okay call the meeting called the fort Meers Beach audit committee to order and it's April 88th 2024 and the time is 1 125 oh excuse me 135 okay I'll do we have the eye on this no okay let's do the pledge allegiance okay I pled stes okay let's do roll call Jeff Taylor resigned and his chair needs to be elected Jack L is present Barb puffer is President Ryan Thomas is unable to attend Debbie dton is present Maran Shey is present Mike haiser Hower is out not present Scott Safford is is out and not present and we're waiting uh waiting for Scott to come to us by Zoom can we go ahead without him okay we're going to go ahead without Scott he's not present uh okay and rent reorganization who we going to nominate for chair or who would like to be that comes after the reorganization yeah that's okay are there any nominations for chair yeah can we do a temporary chair um can they do a temporary chair um okay Jack can you continue until we have more people I I think it's up to you so if you'd like that to continue that would be up up to you um at least until we have a bigger what how would you one of your ladies like to be in charge I I feel too yeah I think Brian would be good he seems to have a strong background and knew what was going on but nominate him yeah saying I think he would be good but talk to him you could postpone this until the next meeting s we we'll continue can we unless you want to do it I'm a neoy at this stuff but at this item but you know you could always fire me right resign well let's let's I think let's wait till next time fairness to everybody okay and then uh likewise for nomination for vice chair we'll wait till we have more people present uh prove all the minutes who who um votes how it I second okay hold it why don't me write approve and who second it buffer did AR okay I didn't write it down last time so okay should we move on then Joe now you would have to um vote you have to vote on whether to approve the oh okay I vote all in favor all in favor hi hi okay Barb first for the minute I mean deah first well I moved and it was approve wait hold it let me get that let me get the sheet here so they just need to vote and I think they are okay we vote to adop for minutes and all approved okay yes okay all um well we'll worry about it later okay four out of six or sorry four out of seven would be the oh four out of seven seven is a total number of committee members who is the motion by um me Barb okay that one Barb second it's okay whatever debie okay I think that's all you have to fill in okay very good I can ask pay deal that part yes we'll figure that out okay okay thank thank you [Music] items for discussion we'll start it's public comment well public comment there's nobody here to comment no public is available no here so we will move on items for discussion Finance director report okay um good afternoon everyone um Joe anzuk Finance director so i' just like to review it's only been 3 weeks since we last met so there's not a lot of changes to report on um still working with um Frankie caek who is our procurement manager on obtaining information for um the the possibilities of replacing our accounting software I think we've got um three different vendors identified and we we need to go through the process of um actually looking at them and ations in order for them to provide us with quotes So that would be the next step that we would go through Jack has a question my question what systems are these other Villages using Naples Bonita Springs and Fort Meyers are we going to something different or if they're they're using the same system can't we just jump on the badwagon and well that that is certainly a possibility and I've reached out to um santel banita Springs um I think Cape Coral has a version of it and they all use the same system um it's the Tyler um it's it's Tyler is the organization that um I forget the exact name of their software but it's it's um developed by Tyler maintained by Tyler they're they're all very happy with it I came from Illinois that used it as well we were very happy with it my accounting manager also so um used it where she came from so it's a it is a common software and it's um The People's experiences so far that we've reached out to they're they're happy with it and they recommended but we do want to do our due diligence and just explore other options just in case there might be something that might better fit our needs um so that's that's the process that we're going through right now now you say when you do just get closer to start AAL Val ating though would you have any people from this committee maybe take a look at it too or is it just going to be people in your team well are you interested in seeing the demos is that I mean okay but I'm asking do you want anybody I don't know if there's somebody here who might have more experience with that right I think um Mike Hower had been volunteered by Jack Taylor I think a few meetings back to assist us with it so I know he's certainly but anyone else would be welcome to and we wouldn't make a you know decision until we had your um response to what we would present to you as well just to make sure that you know it's agreeable to you you may want to just open it up when you decide to set something up that that would be fine okay oh well that's great okay well then that's what we could do when we set up the demo we can you know send out an invitation to all of you and then whoever able to be participate you'd be more than welcome to um the fiscal year 2023 audit uh we do finally have a a beginning date it's um scheduled to begin August 22nd um possibly a week later but that's our tentative start date and the the plan is to finish to complete the audit fieldwork by the end of May and to have the financial statements prepared and the audit completed by the uh June 30th deadline so we're working very hard to be prepared for the audit one of the things that has um just to kind of comment on this has