School Board considers Audit Committee at Feb 19 meeting

[Betsy Voinovich]

Wow, this is a hot topic.

It sounds like this idea is getting very thorough and serious consideration.

Here is a report of last night's meeting, copied from the LO online front page at http://www.lakewoodobserver.com/read/20 ... -committee

School Board Considers Audit Committee

by Woody Calleri

The February 19, 2013 special school board meeting was called to order at 6:00 P.M. by Council President Edward Favre.

The meeting began with an adoption of the Agenda (Roll Call Vote – All Yes), and commentary on the purpose of the meeting which was to have a planning session to discuss creation of on outside Audit Committee.

President Favre provided background on the issue which included commentary on a phone call he had with the School Board’s auditor, a listing of current information on Audit Committees, and background on other public boards that currently had an Audit Committee (e.g. Lakewood Council, Mentor, etc). He indicated that they needed to discuss 1) the size of the committee, with 3 to 5 being the suggestion of the current auditor, 2) the qualifications of the position and 3) the Audit Committee’s mission statement. He noted that their auditor did not have an example to send them but had suggested that they look at the Lakewood Council’s mission statement.

He then reviewed the Lakewood Council’s mission statement noting that they had 9 members (3 council members and 6 outside citizens (4 appointed by the mayor, 2 appointed by the council), and that their mission statement was one paragraph in length and had been broadly written. The board then reviewed a mission statement from Mentor Schools that Treasurer Penton had located.

Following that discussion, President Favre opened the floor for a discussion concerning the creation of an Audit Committee for the Lakewood School Board. During this discussion the School Board members 1) reviewed the auditor’s commentary on “Best Practices” for public organizations, 2) talked about qualifications for candidates for the Audit Committee (CPA types), and 3) considered the size / makeup of the Audit Committee - 2 to 3 from the Board and 3 citizen appointments.

The discussion continued on these three points. Members of the Board debated which current positions should sit on the Audit Committee with possible options including the Treasurer, Board Finance Chair, and/or Superintendent. Members of the Board debated the qualifications needed for the citizen appointments with possible qualifications included: CPA types, a local banker, a local CFO from a larger company, a local small business owner, a local finance executive with broad based experience.

The board then discussed how often the Audit Committee should meet and when. The consensus was to meet 4 times a year: 1 pre-audit, 1 post-audit, and 2 other times to be determined.

Other topics discussed included 1) the role of Audit Committee – are they Advisory (don’t let them vote) or empowered to act (is so when and how), 2) the scope of the committees charge with possibilities including reviewing the audit and concerns raised during the audit, reviewing best practices and benchmarks, reviewing the School Board 5 year forecast, 3) the need to have someone on the Audit Committee with an understanding of the School Boards goals – possibly the Superintendent, 4) the desire to have the Committee present to the School Board at least once a year - in the Spring after the Audit but before the fiscal year end in June.

The last topic discussed was the length of the term for the Audit Committees members. The School Board members discussed possible terms of 1 year, 2 year and 3 years. They discussed staggering the Audit Committee so that it had “institutional knowledge”. To do this would require terms of either a 2 year of 3 years. The Board discussed the need to always have “new blood” and “fresh ideas” on the Committee and not allowing someone to “park them self in a permanent position.” The initial consensus was for 3 year terms and to stagger them annually so that a new member would be appointed yearly but the board would always have 2 returning members.

At 6:30 pm the Board members agreed to end the discussion for this meeting. President Favre indicated that he would be putting together a proposal based on their discussion for further review and discussion at a future meeting. The School Board then voted to go in to a closed “Executive Session” for consideration of the employment of a public Employee. After that discussion which is not open to the public or reporters, the School Board adjourned.

Bottom Line: The School Board is working to create an outside Audit Committee. The proof will be in the details concerning the effectiveness of the Committee but it is a solid step in the right direction.