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Home My WebLink About4779 ORDINANCE NO. 4779 AN ORDINANCE amending Chapter 2.18 Audit Committee and City Auditor as created in the City of Bremerton Charter, Section 18. THE CITY OF BREMERTON DOES HEREBY ORDAIN: Section 1. Chapter. This chapter is hereby amended in the Bremerton Municipal Code to read as follows: CHAPTER 2.18 AUDIT COMMITTEE AND CITY AUDITOR 2.18.010 PURPOSE. The purpose of the Audit Committee, as provided in the Charter of the City of Bremerton, Article III, Section 18, shall be to assure elected City officials and management that the internal auditing of the municipality and its departments, programs and activities is performed in accordance with standards for the practice of internal auditing and with professional standards of conduct. "Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes" as defined by the Institute of Internal Auditors. To this end, the Committee will: (a) Conduct annual appraisals of the City Auditor's performance as to effectiveness and efficiency; including a comparison of planned and actual audits; (b) Review and approve the internal audit work schedule and planned budget for the coming year; (c) Review results of external and internal audits, prior to release of internal audit reports, with specific attention to: (1) restrictions (2) cooperation received (3) audit findings (4) audit recommendations (d) Review and approve appropriate special audit requests; (e) Review and recommend revisions to policies relating to unethical and illegal procedures; (f) Ensure the City Auditor's independence of management; (g) Meet regularly with the City Auditor; (h) Help to assure that management is exercising due professional care. 2.18.015 Scope of Work. The three fundamental characteristics of internal auditing function include 1) risk assessment and control, 2) operations: effectiveness, efficiency, and improvement, and 3) compliance with laws, regulations, and contracts. The scope of internal auditing will include but not be limited to: Audit Committee & City Auditor. Ord Revised 1 O/10/01 Page I (a) Assurance Services - traditional audits, investigations and testing, performance evaluation, limited assurance. (b) Consulting and operations improvement services - Business process reviews, internal control education and other training as requested and approved by Audit Committee, and self-assessments reviews. (c) Ethics Compliance reviews per BMC 2.96 and compliance with all applicable Federal, State and local laws and regulations. (d) Serve as a liaison between external auditors to assure audit coordination. 2.t8.020 MEMBERSHIP. There shall be an Auditing Committee consisting of two Council members and an independent Certified Public Accountant to be designated by Council, and two Bremerton residents selected by the designated members of the Audit Committee. The City Council may designate by majority vote one alternate member to serve in the absence of either or both of the appointed Council Members. The Audit Committee shall appoint the City Auditor to serve at the pleasure of the Audit Committee. The City Auditor shall only be removed by the majority vote of the entire membership of the Committee sitting as a whole. In order to foster continuity, dudng the first meeting in January, the Committee shall elect one of its members as Chairman to serve a term of one (1) year. The Chairman will conduct the order of business at meetings, coordinate communications of the committee, and perform other duties as specified by the Committee. 2.18.030 TERM. Audit Committee members shall serve terms as follows: (a) The two Bremerton residents selected by the other members of the Audit Committee shall serve three (3) year terms. The first two appointments, shall be made as follows: one currently sitting resident (Citizen Position #1) shall expire on December 31, 2000; and the second currently sitting resident (Citizen Position #2) shall expire on December 31, 2001. At the expiration anniversary date of each term, a resident appointee shall be appointed for a three (3) year term thereafter. Residents may be appointed to an unlimited number of terms. (b) The Council members appointed by the Council shall serve for a term up to the unexpired term of their current elected office, and may be re-appointed during successive terms of elected office. (c) The independent Certified Public Accountant selected by Council shall serve a three (3) year term, which shall expire on December 31, 2002, and may be re-appointed for an unlimited number of terms. The City Auditor shall be a permanent ex-officio member of the Audit Committee. In the event that any member does not serve a