Audit Committees In The Public Sector
Citizens of Owasso deserve and have come to expect the highest quality of services and integrity from their city government. Too often in governmental organizations there is a gap between the services citizens expect and those delivered. As a result there has been increasing pressure for public officials to demonstrate a higher level of accountability over the use of public funds.
It has and remains the mission of the City to provide accurate and reliable financial information to the City Council and the citizens of Owasso and to be in compliance with financial policies and regulations that govern our city. The leadership of the City of Owasso has demonstrated its commitment to proper stewardship and accountability over public funds through the establishment of an Audit Committee.
The Audit Committee augments the fiscal accountability standards established and adhered to by the city’s leadership and is a key component for promoting good governance practices. Although there is no statutory requirement to form an audit committee, it was recognized that an effective Audit Committee would make a valuable contribution to improving the transparency, performance and accountability of the City. Further it was felt the Committee could play an important role in examining the organization’s policies, processes, systems, and controls.
Perhaps most significant was the demonstrated commitment to a culture of openness and continuous improvement, critical values of the City of Owasso. In creating an audit committee to protect the interests of the city’s primary stakeholders, the “citizens”, city leadership considered several critical principles.
Independence was a primary consideration. Members of the Audit Committee are required to be independent of the management team. The membership of the committee is expected to be knowledgeable, balanced, objective and independent of mind. To that end, the Audit Committee ensures the city’s auditing firm is independent of management and addresses control and compliance weaknesses.
Competence and compensation were also key factors. Audit Committee members are required to have relevant experience and expertise in the areas of banking, finance, business and accounting. The City’s Audit Committee consists of five voting members and two non-voting ex-officio members. All members are appointed by the City Council and serve without compensation for a term of three years (with the exception of the City Councilor who is appointed for a one year term).
A primary responsibility of the Audit Committee is to recommend to the council an independent firm of certified public accountants to perform the annual audit of the City. The Audit Committee analyzes and reports to the Council any significant findings in the annual audit report and makes recommendations regarding these findings.
As the demand for enhanced accountability and quality of services in the public sector increases, so does the significance of the Audit Committee’s role. The Audit Committee has a major responsibility in assuring the mechanisms for achieving accountability and for limiting risk are in place and functioning. To achieve that goal, open and transparent communication with the governing body and the citizens of Owasso is imperative.
Through the establishment of an independent Audit Committee, a clear message is being sent to the citizens of Owasso that their governing body aspires to achieve “excellence” in the common goals of quality of service, accountability and transparency.