITOR.

GREAT.

AND I DON'T BELIEVE I JUST VOLUNTOLD HER.

I THINK, I THINK THAT I THINK THAT'S ACCURATE.

UM, OKAY.

SO THANK YOU VERY MUCH.

THANK YOU.

UM, NOW

[3. Discussion and possible action regarding the Fiscal Year 2021 Annual Comprehensive Financial Report and Single Audit Report by Deloitte & Touche LLP, the City’s external auditor.]

AND WE WILL HEAR FROM MARIA, YOU, YOU, YOU GET, UM, WHO WILL OPEN THE ITEM AND I'M NOT SURE IF I GOT THAT RIGHT.

I GET IT RIGHT.

OKAY.

UH, OR COMPTROLLER.

THANK YOU.

AND THEN DELOITTE WILL PRESENT.

GOOD MORNING, EVERYONE.

UM, CAN WE BRING UP THE PRESENTATION PLEASE COME RIGHT UP.

THANK YOU.

GOOD MORNING.

MAYOR PRO TEM AND COUNCIL MEMBERS.

UM, I'M MARIE MUKESH, THE CITY CONTROLLER.

I'M HERE WITH TRACY COOLEY AND CAMERON DECKER FROM DELOITTE AND TOUCHE, LLP.

THE CITY'S EXTERNAL AUDITOR TO PRESENT THE RESULTS OF THE FISCAL YEAR 2021 CONGRESS ANNUAL COMPREHENSIVE FINANCIAL REPORT, OR ACT FOR A LOT, ALONG WITH THE RESULTS OF THE FISCAL YEAR 2021 SINGLE AUDIT OR GRANT AUDIT, YOU WILL RECEIVE YOUR BOUND COPIES OF THE REPORTS DISCUSSED TODAY.

AS SOON AS THEY'RE PRINTED, IF WE CAN GO TO THE NEXT SLIDE, PLEASE, THE OXFORD REPORT WAS ISSUED ON MARCH 14TH, 2022.

IT IS AVAILABLE ONLINE AT AUSTIN FINANCE ONLINE.

THE WEB ADDRESS IS LISTED ON THIS SLIDE FOR THIS YEAR'S COVERS.

WE CHOSE TO HIGHLIGHT THE NEW AUSTIN FC STADIUM AND SOME OF THE NEW PARK OPENINGS, INCLUDING THE ALLIANCE CHILDREN'S GARDEN AND NEW WATERLOO PARK.

THE FINANCIAL SERVICES CONTROLLERS DIVISION IS RESPONSIBLE FOR THE PREPARATION OF THE CITY'S AQUIFER.

AND OUR TEAM WORKS CLOSELY WITH DELOITTE TO OBTAIN AN INDEPENDENT AUDIT OF THIS REPORT.

NEXT SLIDE, PLEASE.

THE REQUIREMENTS FOR AN ANNUAL AUDIT ARE OUTLINED ON THIS SLIDE.

THE CITY IS IN COMPLIANCE WITH EACH OF THESE REQUIREMENTS, DELOITTE AND LLP IS AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM.

AND THIS IS THE FOURTH YEAR OF A FIVE-YEAR CONTRACT FOR AUDIT SERVICES.

THE ACURA WAS PUBLISHED ON MARCH 14TH, 2022, AND THIS IS AN ADVANCE OF THE REQUIRED SIX MONTH DEADLINE OF MARCH 31ST.

AND DELOITTE IS HERE TODAY, APRIL 27TH, WHICH IS 44 DAYS AFTER THE ISSUANCE OF THE EFFORT TO PRESENT THE RESULTS OF THE ANNUAL AUDIT.

NEXT SLIDE, PLEASE.

THE SINGLE AUDIT COVERS THE CITY'S COMPLIANCE WITH FEDERAL AND STATE GRANT REQUIREMENTS.

THE SINGLE AUDIT REPORT WAS ISSUED ON MARCH 25TH, 2022, WHICH IS WELL IN ADVANCE OF THE REQUIRED JUNE 30TH DEADLINE.

WE DON'T PUBLISH THE SUPPORT ON OUR EXTERNAL WEBSITE.

HOWEVER, THE REPORT IS AVAILABLE UPON REQUEST.

AND AS MENTIONED EARLIER, EACH OF THE COMMITTEE MEMBERS WILL RECEIVE BOUND COPIES OF BOTH REPORTS DISCUSSED TODAY, AS SOON AS THEY'RE PRINTED.

NEXT SLIDE, PLEASE.

THIS SLIDE LISTS THE REQUIREMENTS FOR WHEN AN ENTITY IS REQUIRED TO HAVE A SINGLE AUDIT OF ITS FEDERAL AND STATE AWARDS.

UM, BOTH UNDER FEDERAL AND STATE REGULATIONS, WE'RE REQUIRED TO HAVE A SINGLE AUDIT.