full term, either by resignation or removal, a replacement shall be selected by the original appointing authority to serve the remainder of the term. 2.18.040 VOTING & CONFLICT OF INTEREST. Audit Committee & City Auditor. Ord Revised 10/10/01 Page 2 Decisions of the Committee shall be by majority vote of the members in attendance except that if a tie vote occurs the City Auditor may cast a tie-breaking vote. A Committee member may abstain from voting at will or may be requested by Committee consensus to abstain from voting on issues that are sensitive to that member's area of control or influence. When a department which is directly represented by an Audit Committee member is the subject of a particular audit, that member of the Committee will be excluded from participating in that portion of the Audit Committee agenda affecting that department and will also be prohibited from being present during any Audit Committee discussion of that audit, whether it concerns the interim report, scope or final release of a report. There shall be no voting by proxy except that any member who will be absent may prepare a written statement of position to the Chairman in advance of any meeting to be read to the members present during that meeting. 2.18.050 MEETINGS. The Audit Committee shal~ meet on the second Thursday of each month. Audit Committee meetings shall commence at 4:00 p.m. in the City Council Conference Room. In the event the regularly scheduled meeting falls on a holiday, the Audit Committee shall meet on the third Thursday of the month. By majority vote, and upon notice to the public, a different time or date or place of a regularly scheduled meeting may be designated by the Committee. 2.18.060 REPORTING. The Audit Committee shall issue periodic reports to the City Council and Mayor and will advise City Council and Mayor at any time and on any issue that the Committee deems essential for the effective performance of duties and decisions by them, provided that: (a) The Committee and the parties will comply with Title 42.17 (Public Disclosure Laws). (b) The Committee shall present to the Council and the City Mayor, on a yearly basis, the City Auditor's summary of audits performed, reported upon, and responded to by management. The City Auditor shall report administratively and functionally to the Audit Committee. In carrying out duties and responsibilities, the City Auditor shall have full, free and unrestricted access to all City activities, records, property and personnel. The City Auditor will advise the Audit Committee, at regular meetings and upon request, of the audit work anticipated, scheduled and/or performed. To this end: (a) The City Auditor shall prepare projected schedules for each quarter with the underlying, proposed objective statement and scope of audit work for each audit, for Committee review and approval. (b) The City Auditor may discuss audit objectives with the Audit Committee and relevant management before the start date of an audit and as needed. (c) The City Auditor may discuss audit findings with the appropriate management during the course of an audit and with the Committee as deemed necessary. However, Audit Committee reserves the privilege of reviewing written reports to the auditees before such reports are issued and routed, provided, that the review privilege shall not exceed five (5) days from report completion. Distribution will then be to the Mayor, City Council, Treasurer and Audit Committee & City Auditor. Ord Revised 10/10/01 Page 3 responsible department head, and to others as directed by the Audit Committee. A public copy will be maintained in the City Council Office. (d) All responses to audit reports shall be to the City Auditor in wdting and within twenty (20) working days. Both the report and response shall be submitted to the Council through the Audit Committee in a timely manner. (e) Upon official submittal to the Council, the report and response will no longer be exempt from public disclosure. (f) The City Auditor will ensure adequate and appropriate auditee response to audit findings through follow-up and will update summaries accordingly. 2.18.070 CONFIDENTIALITY. All employees and the auditee involved in an investigation by the City Auditor are subject to strict confidentiality. In order to protect the integrity of the Internal Audit function, members of the Audit Committee will be held to a stdct standard of confidentiality. Strict confidentiality will be maintained for any communication between the City Auditor and Committee members or between individual Committee members, regardless of whether the communication is generated dudng an Audit Committee meeting. It is further understood that the City Auditor is to retain all confidences obtained from managers during performance of an audit. The City Auditor will communicate confidences obtained during an audit at the time a report is presented to the Audit Committee if such information is significant to the report conclusions and findings, or if it is relevant and necessary to a request of the Committee to change the scope of an audit or to discontinue a particular audit. Confidences, which relate to illegal activities, shall be immediately communicated to the City Attorney and/or State Auditor. 