PERALTA COMMUNITY COLLEGE DISTRICT
AUDIT AND FINANCE COMMITTEE MEETING
MINUTES
Date:
Location:
Start time:
End time:
May 10, 2007
Chancellor’s Conference Room, District Office
4:10 p.m.
6:20 p.m.
PRESENT:
Bill Withrow, Chair
William Riley, Trustee
Abel Guillén, Trustee
Cy Gulassa, Trustee
Gail Waiters, Inspector General
Tom Smith, Vice Chancellor for Finance and Administration
Margaret Haig, Vice Chancellor for Educational Services
Joseph Bielanski, President, District Academic Senate
AGENDA:
1.
2.
3.
4.
5.
6.
Review and approve the agenda.
Review and approve the minutes of the April 12, 2007 meeting
Status of contract with the Pineapple Group.
Status of budget and current financial condition.
Report by the Inspector General.
Discussion with respect to the review by the IG of the International
Education Department.
7. Discussion and recommended actions in conjunction with the review
of the Administrative Center Renovations.
8. Discussion and recommended actions with respect to Health, Safety
and Security issues throughout the Peralta Colleges and the Fast
Track Policies that need to be put into place.
9. Discussion and recommended actions that could/should be put into
effect to control assets of the Peralta Colleges that historically have
been expensed upon receipt
10. Discussion and recommended actions to facilitate a coordinated
collaboration of the goals, strategies and actions of the Inspector
General and the Risk Manager/General Counsel (postponed until next
meeting).
11. Discussion and recommended actions deemed appropriate for the
Inspector General to establish an audit routine relative to the
Accreditation Process (postponed until next meeting).
12. Discussion and recommendation actions to be taken with respect to
periodic audit of the purchasing role from the stand-point of quality
control and communications (postponed until next meeting).
Chair Withrow opened the meeting at 4:13 p.m. requesting agenda comments. IG
Waiters requested that Item #6 be presented at 5:00 p.m. when VC Haig would be able
to join the meeting. Chair Withrow indicated that Trustee Guillén would also be
attending the meeting at 5:00 p.m. Chair Withrow discussed that the intent of the
agenda is to have a placeholder for items and that some may be discussed at the
following meeting. His intention is to not go beyond two hours for the committee
meeting.
May 10, 2007
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Chair Withrow requested comments on the minutes from the April 12, 2007. No
comments.
Pineapple Group (VC Smith)
VC Smith distributed contract information with Dale Scott and Mark Harris (the
Pineapple Group) which had been requested by Trustee Guillén. Mr. Harris has not
submitted a new contract yet, but it should have the District paying approximately
$30,000 for software on an annual basis plus other expenses. VC Smith mentioned
that if this District is paying $30K for software, we want to look at it first. It is a
licensed software that only licensed bankers can use. District will reimburse the
Pineapple Group and instead of paying eight (8) basis points, we will pay them six (6)
basis points.
Chair Withrow agreed that the committee would like to see what the software is going to
do prior to finalizing an agreement. One of the reasons the District wants the software
is for an ongoing assessment of risk. VC Smith said we paid $60K last year to
Pineapple Group and we really didn’t get a lot out of it. He would like to see some
deliverables and check out the product to see if it meets our needs prior to paying
$30K.
VC Smith stated we are hoping it is the type of software to be able to do the risk
management they are looking for. Chair Withrow, for the benefit of committee,
indicated we have a substantial commitment to oil and we need to have sense of what
this is doing to our risk profile. We are currently mirroring what CalPERS is doing. As
CalPERS makes adjustments, we need to see if we want to make the same. VC Smith
asked if the Pineapple group worked for the District or the Committee. Chair Withrow
stated he prefers the District. VC Smith asked this to determine whether travel and
reimbursement of expenses should come to the Committee or Chancellor. Chair
Withrow stated we are policy body, we don’t want to be pulled into day to day
transactions. If it becomes more complex we may want to look at it at that time.
VC Smith proposed that the Committee approve the essence of the contract which is six
(6) basis points, travel and expenses with district approval, and with Thuy reviewing the
final contract and then bring to Board on May 22nd.
ACTION: Upon a motion by Trustee Riley, seconded by Trustee Gulassa, the
Committee voted to approve to create contract. The committee voted
unanimously to approve the action.
VC Smith indicated he will approve travel by the Pineapple Group before it takes place.
VC Smith now receives reports on each one of their segments so he can see what is
happening.
Financial Statements (VC Smith)
VC Smith distributed income statement for the four colleges for funds 1-10. Cash
based accounting system. VC Smith mentioned colleges good at staying within their
budgets. Mr. Bielanski asked about information for Laney. VC Smith said that he
inadvertently left Laney out and will provide to the committee.
VC Smith distributed a document from legislative committee. AB 1305, basically states
if you have over the 5% reserve, you are required to hire full time faculty. Trustee
Gulassa felt the rationale is that some districts go over the 5% reserve and they have a
May 10, 2007
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lot of money in reserves, this is pressure to have them use it. You can not make long
term commitment without a reserve.
VC Smith also handed out an actuarial report for state employees, does not include
University of California, K-12 or Community Colleges. Liability is $48 billion just for
state employees which covers 130,000 retired state and CSU employees, plus
dependents. The governor has appointed a bipartisan commission called the Public
Employee Post-Employment Benefits Commission which is going around state seeking
testimony. VC Smith has been asked to testify in front of commission in Los Angeles.