IF WE HAVE SPENT MORE THAN $750,000 ANNUALLY IN FEDERAL OR STATE FUNDS, THE FOCUS OF THE SINGLE AUDIT IS ON GRANT COMPLIANCE AND THE AUDIT MUST BE COMPLETED WITHIN NINE MONTHS OF FISCAL YEAR END OR JUNE 30TH.

[00:25:01]

FINALLY, I'D LIKE TO THINK, UM, THOSE LISTED ON THIS SLIDE FOR THEIR CONTRIBUTIONS TO THE EARLY COMPLETION OF THESE KEY FINANCIAL REPORTS, THE MAYOR COUNCIL MEMBERS, AND CITY MANAGEMENT FOR THEIR SUPPORT OF EXCELLENCE IN FINANCIAL MANAGEMENT CITY STAFF, ESPECIALLY THE CONTROLLERS TEAM FOR THEIR MANY HOURS OF DEDICATED SERVICE TOWARDS THE COMPLETION OF THESE REPORTS AND THE DELOITTE TEAM FOR THEIR PROFESSIONALISM AND THOROUGH MANNER IN WHICH THEY CONDUCTED THESE AUDITS.

UM, NEXT, I'M GOING TO HAND IT OVER TO TRACY AND CAMERON FROM THE LATE WE'LL TAKE OVER THE PRESENTATION, BUT I'M HERE TO ADDRESS ANY QUESTIONS WE HAVE FOLLOWING THE PRESENTATION.

SO IF WE CAN GO TO THE NEXT SLIDE, PLEASE.

THANK YOU, MARIA.

UM, GOOD MORNING TO MAYOR PRO TEMP AND COUNCIL MEMBERS.

MY NAME IS TRACY COOLEY AND I'M A MANAGING DIRECTOR AT DELOITTE LOCATED HERE IN AUSTIN, AND I'M RESPONSIBLE FOR THE SERVICES THAT WE PROVIDE TO THE CITY FROM AN AUDIT CAPACITY.

CAMERON DECKER WITH ME IS OUR SENIOR MANAGER, AND WE'RE VERY, VERY PLEASED TO BE HERE TO REPORT THE RESULTS OF THE FY 22 AUDITS THAT WE CONDUCTED.

UH, SO MAYBE FLIP TO TWO MORE SLIDES, PLEASE.

ONE MORE.

THANK YOU.

SO ONE OF THE COVER, OUR RESPONSIBILITY AND REALLY THE SCOPE OF THE AUDIT FIRST, AND AS WE GO ALONG, PLEASE STOP US IF THERE ARE QUESTIONS AND WE'RE HAPPY TO TAKE THOSE AT THE END AS WELL.

SO OUR AUDIT OF THE 2021 FINANCIAL STATEMENTS THAT AQUIFER AS MARIA TALKED ABOUT, WE PERFORM THE AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, AS WELL AS GOVERNMENT AUDITING STANDARDS.

AND THE REASON WE HAVE TO LAYER ON THE GOVERNMENT AUDITING STANDARDS RELATES TO THE FEDERAL AND STATE GRANT AUDITS THAT WE CONDUCT AS WELL.

SO ON THE APP FOR IT WAS AN UNMODIFIED OR CLEAN OPINION ON THE FINANCIAL STATEMENTS.

AND IF YOU LOOK AT OUR OPINION ON THE FINANCIAL STATEMENTS, WE DO REFERENCE OTHER AUDITORS THAT ARE AUDITING THE 80% IN COMPONENT UNITS.

SO THIS WOULD BE AC ABLE, AND THIS YEAR ATP, UH, THOSE ENTITIES HAVE EXTERNAL AUDITS.

WE DON'T RE AUDIT THAT INFORMATION.

WE JUST ACCEPT THE REPORTS THAT ARE PROVIDED BY THE OTHER AUDITORS.

WE ALSO LISTED IN OUR OPINION, AN EMPHASIS PARAGRAPH, UH, THAT REALLY JUST TALKS ABOUT THE ADOPTION AND IMPLEMENTATION OF A NEW ACCOUNTING STANDARD THIS YEAR, A GOVERNMENT GOVERNMENTAL ACCOUNTING STANDARDS, BOARD STATEMENT 84, WHICH IS FIDUCIARY ACTIVITIES THAT WAS ADOPTED BY THE CITY IN THE CURRENT YEAR.

SO IF YOU RECALL WHAT THE APP FOR LOOK LIKE IN PRIOR YEARS, THE CITY HAD ALWAYS REPORTED AGENCY FUNDS, AND THESE ARE FUNDS THAT ARE NOT NECESSARILY PART OF THE OPERATIONS OF THE CITY, BUT ARE HELD BY THE CITY IN A CUSTODIAL CAPACITY.

UH, SO THERE WAS, UH, SOME RE UH, PROBABLY A NEW DEFINITION OF WHAT CONSTITUTES AN AGENCY OR CUSTODIAL FUND.