been very time consuming for us has been the review of the emergency expenditures and just making sure that we have everything in sync with what's being or what will be reported or what has already been reported to FEA in terms of specific project numbers um that that's been very very difficult only because some of these project numbers were not assigned until you know almost a year later after the expenditures were occurred so it's it's trying to go back and kind of recreate things to make sure everything is properly plugged in and we'll have like a master spreadsheet that has all the individual projects and expenditures that would tie to the um the general ledger and so that's our goal so we have all the detail that's needed for both Auditors for FEMA um and for our purposes as well to be able to track all of these projects and their progress and what reimbursements have been coming and already um what FEMA has obligated or promised to give us um assuming that what we submit to them is truly eligible so it it's just more time consuming than what we expected and we were short handed probably almost an entire year we had one vacancy um that but now that's been Phil that's the senior accountant position and we have another person who joined us um for grants that I think I mentioned last meeting so with that staff augmentation I we're really starting to move and progress is being made so I'm very encouraged by that um excuse me Joe what is the fiscal year end for the village uh September 30th September 30th okay so that's um that's the paragraph about review and allocation of emergency expenditures um and also FEMA Public Assistance I just thought you might be interested to know that we did have 37 separate projects that were identified um 11 of them were Consolidated so now we're down to um 20 27 separate projects that we need to track expenditures for um let's see and then I have the same list of avail funding sources that I provided in my report last month so there's really nothing new here it's un unchanged but I wanted to continue to provide that to you Joe I have a question on one of these things sure it's the bridge loan yes and you say there's legislation extending it for 10 years consideration of it being forgiven so is that proposed was it already voted is it are there pending dates I haven't had update on it so I'm really not sure where the official status is um but I think in discussions with um like the town manager and um our um Lea on to the state legislature there's been much talk between those people at that level that this is what is going to take place but there's I don't know that there's anything official yet um I I and I have heard and I haven't but we have not been re sent the documentation yet that it was already approved to extend it for two years I mean that we would have two years to repay the loan right now our current agreement that we have in writing is for one year so the loan would be expiring June 30th under the our copy of the current agreement but it was approved by legisl to extend it for two years and it's the 10year proportion that I I think we're still waiting to hear if that's going to be approved so it's it's a little bit confusing in that we don't have upto-date information on these things um it's just more word of mouth um at this point thanks okay Utility Billing um I think I reported to you last time that we had some concerns and so because we had concerns I wanted to make sure that you're aware of it and we were noticing that there was quite a a large amount I think it was like $20,000 at the time of unapplied payments that was accumulating under Utility Billing um and as we looked into it I actually it's the utility billing department that looked into it um working with the utility manager and his staff so jointly looked into it so we what I I was had the misunder understanding that these are payments that were not associated with particular customers but they are in fact associated with particular customers and it's basically overpayments by these various customers that have not been applied to specific invoices so as they've looking into each one there's refunds that are due to some of them and others they'll be working with them to apply those to future future Billings so it's it just takes a little bit of time and research so I think that'll be cleared up pretty s soon and then we also had about $400,000 of EX receivable balances that were old but they're related to properties that you know the homes were demolished there still the continuation of storm water fees on the property that were um adding to the balances there's people who moved that were unreachable so there's a there's a Sit different situations depending on the circumstance es of the customer and so what they're what we recommended to that the utility department do is to investigate each one of the outstanding balances and provide like an explanation of what the situation is and then based on that we can categorize them into these various categories of of what their situation is some of it we may need to um just forgive their balances if there's extenuating circumstances but that would be more of a Town Council decision but that would be a consideration or others we may have to enforce um the the policies where we would have to actually shut off their water as a last resort if if the circumstances warranted and that was truly the way we would have to handle it and there may have been some overbilling as a result of water leakages that we have to look into and if that's the case then we would have to correct the billing so just depending on the circumstance St we would have to make appropriate adjustments to it and hopefully um the the ones that perhaps we've lost touch with we can somehow figure out how to reconnect with those people and perhaps you know they would be willing to pay their balances once they were aware of them so I think there's just be a variety of explanations