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18-2028S:\Legall0ur pocuments\Ordinances\18\Covernance of City Auditor,docx ORDINANCE NO. 1$-ZO2g AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, ESTABLISHING A GOVERNANCE PROCESS FOR THE CITY AUDITOR'S DEPARTMENT FOR THE PURPOSE OF DEFINING THE CITY AUDITOR'S AUTHORITY AND RESPONSIBILITIES; PROVIDING FOR A REPEALER; PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, pursuant to Article VI, Section 6.04, the City Council of the City of Denton appointed a City Auditor to provide the City Council with independent, objective, and useful information regarding City operations to promote efficiency and effectiveness in m.aximizing City resources in the public's interest; and WHEREAS, the City Council desires to establish a governance process for the City of Denton's internal audit function that defines the authority and the responsibilities of the City Auditor; and WHEREAS, the City Auditor has submitted an Internal Audit Governance document for City Council's review and approval; 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 Internal Audit Governance document that describes the authority and responsibilities of the City of Denton Auditor depicted in the memorandum attached hereto as Exhibit "A". SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. , �..._ . � p , rdinance was m ThisOrdin� c�was � � �d � .., " � �_� ���"�"�� ��� . Y .... �.�.. .... e z����t�car� �� �. � �t��� i�� � O seconded by eHO ����� �� ��'� � ' � � � �°� �ssed and approved by the following vote � - �: Chris Watts, Mayor: Gerard Hudspeth, District 1: Keely G. Briggs, District 2: Don Duff, District 3: John Ryan, District 4: Aye Na� W���t���� Absent S:lLegal\Our pocuments\OrdinancesU 81Govemance of City Auditor.docx Deb Armintor, At Large Place 5: _� Paul Meltzer, At Large Place 6: �,�" � PASSED AND APPROVED this the �°�� �� ATTEST: JENNIFER WALTERS, CITY SECRETARY �.� B �S , �� �� � .�;� � „ f � ��..�, � �� ° � �� �d APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY :_ r day of �°"�'��� � �" ����� ��' ���,,. � 2018. ������` ��, ,���� � �� �����$ �w����������� �„�.�w �.._�.� � WATTS, MAYOR �; J �IM: ' � ir ` � Is f; , . ��, �� , . ,. �.�.� y° � �,� � �� � � � .�� , � �� .�� �. , ��� . ��'� � Internal Audit Authority and Respons►bflities INTRODUCTION Page 2 ESTABLISHMENT Page 2 INTERNAL CONTROLS Page 2 AU ITIN STAN A S Page 2 OBJECTIVE Page 3 CITY CHARTER REQUIREMENTS Page 3 INTE NAL AUDIT AUT TY AN RESPONSIBILITY _._._.. ,__ --------- --------- --------- -------.— .......... . . . . . ------ -- — ., 1. INDEPEND�NCE Page 3 �.� � �� ...._..... ---- -- ---- ---- � .... �....r...._....,_ - --------- � ...�.. ....._ . . _--- 2, AUTHORITY Pa�e 5 . .. � ., ..........�_ . . ... .. a -----..... ...... ..__ _� _........ PTLC}F�E£2 LJS� C3F` C�(�V�F�I�II��;NT iNF`d3RridP�TI�IV, F�ES�3i1F��ES, �ilvi3 Page 6 I'i3SIT'IC)I�iS 4. REPORT STRUCTURE �� � ....rm.,.. .___ -- . � ................_. ---�-- p.... .......�. --- ��e � ----- .. ...m.... ... _.�..... .,_._., -- ..., n.�._ .— .... .. ........: 5. RESPONSIBILITIES Page 6 .�.. ..... _ _ .............. � � ......�__ — 6. ACCESS TO AUDITOR'S WORK PAPERS Page 8 CITY ANAGE ENT RESPONSIBILITY ___ -- -------- ......._ ---- --- ._. _ ..............._. PEE EVIE Page 8 ......................