Chair Withrow said commission has quasi-subpoena authority. VC Smith will be on
panel to do 15 minute background on what District did, with discussion following.
Peralta will be only school on panel. The date is May 31st. VC Smith asked Trustee
Withrow to go with him.
VC Smith could do a short presentation of document at the next Board meeting; could
take Prop 98 funds to help fund the ARC. Chair Withrow said it is questionable of
whether that is legal. VC Smith indicated about 400 people will be there, heavily
covered by the press.
Chair Withrow asked is this is all vested. VC Smith said no one knows the answer to
that. Question came up of whether you can you go back and charge the retirees,
legally; they don’t know the answer to that.
Chair Withrow asked about the status of the Dimally bill. The bill that requires benefits
for adjunct faculty. VC Smith indicated he does not know where that is right now.
Currently our part-time faculty receive partial benefits. We are getting some money
from the state, any adjunct who wants benefits pays 50%.
Review of Administrative Center (IG Waiters)
IG Waiters sent Board a memo regarding the budget for Project 2940, District
Administrative Center Renovations managed by General Services. It is the IG’s opinion
that the project idd not exceed its project budget.
Health, Safety and Security Issues: Fast Track Policies
Chair Withrow indicated that an item came to the full Board regarding a pipe leak at
Laney College for approval to fix it; his concern was why this was coming to the Board
and not just getting fixed. Chair Withrow felt that the Chancellor would be the one for
this line of approval. VC Smith stated, if health and safety issue, they just repair it.
They don’t even need to do paperwork on the front end.
The question came up of having the Risk Manager attend Audit and Finance
Committees. IG Waiters suggested it may not be necessary to have risk manager at
each monthly meeting but maybe she could do a report to present to the committee of
what alerts are out there. Chair Withrow mentioned he doesn’t want bureaucracy to
put in hurdle to affect something that may be an emergency in nature.
VC Smith is working with Local 39 in contract negotiations on this. He indicated the
District is getting the engineers, custodians, etc. trained in these types of emergencies.
As far as Facilities [Department] is concerned, they call immediately to get these things
done.
Trustee Gulassa, mentioned there were some specific problems, such as the Laney
nurse going on sabbatical, the union would not allow a nurse to be replaced and an
May 10, 2007
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emergency came up. None of the classrooms have any information on safety, no one to
call, no room capacity. At this point, just basics needed to be clarified. IG Waiters
suggested Joanne [Baldinelli, Risk Manager] could contact the Oakland fire marshal to
see if they have posters she could use.
Chair Withrow asked what the policy is if no nurse was available. They were told to call
911.
Asset Controls
This is a long-term issue. The question came up of what other community colleges do.
IG Waiters indicated that Peralta has done some. There is some inventory control. Her
concern is about the annual or bi-annual physical assessment of it; she has some
internal control checks for fixed assets. It should not be that difficult to shore it up.
Chair Withrow questioned whether the District should have a policy to address asset
control. VC Smith indicated the District, Karen Ulrich’s department, is developing an
intake and exit interview that will have checklist of when things are returned.
With Measure A funds, a name has to be associated with any computer issued.
Trustees will set tone by signing a form of what equipment they have. Chair Withrow
currently has an uneasy feeling about whole process and questioned when VC Smith
expects to have asset control portion of PeopleSoft up and running. VC Smith is
contracting with CIBER to have up and running within three (3) months. Minh Lam
[consultant], if we get him back, we can move very quickly.
IG Waiters requested, to readdress item on Fast Track Policies, asking if Chair Withrow
had identified an ownership of some of the items. That is, is ownership Risk Manager?
Chair Withrow indicated from our [Board’s] standpoint it is the Chancellor. IG Waiters
asked if Audit and Finance Committee discussions get back to the right person. Chair
Withrow will check in with Chancellor; things are moving in the right direction and he
does not want the Board to cause an obstacle.
International Education Department Review (IG Waiters)
The Inspector General report has been completed, is confidential and has been
distributed to the Trustees, Chancellor, VC Haig and AVC Ng. AVC Ng’s response was
due today, May 10th. IG Waiters received verbal response from VC Haig that no written
response was coming. IG Waiters indicated that since she did not receive a response
and no request for extension, her final report will speak to “no management response”
which defaults to no factual inaccuracies. There were a total of ten (10) findings and
forty-six (46) recommendations. The default does not automatically remove
confidentiality from the report; that will happen when the Board approves the report for
public distribution.
Trustee Guillén arrived at 5:25 p.m. Chair Withrow brought Trustee Guillén up to date
with meeting and International Education discussion regarding recruitment, standards,
payment of fees, etc. The Audit and Finance Committee is not ready to make this report
public and decided to speak with Chancellor regarding findings prior to issuance of final
report.
ACTION: Upon a motion by Trustee Gulassa, seconded by Chair Withrow, the
committee has agreed not to release the findings of the Inspector General
report on International Education at this time, but instead will have Chair
Withrow prepare a letter to the Chancellor requesting information on report.
There was unanimous committee approval
May 10, 2007
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Agenda items #10, #11 and #12 will be postponed until the next meeting.
Next meeting will be June 14, 2007 from 4:00 p.m. to 6:00 p.m. in the District Office
Boardroom.
Meeting adjourned at 6:20 p.m.
May 10, 2007
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