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HomeMy WebLinkAbout029171 ORD - 08/23/20111 ORDINANCE PROVIDING FOR THE HIRING AND QUALIFICATIONS OF A CITY AUDITOR; PRESERVING THE AUDITOR'S INDEPENDENCE; PROVIDING ACCESS TO CITY RECORDS; DETERMINING DISTRIBUTION OF AUDIT REPORTS; ESTABLISHING THE POWERS AND DUTIES THEREOF; AND PROVIDING FOR A PEER REVIEW. WHEREAS, on November 2, 2010, voters approved an amendment to the City Charter adding the position of City Auditor who shall be appointed by and report to the City Council; WHEREAS, Article II, Section 29(a) of the City Charter provides for the City Council to appoint a City Auditor; WHEREAS, Article 1I, Section 29(b) of the City Charter provides that the City Auditor shall report to the City Council and have such duties, responsibilities, and staff -as determined by ordinance, including the responsibility to conduct, or cause to be conducted, financial, performance, investigative, and other audits following government auditing standards as promulgated by the Comptroller General of the United States; WHEREAS, modern internal auditing objectively evaluates and reports not only whether government funds are handled properly and in compliance with laws and regulations, but also whether government organizations, programs, and services are achieving the purposes for which they were authorized and funded and whether they are doing so economically, efficiently, and effectively; and WHEREAS, close cooperation between the City Council, City Management and the City Auditor is essential to facilitate the City's commitment to provide cost effective, high quality service to the community; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI: SECTION 1. The Code of Ordinances of the City of Corpus Christi, Texas, is hereby amended by adding a new Chapter 12 1/2 as follows: "Chapter 12 1/2. CITY AUDITOR Section 12 1/2-1. Establishment of the office of City Auditor. (a) There is hereby established the Office of the City Auditor, which shall be directed by the City Auditor who shall be appointed by affirmative vote of a majority of the entire membership of the City Council. (b) The City Auditor must: (1) be a person knowledgeable in performance and financial auditing, public 029171 J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 clean.docx INDEXED 2 administration, and public financial and fiscal practices; (2) be licensed as a Certified Public Accountant or Certified internal Auditor, and (3) exercise due professional care in carrying out his or her responsibilities, and provide reasonable assurance that due professional care will be employed in conducting audits. The City Auditor will establish audit policies and procedures consistent with Government Auditing Standards, established by the Comptroller General of the United States, as well as applicable laws and regulations. Section 12 112-2. Independence, objectivity, and audit standards. (a) The organization and administration of the auditor's office shall be sufficiently independent to assure that no interference or influence shall adversely affect an independent and objective judgment of the auditor. (b) The Office shall be provided a discrete budget sufficient to carry out the responsibilities and functions established in this ordinance, (c) The City Auditor shall establish an organizational structure appropriate to carrying out the responsibilities and functions of this ordinance. (d) No person shall be appointed to the position of City Auditor who has been Mayor, Council Member, or City Manager of the City during a period of five years prior to the date of the City Auditor's appointment. In no case shall the City Auditor be related, by affinity or consanguinity within the second degree, to the Mayor, any Council Member or the City Manager. (e) The City Auditor shall not be actively involved in partisan political activities of the City of Corpus Christi. (f) Neither the City Auditor nor any member of the Office staff shall conduct or supervise an audit of an activity for which they were responsible or within which they were employed during the preceding two years. (g) The City Auditor shall adhere to Government Auditing Standards, insofar as possible, when conducting the City Auditor's work and will be independent as defined by those standards. (h) The responsibility for selection of audit areas shall initiate with the City Auditor, with due consideration of the interests and concerns of the City Council and City Manager. To accomplish this: (1) no less than thirty (30) days prior to the beginning of each fiscal year the City Auditor shall submit an annual audit plan to the City J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 cFean.docx 3 Council through the Council Administrative Committee for review and comment. The plan shall include identification of the scope of each audit to be conducted in terms of the organizations, services, programs, functions, and activities to be audited and in terms of the potential audit elements to be addressed. The Council Administrative Committee shall forward the plan to the City Council for City Council review and final approval; (2) the annual audit plan may be amended during the year, following notification of the Council Administrative Committee and due provision for comment. Such amendments may be initiated by the City Auditor, or requested by the Council Administrative Committee, or the City Manager, or City Manager's designee; any amendments to the annual plan must be reviewed by and approved by City Council; (3) Results of special audits shall be distributed in the same manner as all other audit reports, as provided in Section 12 1/2-5, Preparation and Release of Reports, of this ordinance; (4) if the City Auditor determines that there is serious concern regarding fraud, abuse, or illegality, or that the scope -of.. an audit • in progress should be expanded as the result of any findings, the City Auditor is authorized to initiate spontaneously and conduct, or expand the scope of, an audit beyond that approved in the work program. The City Auditor shall notify the Council Administrative Committee of the change. (5) Notwithstanding the calendar identified above in subsection (h)(1), the initial audit plan for remainder of the fiscal year ending July 31, 2012 shall be prepared by the City Auditor and submitted to Administrative Committee, for review and comments by Administrative Committee, within thirty (30) days of appointment of City Auditor. The initial audit plan shall then be submitted to City Council for its review and final approval. (i) Within the budget approval process and personnel policies established by the City Council for all departments, the City Auditor shall have the power to appoint, employ, and remove such assistants, employees, and personnel as he/she may deem necessary for the efficient and effective administration of the affairs of the office of the City Auditor. All employees of the City Auditor's Office shall be in the -exempt from classified persenne1 service - - _ • - _ W designated by the City Auditor. (j) Neither the City Manager, nor Assistant City Managers, nor the Council nor any of its members shall in any manner dictate the appointment or removal of any such officer or employee whom the City Auditor is empowered to appoint, subject to any duly authorized grievance procedure. J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 clean.docx 4 (k) As provided in the City Charter, Article II, Section 29(a); the City Auditor may be removed only by a majority of the City Council. Section 12 1/2-3. Council review. (a) The appointment of Council Administrative Committee members will be decided annually in August. However, if a committee has not been appointed, then the duties of the Council Administrative Committee as described in this ordinance shall be undertaken by the entire City Council. (b) The duties of the committee with respect to the City Auditor are described below: a. To review and provide comments regarding the City Auditor's annual work program, to be formally reviewed and approved by City Council each year; b. To monitor the City's internal controls through the results of external audits, and internal audits and other activities of the City Auditor; and c. To monitor audit results and follow-up activities of the City Auditor The City Auditor shall have direct communication with the Council Administrative Committee, and attend all Council Administrative Committee meetings. Section 12 1/2-4. Access to records and property. All officers and employees of the City shall provide free and open access to and furnish the City Auditor or employees in the Office of the City Auditor with requested information, records, books, accounts, internal memoranda, writings and tapes, reports, correspondence files, computer data, reports, money, and other information and property in their custody. In addition, they shall provide access for the City Auditor to inspect all property, equipment, and facilities within their custody and observe any operations for which they are responsible. Section 12 1/2-5. Preparation and release of reports. (a) Each audit shall result in a report which shall: (1) Be transmitted in draft to the City Manager, who will provide a written response to the City Auditor regarding the audit findings and recommendations within an agreed time frame. The response will indicate agreement or disagreement and reasons for any disagreements, and what actions, if any will be taken. The City Auditor will include the responses in the final report unless they are not received within the established time frame; (2) Be submitted in final form to the City Council and the City Manager, and shall be retained in the City Auditor's office as a permanent record; (3) Adhere to reporting standards for financial and performance audits as described in Governmental Audit Standards; J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 clean.docx 5 (b) When appropriate, the City Auditor may issue other reports as needed which provide information when an audit is not required. These reports present work that is generally advisory in nature. Section 12 1/2-6. Powers and duties. (a) The City Auditor shall systematically and continuously examine the works of all City operations to identify opportunities to reduce costs, increase efficiency, quality, and effectiveness, or otherwise improve management of City programs and services. (b) Scope of work. The City Auditor is empowered to conduct performance and other audit work to determine whether: (1) Activities and programs being implemented have been authorized by the Council, or some other legal authority, and are being conducted in a manner contemplated to accomplish the obiectives intended by the Council or other authorizing authority; (2) The effectiveness of organizations, programs, activities, functions or policies, and the extent to which desired results or benefits are being achieved; (3) The audited entity is acquiring, protecting, and using its resources (such as personnel, property, and space) economically and efficiently, and the causes of inefficiencies or uneconomical practices; (4) The audited entity is in compliance with Council or other legally imposed mandates regarding efficiency, economy, effectiveness, or expenditure of public funds: (5) Systems of administrative and accounting control have been established by management to effectively, economically, and efficiently carry on the City's operations (6) Financial and performance reports are being provided that disclose fairly, accurately, and fully all information that is required by law or other established or state criteria that is necessary to ascertain the nature and scope of programs and activities, and that is necessary to establish a proper basis for evaluating the results of programs and activities. (c) Follow-up on audits. The City Auditor shall ensure accountability and implementation of a continuous improvement process by an annual status report of prior audit recommendations. Accordingly: (1) Six months after the transmittal of an audit report to the Council, the City Auditor shall request a status report on actions taken by appropriate officials in response to the audit recommendations; (2) The City Auditor may request additional periodic status reports, and J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 clean.docx 6 conduct follow-up review as needed; (d) Report