[R.O. 2011 § 125.170; R.O. 2009 § 33.040; CC 1981 § 2-174; Ord. No. 86-2, 1-7-1986; Ord. No. 95-122, 5-4-1995; Ord. No. 07-162, 6-11-2007; Ord. No. 08-16, 1-23-2008; Ord. No. 11-76 § 2, 4-20-2011; Ord. No. 14-137 § 1, 7-1-2014]
A. 
Establishment And Purpose. There is hereby established an Audit Committee of the City of St. Charles, Missouri. The purpose of the Audit Committee is to ensure fiscal accountability and transparency, and it shall assist the City Council in fulfilling its financial oversight responsibilities by reviewing and evaluating the financial reporting process, compliance with related laws and regulations, the internal control system and the audit process. The Audit Committee shall have the composition, powers, and duties as prescribed in Chapter 125, Article I of this Code of Ordinances.
[Ord. No. 24-001, 1-2-2024]
B. 
Members, Qualifications, Terms And Meetings.
[Ord. No. 15-157 § 1, 7-21-2015; Ord. No. 24-001, 1-2-2024]
1. 
Members. The Audit Committee shall consist of three (3) members who shall be City residents or residents of the region with an interest in the City. Notwithstanding Section 125.100, the Council liaison on the Audit Committee shall not vote on the Committee.
2. 
Qualifications. All members should possess a basic understanding of governmental financial reporting and auditing. At least one (1) of the three (3) members shall be a financial expert, preferably a certified public accountant.
3. 
Terms. The City Councilmembers liaison of the Audit Committee shall be appointed for a one-year term consistent with Charter Section 3.16, but nothing shall prohibit the reappointment of the same Councilmember to the Audit Committee. The three (3) members shall be appointed for a three-year term.
4. 
Meetings. Any member of the Audit Committee may call a meeting of the Committee. The affirmative vote of a majority of the entire Audit Committee shall be necessary to adopt any motion or resolution. Any Audit Committee member may place an item on a meeting agenda. The Audit Committee shall meet at least three (3) times a year and may convene additional meetings, as circumstances require. Audit Committee members are expected to attend each meeting, in person. The Audit Committee will invite members of management, auditors or others to attend meetings and provide pertinent information, as necessary. Meeting agendas will be prepared by the Audit Committee Chair and provided in advance to members, along with appropriate briefing materials. The Audit Committee Chairperson will also be responsible for briefing the City Council on Audit Committee business.
C. 
Definitions. For purposes of this Section, the following words shall have the following meanings:
CITY MANAGEMENT
The executive branch of City Government and includes all of City Government except the City Council and the Municipal Judge.
INDEPENDENT FINANCIAL STATEMENT AUDITORS or INDEPENDENT AUDITOR
A certified public accountant or certified public accounting firm hired to provide an independent audit of City accounts in accordance with Charter Section 3.14.
INTERNAL AUDITOR
A person or firm employed by or contracted with by the City for the purpose of providing internal audit services and who reports directly to and is exclusively under the control and supervision of the City Council.
D. 
Duties And Responsibilities. The Audit Committee's responsibilities shall include:
1. 
Periodically review this Section and assess its adequacy and recommend changes to the City Council.
2. 
Meet at least three (3) times per year, and at additional times when necessary. Request members of City management or others to attend meetings and provide pertinent information.
3. 
Conduct executive sessions with the Mayor, Director of Administration, City Attorney, internal auditor, independent financial statement auditor, Finance Director, Municipal Judge and anyone else as determined necessary by the Audit Committee.
4. 
Advise the City Council on the hiring of professional consultants and auditors as necessary and in accordance with the City's procurement ordinance.
5. 
Review and advise the City Council on the appointment, replacement, or dismissal of the internal auditor.
6. 
Oversee the appointment for the City Council of the independent financial statement auditor.
7. 
Advise the City Council on the establishment of a regular schedule for periodically rebidding the independent financial statement audit contract.
8. 
Inquire of City management, the internal auditor, and the independent financial statement auditor about significant financial risks or exposures and advise the City Council as appropriate.
9. 
Review with the independent financial statement auditor, the Finance Director and internal auditor the scope and plan of the internal auditor and independent auditor. Assess the coordination of audit efforts to assure the completeness of coverage, reduction of redundant efforts, and the effective use of audit resources.
10. 
Review and approve with City management and the internal auditor and advise the City Council on the following:
a. 
Internal audit charter, budget, staffing and audit plan at project initiation;
b. 
Significant findings on internal audits during the year and City management's responses;
c. 
Any difficulties the internal auditor encountered in the course of an audit, including any restrictions on the scope of their work or access to required information; and
d. 
Any changes required in the scope of internal audits.
11. 
Inquire of City management regarding the City's fiscal condition and financial status in relation to the budget and report as appropriate to the City Council.
12. 
Review with the independent auditor and the internal auditor and advise the City Council on:
a. 
Adequacy of internal controls; and
b. 
Any related significant findings and recommendations of the independent auditor and internal auditor together with City management's responses.
13. 
Review with City management and the independent financial statement auditor and advise the City Council on the effect of any regulatory and accounting initiatives.
14. 
Review with the independent financial statement auditor and advise the City Council on:
a. 
Critical accounting policies and practices;
b. 
Significant accounting and reporting issues, including complex or unusual transactions and highly judgmental areas, and recent professional and regulatory pronouncements, and their impact on the financial statements;
c. 
Alternative treatments of financial information within generally accepted accounting principles that have been discussed with City management, the ramifications of each alternative, and the treatment preferred by the City.
15. 
Review significant written communications between the independent financial statement auditor and City management, such as any management letter or schedule of unadjusted differences and advise the City Council as appropriate.
16. 
Review with City management and the independent financial statement auditor and advise the City Council regarding:
a. 
City's annual financial statements, related footnotes, and management's discussion and analysis;
b. 
Financial statement audit and report;
c. 
Independent financial statement auditor judgments about the quality of the City's accounting principles;
d. 
Audit report of Federal awards administered by the City;
e. 
Any significant changes required in the audit plan;
f. 
Any serious difficulties or disputes with City management encountered during the audit; and
g. 
Matters required to be communicated in accordance with generally accepted auditing standards, U.S. Government Auditing Standards and OMB Circular A-133 related to the conduct of audits.
17. 
Review with the City Attorney and the internal auditor legal and regulatory matters that, in the opinion of City management or the Audit Committee, may have a material impact on the financial statements and compliance with Federal, State, or local laws and regulations and advise the City Council.
18. 
Review with the City Attorney elected official and employee compliance with City and State conflicts of interest laws.
[Ord. No. 15-157 § 1, 7-21-2015[2]]
[2]
Editor's Note: Subsection 1 of Ord. No. 15-157 also redesignated former Subsection (D)(18) through (25) as Subsection (D)(19) through (26), respectively.
19. 
Periodically review the City's Code of Ethics.
20. 
Review the findings of any examinations by regulatory agencies and any auditor observations.
21. 
Review the procedures for the receipt, retention, and treatment of complaints received by the City regarding suspected fraud that may be submitted by any party internal or external to the City.
22. 
Review any suspected fraud complaints that might have been received, current status, and resolution and advise the City Council as appropriate.
23. 
Evaluate the performance of the independent financial statement auditor and the internal auditor and advise the City Council.
24. 
Confirm annually that all responsibilities outlined in this Section have been carried out.
25. 
Evaluate the Audit Committee's performance on a regular basis.
26. 
Create an agenda for the ensuing year.
[1]
Cross Reference: As to finance department, §§ 120.100 et seq.