SO THE CITY HAS, I WOULD SAY VERY IMMATERIAL, UM, ITEMS THAT THEY HAD TO MOVE OUT OF THESE FIDUCIARY ACTIVITIES AND PUT INTO OTHER AREAS OF THE, UH, THE CITY'S FINANCIALS, SPECIAL REVENUE FUNDS, AUSTIN ENERGY, BUT OVERALL, UM, NOT A MAJOR IMPACT TO THE CITY'S FINANCIAL STATEMENTS.

THE ACURA INCLUDES QUITE A BIT OF INFORMATION BEYOND JUST THE CORE FINANCIAL STATEMENTS.

THERE'S REQUIRED, SUPPLEMENTARY INFORMATION TO BUDGETS AND PENSIONS.

UH, THERE'S THE COMBINING SCHEDULES WHERE YOU CAN SEE INDIVIDUAL FUNDS AND THE ACTIVITIES OF INDIVIDUAL FUNDS, AS WELL AS A HEALTHY, ROBUST STATISTICAL SECTION THAT OUTLINED SOME OF THE, UM, MAYBE NON-FINANCIAL METRICS OF THE CITY.

SO OUR RESPONSIBILITIES FOR THE AUDIT, UH, WHICH DESCRIBED IN OUR CONTRACT, AS MARIA SAID, WE'RE IN YEAR FOUR OF A FIVE-YEAR CONTRACT.

AND WE ALSO ISSUE AN ANNUAL ENGAGEMENT LETTER, UH, MANAGEMENT AND THE AUDIT AND FINANCE COMMITTEE AS WELL HAVE RESPONSIBILITIES AS IT RELATES TO THE AUDIT.

UM, AND THAT INCLUDES PREPARING THE FINANCIAL STATEMENTS AND THE RELATED DISCLOSURES MANAGEMENT'S ESTIMATES JUDGEMENTS THAT TYPE OF THING.

OUR RESPONSIBILITIES ARE DETAILED IN THIS ATTACHMENT, APPENDIX A I WON'T GO THROUGH THAT UNLESS THERE ARE QUESTIONS RELATED TO WHAT OUR RESPONSIBILITIES ARE, BUT I THINK MOST OF US, OUR RESPONSIBILITY IS TO ISSUE AN OPINION ON THE FINANCIALS, WHICH OF COURSE WE'VE DONE.

SO NEXT SLIDE, PLEASE, THE ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES.

SO ACCOUNTING POLICIES, THERE WERE NO CHANGES, NO MATERIAL CHANGES TO ANY OF THE CITY'S ACCOUNTING POLICIES, OTHER THAN THE ADOPTION.

AS I MENTIONED ON GADSBY STATEMENT, NUMBER 84, YOU KNOW, WE EVALUATED ANY SIGNIFICANT QUALITATIVE ASPECTS, WHETHER IT RELATES TO THE ACCOUNTING PRACTICES, POLICIES, DISCLOSURES, ESTIMATES, AND CONCLUDED THAT THE POLICIES ARE APPROPRIATE.

THEY'RE ADEQUATE, ADEQUATELY DISCLOSED IN THE FINANCIAL STATEMENTS AND THEY THEY'RE CONSISTENTLY APPLIED BY MANAGEMENT.

SO IF YOU PICK UP ANY SET OF FINANCIAL STATEMENTS, YOU'LL TYPICALLY SEE THAT THERE ARE EMBEDDED IN THE FINANCIALS.

THERE ARE SIGNIFICANT ESTIMATES, AND THESE ARE ESTIMATES MADE BY MANAGEMENT.

UM, APPENDIX B TO THIS PRESENTATION, WE OUTLINE NOT ONLY THE SIGNIFICANT ESTIMATES, BUT WE OUTLINE WHAT THE CITY DOES TO DETERMINE THESE ESTIMATES, AS WELL AS

[00:30:01]

UM, I, WASN'T GOING TO GO OVER APPENDIX BEING IN DETAIL.

I'LL JUST HIT THE HIGHLIGHTS FROM THIS SLIDE, BUT, UH, THE FIRST TWO SIGNIFICANT ESTIMATES, UH, WE TALK ABOUT ARE OUR PENSION LIABILITIES, AS WELL AS OTHER POST-EMPLOYMENT BENEFITS ARE OPEB.

UH, THESE ARE NOT NEW.

THESE HAVE BEEN REPORTED FOR A NUMBER OF YEARS ON THE FINANCIAL STATEMENTS, THE CITY HIRES ACTUARIES TO HELP DETERMINE WHAT THESE BALANCES SHOULD BE.

UM, AND THERE ARE A LOT OF ASSUMPTIONS ASSOCIATED TO WHETHER IT'S INVESTMENT GROWTH RATE, DISCOUNT RATES, UM, MORTALITY TABLES, AS IT RELATES TO PENSIONERS.

