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HomeMy WebLinkAboutMN-IURAAC-2024-04-26 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY Audit Committee 8:30 A.M., Friday, April 26th, 2024 Members: Karl Graham, Chairperson; Donna Fleming, Vice-Chairperson; Chris Proulx; Robert Cantelmo; Ducson Nguyen (Common Council Liaison) Excused: Shaianne Osterreich IURA Staff: Nels Bohn; Anisa Mendizabal [virtual]; Charles Pyott [virtual] City Staff: Lisa Nicholas, Director of Planning & Development Department Guests: None I. Call to Order Chairperson Graham called the meeting to order at 8:31 A.M. II. Review of Audit Committee Membership & Charge Membership: Each member of the IURA Board is appointed to the Audit Committee (Chair: Karl Graham; Vice-Chair: Donna Fleming). Responsibilities: 1. Oversee preparation of an annual audit of the Agency prepared by an independent accounting firm; 2. Review the results of external audits and develop recommendations to the Agency to address any issues or concerns raised by the external auditor; 3. Review and approve internal controls to safeguard its assets; and 4. Investigate problems in financial reporting, internal control or compliance as they arise. III. Additions/Deletions to/from Agenda None. IV. Public Comments (3 min. max. per person) None. V. Review of Draft Meeting Minutes: April 27, 2023 (not yet available) Approved: 5/24/24 VI. New Business A. Election of Committee Vice-Chairperson & Nomination of Chairperson Graham asked if any other Committee members would like to serve as Chairperson or Vice-Chairperson. No Committee members responded. Proulx nominated Graham to serve as Chairperson. No objections were raised. Graham nominated Fleming to serve as Vice-Chairperson. No objections were raised. Moved by Graham, seconded by Proulx: 2024 IURA Audit Committee Election of Vice-Chairperson & Nomination of Chairperson WHEREAS, the IURA By-laws provide that the committee membership shall elect its own committee Vice-Chairperson and nominate to the Agency a member to serve as Chairperson of the Audit Committee, and WHEREAS, officers of each committee serve a one-year term, but continue to hold office until their successor is selected or appointed, and WHEREAS, the current committee officers are: Chairperson: Karl Graham Vice-Chairperson: Donna Fleming, and WHEREAS, at their April 26, 2024 meeting, the IURA Audit Committee called for nominations for Vice- Chair and Chair of the IURA Audit Committee; now, therefore be it RESOLVED, that the IURA Audit Committee hereby nominates Karl Graham as Committee Chairman, and be it further RESOLVED, that the IURA Audit Committee hereby elects Donna Fleming as Committee Vice- Chairperson. Carried Unanimously: 4-0 B. Approval of Audited 2023 IURA Financial Report Graham explained that Insero & Company’s FY2023 Financial Audit Report raised no issues, findings, recommendations, or concerns. Since the IURA is considered a blended component of the City of Ithaca, this audit only represents a small proportion of the larger City audit. The IURA audit is required to be conducted within 90 days of the end of each fiscal year. Fleming reported that the Governance Committee (GC) reviewed the audit, which was completed on time and contained no findings of particular note. There was very little discussion about it by the Committee. Proulx observed one item the report cites every year is the IURA’s overdependence on U.S. Department of Housing and Urban Development (HUD) funding for its revenue and the long-term viability of the IURA’s financial outlook; but that by no means a new concern. It is a long-standing issue the IURA Board has been aware of. “Federal budgeting for the HUD Entitlement Program does not provide CPI increases. Recent high inflation rates that peaked at 8% in 2022 increased operating expenses while core federal grant awards remained flat. A trend where expenses rise faster than revenues raises the risk for an operating deficit in future years.” “Overall, special one-time HUD awards (CDBG-CV and HOME-ARP) allowed the 2023 budget to be fully funded from projected revenues. This infusion is anticipated to provide additional administrative funding through 2026 when they will be fully expended. At that time the IURA operating budget may experience a modest operating loss if additional revenue sources are not identified and federal grant funding remains flat.” “In the longer term, the Agency will continue to work to reduce its reliance