Update on Recommendations from KPMG, Management Partners, and Task Force City Council Meeting November 16,

Studies Resulting from Embezzlement KPMG – completed a detailed forensic analysis resulting in 43 recommendations on operational and enhanced oversight as well as improve various procurement and accounts payable practices. Management Partners – performed a desk audit of the Underground Utility Program resulting in 13 recommendations 2

Studies Resulting from Embezzlement Task Force on Financial Administration and Internal Controls – reviewed and assessed the city’s financial reporting, systems, administration and control and provided 26 recommendations 3

Common Recommendation Themes Establish new written procedures for the operation of the Underground Utility Program Segregation of duties within financial processes Scrutiny and maintenance of City’s master vendor list Clarifying and limiting us of Special Handling Requests 4

Common Recommendation Themes 5 Enhancing the City’s audit function Emphasis on employee training and supervision

Actions Taken by Staff 6 Segregating duties within the Underground Utility Program Immediately separating Accounts Payable from the Purchasing Division Limiting the use of Special Handling Check requests Hired and Internal Audit Manager Awarded contract for the Fraud Risk Assessment

Actions Taken by Staff 7 New procedures mandating the completion of a W-9 form by all vendors Implementation of the new Tyler Munis Enterprise Resource Planning (ERP) system maintains segregation of duty workflows Completed revised Manual of Personnel & Administrative Rules and will include expanded training for all employees

Next Steps 8 Continue to review and improve all financial processes with a more focused commitment to improve internal controls and segregation of duties Continue training on administrative policies and procedures with an emphasis on training for Finance Department employees Finalize organizational structure of Department of Finance to ensure that adequate staffing exist to carryout all financial recommendations

Next Steps 9 Continue employee campaign on work product ownership and pride as well as the see something – say something motto Continue relationships with members of the Task Force as we implement their suggestions or evaluate other internal controls and systems.