____..__ _ __....-- ---- ..... ..�.__ ------- .... .. ............._ _ ..._.......... ACCESS T T E CITY AU IT 'S WORK PAPERS Page 9 -- ISCIPLINA Y ACTI NS .. _.�.._____ ... .. �_.�_.------ Page 9�. � I ► i i 1 � ll Internal Audit Authority and Responsibflit►es � ! 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F � , r ��� - -� � � ` ��� - - • •�- - . .-� . r � �.� .: �� �* -• w-• � �' � • `+� •�-,. • � - - , � . _ w •�' . • '-�a� � �. •�� � � '�� � � ` � � . � -� � ���� �� . � -� . � • . r - . �� , � -� + . � �� � ` ' . • � : . � . �, * - .� , � �. �;� .; . � - - , , . . � - � �� • - . � _�, . �, � . . , � _. , � �� , r r + �. � ��• � -• ♦ r .� ♦ � r � . • � � � . . � - � � . . �� , � .�� w , , � - � - . � ���� � - � - ���� - - . • �� � � � ' � � . '� �+ - • •` ` - � . � w �` � , - • ` . � . � -�� . �� ���, � � - � ��� � ♦ ��'� - ���� . • � ��� � ' � s � �� '� . . �. ♦ � � � � ! �r- r� � • ' • � - �� . � . c • � - � -�� � a. Einphasis on the public interest; b. Integrity and objectivity in perfonnance of work; c. Proper use of government information, resources, and pasitions; and d. Professional behavior. � �' . Internal Aud►t Authority and Responsibilities � . �� - - .� � - _ � � � , ;. . - - w�� � � � -, , ♦ - . . � _ . r * � ,. ♦ . ;, � • � ♦ . w � r � � . . ♦ ' � . � - - . . . • � . , w - . - � - • , � # •♦ . - � � w_ . , � •�- . � - • , �� � - � ' � � • - � . - � +r, r �� ` M � + ... � � �,,; ■ . � �.,� � ....; � • .`. � # ��� � ..' � .....' ..� � w ��. #� �. f ` � i'� � ' �'. � . . • � .... � `� ' - # � ' � . I � �1` 1 ���� f �� • .. . . _ � •'! � �,' *" ' �'�' w�, ' � i' w , ! �� • #��'� � R i' ` � 1 ' ♦ T � ' •. , � *. , f , ���. . . � �.�. �� � _ � _ �; � ��,,� . . � a ��� l.1 •! c. • # �� � R ! � ��.' # ! :� 1 f � �. ',. � ' l...'. • ' '��. + � • �.:, � ! ,,... �!` '1 * ' ' •� . ! i # `� ! . .,' � 1 ! '�,, • � • ' ,,,. � � • • '�. # i . �: ! . � . � ', � • • � '..' . ' •' � � . , . # . ,.... ' ! . • ' ����. . � ' •���. �. • , ' . ..:. . ` ' ' �� ��. ' !'�. �. ;� ♦ '. . � " • -, � ... . . , � � . � # . ' .� . �. ' ' . � � +'� `. �� • � � ` +' � ' �'��. . '�. ♦ ! • ',..� :..��:� � � : �' � ��: � + . . � 1 �: �� ���� �.:� ' � � i� ` � ��: � ! — . - .`�.�. ` '��. i . .�����, . � �,.�.. .., � ' �.. �: ! �, . � . 'f � 1� . ! ��.'1 1 � 1 ' ♦ f-�.�' ����, inisrepresenting to induce another to part with something of value or to surrender a legal right. � Waste: to spend or use carelessly or use resources inefficiently or become dissipated. • Abuse: ta put to a wrong or improper use or ta use excessively. To enable the City Auditor ta carry out the above responsibilities, the City Council approves the following: � r 1 Internal Audit Authority and Responsibilities • . . �; . �� . � �� � � 1 ' ► 7�►C�7�1 - �# . � �- - i r � ' +' - . , � � �. . , r #• . • �+ , . � w, . r' . � � ' , _ � �' � � � � .: � # �, � �- �-�- �' � .��`. . � , w �` �- .. � � 1 . - ' . � .. � . _ . . t ' 1 f -� . � -�# -� .'' � . . ! �, . . . � � + - �s,+- ., . ♦ � �. � - ' � ♦�'� � ' ���. �. � �.�.. . � . � �, . ♦ 1' " . � '� ' .�� � ' • ,, �' � �. �. '� � . 