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sAlegal\our documents\ordinances\17\ordinance - fy17-18 audit plan.docx
ORDINANCE NO, 2017-291
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROVING THE FY17-18 ANNUAL AUDIT PLAN AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, one of the City Auditor's responsibilities is to create an Annual Audit Plan; and
WHEREAS, upon conclusion of developing his FYI 7-18 Annual Audit Plan, the City Auditor
presented it to City Council on October 10, 2017; and
WHEREAS, the City Council finds that this Ordinance is in the public interest; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION. 1. The recitals and findings contained in the preamble of this Ordinance are
incorporated into the body of this Ordinance.
SECTION 2. The City Council hereby approves the City Auditor's FYI 7-18 Annual Audit
Plan as depicted in the memorandum attached hereto as Exhibit "A".
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the lot- day o � cl r -jai " ,, 2017.
w.
CHRIS A 1"S, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
c
APPROVED AS TO LEGAL FORM:
AARON L1 1:.,, INTERIM CITY ATTORNEY
m,
F
BY:
Exhibit "A"
CITY AUDITOR'S OFFICE * 215 E.. McKinney Denton,TX 76201 * 940-349-8158
DATE:MEMORANDUM
October , 2017
. Mayor and Co . ci a ers
Craig a et er, City Auditor
SUBJECT:! Annual Audit Plan
Basis for Plan
The basis for this Internal Audit plan comes from a risk
assessment that consisted of auditor observations and
inquiries with City Councilmembers and members of
management based on likelihood and impact to the
organization. Likelihood and impact were assigned risk
factors.
From the Risk Assessment the following were the top
risks of the City:
➢ Contract Administration
➢ Capital Improvement Program
➢ Management of Bond Funds
Exhibit "A"
➢ DME
➢ IT Information Security
Additionally, the available resources to complete audits
were examined. The hours required to perform the work
plan are estimated hours. After considering hours that are
unavailable for audits due to paid time off, administrative
duties, required in-house and external training, and
meetings, the net available hours for audits are
determined.
Combining available hours and audits yielded the audit
plan.
Total hours are considered to be 3,640. These hours
assume a Staff Auditor for nine months of FYI 8.
Administrative hours which include items such as:
preparing for and attending meetings, budget reviews, In-
house and external training and general management
functions are estimated at 450 hours.
Time -off includes vacation, sick, holidays and other
available absences. This is estimated at 150 hours.
This leaves 3 040 hours available for audits, follow-ups,
reviews, agreed-upon procedures, investigations and
advisements.
Exhibit "A"
IN"'rERNAL AUDIT PLAN
AUDITS/REVIEWS/PROSPECTIVEANALYSIS/
AGREED-UPON CE S ENGAGEMENTS
Contract Administration Audit (From FYI 7) — Evaluate
the process and determine if accountability is in place -
255 Hours
Management of Bond Funds — Have Bond Funds been
used appropriately and timely — 310 Hours
Access Rights Audit — Evaluate User Access for the
Animal Shelter, Parks Department and Development
Services Information Systems — 210 Hours
DME's Policies and Procedures and Denton Energy
Center — Evaluate DME's Policies and Procedures and
billings at DEC — 340 Hours
P -Card Audit — Evaluate Internal Controls Over This
Program — 300 Hours
CIP Project Delivery Audit — Determine if there is an
efficient and effective process in place — 300 Hours
Fixed -Based Operator Lease Agreement Audit — Evaluate
Compliance with all lease fees — 275 Fours
Exhibit "A"
Hotel Tax Audit — Evaluate if a sample of hotels are in
compliance with laws and paying the correct amount to
the city. — 305 Hours
Alcoholic Beverage Permit Fee Revenue Audit — Evaluate
Whether the City Is Receiving All the Revenue It Should
Be Receiving From Retailers Regarding the Sale of
Alcoholic Beverages — 205 Hours
Total A u eva'
t" ews` greed -U
pon,,,,Procedures Hours
2500 Hours
o; ow Aud,its
Vendor Master File Audit — 120 Hours
Cash Count Follow-up Audit — 120 Hours
Total Follow- Audits = 240 curs
VESTIG A� - S/A V S S/ , S
ASSESSMENVANNUAL AUDIT PLAN/ANNUAL
PORTS/FRAUD
This Section is Estirated at 300. ours
TOTAL A S/ EV S S E C V
ANALYSIS/AGREED-UPON
S/I V S A. S/A V S A /
Exhibit `°A"
RISK E VANNUAL � -�
ShouldPLAN/ANNUAL REPORTS = 3040 HOURS
1presentr FY18
and the City
Council.,Auditor1
Shouldadvise, review or audit in the particular area this audit
plan, will automaticallybe amendedby the change.
any additional1 1available
includeFY18 they will be used for the Red Light Camera
Red Light Cameras — Evaluate the Redflex Contract to
' Business Rules
and A
,1 ' issuing
tickets — 11 Hours