for the situation that just takes the time to research it and that's what they're doing now are we acre for any estimated you know loss of collections we yes I want to say when we closed last year it was like 300,000 so I think what we've accured for maybe close to what we probably overstating what we'd have to write off but we're we're hoping not to have to write off very much but there is I think a substantial acral for that reason okay and then the financial statements um I apologize I did find that one error in that last statement for the cash flow that I was trying to provide for you um a cash flow statement of what we've been spending through hurricane Ian since hurricane Ian and I I was wondering why that all the amounts look different of course I did this you know late at night when I first ran it and I couldn't it was bothering me and I finally was able to look into it and I realized when I ran the report I ran it with a the incorrect start in date so I I reran the report and I provided the updated version at the end of your packet now so I apologized for that eror it's something I should have caught in the beginning but I I didn't but otherwise it's the same set of financial statements that I provided last month these are through the month of February instead of January um there we it does take us time and and now that we have U more staff we should be able to do this more Qui quickly but there are a lot of um month-end type things that we need to post um that it's just not um soon enough to provide you an accurate statement like for the month of of March for example so February is really the best that we can do at this point um so the first statement is the balance sheet um and then the second one is the revenue and expenditures and changes in fund balances for all the governmental funds and that's several pages long but so it's all the various light items by fund there's 10 pages so the first half of course would be the the governmental funds and then the bottom line so this would I also I numbered all the pages in the packet so it might be easier to keep track of where we're at so that little page number way at the right hand side would be the agenda packet number page number so on page 14 for example that shows you the change in the fund balance um for this fiscal year um through February 29th for the governmental funds and then if you move on towards page 19 it looks like it'll be that's the change in net assets for the proprietary funds so you could see we're actually doing better than you may think but but that's because our our expenditures are down um as well as our revenu so we're actually doing fairly well in consideration of that then cash flows is the same um organization we've got the governmental funds like on page 20 and on page 21 it would be the proprietary funds and this is through the fiscal for the fiscal year ending year to date February 29th then I have on starting on page 22 I've got the revenue and expenditures compared to budget and so this gives you an idea of where we are according to the budget page 23 you could see the total revenues we're we're ahead in comparison to the budget and how I tried to draw this comparison just like last month I just took the number of months I divided like the annual budget by 12 and multiplied by five which is the number of months to come up with the five month average budget and then compared that to the year-to date actual and then the variance as a result of the comparison of those two figures so in terms of Revenue were ahe $1.2 million I think most of that has to do with the fact that we do collect most of our property tax revenue in the first part of the year so it may be a little bit deceiving in terms of that then as you go towards the end of the this report it would be on page 25 and here our expenditures are $1.7 million below or you know favor able variance of $1.7 million under what was budgeted so far for so we're actually ahead so far this year almost $3 million the next starting on page 26 is what I tried to do is comp do the similar comparison but instead of the 2024 current year budget I'm comparing it to the 2023 budget because that budget was prepared before hurricane Ian so this represents what we would normally experience um pre hurricane and so that's like the best representation that we have to see like how our revenues may be doing um compared to what we would have had there not been a hurricane and our revenues at this point year today are 200,000 below what we normally would have been had there not been the hurricane so that's the Assumption anyway as far as why these revenues are are lower than what they otherwise would have been and then the last well not the last but on page 28 and 29 this is the cash flow statement since hurricane Ian and this kind of gives you an idea of of where the the dollars were spent the cash dollars are spent um and this is the corrected version that you're looking at in paper and I did email it out as well so hopefully those who are looking online have that copy that they can refer to the next page is the cash Investments and Loans um it's just an update this similar format as last time I think um the only thing different here might be that last line but I think that may have been their last month that $5 million loan that we received um from this would be the um from the state and this is money upfront that we can use on any of the FEMA projects that they had um given us kind of a pre-approved list of that we can then use this loan money to pay for our upfront expenditures cuz normally FEMA is on a reimbursement basis so if we we can use this loan money to to to actually incur the expenses and incur those expenditures and then when we're reimbursed by FEMA it would go directly to repaying this loan from the state and the very last page then is our sample um budget calendar and this is although it's long it just pretty much hits the highlights of what we need to