on federal funding revenues by diversifying its revenue streams to include urban renewal projects, real property sales, increased small business loans, and property leases to ensure continued financial stability and retain current staffing capacity.” Bohn explained this section of the report is actually his own written analysis of the IURA’s future financial challenges. Moved by Graham, seconded by Fleming: Approve Audited 2023 IURA Financial Report WHEREAS, the Ithaca Urban Renewal Agency (IURA) derives the majority of its finances from grants awarded to the City of Ithaca, and WHEREAS, for financial reporting purposes the IURA is a blended component unit of the City of Ithaca whose financial activity is reported in the Special Grant Fund, a governmental fund of the City of Ithaca financial statements, and WHEREAS, the IURA contracts separate from the City to have its finances audited within 90 days of the end of its fiscal year to comply with the Public Authorities Law, and WHEREAS, the IURA received an audited 2023 IURA financial report on March 27, 2024, and WHEREAS, at its April 2024 meeting, the IURA Governance Committee conducted preliminary review of the financial report and recommended approval of the financial report, and WHEREAS, at its April 2024 meeting, the IURA Audit Committee reviewed the financial report with auditor correspondence and recommends the following; now, therefore, be it RESOLVED, that the Financial Report of the Ithaca Urban Renewal Agency for the period January 1, 2023 through December 31, 2023, prepared by the accounting firm of Insero & Company, LLP, be approved. Carried Unanimously: 3-0 C. Review Internal Controls & Separation of Duties Graham walked through the following Internal Controls and Separation of Duties, which are designed to distribute fiscal responsibilities and oversight amongst staff, and which the auditors review annually. The auditors determined it meets their standards. Graham noted he was very satisfied with the internal controls the IURA has established. (continued on following page) D. Review HUD PY2022 Annual Community Assessment (ACA) Report Graham reported the IURA received HUD’s most recent Annual Community Assessment (ACA) report (excerpted below) for the City, examining the IURA’s performance in administering its Community Development Block Grant (CDBG) Program and HOME Investment Partnerships Program (HOME) grant awards. Bohn remarked the audit once again cites the City’s own late audit submissions: “Ithaca is non-compliant with Single Audit Report submission guidelines as outlined at 2 CFR 200.512(a)(1). The City did submit FY2020 during this program year on 1/30/2023, however the City’s report for FY2021 and FY2022 to the Federal Audit Clearinghouse remain due.” Proulx inquired about the concern the audit raises about the IURA’s progress in completing required HOME-assisted housing unit inspections: “Ithaca has not conducted required comprehensive inspections of HOME assisted units since 2016. The waivers cited in the report are no longer valid as they have been discontinued as of December 31, 2021. Previously, the City was noted to reconvene inspections in 2019, however the pandemic set the schedule on hold. The City now cites the pandemic and capacity challenges have hindered them from completing inspections of overdue units. Despite this, the City explained to HUD in 2021 that inspections were to reconvene by September 30, 2022. This CAPER reports that 7 of the 28 HOME units requiring inspection have been conducted. As a result, the City remains out of compliance of 24 CFR 92.504(d) and should submit an inspection schedule for PY’23 to HUD.” Bohn replied, as of this week, all delinquent housing inspections (and re-inspections) will have been conducted, with the assistance of an independent contractor, a former City housing inspector. Proulx asked how any IURA/City annual audit concerns are formally communicated to City officials. Bohn responded the audit report is submitted to the Mayor’s Office and City Manager. IURA staff also ensures the Controller’s Office is made aware of any issues. The audit report is not, however, routinely submitted to Common Council. Proulx recommended Common Council also be formally apprised of any concerns with annual audits, since it is ultimately responsible for oversight of the City. Graham agreed. VII. Adjournment The meeting was adjourned by consensus at 8:48 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.