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' + ...',.. � Internal Audit Author►ty and Responsibilities � � • • � �- �- + � . x ��- � � i • �` �t�� � �� � +. �- .+- • � •�+ . aM -�r � ��� - - .'�� � � ���� � � �. - �� ♦ � - . -� . . _ � , ' � ' � • • w- �� ♦ • r. - - . � � . <r � . . �� , - �� � - • �� . �` .� � - , • � � �. . � � � .- . � � - . . . � � -� , r- . '.r _ • � : � r- �� �� � - � • � �r�._- � I� . � • .' , - - �'� •, * - - . � • . r • . � - s �: • � - �� � . + , _ � . . � � , � � ` •♦ . ' . -� � ��` . � � ��- � •. # . . . � � __ � � � - � � • - • . w � - w r��� . a ���� • � � ♦ • �� � � . � � ���� � � � � ' � • .s . r � ���� . ����� �- �-�� •�� �- �� ��"' • � w � s , � , �, � �-.• �. � • � w . * , � , , . � -- . - w 1 • •T • , • r r• * � . • •' r-r � • w w r . ♦ ` w • + ��� + --� . + -� -� • •- . .. . . �� _ � . � � ♦ � � .� ���� • ♦ +� . . � � � � ` . � � � sr� r . . � � . � . . . � . - -� - . �. _ _ , . � + � w, � ��; � � - - - . � -� � - � - � � ����� �' • ��� ♦ , �, � � . � � . . �� � . � -w �w � , ♦ • , • �• - � _ � _ . -� • *� . • �- �� - •,���� - . � . � �� �' •�� -w��� ���� `�� - + '��� . � .� * - � � �. �� ���� • • - � �� � . - � • ���� r � �- �� � * ���� • •- -w i� . , � '��,. . �- w�� • • - . . • ��� -• � � - . •. • ;, . � . � r . � ''.�.� �`�',� A l ��� � 1 � ... � R� ��.. � 1 �' .. . . ��� � � ..: ' � * ` , � � a' i. r .,`� � ♦' ♦ ♦�� ' ' ' _ � ♦ ' � Internal Aud►t Authority and Responsib►lities , � - �- w - w . � � _ � • • '' . `� ` . . . � s - � •;• . � • � . � � •. . • � ♦ , � �- � � � � � � . � . � : " � . �, '� ! The City's information, resources, and positions are to be used for official purposes and not: � - � •': � � .� +, •�` � • � � � � „ +, This concept includes the proper handling of sensitive or classified information or resources. �- _� - . . , . . � , , - r. -���� � �• - ��� - ��� � , � .- .. . -� - •- - � . � .�� � r - ' � • • - ♦ -+ � •-, � � • T - � � . ♦ - + i - � � ♦ � . � .� +, ' � '�� ♦ �� � �, - � . ;���� ♦ . . '� . � ��� . • + �� • . . . � � � . � ,' • , � � •,,, , � . -♦ .� - • �. _ � � � . ♦ -� � ` . - • , - .�� �• . -� r � • � • - . _ . , . .� � . � r w .�� � r., ,,-� � � ' r� � ` w � . . � _ , r � � . .. . � ., • � � - - � -� , � -�� � , , _ � � � • �+- . . � • •� • i• � r _ ' ♦ , r - •� �`+ #; � � .' w #'' . � � * ��- � r- • . � - • �. -� �i . �� ���� * � . ♦ � ` R � ��� Tn doing so, Internal Audit will conduct audits and other projects to determine if: � Risks are appropriately identified and managed. � Significant financial, managerial and operational infarmation is accurate, reliable and timely. � � Employees' and City's actions follow palicies, procedures and applicable laws and regulations. � Resources are acquired and used econamically and efficiently, and adequately protected. � Programs, plans and objectives are achieved in an effective ma er. �� C►ty of Denton Internal Audit Authority and Responsib►lit►es � The City aperations are conducted efficiently and economically far effective delivery of public service. � Significant legislative or regulatory issues affecting the City are recognized and addressed. . , w ��� r� - - ��� ♦ r -� � � ' ' • ��� : � ��� � � �' �- - � � : . . � - , . � ,,• ' , r �- . � � � � . �. . � � ���� � � - ���- '��. .,.� . �,, . # - . �; . �, ,�. � . �, . , � , w . - � .. � . . ��; .