AND THEN WE IN TURN FROM AN AUDIT APPROACH, WE EMPLOY OUR ACTUARIES AS PART OF OUR TEAM TO REVIEW THOSE ESTIMATES.

WE DIDN'T NOTE THAT THERE WERE ANY SIGNIFICANT CHANGES TO THOSE ESTIMATES THAT WERE MATERIAL.

AND WE DIDN'T NOTE ANY AUDIT ADJUSTMENTS RELATED TO THESE ESTIMATES.

AND THE NEXT ONE ON THE LIST WOULD BE ASSET RETIREMENT OBLIGATIONS.

UM, THESE AGAIN ARE ENVIRONMENTAL LIABILITIES.

UM, AUSTIN ENERGY HAS, UM, SOME OF THESE RECORDED ON THEIR FINANCIAL STATEMENTS AND THEY USE A SPECIALIST TO HELP DETERMINE, UH, SOME OF THESE LIABILITIES, UH, NOT ANNUALLY, BUT PERIODICALLY.

AND WE IN TURN HAVE AN INTERNAL SPECIALIST THAT WILL HELP US, UH, AUDIT THESE BALANCES AND THE ASSUMPTIONS.

AND AGAIN, JUST LIKE PENSIONS AND OPEB, THERE WERE NO UNREASONABLE ASSUMPTIONS THAT WERE NOTED, AND THERE WERE NO AUDIT ADJUSTMENTS RELATED TO ASSET RETIREMENT OBLIGATIONS.

AND LAST BUT NOT LEAST, WE HAVE THE DEFERRED AMOUNTS RELATED TO REGULATED OPERATIONS.

UH, THESE ARE APPLICABLE ONLY TO AUSTIN ENERGY AND AUSTIN WATER, AND IT BASICALLY RELATES TO THE ACCOUNTING FOR COSTS TO BE RECOVERED IN FUTURE RATES.

UH, SO IT'S A LARGE CALCULATION DONE BY MANAGEMENT.

UH, WE REVIEW THEIR CALCULATIONS.

DID NOT, AGAIN, NOTE ANY AUDIT ADJUSTMENTS.

AND SO NEXT SLIDE PLEASE.

AND I'LL TURN IT OVER TO CAMERON TO TALK ABOUT OUR UNCORRECTED MISSTATEMENTS.

GOOD MORNING, MAY I APPROACH THEM AND COUNCIL MEMBERS? UH, AS I MENTIONED, MY NAME IS CAMERON DECKER.

I'M THE SENIOR MANAGER SERVING ON THE CITY ACCOUNT THIS YEAR.

IT'S A PLEASURE TO BE WITH YOU THIS MORNING.

UH, I WANT TO JUST GO THROUGH A FEW OF OUR OBSERVATIONS FROM OUR AUDIT THIS YEAR AND SUMMARIZE, UH, JUST A FEW ITEMS FOR YOU.

SO THE FIRST ITEM THAT I'LL ADJUST IS THE UNCORRECTED MISSTATEMENTS.

UH, AS PART OF OUR AUDIT, WE DESIGN OUR TESTING TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE FROM MATERIAL MISSTATEMENT.

UH, WE'VE ATTACHED IN APPENDIX C THAT MANAGEMENT REPRESENTATION LETTER THAT SUMMARIZES THOSE UNCORRECTED MISSTATEMENTS.

WE ACCUMULATED AS PART OF OUR AUDIT AND PRESENTED TO MANAGEMENT DURING THE COURSE OF THE AUDIT.

UH, THESE MISSTATEMENTS WERE DETERMINED BY MANAGEMENT TO BE IMMATERIAL BOTH INDIVIDUALLY AND IN THE AGGREGATE.

AND WE AGREED WITH THAT ASSESSMENT AND THEREFORE THE FINANCIAL STATEMENTS WERE, WERE NOT ADJUSTED FOR THOSE ITEMS. UH, WE WILL GO THROUGH THOSE IN DETAIL, BUT WE DID WANT TO BRING TO YOUR ATTENTION ONE CORRECTED MISSTATEMENTS.

UM, THIS WAS A RESULT OF, UH, A CHANGE IN POLICY WITHIN THE HOUSING ARENA.

THE RESULT OF THE CORRECTION WAS RECOGNITION OF CAPITAL OUTLAY EXPENDITURES IN THE, UH, SPECIAL REVENUES HOUSING FUND, AND A DECREASE IN LAND HELD FOR SALE.

UM, THE GOVERNMENT WIDE FINANCIAL STATEMENTS, THE CORRECTION WAS A RECLASSIFICATION FROM LAND HELP FROM SELL TO CAPITAL ASSETS.

UH, AS YOU CAN SEE, THIS WAS A VERY SPECIFIC AREA, UH, SPECIFIC TO HOUSING AND THE LAND HELD FOR SALE DETERMINATION THAT THE CITY HAS HAD IN PLACE IN PRIOR YEARS.