focus on in terms of um like deadline dates for us in the finance department and then within each of these especially like the first few like lines we'll have um individual meetings that will be scheduled like for um with individual department heads and with the town manager to review things and also with Town Council Members so during the month of April we start out by preparing um the budget spreadsheets these are worksheets that we are prepared in the finance department that are then distributed to each of the department heads that they use to fill in what they think they need for the the next fiscal year there's also Personnel worksheets in an organizational chart that would represent um what they currently have and then they have an opportunity to make adjustments if they see fit for their requests for next year um the end of April early May the town manager is trying to schedule a strategic planning session with the Town Council um I don't have any details on that yet but that that's um in the early stages of planning that in May this is where we'll actually be meeting with the department heads and the town with the town manager um in individual meetings um to to review what they're requesting for their budgets and to make sure it's in line with with the um expectations and the direction of the Town manager who also is receiving direction from the Town Council Members in June 1st is the date that we expect to receive the tenative property appraisal value from the property appraisers office so this will give us an idea based on that appraised value of what our um property tax revenue may be um Depend and then we can do the calculations depending upon the millage rate that we choose whether we choose to leave it the same to increase it to decrease it um but we'll have at least that basis on which to calculate what the actual Revenue would be in the different scenarios June 3rd would be the council meeting that we will be striving to present the preliminary general fund budget to because the month of June is when the maximum millage rate needs to be determined by the Town Council and the maximum illage rate is a a major funding source for the general fund and so by having a good idea of what the general fund budget requests are in comparison to what Revenue could possibly be generated with various millage rates we would present that information to the Town Council with perhaps a few different options for them to consider and this basically starts the discussion and by the end of June the June 17th meeting um this is when they would have to make their final decision on what the maximum M rate would be um but that that still is not setting the rate it's just setting the maximum um and then in between there there's a um management planning meeting in which we'd also be discussing in more detail the budget and the fee schedule um with the Town Council Members July 1st um this is when we receive a certification of the taxable value so it's pretty much the final taxable values from the property appraiser um in July 10th is when we need to submit the maximum millage rate that was decided upon by the Town Council in in their June meeting Town Council normally doesn't meet in July which is why we need to make that decision in June at their June meeting um July 15th is the official deadline that's provided by the town Charter for the town manager to present the budget to the Town Council Members so by then we should have a a a written version of the budget I should say more a more complete version of the budget um and all the different fund detail that we can then present to the individual Town Council Members in writing and again it's really the proposed budget or tenative budget it's not it's not going to be the final budget but that gives them an opport Unity to see it um in August there is a capital Improvement plan that presumably we will have prepared by then it's we've kind of put that on hold last year because of hurricane Ian and we were really focused on the restoration and the rebuilding and there really wasn't any new initiatives that we could consider um and we were still not even sure like where the funding sources would be so we put that on hold this year there may be opportunity to start begin a longer term plan um and this is typically like a 5year capital Improvement plan so this will be new for me to be involved with um and we'll see what the Town Council is thinking what the town manager is thinking um to see if we would have something that we could provide but August would be the time that it would be considered by the LPA or and normally in in past years is considered by the LPA um in August 6th or 7th um those would be indiv if we follow the pattern that we had last year we would be meeting individually with council members to present the budget to them so that they would have opportunity to answer or to have their questions answered by us um and then maybe make suggestions for things and then August 8th would be the U management planning meeting which would be another opportunity to present the budget and have more of an extended discussion on any of those items if they so choose and then September is when we have to have our first public hearing and that date will depend on when other um Municipal organizations or um taxing bodies have their meetings for example the school district because we can't have the a meeting at the same time as one of the other taxing bodies so we have to see when we get closer to that date what date we can actually hold the public hearing um and then it's there's a final public hearing towards the end of September in which the final millage rate and the budget would be adopted and then the last um days are just more our days when we have to do our technical filing with the property appraiser and the tax collector and the Department of Revenue so I know I've covered a lot I I just wanted to kind of give you an idea of how this is all late what