City Council Agenda and Packet 2018 12 04

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11: City,/ im Louisville COLORADO • SINCE 1878 CITY COUNCIL COMMUNICATION AGENDA ITEM 5E SUBJECT: AUTHORIZATION TO EXECUTE ENGAGEMENT LETTER WITH EIDE BAILLY, LLC FOR INTERNAL CONTROL AND REVENUE COLLECTION PROCESS EVALUATION SERVICES DATE: DECEMBER 4, 2018 PRESENTED BY: KEVIN WATSON, FINANCE DEPARTMENT SUMMARY: The City of Louisville has five main revenue collection areas that receive, reconcile, report, and/or deposit City revenue. Other than Finance Department's front counter in City Hall, there are four main "offsite" revenue collection areas; the Recreation Center, the Library, the Golf Course, and the Municipal Court. Cemetery revenue is collected at the City Services Facility but, due to the amount and timing of the collections, this is not considered a main offsite revenue collection area. Because the collection processes at four main offsite areas process a significant amount of cash transactions, staff recommends a periodic third -party review of internal controls and collection procedures. On September 15, 2015, City Council authorized the execution of an engagement letter with Eide Bailly LLC for an internal control review for the Recreation Center, the Library, and the Golf Course. Staff is now recommending a follow-up review to include the Recreation Center, the Library, the Golf Course, and the Municipal Court. At a later date, staff may request an internal control review for the City Hall front counter and City Services Facility Cemetery fee collection area. Any recommendations for enhancing controls or improving efficiencies under the current proposal for the main offsite collection areas will also be considered for all collection areas. A review of internal controls and collection procedures at this level of detail is typically not part of a financial statement audit. Therefore, staff has asked Eide Bailly to submit a separate engagement letter with a specific list of procedures to be performed. The proposed engagement letter including a list of agreed -upon procedures is attached. The Finance Committee approved the engagement letter at their meeting on November 19, 2018. FISCAL IMPACT: The proposed cost for the service is $9,500. This amount was included in the budget amendment adopted on November 5, 2018 CITY COUNCIL COMMUNICATION 31