UH, THE AMOUNT OF THIS CORRECTION WAS $21.9 MILLION REFLECTED IN THE FINANCIAL STATEMENTS.

AND WE'LL TALK A LITTLE BIT MORE IN A COUPLE OF SLIDES AS WE DISCUSSED THE CONTROL IMPACT OF THIS CORRECTION.

NEXT SLIDE, PLEASE.

A FEW OTHER ITEMS OF NOTE HERE.

UM, THIS SLIDE REALLY SUMMARIZES THAT WE, WE RECEIVED THE FULL COOPERATION OF CITIES MANAGEMENT.

WE DIDN'T HAVE ANY DISAGREEMENTS WITH MANAGEMENT.

UH, THERE WAS NO CONSULTATIONS WE WERE MADE AWARE OF WITH OTHER ACCOUNTANTS OUTSIDE OF OUR DELOITTE AUDIT TEAM, AND WE ENCOUNTERED NO SIGNIFICANT DIFFICULTIES DURING THE PERFORMANCE OF OUR AUDITS.

UH, AS I'VE I'VE MENTIONED ALREADY, WE DID OBTAIN A MANAGEMENT REPRESENTATION LETTER THAT WE'VE, UH, UH, UH, UH, INCLUDED HERE AS APPENDIX C UH, TO OUR PRESENTATION AND WOULD BE HAPPY TO ANSWER ANY QUESTIONS ON THAT HERE IN A FEW MINUTES.

UM, THIS WAS MY FIRST YEAR SERVING THE CITY AND, UH, I WAS, UM, VERY, VERY MUCH, UH, IT WAS A PLEASURE TO SERVE WITH THE CITY TEAM, MARIA AND HER'S TEAM AND THE CONTROLLER'S OFFICE SPECIFICALLY.

UH, AS WE MENTIONED, WE RECEIVED THEIR FULL COOPERATION AND IT WAS A PLEASURE WORKING WITH THEM.

UH, THE OTHER ITEM OF NOTE ON THIS SLIDE IS RELATED TO OUR SUBCONTRACTING FIRM, A MONSTER MAYOR IN AND BENDER.

THEY PROVIDED SOME CONSISTENT STAFFING

[00:35:01]

UH, NEXT SLIDE, PLEASE.

UH, AS TRACY MENTIONED EARLIER, AS PART OF OUR AUDIT, WE DO ISSUE A SEPARATE REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS.

WE CALL THIS THE YELLOW BOOK REPORT.

UH, WE DO NOT EXPRESS AN OPINION ON CONTROLS, BUT AS PART OF OUR FINANCIAL AUDIT, WE DO CONSIDER THE DESIGN OF CODE TROLLS TO ASSIST OUR AUDIT PROCEDURES, UH, RELATED TO THE CORRECTED MISSTATEMENT THAT WE DISCUSSED EARLIER.

UH, WE DID IDENTIFY A DEFICIENCY IN CONTROLS THAT WE CONSIDERED TO BE A SIGNIFICANT DEFICIENCY.

THE DEFINITIONS OF THE VARIOUS DEFICIENCY LEVELS ARE INCLUDED IN APPENDIX D.

THOSE ARE SET FORTH BY THE AI CPA.

UH, FOR THIS ITEM, WE DETERMINED THE CONTROL DEFICIENCY WAS NOT A MATERIAL WEAKNESS, BUT WAS THAT THE LEVEL THAT WE WOULD WANT TO BRING IT TO THE ATTENTION OF THOSE CHARGED WITH GOVERNMENTS, WHICH IS, WHICH IS THIS GROUP WE'VE INCLUDED THE WORDING OF THIS SIGNIFICANT DEFICIENCY, UH, ON THE NEXT SLIDE, IF WE WANT TO MOVE TO COUNCIL BEFORE YOU, BEFORE YOU MOVE TO THAT.

UM, SO IF YOU'RE NOT EXAMINING OR TESTING OUR INTERNAL CONTROLS, WHERE SHOULD WE BE TESTING THOSE INTERNAL CONTROLS? AND HOW DO WE TEST THOSE AS PART OF OUR AUDIT PROCESS, WE DO, AS CAMERON SAID, WE DO LOOK AT THE DESIGN AND IMPLEMENTATION OF THOSE CONTROLS, AND WE LOOK AT THEM BY PROCESS PAYROLL REVENUES.

UH, SO AS PART OF OUR PROCESS IS IF WE NOTE THAT THERE ARE DEFICIENCIES OR GAPS IN THOSE CONTROLS, BECAUSE YOU CAN HAVE A CONTROL THAT'S PROPERLY DESIGNED, BUT IT COULD NOT BE IMPLEMENTED, OR YOU COULD HAVE ONE THAT'S NOT PROPERLY DESIGNED AND NOT IMPLEMENTED.

SO WHEN WE'RE GOING THROUGH, WE DO LOOK AT CONTROLS.