all this information is um if you have any questions about anything I'd be happy to try to answer them that was very thorough thank you you're welcome I'm glad they're helpful um my my goal is to be as transparent as possible so there's no surprises and as we continue to work with this I think the information should be you should start seeing improvements like for example this list of funding sources that's on page two of my report I think what ultimately what I'd like to do is show like the total amount and then the total amount of expenditures we've already had what is planned so you can see more of a a sum summarized view of each of those funding sources and how they'll be spent um rather than just a written explanation think these meetings go get easier as they go on well hope hopefully but that that concludes my my report and then I think on the agenda let's see we've got oh I can give you an update on the forensic audit I was hoping Scott would be here because he participated in a discussion with me have to find my my notes on that I'm sorry okay so this last Friday I had reached out well I had reached out prior to Last Friday to our external Auditors molden and junkins and I reached out to the a managing partner um Wade Sansbury and we were able to schedule a call with him and myself and Scott Safford and we had that call uh last Friday March 5th at 1:00 and we presented um this requests that we've that Scott and I were directed by Town Council and by the audit committee to reach out to him and to ask his opinion as to whether or not he thought it would be um advisable to conduct a forensic audit um and just to obtain his opinion so just to try to carefully summarize what he said because I I don't want to misquote him um so to the best of my recollection this is what was said and I was hoping Scott could confirm this because I certainly don't want you to just simply take my word for it alone but since we do not have any specific evidence of where fraud may have occurred it was Mr sansbury's opinion that a forensic audit would be very timec consuming and costly to review everything since the regular financial statement audit that was conducted by his firm over the past few years did not reveal any indications of theft the fraud of malfant it was Mr sanur's opinion that it would very be very unlikely that any evidence of fraud would be found in a forensic audit he stated that if fraud did occur it would more likely have been the result of some type of collusion with an out side party like where the evidence of that activity would not necessarily be present in the town's records and like for example it's possible that there may have been collusion with a contractor the result of which um May an employee may have received a kickback from a contractor for having been awarded a contract but evidence of such An Occurrence could only be found by auditing the contractors or the employees personal records which is something that a parents of God it could not do so with those um things in mind Mr sandberry it was Mr sanur's opinion that it would not be in the best interest of the town to pursue a fance god it and that it would be throwing good money after bad which coincidentally is the same phrase that our town attorney um used when she answered that question at I think it was the second or third to the last Town council meeting in which she was asked her opinion on that so he's not advising that we have one he said if something changes and that if we were to um find some type of evidence you know then that of course would would be different and then it should be reconsidered at that point but I was hoping Scott could confirm that that was the case how do we end this charade and can we end this because I I think agree with the auditor is not going to go anywhere unless it's a Witch Hunt they're just wasting a lot of money and what will uh forensic audit Pro I I agree with you with best practices I think right last if it's in our minutes and I got the sense last time that we all kind of felt we didn't probably need it but we ought to check with the auditor which you've done and the lawyer if I remember right the town attorney said the statute of limitations excuse me was only two years yes so then we're in the middle of all this hurricane stuff it seems like an almost impossible certainly expensive task ever wasn't it a public some from the public was asking about it so I feel the town did what they were supposed to which by asking the Auditors and be fine right yeah I would just vote to end this yeah I do I don't know how I have a suggestion though for another countermeasure or something we can do to double check is like a some kind of hotline some kind of email address or something like that maybe maybe not an email because then you can you can tell who's coming from but something that could be anonymous where people can call and leave a message hey I think you know Joe Blow was uh using a contractor that's his brother you know he call or something like that if you have that a lot of companies have that it's a hotline there's lots of different ways in bigger companies but just something where people can leave a message and somehow we have to communicate that to the commun you know to everyone that here if you think you suspect something give us a call you know it's sort of like a whistleblower kind of thing but just you know not going to get in trouble you know if you're an employee of the city or those that kind of thing um I can certainly um bring that back to the Town Council as as your recommendation and hope and actually Scott will probably do that but I can share this information with Scott and he'll have the the minutes from this meeting also because in my opinion if someone's cheating or stealing is not going to be overt it's going to be ping and just but you might know hey that guy over there I saw him do something you know and call it in and maybe it's nothing you know he can do