2.18.080 REMOVAL. The Audit Committee may request the removal of a member by majority vote of the entire membership of the Committee sifting as a whole, to the appointing authority of that member. 2.18.090 PROCEDURES. The Audit Committee and the City Auditor may adopt such policies, procedures, and directives as are necessary to fulfill the purposes of their functions. Proposed policies, procedures and directives shall be presented to the Audit Committee during a meeting open to the public, and may be approved upon a majority vote of the Audit Committee. Copies shall be maintained in the City Council Office. Section 2. Effective Date. This Ordinance shall take effect ten (10) days after passage and publication. APPROVED by the City Council of the City of Bremerton this 24th day of October, 2001. Audit Committee & City Auditor. Ord Revised 10/10/01 Page 4 PASSED by the City Council of the City of Bremerton this 7t" day of November, 2001. .~~'~W, ~¢0uncil President APPROVED this ~.(. day of ~.~o ~ , 2001. ATTEST: KATHLEEN L. McCLUSKEY, ~ity Clerk EFFECTIVE DATE //-..~4- c~/, ,, PUBLI0ATION DATE //-//.-~ / ,.. ORDINANCE NUMBER_ Audit Committee & City Auditor. Ord Revised 10/10/01 Page 5 AFFIDA VIT OF PUBLICATION County of Kitsap, State of Washington No. 164804 I, Melinda Monroe, being first duly sworn on oath, deposes and says: That she is now, and at all times embraced in the publication herein mentioned was the principal clerk of the printers and publishers of THE SUN; that said newspaper has been approved as a legal newspaper by order of the /superior Court of the Count of Kitsap, in which County it is published and is now and has been for more than six months prior to the date of the publication hereinafter referred to, published in the English language continually as a daily newspaper in Bremerton, Kitsap County, Washington, and is now and during all of said time, was printed in an office maintained in the aforesaid place of publication of said newspaper; that the following is a true text of a legal advertisement as it was published in regular issues (and not in supplement form) of said newspaper on the following dates, to wit: November 16, 2001, during all of said period. That the full amount of the fee charged for the foregoing publication is the sum of $506.16 which amount has not been paid in full. lJ'lL~~-f{) t-J~d ,N- Notary Public in and for the State of Washington, Kitsap County. '1Y1iLo~ 2JYY\n~A~ (Signature of Principal Clerk) \\\\\\\\1111/11111/1 ~,,\ p- W N S 111// Subscribed and sworn to before me this day of November 20, 2001. ~ ~.............~-1/- ~ ~ .... .... "'^~ - .' ~OT-4L\" - ~ en : '7 J- '. ::;. ~ ~ i 7'30 \ ~ :::: y '. ~ -02.: :::- - ..-11' V .- ~~... SllC /< '::... ~ 0...... ......"'0 .:; '/ ;:::- .......... 0 ., "/"/11 WAS r\ \ ~ ",':"'-' III \\\ 1111/11111\\\\\\ ORDINANCE NO. 4779' AN ORDINANCE amending Chapter 2.18 Audit Committee and City Auditor as created in the City of Bremerton Charter, Section 18.- THE CITY OF BREMERTON DOES HEREBY ORDAIN:- Section 1. Chapter. This chapter is hereby amended in the Bremerton Municipal Code to read as follows:- CHAPTER 2.18 AUDIT COMMITTEE AND CITY AUDITOR- 2.18.010PURPOSE.- The purpose of the Audit Committee, as provided in the Charter of the City of Bremerton, Article III, Section 18, shall be to assure elected City officials and management that the internal auditing of the municipality and its departments, programs and activities is performed in accordance with standards for the practice of internal auditing and with professional standards of conduct. "Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes" as defined by the Institute of Internal Auditors.- To this end, the Committee will:- (a) Conduct annual appraisals of the City Auditor's performance as to effectiveness and efficiency; including a comparison of planned and actual audits;- (b) Review and approve the internal audit work schedule and planned budget for the coming year;- (c) Review results of external and internal audits, prior to release of internal audit reports, with specific attention to:- ............(1) restrictions- ............