November 15, 2011
A meeting of the Audit Committee was held via videoconference at the Authority’s offices at 123 Main Street, White Plains, New York at approximately 10:25 a.m.
The following Members of the Audit Committee were present:
Also in attendance were:
Michael J. Townsend Chairman
John S. Dyson Trustee
R. Wayne LeChase Trustee
Gil Quiniones Acting President and Chief Executive Officer
Judith McCarthy Acting General Counsel
Donald Russak Acting Chief Financial Officer
Karen Delince Corporate Secretary
Brian McElroy Treasurer
Thomas Concadoro Vice President and Controller
Lesly Pardo Vice President – Internal Audit
Dennis Eccleston Chief Information Officer
Lorna Johnson Assistant Corporate Secretary
Sheila Baughman Senior Secretary, Corporate Secretary’s Office
Ken Deon Managing Partner, KPMG
Brendan Kennedy Senior Manager, KPMG
Chairman D. Patrick Curley welcomed committee members and also Chairman Townsend, Trustees Dyson and LeChase, and staff to the meeting.
By motion made and seconded the agenda for the meeting was approved.
The minutes of the Committee’s Regular Meeting of September 27, 2011 were adopted.
Mr. Lesly Pardo presented an overview of the Authority’s 2011 Internal Audit Plan to the Committee. He said that as of October 31, 2011, twenty-seven audits have been completed and six are in progress. Approximately 86% of the audits in the Audit Plan are completed or in progress. Twenty-two audit reports with 47 recommendations to improve or enhance the Authority’s internal controls were issued. He said that Internal Audit staff tracks the status of the recommendations and receives full cooperation from management during the audits.
Mr. Pardo reported two changes to the Audit Plan. The operations compliance audit at the Blenheim-Gilboa Project was postponed until the first quarter of 2012 because of the impacts of hurricane Irene. The audit on Energy Services’ solar projects was also postponed because of inactivity. As a result of this, two audits were added to the Plan: 1) compliance with NYS Comptroller’s new contract reporting requirements whereby contracts exceeding $1 million that were not competitively bid or awarded on a sole source basis must be sent to the Controller for approval; and 2) review of Headquarters Travel Expenses. He ended by stating that Internal Audit is in the process of completing its 2012 Audit Plan; the staff will be meeting with Business Unit heads to identify critical risk areas and will also contact the Committee for input in the Plan.
In response to a question from Trustee Nicandri, Mr. Pardo said Internal Audit conducted a review of selected activities of the Law Department, including its expenditures for outside legal services, which was completed the second quarter of this year.
Mr. Ken Deon, KPMG’s audit engagement partner, presented an overview of the Authority’s 2011 Audit Plan. In response to a question from Trustee Nicandri, Mr. Deon said that he has experience in government and energy audits. As the engagement partner in charge of the Authority’s audit, he is fully involved in all phases of the audit. Also, in regard to his level of participation in the audits, the timing of the Authority’s audit fits in well with his schedule of other engagements so he can spend sufficient time at the Authority. Although two new auditors were added to the team, there is consistency in the team of auditors assigned as outlined in the Engagement Team Chart. Mr. Deon also outlined KPMG’s 2011 Audit Objectives and gave a summary of the Authority’s management and Audit Committee’s responsibilities, as well as KPMG’s responsibilities in conducting the audit in accordance with generally accepted auditing standards.
In response to a question from Chairman Curley, Mr. Deon said that, as part of KPMG’s professional responsibility to the Authority, the team meets with Mr. Pardo to review the Authority’s internal audits performed during the course of the year and adjusts KPMG’s audit scope, if appropriate. Mr. Pardo added that KPMG receives a copy of all audit reports completed by Internal Audit.
In response to a question from Trustee Nicandri, Mr. Deon said that Mr. Pardo provides KPMG with a copy of the Authority’s Internal Audit Plan, which he presents to the Audit Committee, and which KPMG uses as a basis for relying on its audits.
Mr. Brendan Kennedy, Senior Manager, discussed KPMG’s audit approach and methodology; risks, specific to the Authority, in conducting the audits; and entity-wide and monitoring controls, the basis for the Audit. He said that KPMG’s goal is to perform an effective and efficient audit. In conducting the audits, KPMG communicates with the Authority’s Internal Audit staff, its management and Audit Committee on a regular basis and complies with professional standards of conduct. Mr. Kennedy then outlined KPMG’s timetable through March 27, 2012, at which time the financial statements will be presented for approval.
5. Next Meeting
The next regular meeting of the Audit Committee will be held on Tuesday, March 27, 2012, to commence at approximately 9:30 a.m., at the Clarence D. Rappleyea Building, White Plains, New York.
On motion made and seconded, the meeting was adjourned at approximately 11:00 a.m.