�• ��'� � • ��t�� . .� � � - - ��• ���� .�t+ - �,. . ,� , � , . - �- � - .�r �• w . • . . _ � • A professional audit staff will be maintained with sufiicient knowledge, skills, experience, and professional certifications to ensure the requirements of this Charge are achieved. Within the budgetary lilnitations, proper funding will be available for the auditors to recruit cotnpetent staffing and perform their dnties. � The City Auditor will perform follow-up reviews to monitor and ensure that management has appropriately and effectively implemented recommended actions by internal audits, external audits and external consultants. At times, management will accept risk identified by audit. The City Auditor will advise City Council if the management is accepting unreasonable rislc. � The City Auditor will assist the Audit/Finance Committee in their responsibility to hire, direct and provide oversight of the External Audit and administer contracts related to services provided by the External Auditor. � The City Auditor shall be primarily responsible for investigating fraud, waste, and abuse, complaints. For this purpose: , . • � . � ��� , . � _ . �� . � . . , ,�� � .� � . . , � � - - , .- -� . � - , . . . � � • . . . -� • . - - +. -� . � � -r - ' � � ' �. _ . � . � , . � . , -� � - # r' -r �� _ . � � '` r- � . � . .+- . • - •� r ,. �,, � . � , � � � � • w +' - • s . - . . �, � .. �- � ,. � . � . �- .� � !-�. • � � �. 4 �,� • , '�� , _:, � � , �, � � ,* . . � ^�.-' r � + • ! -�, � 4 • '# �' �♦ • ,• , � •' • ' ' . # � , � ` - • � _' � ' � � , � � .. � , . # . '• � . . �. . * ' +� � '� � ! � '� :. � .'�. � � ' ' � � ... .���. � • #��'��. . ! '+�. . �...'� 4 . ... � .. ,. � � � .,.. � � ,.. ,. � ��' � Internal Audit Authority and Respons►bilities � �' � . �! ` 1 � ... � # ` � /"!. � # � • i ` ��,. s � � + � w���� ���, � � �'.. '' �� • � ��`�� • �'... �,... I ' • f�. ��. � �.. ����. ���.1 • �' �,,�1 ' "!? �'I� '�`.�s l���.♦ �� � ' . '. f � . # �I i � � �'.: R `� �.. � � �' �: � + �. � ' � ►'��. ' �, ' � *'., " . " "`�� . � �, #,� !'.� ' � # . '�, � . � . , ., .. . � ... � � #' . • • ' 1 ' . r i ' ' • !' ' ! i' � . �' . ' The City Auditor shall provide adrninistrative support to the City's Ethics Board City's Ethics Ordinance. ��;. . �� � - • .�� . , � -� � . � . - � ��� ��� . • � � - � ., . � � - � ���� � - , � � � � � . . . . � � , �, _ . . . - �� - - - , �� � , � w��� , � ��� - � �' � • w� �'�� - � . - �� - - ••�� w � - . � � , � _ .�� . . � -����• � + �� �, � - �� - � . * . . . +� � � , w � . - � . • � . '���� • � - -� . � _ �` •� � � t . ., , � � . �. ��._ , - ���w� •-.' -� • - � w ���� � - � � ' , ,+� - � � w�- ♦ • + , * . # '�,' � !' ! # •, �,, ! .�� 4 . � �� '�, - � - . ; � i� • � • �` �� �- !•, � - ,. . � ' . • #, �, �� � ��- 1 �. � ' � ' ' ' �� � # i • `��. ! ` � ` f''. ��. � # � • -. � ■. ,, '. � � � �.', • � : .. � w ,,1 ♦ ► �- . ' # � ' '� • • . . . ' ' . 'iM "'� � .' � � f !'�,' �� A � �. i •�. . �►' . �'�. . � ' .� ' • I� �. � � � � .. '. �. • • ..�. ` . '���. ! ! ' ., . # ... • ... f � � �. � # �. .: � � . ..... . '. �# - _ � r '� �i,li' . y ' � 1�'1 !'� • • f- '• ' .w .,.� •�:: � ��. ' �1 . . '. ! . ', � ` ! f '�.. ' � ', 1 �, � ' � �. �: � • ` _ � � � ` � ���