(2) cooperation received- ............(3) audit findings- ............(4) audit recommendations- (d) Review and approve appropriate special audit requests;- (e) Review and recommend revisions to policies relating to unethical and illegal procedures; - (f) Ensure the City Auditor's independence of management;- (g) Meet regularly with the City Auditor;- (h) Help to assure that management is exercising due professional care. 2.18.015 Scope of Work.- The three fundamental characteristics of internal auditing function include 1) risk assessment and control, 2) operations: effectiveness, efficiency, and improvement, and 3) compliance with laws, regulations, and contracts.- The scope of internal auditing will include but not be limited to:- (a) Assurance Services - traditional audits, investigations and testing, performance evaluation, limited assurance.- (b) Consulting and operations improvement services - Business process reviews, internal control education and other training as requested and approved by Audit Committee, and self-assessments reviews. (c) Ethics Compliance reviews per BMC 2.96 and compliance with all applicable Federal, State and local laws and regulations.- (d) Serve as a liaison between external auditors to assure audit coordination.- 2.18.020 MEMBERSHIP.- There shall be an Auditing Committee consisting of two Council members and an independent Certified Public Accountant to be designated by Council, and two Bremerton residents selected by the designated members of the Audit Committee. The City Council may designate by majority vote one alternate member to serve in the absence of either or both of the appointed Council Members.- The Audit Committee shall appoint the City Auditor to serve at the pleasure of the Audit Committee. The City Auditor shall only be removed by the majority vote of the entire membership of the Committee sitting as a whole.- In order to foster continuity, during the first meeting in January, the Committee shall elect one of its members as Chairman to serve a term of one (1) year. The Chairman will conduct the order of business at meetings, coordinate communications of the committee, and perform other duties as specified by the Committee.- 2.18.030TERM.- Audit Committee members shall serve terms as follows:- (a) The two Bremerton residents selected by the other members of the Audit Committee shall serve three (3) year terms. The first two appointments, shall be made as follows: one currently sitting resident (Citizen Position #1) shall expire on December 31, 2000; and the second currently sitting resident (Citizen Position #2) shall expire on December 31, 2001. At the expiration anniversary date of each term, a resident appointee shall be appointed for a three (3) year term thereafter. Residents may be appointed to an unlimited number of terms.- (b) The Council members appointed by the Council shall serve for a term up to the unexpired term of their current elected office, and may be re-appointed during successive terms of elected office.- (c) The independent Certified Public Accountant selected by Council shall serve a three (3) year term, which shall expire on December 31, 2002, and may be re-appointed for an unlimited number of terms.- The City Auditor shall be a permanent ex-officio member of the Audit Committee.- In the event that any member does not serve a full term, either by resignation or removal, a replacement shall be selected by the original appointing authority to serve the remainder of the term.- 2.18.040 VOTING & CONFLICT OF INTEREST.- Decisions of the Committee shall be by majority vote of the members in attendance except that if a tie vote occurs the City Auditor may cast a tie-breaking vote. A Committee member may abstain from voting at will or may be requested by Committee consensus to abstain from voting on issues that are sensitive to that member's area of control or influence.- When a department which is directly represented by an Audit Committee member is the subject of a particular audit, that member of the Committee will be excluded from participating in that portion of the Audit Committee agenda affecting that department and will also be prohibited from being present during any Audit Committee discussion of that audit, whether it concerns the interim report, scope or final release of a report.- There shall be no voting by proxy except that any member who will be absent may prepare a written statement of position to the Chairman in advance of any meeting to be read to the members present during that meeting.- 2.18.050MEETINGS.