Minutes — August 2017 Audit Committee Meeting

2017 Council and Committee Meetings

Attendance

Committee Members Present

  • John Thomas, Chair
  • Kristen Cox
  • Mary Durheim, Council Chair
  • Amy Sharp

Committee Members Absent

  • Scott McAvoy

Guests Present

  • Daniel Graves, Weaver & Tidwell

Staff Members Present

  • Beth Stalvey, Executive Director
  • Martha Cantu
  • Koren Vogel

Call To Order

The Audit Committee of the Texas Council for Developmental Disabilities convened on Wednesday, August 2, 2017, at the Hilton Austin Airport, 9515 Hotel Drive, Austin, TX 78719. Committee Chair John Thomas called the meeting to order at 2:14 PM. A quorum of members was not present until 2:20 PM.

  1. Introductions
    Committee members, staff and guests were introduced.

  2. Public Comments
    No public comments were offered to the Committee.

  3. Review of Internal Audit Activities
    Daniel Graves, Senior Manager from Weaver & Tidwell LLP discussed internal audit activities and presented information for agenda items 4–6. Graves first presented a revised version of the “FY 2017 Annual Internal Audit Report.” This report requires Council approval and is due to the State Auditor’s Office, Governor’s Office, Legislative Budget Board and Sunset Advisory Commission by November 1, 2017 and must be posted to the TCDD website following that submission. He noted that the Council can approve the report with the understanding that revisions will note the selection of a contractor for Fiscal Year (FY) 2018 audit activities. The report highlights audit activities for FY 2017 in Grant Management and Administration as well as follow-up audit activities for FY 2016 of Website Maintenance and FY 2015 Procedures and Controls. The report also notes compliance with the Texas Government Code, reviews consulting services for grantee desk reviews, notes that an external quality assurance review was conducted in FY 2016, and shows TCDD compliance for reports of suspected fraud and abuse. Committee members did not have questions regarding this report.

    Graves next provided details on the “FY 2017 Findings and Observations of Grant Management and Administration.” An overall assessment rating of “strong” was awarded. The objectives of the audit were:

    1. Determine whether internal controls over Grants Management ensure that consistent processes are implemented and designed effectively to manage grant awards, grantee monitoring, sub-recipient monitoring, grant reporting, and close-out.

    2. Ensure that controls over critical requirements within the Grants Management processes are operating efficiently and effectively.

    A total of 41 controls were tested and four findings were identified. The findings included:

    1. Informal Request for Proposals (RFP) Approval: Final approvals to issue RFPs are not documented and retained by TCDD — low rating.

    2. Technical Review of Grant Applications: There is not a formal process in place to document the personnel who completed the technical review of grantee applications — low rating.

    3. Tracking Quarterly Project Progress Report (QPPR) Submissions: TCDD does not have a systematic method to verify all QPPR reports are received on or before their due date — moderate rating.

    4. Submission of Closeout Documentation: There is no tracking mechanism in place to ensure all closeout documentation is submitted prior to approving the final reimbursement payment — moderate rating.

    Graves noted that TCDD management reviewed, accepted and drafted response plans for the findings and that efforts to remediate all findings were to be complete by May 2017.

    Graves next provided the “Update on FY 2015 Audit of Controls and Procedures.” He reported that follow-up field testing and the final report for this audit was conducted in the fall of 2016. Follow-up procedures focused on remediation efforts of 17 findings from the initial FY 2015 audit. A review of 16 of these findings was conducted and the remaining finding was covered with the review of FY 2016 activities. 15 of the remaining16 findings were found to be completely remediated and one was partially remediated. Graves also provided the “Update on FY 2016 Audit of Website Maintenance.” Follow-up field work for this audit was conducted in June 2017 with the final report issued in July. Four of the six findings were fully remediated and the remaining two were partially remediated. Management response indicated plans to fully address these findings by July 2017.

  4. Consideration of Minutes
    This item was initially deferred until a quorum was present. The Committee reviewed the minutes from the November 2, 2016, Committee meeting. No revisions were offered.

    MOTION: To approve the minutes of the November 2, 2016, Audit Committee meeting as presented.
    MADE BY: Amy Sharp
    SECOND: Mary Durheim
    The motion passed unanimously.

  5. Consideration of the Fiscal Year 2017 Annual Internal Audit Report
    The Committee had no further discussion of the report.

    MOTION: To recommend Council approval of the FY 2017 Internal Audit Report.
    MADE BY: Amy Sharp
    SECOND: Kristen Cox
    The motion passed unanimously.

    Dan Graves exited the meeting at this point.

  6. Internal Audit Contract Awards Fiscal Year 2018
    Operations Director Martha Cantu reminded members of the process to select a contractor for internal audit activities for FY 2018 and additional years. Bids were accepted and evaluated by the review panel which consisted of Cantu, Executive Director Beth Stalvey, TEA Contracts Specialist Lorie Williams, and Committee members John Thomas and Scott McAvoy. Cantu discussed two proposals which scored highest and then were presented by the applicants to the review panel. The panel recommended continuing with Weaver and Tidwell. The Request for Qualifications was posted with the parameters of a one-year contract with the option to renew for four years. The contract amount is for up to $40,000 per year.

    MOTION: To recommend Council approval of Weaver and Tidwell as the contractor for TCDD internal audit services for FY 2018 with the option to renew for four additional years.
    MADE BY: Amy Sharp
    SECOND: Mary Durheim
    The motion passed unanimously.

  7. Other Discussion Items
    No further topics were offered for Committee discussion.

Adjourn

Committee Chair Thomas adjourned the Audit Committee at 3:05 PM

Beth Stalvey, Secretary to the Council