PERALTA COMMUNITY COLLEGE DISTRICT
AUDIT AND FINANCE COMMITTEE MEETING
MINUTES
Date:
Location:
Start time:
End time:
February 11, 2009
Chancellor’s Conference Room, District Office
5:15 p.m.
6:45 p.m.
PRESENT:
Bill Withrow, Chair
Cy Gulassa, Trustee
William Riley, Trustee
Thomas Smith, Vice Chancellor Finance and Administration
Gail Waiters, Inspector General
Elihu Harris, Chancellor
Joseph Bielanski, President, District Academic Senate
Yvonne Dorrough, Associate VC, Budget and Finance
Heidi White, VTD
Bill Rauch, VTD
Steve Haigler, VTD
AGENDA:
1.
2.
Review and approve the agenda.
Review and approve the minutes from December 11, 2008 and January 23, 2009
meetings
3. Discuss the status of the external audit for FY 2007-08 and discuss issues involved and
strategies and timeline to address deficiencies and recommendations.
4. Discuss written report on the current status of all significant and material weaknesses
that were documented in the External Audit Report for the fiscal years 2005-06 and
2006-07.
5. Review external audit report of the Peralta Colleges Foundation.
6. Review external audit report of the Measure expenditure process.
7. Review status of California State Budget and prognosis for impact upon The Peralta
Colleges.
8. Report by the Inspector General.
9. Review report on the financial issues involving the IT Department.
10. Discuss the progress to date in developing and implementing Program Based Budgeting
techniques for the FY 2008-09.
11. Review the status of the Retiree Healthcare Trust Investments and modification of Asset
Allocation to ensure that we are adequately positioned for the future economy and
financial market.
Chair Withrow opened the meeting at 5:15 p.m. Minutes will be moved to the March meeting.
Item 3 – Discuss the status of the external audit for FY 2007-08 (Heidi White)
Ms. White distributed an update and status of the FY 2007-08 annual Audit. As of January 30, 2009 the
fieldwork for the audit is completed and the auditors have received sufficient information from the District
staff to complete the report. A draft should be ready next week with a final report by February 27, 2009.
February 11, 2009
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The federal compliance audit is completed with an audit of Student Financial Aid at all four colleges, as well as
the VATEA (vocational education) and TechPrep programs. The state compliance portion is also complete.
VTD will provide an opinion on financial statement – same process this year. There will be a disclaiming
opinion on capital assets which is definitely an accounting issue – some issues capitalized that shouldn’t be
and some that should. For the Federal and State Compliance opinions – instances of noncompliance were
noted that will result in a qualification of the opinion.
Ms. White discussed two areas – the ability of the District to correct prior year problems. Last year the audit
was completed in March, this year by end of February – it doesn’t give the District a lot of time to get things
fixed. Seventeen items were still an issue. When looking through comments at end of year. Corrective action
plan by management should be where auditors can check on results. The other issue from last year is the
financial accounting system contributed to the delay in audit report and process of getting updated
information.
Three levels of comments – control deficiency, control in place but there is a slight deficiency, significant
deficiency, someone out and no one took there place; a material weakness, we find out that nothing has been
done for a year and it effects your accounting system. Drafting what has been significant deficiency will have
by Friday to management for factual check. Vice Chancellor Wise Allen will be at next Audit and Finance
Committee to talk about the financial aid issues.
As a result of audit, we have adjustments with A/P, increased payables, accruals of A/R that did not take into
account proper cut off. One of the primary reasons the audit comments remain open is the lack of a
functioning Internal Audit department. The Internal Auditor would assist in the implementation of Corrective
Action Plans and should be responsible for internal audits of the four college campuses, as well as the District
Office. An Internal Auditor performing these functions on a full-time basis will provide the Audit and Finance
Committee and the Board assurance that policies and procedures are in place and functioning at all locations
throughout the year.
Input of what is most important going forward: 1) need for internal audit function. Someone who would take
correction action plan, prepare implementation plan and follow through on internal audits at each college.
We recommend that you consider this position; 2) completion of the installation of the PeopleSoft accounting
system.
Ms. White distributed Internal Audit Standards information. LA County has their own PeopleSoft system; all
community colleges work out of the one system. No other District they audit has PeopleSoft. All California
State universities on PeopleSoft.
Item 4 – Discuss written report on the current status of all significant and material weaknesses that
were documented in the external Audit report for FY 2005-06 and FY 200607.
The report was distributed and reviewed under Item 3 above.
Item 5 – Review external Audit report for the Peralta Colleges Foundation
Audit for PCF will be ready next week and e-mailed to the committee.
Item 6 – Review external Audit report for the Measure A bond
Measure A audit for FY 2007-08 is just getting started. Jennifer Lenahan will e-mail FY 2006-07 Measure A
audit report to committee.
Item 7 – Review status of California State Budget and impact on the Peralta Colleges
No report. The District is not borrowing from Measure A yet.
February 11, 2009
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Item 8 – Report by the Inspector General
Ms. Waiters started reviewing Board Policy (6.85) for Independent Contractors – started working on policy
and administrative issues. The next committee meeting will be spent on policy discussion then move onto IG
Waiters concerns regarding how policy is implemented and internal controls.
Development of a fraud prevention policy should be at this committee. Ms. Waiters distributed AGA rules on
what should be in the charter of this committee.
Item 9 – Review report on the financial issues involving the IT Department.
There has been a request for Mojdeh Mehdizadeh (IT consultant) to come back and have a workshop – in
closed session.
Item 10 – Discuss progress in developing and implementing Program Based Budgeting techniques for
FY 2008-09.
No report.
Item 11 – Review the status of the Retiree Healthcare Trust Investments and modification of Asset
Allocation.
No report.
The meeting adjourned at 6:45 p.m.
Recorded by: Jennifer Lenahan
February 11, 2009
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