UM, WHAT WE'RE MENTIONING IS WE, WE DON'T OPINE SPECIFICALLY ON CONTROLS AS YOU WOULD SEE IN PERHAPS A PUBLIC COMPANY.

UM, BUT THE EXTENT THAT WE, UH, DO OUR AUDIT PROCEDURES IDENTIFY ANY GAPS IN THOSE CONTROLS, IF WE BELIEVE THOSE TO BE SIGNIFICANT, WE WOULD BRING THEM A MAYOR PRO TEM TO YOU IN THE COMMITTEE.

OKAY.

SO IS THERE ANOTHER STEP THAT WE OUGHT TO BE TAKING WITH RESPECT TO THOSE INTERNAL CONTROLS SINCE THIS, I THINK, UM, YOU KNOW, WHAT OTHER CLIENTS DO, YOU KNOW, INTERNAL AUDIT IS IN THE CITY AUDITOR'S OFFICE IS, YOU KNOW, A PART OF THIS, AS FAR AS LOOKING INTERNALLY AT WHAT CONTROLS COULD BE STRENGTHENED.

I THINK IF WE LOOK AT, FROM A FINANCIAL REPORTING STANDPOINT, UM, YOU, MARIA AND HER TEAM CONTINUE TO ASSESS CONTROLS.

DO THEY HAVE THE RIGHT CONTROLS IN PLACE? I THINK A GOOD EXAMPLE OF THAT WOULD BE GOING REMOTE WORK, YOU KNOW, WHERE THE CONTROLS IN PLACE THAT NEEDED TO BE IN PLACE.

SO I DO THINK IT'S A CONTINUOUS PROCESS, UM, AS FAR AS THE FINANCE TEAM, AS WELL AS YOU HAVE THE INTERNAL AUDIT STANDPOINT, AND THEN OUR LOOK EVERY YEAR AT, YOU KNOW, SPECIFIC CONTROLS AS WELL.

SO I DON'T KNOW THAT YOU WOULD NEED TO HAVE, YOU KNOW, A SARBANES-OXLEY TYPE, UH, REPORT, UM, YOU KNOW, FOR THE CITY, BUT, YOU KNOW, CERTAINLY WE CAN CONTINUE TO HAVE THAT DIALOGUE.

THANK YOU.

WE CAN CONTINUE WITH THE SLIDES.

GREAT POINT OF CLARIFICATION.

UM, AND THEN I THINK FLIPPING FORWARD TO A COUPLE OF SLIDES, UH, MAYBE NEXT ONE.

OH, I THINK WE'RE GOING THE WRONG DIRECTION.

THERE WE GO.

KEEP GOING ONE MORE.

PERFECT.

THANK YOU.

UM, THIS IS THE WORDING THAT WE'VE, UH, INCLUDED, UH, AROUND THAT SIGNIFICANT DEFICIENCY THAT WE, UH, IDENTIFIED ALONG WITH ON THE NEXT SLIDE, THE RESPONSE FROM, FROM MANAGEMENT.

I WON'T READ THIS TO YOU, BUT I WILL SUMMARIZE, WE WANT TO FLIP TO THE NEXT SLIDE.

UH, THE CAUSE OF THIS CONTROL, UH, FAIL FAILURE WAS, WAS REALLY A POLICY CHANGE THAT DID NOT GET REFLECTED WITHIN THE FINANCIAL STATEMENTS.

THIS WAS A VERY SPECIFIC POLICY, UH, CHANGE THAT WAS TAKEN BY AUSTIN HOUSING DURING FYI 21, JUST RELATED TO THEIR CLASSIFICATION AND DETERMINATION THAT LAND HELD FOR SALE, UH, THAT, THAT HAS BEEN ACCUMULATED PREVIOUSLY BY AUSTIN.

HOUSING WAS NOT REALLY GOING TO BE HELD FOR SALE ANY FURTHER.

THERE, THERE WERE SOME CHANGES TO THIS POLICY, UH, THAT WOULD, THAT WOULD TRIGGER AN ACCOUNTING TREATMENT WHERE WE WOULD RECLASSIFY THAT, UH, LAND HELD FOR SALE JUST TO A CAPITAL ASSET INSTEAD OF IT BEING HELD FOR SALE.

AS WE MENTIONED EARLIER, THAT HAS SOME ACCOUNTING IMPLICATIONS BASED ON BOTH ON THE GOVERNMENT WIDE FINANCIALS, AS WELL AS WITHIN THE SPECIAL REVENUES HOUSING FUNDS.

UH, OUR RECOMMENDATION RELATED TO THIS CONTROL WAS REALLY FOCUSED ON TRAINING AND, AND

[00:40:01]

UH, THAT IS EXACTLY HOW, UM, THE CITY MANAGEMENT HAS RESPONDED WITH THEIR, UH, VIEW AND FUTURE TO ADDRESS THIS ITEM.