the investigation and find out it's nothing or it could be something big you never know agree but would that relate to financial activity or just who knows that's going forward yeah going from behind we want to just say we're not doing it yeah based on the auditor's recommendation and the attorney and the attorney might be the person who would be responsible for that hotline that's typically in companies it's it's the lawyers who are responsible for it are these I don't even know if we're supposed to be talking in into these it doesn't sound like this one's on but um would you feel more com comfortable if we had a motion like what Deborah just said I think um the more official it is I think the more weight it would carry um then we could provide that back to the Town Council well I move the city set up a a hotline to report issues and and communicate it to the you know entire population that's part of it too you got to make sure people aware of it issues not just Financial like people parking and wrong places and stuff like that because that can get out of control if you see people someone will have to come up with a list and better understand what should be you know how it should be done and maybe it's you and the lawyer you know kind of come up with the wording for that you'll have to hire someone to stand to the phone all day so uh you're suggesting a motion um how about coming up for a policy to create a hotline how's that because at first you have to have the policy you have to understand what people can can uh [Music] report I'm just trying to think of how to word this so draft a policy um um no I'm I'm not I can see what my company uses you know how you do it it's determining how to how to actually do it so yeah it would be setting up a policy researching it I don't know researching it to create a policy um nearly I mean I would think it's going to be mostly used by for Myers Beach uh employees but if you know something else you know hey I know he's getting a kickback or yeah IL legal What would again I think you and the lawyer might be able to kind of walk through it because the there are policies out there that are General that you know other major companies probably can just pull right off the internet okay so I'm just trying to think of how to word this for the Town Council I don't know if it's a move if we're making a motion we're just making a suggestion the a committee is is it too strong to say recommending or would you prefer suggesting I'm I'm suggesting it are suggesting so suggesting and that might help help alleviate their is you know any issues they have that maybe that the um it goes back to having good internal control policy so then the Auditors can a audit to them and then you know everything's okay something like suggesting that the tone cons consider setting up yeah and anonymous tip line yeah there we go just Financial or financial and legal matters okay that might be good enough to start with and then of course it can be fleshed out depending on sure the um the input from the attorney and and Joe how about or both of you how about a motion that says that we um reviewed a suggestion to have a forensic audit and have decided we will not do something like that at this time we will not conduct that at this time as a motion I'll second that motion that's when you say all in favor say what call motion so there's there was a motion I just did the second one I so now you could made a motion to suspend forensic or not pursue it not pursue it purs not pursue the forensic audit anymore it was second by Miss dton so then you would I said at that at this time there might be some time in the future body would like to do so your your motion was re you have reviewed a suggestion to have a forensic audit and have was it have agreed or have have decided I can't remember the word you used have decided better decided not there is no need for a friends to got it at this time there go that put finality to it for a parents who got it at this time okay that's good and are we all in favor hi hi okay got that vote right and then you want to read the one for me so then I just started to um write the audit committee is suggesting that the town consider setting or maybe I should say is establishing establishing yeah establish an anonymous tip line for financial and legal matters to report to to report financial and legal matters is that issues issues okay anybody second that one it's a motion I motioned it sure I'll second it take a vote or yeah you would ask all in favor yes all in favor are all in favor I I I okay oh okay okay thank thank you for your input and advice on those then okay I already spoke about the accounting software um I'm still waiting for a response from our attorney regarding the risks and costs related to upcoming demolitions planned by the town um I I don't know why I have not heard I imagine they're very busy but I did remind them that I'm still waiting for an answer um I I could tell you that we have determined that the funding for the demolitions would be or could be the bridge loan since it can be used um for operations and anything resulting from um especially additional costs resulting from the hurricane and certainly having to do demolitions would fall in that category so that would be an allowable use of the bridge Alone um other than that I have no nothing else to report for to you are we on member items or yes are there any member items our report and reports none okay then I vote to ger are we oh no it's the next meeting is scheduled for Monday May 13th at 9:00 a.m. we vote on it or um well I suppose if there's any concern um that's back to the second Monday of the month that is typically when the audit committee meetings have been held and they're trying to keep to a regular schedule so that it's just easier for the town to manage the [Music] calendar V toour yes I'll move to adjourn who seconds all in favor I I why we got that done practice makes perfect