DeSoto Audit and Finance Committee
The City of DeSoto believes that Residents should (1) assure that the City's Committee fulfills its responsibilities for the City's external audit process, the financial reporting process and the system of risk assessment and internal controls over financial reporting; and (2) provide an avenue of communication between management, the independent auditors, and the City Council members. Through this committee, citizens develop belonging, pride and ownership in the city’s future because in DeSoto, there is:
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The DeSoto Audit and Finance Committee (AFC) shall consist of five (5) members including three (3) members of the City Council appointed by the City's Mayor and two (2) members of the community appointed by the City Council. The Mayor shall appoint the AFC Chair.
The community members shall possess training and experience providing knowledge of generally accepted accounting practices and financial audit processes and shall be selected based thereon. These members shall be appointed for two (2) year terms with no limit on reappointment.
The Committee’s Responsibilities:
The AFC shall have responsibilities related to: (a) the independent auditor and annual financial statements; (b) oversight of management's internal controls, compliance and risk assessment practices; and (c) miscellaneous issues related to the financial practices of the City.
Independent Auditors and Financial Statements
The AFC shall:
- Recommend appointment, compensation and oversight of independent auditors retained by the City and pre-approve all audit services provided by the independent auditor.
- Recommend the establishment of procedures for the engagement of the independent auditor to provide permitted audit services. The City's independent auditor shall be prohibited from providing non-audit services unless having received previous written approval from the AFC.
- Non-audit services include tasks that directly support the City's operations, such as bookkeeping or other services related to the accounting records or financial statements of the City, financial information systems design and implementation, appraisal or valuation services, actuarial services, investment banking services, and other tasks that may involve performing management functions or making management decisions.
- Review and recommend approval of the City's audited financial statements, associated management letter, report on internal controls and all other auditor communications.
- Review significant accounting and reporting issues, including complex or unusual transactions and management decisions, and recent professional and regulatory pronouncements, and understand their impact on the financial statements.
- Meet with the independent audit firm as needed to discuss any significant issues that may have surfaced during the course of the audit.
- Review and discuss any significant risks reported in the independent audit findings and recommendations and assess the responsiveness and timeliness of management's follow-up activities pertaining to the same.
Internal Controls, Compliance and Risk Assessment
The AFC shall:
- Review management's assessment of the effectiveness of the City's internal controls and review the report on internal controls by the independent Auditor as a part of the financial audit engagement.
The AFC shall:
- Develop an appropriate confidential mechanism for the City that allows individuals an opportunity to report suspected fraudulent activities, allegations of corruption, fraud, criminal activity, conflicts of interest or abuse by the directors, officers, or employees of the City or any persons having business dealings with the City or breaches of internal control.
- Review all reports delivered to it by staff regarding reports received through the confidential mechanism and resolutions thereof.
At least, bi-annual meetings with the expectation that additional meetings may be required to adequately fulfill all obligations and duties of the role.