Minutes – Audit Committee Meeting
September 15, 2011
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MINUTES
AAA CENTRAL PENN
AUDIT COMMITTEE MEETING
THURSDAY, SEPTEMBER 15, 2011
PROGRESS AVENUE
The meeting of the Audit Committee of AAA Central Penn was called to order by Chairperson Robyn Alspach at 4 p.m. on Thursday, September 15, 2011. In attendance were committee members W. Richard Cummings, Susan Simms Marsh, Philip Thompson, and Dean Weidner as well as President/CEO Mitch Hillman, VP/CFO Scott Beagle, and VP Human Resources Barbara Roth. In absence: Ed Ionni and Barbara Kellam. Also in attendance were Tim Hanford (AAA), Jody Forte, Reinsel Kuntz Lesher (RKL), and Tiffany Bentz (RKL).
Tim Hanford, in executive session, reviewed his internal audits for September 2010 to August of 2011. Tim did 13 branch audits during that time. The important points were:
1. No significant issues within the audit status and conclusion.
2. Four branch audits resulted in clean audit reports.
3. Common audit findings included cash drawer shortages/overages of less than $1 and small inventory shortages of travel store inventories of less than $5 per occurrence.
4. Tim’s internal audit responsibilities expand each year (5 to 10% of time). He is also the Compliance Officer overseeing Anti-Money Laundering law/act compliance. This involved Travelex which insures our compliance with the Bank Secrecy Act. The result of the Travelex review was positive. There was a similar review and result with Wells Fargo Bank.
5. He expects to do 15 branch audits over the next 12 months.
6. We asked about a backup for him. There is no specific person, but the audit process is well defined. He will discuss with management.
Hanford is doing an excellent job handling this role and its expanding responsibilities.
Jody Forte of (RKL) reviewed the Deferred Compensation Plan Audit 401(k) Plan Year ending December 31, 2010. Barbara Roth also commented on the process. There were no material weaknesses identified and no issues with the plan finances. Jody Forte indicated that the interaction with the AAACP management and staff was very cooperative and efficient.
The committee unanimously accepted the report and will review the results at the next Board meeting on September 22, 2011.
The Audit Committee met with Jody Forte and Tiffany Bentz in executive session. There were no comments requiring further action.
Scott Beagle presented a recommendation that we engage RKL for the Deferred Compensation Audit for the year ending December 31, 2011. He will discuss the fee with them considering the improvement in the efficiencies of the audit process. On motion (Thompson, Cummings), it was moved to accept the recommendation. Motion unanimously approved. Beagle will contact RKL to discuss a future contract.
As discussed at our December, 2010 meeting, Scott Beagle updated us on the status of his internal reviews for quarters 3 and 4 of 2011 as follows:
1. The payroll system/process review has been completed. All payroll dollars are properly accounted for and represented in the financial statements.
2. Payroll security access has been reviewed and revised as necessary dependent on the personnel role.
3. There was a new payroll administrator hired in November possessing past experience with ADP(payroll software). This person has added value to the process because of analytical ability in this role.
4. There have also been more controls added to ensure accuracy of data between ADP and our General Ledger.
5. Beagle discussed customer credit card receipts process which will be reviewed in the 4th quarter of this year.
Old Business:
There were no suggested updates to the Audit Charter.
Barbara Roth indicated ethics training has been done at management level (executive and branch) so far and management actions send a message to the staff that ethical behavior should be the norm.
Roth updated us on the Whistleblower Policy. There has been one use of it this
year. The staff is reminded of it each year.
There was a discussion of the merger of the Audit and Finance Committees. No specific action is suggested at this time, but will depend on the future size of the board and any
efficiencies an action such as this might bring to AAACP without compromising the Audit Committee’s charter.
New Business: None
The next meeting of the Audit Committee will be in March of 2012 when there will be a review of the year-end audit results for 2011(9 months).
There being no further business, the meeting was adjourned at 5:30 p.m.
Robyn Alspach
Chairperson