AND DELOITTE WILL HELP WITH THE TRAINING EFFORT ON THIS FRONT, UH, IF NEEDED IN THE FUTURE AS WELL.

NEXT SLIDE, I'LL TURN IT BACK OVER TO TRACY TO TALK TO THE STATUS OF OUR OTHER REPORTS AND GET INTO THE SINGLE AUDIT.

ALL RIGHT.

SO OTHER REPORTS THAT, UM, ARE PART OF OUR CONTRACT, ONE IS THE PASSENGER FACILITY CHARGE REPORT, AND THIS ON THE AUDIT STEPS ON THIS REPORT ARE DICTATED BY THE FAA.

UH, WE ARE IN PROCESS WITH THIS, UH, REPORT AND THEN THE AUDIT, UH, WE, WE EXPECT TO FINISH IN THE NEXT WEEK OR SO.

UM, AS OF THIS DATE, NO ISSUES TO REPORT TO THE COMMITTEE.

WE ALSO HAVE AN AGREED UPON PROCEDURES REPORT, UM, DICTATED BY TEXAS COMMISSION ON RODMAN QUALITY.

THAT REPORT HAS BEEN COMPLETED AND FILED BY THE CITY, UH, WITH TCEQ.

AND THEN LASTLY, WE HAVE THE SINGLE AUDIT GRANT REPORT.

UM, MAYBE FLIP TO THE NEXT SLIDE.

WE CAN RECAP THAT, UH, REPORT, UH, MARIA MENTIONED THAT, UH, THAT REPORT WAS ISSUED MONDAY, SO VERY MUCH HOT OFF THE PRESSES FOR US.

UH, THERE'S A FEDERAL PIECE AND A STATE PIECE.

UM, AS FAR AS THE PROGRAMS THAT WE LOOK AT, WE REPORT ON THE CO COMPLIANCE RELATED TO THESE PROGRAMS, AS WELL AS THE INTERNAL CONTROLS OVER COMPLIANCE IN, IN EXECUTING THESE PROGRAMS. AND WE ISSUED CLEAN OPINION.

SO UNMODIFIED OPINIONS ON BOTH THE FEDERAL AND THE STATE SIDE, I SAY, NEXT SLIDE, PLEASE.

OKAY.

SO FROM A FEDERAL PROGRAM PERSPECTIVE, I MEAN, I, NOT NEWS TO ANYONE ON THE COMMITTEE, YOUR FEDERAL PROGRAM EXPENDITURES HAVE EXPLODED IN THE LAST FEW YEARS.

IT'S ABOUT 238 MILLION IN .

THE MAJOR PROGRAMS THAT WE SELECTED FOR TESTING, UH, ARE LISTED BELOW, UH, THESE PROGRAMS. A LOT OF THEM INVOLVE, YOU KNOW, CARES DOLLARS CORONAVIRUS RELIEF FUNDING, AND THESE ARE NEW AND WE WOULD, WE WOULD EVEN BE HIGHER RISK PROGRAMS. SO THEY WERE SELECTED FOR AUDITING IN THE CURRENT YEAR.

THE THIRD ONE ON THE LIST, THE CORONAVIRUS AID RELIEF AND ECONOMIC SECURITY ACT CARES.

UH, THIS WAS ACTUALLY AUDITED IN THE PRIOR YEAR AS WELL.

THERE WAS ONE FINDING, UM, IF YOU RECALL IT RELATED TO, UH, THE REIMBURSEMENT REQUESTED OR BY THE CITY, UM, FOR CARES DOLLARS WERE ACTUALLY REIMBURSED BY, BY OTHER FUNDING SOURCES.

UH, IT WAS ABOUT 70,000.

UH, SO WE DID AUDIT THE PROGRAM AGAIN THIS YEAR.

WE DID NOT NOTE THE SAME ISSUE.

UH, SO THAT ISSUE, UM, APPEARS TO BE CORRECTED FROM THE CITY'S STANDPOINT.

AND THEN THE OTHER PROGRAMS THAT WE LISTED HERE, YOU KNOW, EVEN IF IT'S AN AIRPORT PROGRAM OR, YOU KNOW, FEMA, THERE ARE SOME CARES DOLLARS ASSOCIATED WITH A LOT OF THESE PROGRAMS. UH, SO AGAIN, JUST IN THE STATE THAT WE'RE IN, AS FAR AS THE FEDERAL DOLLARS, A LOT OF WHAT THE FEDS ARE DOING ARE DICTATING WHICH PROGRAMS WE'RE AUDITING, UH, FROM THAT STANDPOINT.

AND THEN, SO THE NEXT SLIDE ON THE STATE PROGRAMS, UH, SIGNIFICANTLY FEWER DOLLARS, 4 MILLION IN STATE PROGRAM EXPENDITURES FOR FY 21.

AND WE DID SELECT THREE MAJOR PROGRAMS, UH, FOR ALL OF THE PROGRAMS, FEDERAL AND STATE.

