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Consent 6.
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| LAFCO |
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| Information |
| SUBJECT |
| Amend the Yolo LAFCo Administrative Policies and Procedures to Add a New Policy Regarding Audits |
| RECOMMENDED ACTION |
| Approve the proposed amendment to the Yolo LAFCo Administrative Policies and Procedures to include the new audit policy. |
| FISCAL IMPACT |
| Staff anticipates that the cost of performing annual audits on a three year cycle will average between $5,000 and $6,000 per year. |
| REASONS FOR RECOMMENDED ACTION |
| Yolo LAFCo currently does not have a policy regarding performance of audits. A policy providing direction regarding the performance of audits would be beneficial. |
| BACKGROUND |
LAFCo recently completed an audit of the last four fiscal years and during this year's budget process, the question came up regarding when it was appropriate for LAFCo to contract for audit services again. The Commission directed staff to consult with Howard Newens, the County Auditor-Controller. Mr. Newens recommended that based on the size of the budget, LAFCo should have an audit performed on a three year cycle, meaning that annual audits would be performed by reviewing three years at one time. Should this recommendation be implemented, LAFCo would contract for an audit in fiscal year (FY) 2014/15 that would review FY 2012/13, FY 2013/14 and FY 2014/15. Costs for these audit contracts could be set aside annually.
In addition, Mr. Newens recommended that for those years where an audit will not be performed until a subsequent year, that financial statements be prepared for Commission review. Auditor staff indicated that this could be prepared by them in approximately 1-2 hours and we would simply pay for the staff time.
In order to convey this recommendation through LAFCo's Administrative Policies and Procedures, staff recommends the following new policy be added:
5.18 AUDITS
LAFCo shall have financial audits performed on a three year cycle (i.e. the auditor reviews the prior three fiscal years at one time). For those interim years when a formal audit has not yet been performed, staff from the County Auditor-Controller’s Office shall prepare a financial statement for Commission review following the close of the fiscal year.
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