Honolulu City Council Policy Resolutions(Link to original Word Processing Version)
92-289
ESTABLISHING A POLICY FOR THE COUNCIL OF THE CITY AND COUNTY OF
HONOLULU RELATING TO A COUNCIL AUDIT PROGRAM.
WHEREAS, the auditing of executive agencies is an
indispensable tool of legislative bodies at all levels of
government to fulfill their oversight responsibility over the
activities of the executive branch; and
WHEREAS, the Revised Charter of Honolulu (RCH) 1973, as
amended, provides legal authority for the City Council to conduct
audits and auditing activities (Section 3-114 re: comprehensive
annual financial audits, and performance audits; Section 6-204
re: quarterly cash counts); and
WHEREAS, the Council wishes to formalize and strengthen its
auditing activities by establishment of a policy relating to a
Council audit program; now, therefore,
BE IT RESOLVED by the Council of the City and County of
Honolulu that it hereby establishes the following policy relating
to a Council audit program:
"POLICY
COUNCIL AUDIT PROGRAM
I. Definitions.
As used herein:
"Audit" means a methodical examination of utilization
of resources, concluding in a written report of findings.
"Financial audit" means an examination leading to the
expression of an opinion on:
(1) The fairness of presentation of the audited
entity's basic financial statements in conformity
with generally accepted accounting principles; and
(2) The audited entity's compliance with various
finance-related legal and contractual provisions
used to assure acceptable governmental
organizational performance and effective
management stewardship.
(1) The economy and efficiency of the audited
entity's operations; and
(2) Program effectiveness--the extent to which program
objectives are being attained.
II. There is hereby established a Council policy relating to a
Council audit program. This policy sets forth guidelines
governing all audit activities by the Council under the
authority granted to it by the City Charter. The audit
program shall consist of three primary components:
(1) Comprehensive Annual Financial Audit
(2) Performance Audit - Broad scope
(3) Performance Audit - Limited Scope
III. Comprehensive Annual Financial Audit.
A. Pursuant to Section 3-114, RCH, the annual financial
audit of the City shall be comprehensive, independent,
and shall be conducted by a certified public accountant
or a firm of certified public accountants.
B. In addition to the annual financial audit of City
operations and funds, the audit shall include the
quarterly cash count required by Section 6-204, RCH,
unannounced cash counts, an audit of the City's fixed
assets, and the single audit of all federal funds
required by Office of Management and Budget (OMB)
Circular A-128.
C. The procedures and terms under which an auditor is
engaged and such audit is conducted shall be in
accordance with Council policy as set forth in
Resolution 86-239, or any successor statement of policy
for annual financial audits.
D. Funding for necessary consultant services shall be
based on appropriations provided for Council audit
activities. IV. Performance Audit - Broad Scope.
A. Pursuant to Section 3-114, RCH, the Council may conduct
a performance audit of any or all City agencies or
operations at any time. As used here, a broad-scope
performance audit means an audit addressing essential
City operations and major issues of governance and
policy. Such audits are typified by a focus on large
organizations, large amounts of public funds, or
complex systems. As such, they are time consuming and
expensive to conduct. It is expected that no more than
one or two broad-scope audits would be conducted in any
year. Further, consultants with technical or
specialized expertise must usually be contracted for.
B. A broad-scope performance audit shall be authorized by
adoption of a Council resolution assigning the
engagement of a consultant, management of the contract,
and overall supervision of the audit to the Office of
Council Services (OCS).
C. Unless time limitations or public exigency so preclude,
consultants shall be selected by a request for
proposals prepared in response to a scope of work as
set forth in the Council resolution and as may be
further detailed by the Council Chair.
D. Funding for consultant services shall be based on
appropriations provided for Council audit activities.
V. Performance Audit - Limited Scope.
A. Also within the authority provided in Section 3-114,
RCH, a limited-scope performance audit, as used here,
means an audit of City operations or issues which can
be accomplished quickly by existing OCS staff,
supplemented when needed with the limited engagement of
outside consultants possessing expertise not available
in OCS. In brief, then, the limited-scope audit is
principally distinguished from the broad-scope audit in
requiring less time and money, which is made possible
by its narrower subject focus.
B. To preserve the attribute of quick response, a limited-scope audit may be authorized by the Council Chair upon
written request by any other Councilmember, or asprovided in any committee report. A limited-scope
audit may also be authorized by adoption of a Council
resolution. The scope of work may include any subject
matter under consideration in any Council committee,
shall be set forth in writing, and shall be as
authorized by the Council Chair. The Council Chair may
also initiate an audit upon approval by the Council
Vice Chair of the proposed scope of work, which shall
be set forth by the Council Chair in writing.
C. Unless time limitations or public exigency so preclude,
consultants required for a limited-scope audit shall be
selected by informal bid.
D. Funding for consultant services, when required for a
limited-scope audit, shall be based on appropriations
provided for Council audit activities.
VI. Administration and General Policies.
A. The Office of Council Services shall be responsible for
the impartial and efficient conduct of Council audits
on behalf of the Council.
B. As soon as practicable, the Council audit activity
shall be identified as, and funded from, a separate
line-item appropriation in the legislative operating
budget of OCS.
C. The City Administration shall be notified in writing
prior to the initiation of any audit.
D. No drafts of any audit report shall be released to any
person except to City agencies requested to provide
responses thereto. OCS shall establish procedures to
maintain confidentiality of preliminary audit results.
E. Once initiated, all audits shall culminate in a written
report which shall be filed with the City Clerk and
shall be a public record, except that if any audit is
terminated prior to preparation of a final report, a
written report from OCS to the Council Chair shall be
filed with the City Clerk stating the date of and
reasons for such termination."
BE IT FURTHER RESOLVED that the Council Chair is requested to provide OCS with the resources, within available legislative appropriations, necessary to implement the Council Audit Program; and
BE IT FURTHER RESOLVED that the Director of Council Services
shall submit a report to the Council on the implementation of the
Council Audit Program no later than one year after adoption of
this Resolution; and
BE IT FURTHER RESOLVED that this Resolution shall take
effect upon its approval; and
BE IT FINALLY RESOLVED that a copy of this Resolution be
transmitted to the Managing Director, the Council Chair, and the
Director of Council Services.
INTRODUCED BY:
Gary Gill
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_________________________________ ADOPTED on this 10 day of March , 1993. (@OCS/102292/rr) |