WE DID NOT HAVE ANY REPORTABLE FINDINGS, SO NOTHING IN THE SINGLE LOTTA REPORT TO, UH, TALK ABOUT ANY FINDINGS RELATED TO COMPLIANCE OR INTERNAL CONTROL OVER COMPLIANCE.

SO BY ALL ACCOUNTS, A CLEAN AUDIT FROM BOTH THE FEDERAL AND STATE STANDPOINT, NEXT SLIDE, PLEASE, UH, REALLY JUST OUR APPENDICES CAMERON AND I REALLY COVERED WHAT'S IN THE REST OF THE DOCUMENT.

WE'RE HAPPY TO COVER ANY OF THIS ADDITIONAL INFORMATION IF THE COMMITTEE WOULD LIKE, UH, AND CERTAINLY HAPPY TO, TO ENTERTAIN ANY QUESTIONS.

UH, CAMERON WAS VERY, YOU KNOW, CORRECT WHEN HE SAID WE DO RECEIVE FULL COOPERATION FROM THE CITY.

UM, MARIA AND HER TEAM ARE GREAT TO WORK WITH AND THEY HELP US, UM, AS FAR AS TALKING WITH OTHER DEPARTMENTS OUTSIDE OF THE CITY CONTROLLER'S OFFICE, UM, TO MAKE SURE THAT THE AUDITS DONE COMPLETELY AND EFFICIENTLY.

AND, UH, CERTAINLY WE HAD NO ISSUES WITH, WITH EITHER OF THOSE FROM THE STANDPOINT OF THIS YEAR'S AUDIT.

SO HAPPY TO ENTERTAIN ANY QUESTIONS, THINK IF WE CAN TAKE THE SLIDES OFF, PLEASE.

THANK YOU.

UM, SO I WANTED TO JUST FIRST PAUSE FOR A SECOND AND, AND ACKNOWLEDGE HOW IMPORTANT IT IS ON THAT SINGLE AUDIT, GIVEN THE SHIFTS THAT WE HAD IN FEDERAL FUNDING AND THE AMOUNT OF MONEY THAT WAS COMING IN FROM, FROM THE CARES ACT, AND THEN SUBSEQUENTLY OUR BO ARPA-E IS NOT A PART OF THIS AUDIT.

UM, THAT WAS A REALLY TALL TASK UNDER, UM, YOU KNOW, DIFFICULT CIRCUMSTANCES.

YOU KNOW, A LOT OF THAT MONEY CAME IN WHEN WE WERE IN 2020, CAUSE

[00:45:01]

AND SO I'M REALLY GLAD TO SEE THE CLEAN OPINION ON THAT.

THAT WAS A REALLY BIG CHALLENGE FOR OUR CONTROLLER'S OFFICE AND FOR ALL OF OUR DEPARTMENTS TO MAKE SURE, UM, THAT WE WERE, UM, MEETING THE NEEDS OF OUR COMMUNITY AT THE SAME TIME THAT WE WERE COMPLYING WITH ALL OF THE, SOMETIMES OUR KEEN REQUIREMENTS OF, OF THE FEDERAL GOVERNMENT IN THAT REGARD.

UM, SO I WANT TO ACKNOWLEDGE THAT, UM, I WILL UNDERSCORE ONCE AGAIN, SOMETHING I'VE SAID PREVIOUSLY IN COUNCIL THAT THE, UM, SMALL NUMBER OF STATE DOLLARS IS KIND OF ASTONISHING, UM, GIVEN WHAT WE JUST WENT THROUGH OF WHAT'S COMING TO SUPPORT, SUPPORT OUR CITY.

UM, AND THEN I DID WANT TO CHECK FOR, UM, THE URBAN OUTDOOR EMMA LONG PROGRAM THAT'S FOR THE WORK THAT WAS AT EMMA LONG PARK.

IS THAT CORRECT? THAT'S CORRECT.

YEAH.

OKAY, GREAT.

THANK YOU.

UM, COLLEAGUES, ARE THERE ANY QUESTIONS OR COMMENTS ON THE AUDIT OR THE, THE KAPHA OR THE SINGLE AUDIT? GREAT.

UM, MARIA OR, UM, MR. VINNY? NO.

DID YOU HAVE ANYTHING ELSE THAT YOU WOULD LIKE TO ADD AT THIS POINT? UH, NO.

I REALLY APPRECIATE EVERYTHING THAT THE WHITE TEAM DID TO HELP US GET US TO THIS POINT, AS WELL AS THE CONTROLLER'S STAFF AND, AND THE CITY DEPARTMENT, FINANCIAL STAFF.

I KNOW IT WAS A HUGE UNDERTAKING, ESPECIALLY FOR THE SINGLE AUDIT, GIVEN THE AMOUNT OF FUNDS THAT WE RECEIVED THIS YEAR AND TO COME OUT WITH A CLEAN OPINION AND NO FINDINGS IS ASTONISHING.