Mayor, Council and A&B Advisory Board Members,
In recent weeks the actions of some Audit &Budget Advisory Board members have been criticized  for questioning the Finance departments competent handling of routine accounting matters such as  reserve balances, fuel tax refunds and bank reconciliations.  These criticisms   along with coincidental sunshine concerns by the City Attorney and Manager  have prompted a  more general discussion regarding purpose of the  A&B Advisory Board.
I would offer the following commentary to further discussion in connection with the  upcoming joint meeting between Council and the A&B  Advisory Board,   as a reminder to Council who was closely involved and others who closely followed that unfolding  Finance department debacle of 18 months ago,  and as context for those who did not.
The Finance department deficiencies  that became apparent for all to see in October 2012  did not  happen overnight.  Those  deficiencies were years in the making,  and misdirection regarding those deficiencies had been masking system wide internal control failures  for just as long.    None the less,  despite the tell-tale signs those deficiencies and failures emitted, including the revelations disclosed in the Warren Pike hearing  earlier in 2012,   critical questions that had been asked prior to October 2012 fell on deaf ears.
That all changed with the October revelations when Council came to realize that,   despite  a calm surface and years of  repeated assurances from the former Manager,  Finance Director and Auditor  that everything was OK,   the reality was anything but, and years and years of  audit recommendations addressing internal control weaknesses  had been  implemented  ineffectively – IF AT ALL.
Council,  in the wake of those Finance department failures and mindful of a seemingly cozy relationship that had developed between  Finance staff and the Auditor,   established a volunteer advisory board titled the Audit & Budget Advisory Board.
I believe that Board was established to ensure that a volunteer citizen oversight board,  possessing specialized educational and practical experience in matters of audit and finance would be on  guard  as yet another failsafe,  to alert Council and the People they are elected to represent,  as to any potential concerns regarding the independence and performance of future Auditors,  Managers and Finance Directors alike.
I believe Council thus intended that the A&B  Advisory Board  focus and provide advice  in 4 important areas:

•   The adequacy of comprehensive interim  financial reporting on a  comparative, and  timely basis.

•   The development of understandable  transparent  budgets on which Council could  bestow meaningful approval.

•  The performance and independence of the Auditor, and  the adequacy of his recommendations and their implementation.

•    To review areas of major financial risk exposure – such as YMCA,  Golf Course  and Reclaimed Water  expenditures.

Council subsequently approved the following Ordinance language  setting forth  the  Purpose, duties and function for the A&B  Advisory Board  in  Ordinance 2013-7  ( italics and highlights are mine)

Sec. 2-123. – Purpose, duties and function.

 
(a)          The audit and budget advisory board shall serve in an advisory capacity to thecity council onfinancial matters. The audit and budget advisory board shall represent the community’s interest and serve as an information resource in matters relating to the budget preparation and implementation and independent auditor review.
 
(b)          The audit and budget advisory board shall have the following  duties relating to the annual budgets:

• (1)     To provide the city with input regarding the taxpayers’ perspective in the development of the annual budgets.

• (2)     To review projections and estimates from the city manager regarding revenues and expenditures for the upcoming  fiscal year and future fiscal years.

• (3)     To review interim financial performance including budget variance as presented periodically by the city manager.

• (4)     To advise the city council on service levels and priorities.

• (5)     To submit recommendations to the city council on a timely basis based on the annual budget preparation schedule.

 
(c)          The audit and budget advisory board shall have the following  duties relating to audits:

• (1)     To advise the city council regarding the appointment, compensation, and retention of the independent auditor selected by the city to prepare or issue an audit report or to perform other audits or attesting services for the city.

• (2)     To evaluate annually the independent auditor’s qualifications, performance, and independence taking into consideration the opinion of city staff.

• (3)     To review the draft annual audited financial statements and discuss with management and the independent auditor prior to the filing of the Comprehensive Annual Financial Report.

• (4)     To review the independent auditor’s annual management letter recommendations on internal control and accounting procedures and make recommendations to the city manager and city council regarding appropriate response and resources to address audit findings.

• (5)     To review the annual and interim planned work activities and advise the city council regarding the adequacy of staffing and other resources to accomplish overall scope and plans for internal audits.

• (6)     To review the city’s major financial risk exposures and steps taken to monitor and control such exposures.

If the foregoing is a substantially factual  summation as to the inquisitive role  Council intended this Board play in budget development, dealings with the Auditor, and in assessing Finance department performance …….  Then  a sea change will be required  by the Manager in his acceptance of this Boards role, and in his insistence that his staff provide timely and detailed responses to questions of  inquiry.
Conversely if I have misunderstood or mischaracterized Councils intent to establish a role of  professional  inquisitiveness and guarded skepticism  for this board,  OR  if that is no longer Councils intent ,  Then  Council  needs to so advise by amending its  ordinance language to more clearly define the scope of citizen oversight  it wishes to place on its Finance department  so as to allow all concerned parties to reposition themselves accordingly.
Establishing a watch dog role for this board will not be an easy lift,  as the Manager or any manager for that matter can hardly be expected to welcome any measure of added scrutiny for himself and his staff, AND not all on Council favor transparency in government.
The future direction Of The A&B Advisory Board  be it watch dog or lap dog is Council’s to make and it will not  be made but  in a  political context.   The people  deserved better performance than they received from the from the former long serving Manager and his Finance staff in protecting their interests.  The primary reason this board was established was provide added assurance that would not happen again.
History will record Council’s inaction regarding problems they knew or should have known existed with the Finance department prior to 2012 as tragedy.
I hope it will not record their current  efforts as farce ??
Ted Noftall