Clackamas County Audit Committee - April 1, 2025

Agenda

Committee:

• Craig Roberts, Clackamas County Chair
• Paul Savas, Clackamas County Commissioner
• Jane Vetto, Legal Counsel
• Christina McMahan, Director of Juvenile Services
• Josh Kam, Public Member
• Scott Johnson, Public Member
• Michael Osborne, Public Member
• Wendy Rader, Public Member, County Budget Committee Liaison

Committee Staff:

• Elizabeth Comfort Director, Finance
• Ethel Gallares, Deputy Finance Director
• Sue Unger, Accounting Manager
• Bouavieng Bounnam, Grant Manager

Agenda

1. Introductions:
2. Approval of August 9, 2023 & August 12, 2024 meeting minutes
3. FY 2024 Audit Results
   1. Clackamas County Financial Statements
   2. Single Audit
   3. IT Audit
4. Open for Other Items
5. Adjourn

The Audit Committee meets several times a year, with independent auditors, to assist in planning and reviewing results of the audits; as well as recommending a course of action to staff and/or the Board of County Commissioners. The Committee also provides review and independent oversight of the County’s financial reporting processes, internal controls and independent auditors.

*Recordings will be saved for one year from the meeting date and will be provided upon request.

Minutes

Committee Present:

• Craig Roberts, Clackamas County Chair
• Paul Savas, Clackamas County Commissioner Jane Vetto, County Counsel
• Christina McMahan, Director of Juvenile Services
• Dan Johnson, Director of Transportation & Development Josh Kam, Public Member
• Michael Osborne, Public Member Scott Johnson, Public Member
• Wendy Rader, Public Member, County Budget Committee Liaison

Committee Absent:

• N/A

Committee Staff:

• Gary Schmidt, County Administrator
• Elizabeth Comfort, Finance Director
• Ethel Gallares, Deputy Finance Director
• Sue Unger, Accounting Manager
• Bouavieng Bounnam, Grants Manager

Additional Attendees: 

• Ashley Osten, Moss Adams
• Kevin Mullerleile, Moss Adams
• Ben Tellin, Moss Adams

Meeting began at approximately 4:02PM Introductions

Welcome by Chair Roberts. He turned it over to Ms. Comfort for roll call. There is a quorum reached as all members were in attendance.

Approval of the Previous Meeting Minutes

• August 9, 2023 (included in meeting invitation & sent out with the agenda)

Motion was made to approve Aug 9, 2023 meeting minutes as there wasn’t a quorum at the last meeting where they were presented. Moved to approve by Mr. Dan Johnson, seconded by Ms. Rader. All in favor of approval, Ms. McMahan abstained as she wasn't present. Motion passed.

• August 12, 2024 (included in meeting invitation & sent out with the agenda)

Motion was made to approve Aug 12, 2024 meeting minutes. Moved to approve by Mr. Dan Johnson, seconded by Mr. Scott Johnson. All in favor of approval, Commissioner Savas abstained as he wasn't present. Motion passed.

FY 2024 Audit Results – Moss Adams

1. Clackamas County Financial Statements
2. Single Audit

Ms. Comfort passed the meeting over to Ms. Osten to present FY24 audit results. Please see the presentation materials as referenced in these minutes.

Ms. Osten and Mr. Mullerleile from the Moss Adams audit team presented the audit results for the county's financial statements. They issued an unmodified opinion, indicating that the financial statements were presented in accordance with US generally accepted accounting principles. The audit focused on internal controls, pension liability, OPEB liabilities, bond funding, capital assets, revenue streams, and net position. The team also tested three major federal programs. Mr. Mullerleile highlighted the smooth process of the audit and the adherence to the planned timeline. The County received an extension to the state deadline and the County issued it before that date on Feb. 27th and the single audit was completed early on March 21, 2025.

Mr. Mullerleile and Ms. Osten discussed the County's ongoing accounting policies, with no significant changes noted. They also mentioned the implementation of a new accounting standard, GASB Statement number 100, which did not have a substantial impact on the County's financial statements. The team audited several cities and counties in Oregon, where the new standard had a noticeable effect. They also discussed the County's financial statements, focusing on key balances and judgments, and found them all to be reasonable. The team encountered no difficulties during the audit and did not identify any material errors.

However, they did identify an immaterial error related to an accounts receivable balance in the H3S Fund, which was not a valid receivable. The team also discussed the County's financial statements' risks, exposures, and uncertainties, and determined that nothing specifically needed to be disclosed.

Ms. Osten discussed the identified deficiencies in the single audit. The first issue was related to the entitlement Grants cluster program, where a required Federal Funding Transparency Act report was not filed for a subrecipient. Ms. Osten recommended monitoring and tracking reporting requirements for each contract. The second issue was related to procurement and allowable costs in the Coronavirus State and Local Fiscal Recovery Funds program. Two vendors lacked required language in their contracts, and there was no indication of a search on sam.gov. Ms. Osten recommended including required language in contracts and performing a search on sam.gov for vendors funded with Federal dollars. The third issue was related to allowable costs, where 9 transactions for contracted employees were charged to a ballot 108 measure, which is not allowable. Ms. Osten recommended evaluating disbursements to ensure they are appropriately recorded and allowable before being charged to a federal award.

Mr. Mullerleile discussed the results of the fiscal year 2024 audit. No fraud or noncompliance with laws and regulations needed to be reported. The team also highlighted two new standards to be adopted in 2025: GASB 101, which requires the evaluation of accrued sick leave, and GASB 102, which involves additional disclosure for significant revenue or concentration constraints.

3. IT Audit

Mr. Tellin discussed the IT testing they conducted, noting a few internal control deficiencies, particularly in change management and security and access areas. The audit committee was informed that the county is working on implementing the recommendations from previous years.

Questions/Comments

Ms. Osten and Mr. Mullerleile discussed the challenges and standards related to financial reporting, particularly for component units. They clarified that there were no significant challenges this year and explained the concept of "GASB 100," which refers to standards for presenting changes in financial statements. Mr. Savas inquired about a previous audit report for the Sheriff's office, which Ms. Osten suggested should be directed to Tammy Lohr. Mr. Dan Johnson asked about the definition of "significant" in the context of financial reporting, to which Ms. Osten responded that it is judgment-based and involves assessing potential impacts on the county's financial statements.

Mr. Kam inquired about the repercussions of single audit findings from Federal agencies. Ashley clarified that the single audit report had just been submitted, and it was unlikely that the Federal agencies would have already responded. Mr. Scott Johnson praised the team for completing the complex reports quickly and commended them for receiving the Certificate of Achievement for Excellence in Financial Reporting. He also pointed out a minor error in the audit report, which was acknowledged by Ms. Osten. Ms. Comfort expressed her team's commitment to continuous improvement. Mr. Schmidt expressed his appreciation for the team's efforts and the clean audit result.

Other Items

Chair Roberts opened the meeting up for any other issues. There were none. He thanked the members and adjourned the meeting.

Meeting Adjourned at 4:52pm