SLC INDUSTRIAL DEVELOPMENT AGENCY
AUDIT AND FINANCE COMMITTEE
AUDIT ENTRANCE CONFERENCE
Audit Dates: January 20 – 23, 2015
Date: January 22, 2015
Time: 9:58 AM
Present: Audit and Finance Committee: (Andrew McMahon - Committee Chair, Mark Hall, R. Joseph
Weekes, Jr.); Pinto, Mucenski, Hooper and VanHouse & Co.: Derek VanHouse, Andrew Smith; St.
Lawrence County IDA staff: Patrick Kelly, Tom Plastino, Kimberly Gilbert, Lori Sibley.
Tom Plastino, Chief Financial Officer for the St. Lawrence County Industrial Development Agency,
distributes a summary of significant events that occurred in 2014, which staff had given to the auditors
on the first day of the audit. He reports that the auditors began their fieldwork on January 20. He then
asks Derek VanHouse, Lead Auditor for Pinto Mucenski Hooper VanHouse & Co. (“PMHV”), to inform
the group of the status of the audit. Mr. VanHouse informs the group this is the third day of the field
audit and so far no issues have arisen that need to be addressed.
Mr. VanHouse notes that part of their work is to do risk assessment prior to the audit start date (mainly
for the loans portion of the audit). He also reports that all the notes in the audits will be reviewed by the
time they complete their field work Friday, January 23rd. PMHV staff plan to plug in numbers after the
texts of the notes have been finalized. Then, they will schedule a meeting with Patrick Kelly and Tom
Plastino to finalize the notes.
Mark Hall enquires into cash payments for loans and the risk factor involved. Kimberly Gilbert responds
by stating an occasional Microenterprise Revolving Loan Fund borrower will make a payment in cash,
maybe 2-3 times per year, in an amount that is typically under $500.00. She adds that all payments in
cash are noted as such on the deposit slips.
Andrew McMahon enquires into the risk profile for an organization like the SLC Industrial Development
Agency compares to other agencies they review. Mr. VanHouse notes that the highest level of risk is
associated with the Industrial Development Agency. There are new loans, follow up on delinquent
loans, and tests of internal controls. The greatest risk is in disbursement of funds and receipt of payment
on loans. Kimberly Gilbert notes an annual risk assessment is done with a focus on payroll procedures.
Mrs. Gilbert reviews the various checks and balances that are required for accepting and recording
payment, as well as disbursement of funds, all of which involve a verification from several staff
members within the office.
Andrew Smith, Auditor for PMHV, notes that inter-fund transfers between the entities are audited to
make certain everything is recorded on both sides of each transaction. With several projects spanning
multiple years and involvement with several entities, the nature of activities can be quite complex.
Andrew McMahon asks the auditors if they are checking with other entities to verify what was paid out.
Mr. VanHouse notes that a periodic check will be done. Mr. Smith elaborates, noting that independent
confirmations of all bank balances are secured but loan balances with various entities receiving funds
are more likely to be sampled. Mr. Smith notes that the verification process within the office is quite
detailed.
Mark Hall asks for recommendations on how to lower the risk factor when receiving invoices for work
performed from contractors. Mr. Plastino admits the SLC IDA is fortunate to have a Facilities Manager
on staff who is actively involved in the work the contractors are doing. He is the first to verify all
invoices received, page by page, and immediately questions any expense that was not anticipated. Mr.
Plastino also notes that the Facilities Manager visits the sites while workers are performing their duties
and has direct involvement in the entire scope of the project. Mrs. Gilbert adds that backup
documentation is required for all invoices prior to disbursement of funds so a paper trail is always
available. Mr. Smith acknowledges dealings thus far have been typically one contractor per project
rather than multiple contractors, so it is conceivable that more control of the risk might be necessary for
more complex projects. Relative to the Newton Falls Railroad project, Mr. Smith notes thus far all
expenses have been fully reimbursable. It is anticipated that the risk will minimize each year as the
project moves forward.
In regards to Authorities Budget Office (“ABO”) requirements, Mr. Hall asks if the audit team looks at
what the state requires to make certain the IDA is in compliance. Mr. VanHouse acknowledges that
ABO requirements are not dealt with specifically in the audit. However, Mr. Smith notes that they
verify that policies have been established as required by directives issued by the ABO; the auditors
verify such that such documents are in place (e.g., the Whistle Blower Policy and the Conflict of Interest
Policy). The Audit Team will make certain these policies are reviewed annually where applicable.
IDA staff exit the room at 10:21 am to allow IDA Audit and Finance Committee members the
opportunity to discuss matters confidentially and directly with the auditors.
With no further questions or comments, the audit entrance conference concludes at 10:30 am.