City Council
Report
City Council Meeting: December 13, 2022
Agenda Item: 11.A
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department Subject: Adoption of a Resolution Amending and Restating the Audit Subcommittee Rules of Conduct to Clarify the Timing of the Election of the Audit Subcommittee Chair and Vice-Chair
Recommended Action
Staff recommends that the City Council adopt the attached Resolution of the City Council of the City of Santa Monica Amending and Restating Audit Subcommittee Rules of Conduct to Clarify the Timing of the Election of the Audit Subcommittee Chair and Vice-Chair (Attachment A).
Summary
Amending the existing resolution establishing the Rules of Conduct of the Audit Subcommittee of the City Council is needed to clarify the timing for the election of a Subcommittee Chair and Vice-Chair.
Discussion
On July 28, 2015, Council adopted a resolution establishing an Audit Subcommittee to assist the City Council in fulfilling their oversight responsibilities for the financial reporting process, the framework for internal control, and the audit process. The resolution, which details Audit Subcommittee responsibilities, has been amended several times to allow for modifications that have clarified the duties and responsibilities of the Subcommittee and to adopt and amend Rules of Conduct.
Included in the resolution is the provision that a Chair and Vice-Chair will be elected at the first meeting of the year to preside over the Subcommittee. Members of the Audit 2 of 3
Subcommittee requested clarification on whether the term “year” refers to the calendar year (beginning January 1) or the fiscal year (beginning July 1). The terms of each member, which are four years, begin on July 1 and end on June 30, matching the fiscal year. However, because the Subcommittee is a subcommittee of the City Council, with three of the five members required to be members of the City Council, the terms of the presiding officers are better aligned with the calendar year. City Council members begin and end their staggered four-year terms on the City Council in December, which may result in a vacancy or vacancies on the Audit Subcommittee, including the Chair or Vice-Chair, that must be filled. Such a vacancy would be filled most expediently at the meeting following the completion of a Councilmember’s term, which would be the first meeting of the calendar year after a general election. The Audit Subcommittee approved this clarification to Section 5 of the Resolution at its November 28, 2022 meeting.
At the same meeting, Audit Subcommittee members voted to propose to the Council that the qualification requirement for the two City residents appointed to the Subcommittee be changed from expertise in governmental accounting specifically, to a more general expertise in accounting (eliminating the word “governmental” in Section 2). This proposed change, as well as the proposed change reflecting the timing of the Chair and Vice Chair selection, is included in the attached Resolution.
If Council approves this Resolution, the members of the Audit Subcommittee will conduct the process of selecting a Chair and Vice-Chair at the next regular meeting in 2023.
Past Council Actions
Meeting Date Description
July 28, 2015 Establishment of an Audit Subcommittee
May 9, 2017 Adoption of Audit Subcommittee Rules of Conduct and Recommendation to Create an Ad Hoc Committee
June 27, 2017 Amendment to the Audit Subcommittee Rules of Conduct – Regarding Quorum
March 27, 2018 Amendment to the Audit Subcommittee Rules of Conduct – Regarding Quorum
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October 22, 2019 Resolution Amending the Audit Subcommittee’s Roles to Support the City’s Confidential Ethics Hotline
Environmental Review
This is not a project for the purpose of CEQA.
Financial Impacts and Budget Actions
There is no projected financial impact associated with this report's recommended action.
Attachments:
A. A Resolution of the City Council of the City of Santa Monica Amending and Restating Audit Subcommittee Rules of Conduct to Clarify the Timing of the Election of the Audit Subcommittee Chair and Vice-Chair Prepared By: Gigi Decavalles-Hughes, Director
Approved Forwarded to Council
Attachments:
A. Resolution of the City Council of the City of Santa Monica Amending and Restating Audit Subcommittee Rules of Conduct to Clarify the Timing of the Election of the Audit Subcommittee Chair, Vice-Chair
B. Exhibit A - R11427