of Irregularities. If the City Auditor detects apparent violation of law, or apparent instances of misfeasance or nonfeasance by an officer or employee, or information that indicates derelictions may be reasonably anticipated, the Auditor shall, after consultation with and advice from the City Attorney, immediately report the irregularities to the appropriate authority, including the City Manager. If the irregularity is criminal in nature, the Auditor shall also notify the appropriate chief prosecuting attorney. (e) Contract auditors, consultants, and experts. Through appropriate procurement requirements and within the limits of the adopted budget, the Auditor may obtain the services of certified or registered public accountants, qualified management consultants, or other professional experts necessary to perform the Auditor's duties. (f) The City Auditor shall meet with the external auditors to discuss pertinent matters, review the financial statements, auditors' opinions, and management letters resulting from the annual financial audit. Section 12 112-7. Peer review. (a) Authority Statement — The City Auditor's Office shall within three years of date of this ordinance be subject to peer review and thereafter not less than once every three years by a professional, non-partisan, objective person or group, comprised of auditors and other professionals with appropriate government auditing expertise and experience. (b) Scope of peer review — The peer review shall determine compliance with Government Auditing Standards and the quality of audit effort and reporting, including: (1) General standards such as staff qualifications, due professional care, and quality assurance; (2) Fieldwork standards such as planning, supervision, and audit evidence; (3) Reporting standards such as report content, presentation, and timeliness. ,(c) Reporting — A copy of the written report of the peer review shall be furnished to each member of the City Council after review and approval by the Council Administrative Committee. (d) Cost — The cost of the peer review, including reasonable travel and living expenses, shall be paid from funds budgeted specifically in the City Auditor's budget. J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 clean.docx 7 Section 12 112-8. City Auditor Vacancy —Selection process. (a) At such times when a vacancy occurs in the Office of the City Auditor, the first principal assistant shall act in the capacity of City Auditor pending the appointment of a new City Auditor. (b) The Council shall appoint an ad hoc nominating committee to recommend to the City Council candidates for City Auditor. The committee shall consist of five members, including a chair and vice -chair selected by majority vote of members, meeting the following qualifications: (1) Three members shall be members of the City Council nominated by the Council Administrative Committee. (2) One member shall be an at Targe City of Corpus Christi resident. (3) One member shall be the City Manager or his or her designee. (c) The full committee shall, within 15 days of its appointment, hold its first meeting to consider applicants to serve as City Auditor. Within 90 days of its first meeting, the committee shall recommend to the City Council three candidates selected by a majority of the committee members. The City Council shall, within 15 days after receipt of the recommendation of three candidates, select a City Auditor." SECTION 2. If for any reason any section, paragraph, subdivision, clause, phrase, word or provision of this ordinance shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction, it shall not affect any other section, paragraph, subdivision, clause, phrase, word, or provision of this ordinance for it is the definite intent of this City Council that every section, paragraph, subdivision, clause, phrase, word or provision of this ordinance be given full force and effect for its purpose. SECTION 1 This ordinance is effective upon final approval of City Council. SECTION 4. Publication shall be made in the official publication of the City of Corpus Christi as required by the City Charter of the City of Corpus Christi. J:\LISA\2011 Ordinance\AUDITOR ORDINANCE Chapter 12 1 2 clean.docx That the foregoing ordinance was read for the first time and passed to its second , 2011, by the following vote: reading on this the r,2 day of Joe Adame Chris N. Adler Larry Elizondo Kevin Kieschnick Priscilla G. Leal David Loeb John E. Marez Nelda Martinez Mark Scott That the fogoing ordinance was read for the second time and passed finally on this the 023 day of A q L ast , 2011, by the following vote: Joe Adame Chris N. Adler Larry Elizondo Kevin Kieschnick Priscilla G. Leaf /413 -n -f David Loeb John E. Marez Nelda Martinez Mark Scott th PASSED AND APPROVED, this the? day of ATTEST: Armando Chapa City Secretary APPROVED as to form: By: Lisa Agu for the ,2011 Assistant City Attorney y Attorney , 2011. 4124,:egte Joe A ame Mayor 029171 State of Texas County of Nueces } } PUBLISHER'S AFFIDAVIT CITY OF CORPUS CHRISTI Ad # 5975977 PO # Before me, the undersigned, a Notary Public, this day personally came GEORGIA LAWSON, who being first duly sworn, according to law, says that she is LEGAL SALES REPRESENTITIVE AND EMPLOYEE OF THE PUBLISHER, namely, the Corpus Christi Caller -Times, a daily newspaper published at Corpus Christi in said City and State, generally circulated in Aransas, Bee, Brooks, Duval, Jim Hogg, Jim Wells, Kleberg, Live Oak, Nueces, Refugio, and San Patricio, Counties, and that the publication of, NOTICE OF PASSAGE OF ORDI NANCE NO. 0291 which the annexed is a true copy, was inserted in the Corpus Christi Caller -Times on the 8/2912011, 8/29/2011. $ 88.93 1Time(s) LEGAL SALES REPRESENTIVE On this day of , 2 OU I certify that the attached document is a true and an exact copy ade by:•ublisher. MICHELLE JOYCE CABRERA MY COMMISSION EXPIRES WO 19, 2012 Notary Public, S . of Texas 1 4E a: August 29, 2011 » CALLER TIMES Legal Notices 1110 N0T CE :Qt= PASSAGE OF ORD). NANCE NO. 020171 Providing for the hir- ing & °qualifications'of a City Auditor.;.. pre- serving the. Auditor's independence;pro- viding access to City records determining distributionof audit