- The Audit Committee shall meet on the second Thursday of each month. Audit Committee meetings shall commence at 4:00 p.m. in the City Council Conference Room. In the event the regularly scheduled meeting falls on a holiday, the Audit Committee shall meet on the third Thursday of the month. By majority vote, and upon notice to the public, a different time or date or place of a regularly scheduled meeting may be designated by the Committee.- 2.18.060 REPORTING.- The Audit Committee shall issue periodic reports to the City Council and Mayor and will advise City Council and Mayor at any time and on any issue that the Committee deems essential for the effective performance of duties and decisions by them, provided that:- (a) The Committee and the parties will comply with Title 42.17 (Public Disclosure Laws).- (b) The Committee shall present to the Council and the City Mayor, on a yearly basis, the City Auditor's summary of audits performed, reported upon, and responded to by management.- The City Auditor shall report administratively and functionally to the Audit Committee. In carrying out duties and responsibilities, the City Auditor shall have full, free and unrestricted access to all City activities, records, property and personnel.- The City Auditor will advise the Audit Committee, at regular meetings and upon request, of the audit work anticipated, scheduled and/or performed. To this end:- (a) The City Auditor shall prepare projected schedules for each quarter with the underlying, proposed objective statement and scope of audit work for each audit, for Committee review and approval.- (b) The City Auditor may discuss audit objectives with the Audit Committee and relevant management before the start date of an audit and as needed.- (c) The City Auditor may discuss audit findings with the appropriate management during the course of an audit and with the Committee as deemed necessary. However, Audit Committee reserves the privilege of reviewing written reports to the auditees before such reports are issued and routed, provided, that the review privilege shall not exceed five (5) days from report completion. Distribution will then be to the Mayor, City Council, Treasurer and responsible department head, and to others as directed by the Audit Committee. A public copy will be maintained in the City CouncilOffice.- (d) All responses to audit reports shall be to the City Auditor in writing and within twenty (20) working days. Both the report and response shall be submitted to the Council through the Audit Committee in a timely manner.- (e) Upon official submittal to the Council, the report and response will no longer be exempt from public disclosure.- (f) The City Auditor will ensure adequate and appropriate auditee response to audit findings through follow-up and will update summaries accordingly.- 2.18.070CONFIDENTIALITY.- All employees and the auditee involved in an investigation by the City Auditor are subject to strict confidentiality.- In order to protect the integrity of the Internal Audit function, members of the Audit Committee will be held to a strict standard of confidentiality. Strict confidentiality will be maintained for any communication between the City Auditor and Committee members or between individual Committee members, regardless of whether the communication is generated during an Audit Committee meeting. It is further understood that the City Auditor is to retain all confidences obtained from managers during performance of an audit. The City Auditor will communicate confidences obtained during an audit at the time a report is presented to the Audit Committee if such information is significant to the report conclusions and findings, or if it is relevant and necessary to a request of the Committee to change the scope of an audit or to discontinue a particular audit.- Confidences, which relate to illegal activities, shall be immediately communicated to the City Attorney and/or State Auditor. - 2.18.080 REMOVAL.- The Audit Committee may request the removal of a member by majority vote of the entire membership of the Committee sitting as a whole, to the appointing authority of that member.- 2.18.090 PROCEDURES.- The Audit Committee and the City Auditor may adopt such policies, procedures, and directives as are necessary to fulfill the purposes of their functions. Proposed policies, procedures and directives shall be presented to the Audit Committee during a meeting open to the public, and may be approved upon a majority vote of the Audit Committee. Copies shall be maintained in the City Council Office.- Section 2. Effective Date. This Ordinance shall take effect ten (10) days after passage and publication.- APPROVED by the City Council of the City of Bremerton this 24th day of October, 2001.- PASSED by the City Council of the City of Bremerton this 7th day of November, 2001.- November 16,