Texas State Library and Archives Commission


Audit Committee


Friday, November 16, 2001


Minutes

The Texas State Library and Archives Commission (TSLAC) Audit Committee met on Friday, November 16, 2001, at 1:00 p.m. in Room 314, de Zavala State Library and Archives building, Austin.

Audit Committee Present:


Kenneth Carr


Sandra Pickett, Chairman

Commissioners Present:


Elizabeth Sanders


Sandy Melton

Commissioners Absent:


Chris A. Brisack


Carolyn Palmer

Staff Present:


Peggy D. Rudd, director and librarian


Edward Seidenberg, assistant state librarian


Manuel Alvarez, director, Information Resources Technologies


Beverley Shirley, director, Library Resource Sharing


Michael Heskett, director, State and Local Records Management


Donna Osborne, director, Administrative Services


Chris LaPlante, director, Archives and Information Services


Belinda Boon, Library Development


Kathleen Walls, Library Development


Cynthia Alvarez-Mack, Administrative Services


Erica McKewen, communications officer


Regina Miles, executive assistant


Angela Taylor, communications department

Guests Present:


Joe Thrash, Office of the Attorney General


Russell Gregorczyk, Jansen & Gregorczyk


Sarah Foster, Legislative Budget Board


Gwen Land, Jefferson Wells International


John Spann, Jefferson Wells International


Dorothy Turner, State Auditor's Office


Cheryl Vanek, Office of the Lieutenant Governor

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A quorum being present, Chairman Pickett convened the meeting at 1:00 p.m.

1. PRESENTATIONS BY INTERNAL AUDIT SERVICE VENDORS.

Russell Gregorczyk, certified public accountant, Jansen & Gregorczyk, outlined the following key items in his presentation:


• Jansen & Gregorczyk provides internal auditing services for eight agencies.


• The firm, which has four staff members (not including Mr. Gregorczyk), includes one certified public accountant and one MBA-Accounting graduate.


• The firm's approach is comprehensive and focuses on more than financial areas.


• The firm has been through three rigorous internal audit quality reviews.


• The firm has standardized fees.

Commissioner Carr asked Mr. Gregorczyk if the firm was the Texas State Library's first internal auditor; Mr. Gregorczyk's responded that, yes, Jansen & Gregorczyk was the agency's first internal auditor. Additionally, Commissioner Carr asked the following questions:

• Has Jansen & Gregorczyk gotten too close to the staff of the Texas State Library and Archives Commission? Mr. Gregorczyk did not feel that the firm had gotten too close. He pointed out that the findings in his firm's reports reflect the firm's objectivity in the audit process.


• Explain the internal audit peer review. Mr. Gregorczyk explained that the Internal Audit Act requires that an internal audit peer review be done every three years.

Commissioner Pickett asked Mr. Gregorczyk for further clarification about one aspect of the Jansen & Gregorczyk proposal; Mr. Gregorczyk responded to her question. Commissioner Melton asked Mr. Gregorczyk if his firm could perform all of the functions of the contract in the time remaining on the contract; Mr. Gregorczyk responded that, yes, the firm could.

The Commission was introduced to the following two representatives from Jefferson Wells: Gwen Land, managing director of Austin office, and John Spann. The following key points were made by Jefferson Wells during their presentation:


• Jefferson Wells is ranked number five (5) on Inc. Magazine's list of the five hundred fastest growing companies in America.


• The firm only hires professionals who have at least five (5) years experience in that type of work.


• The organization has a flat structure and has low overhead costs.


• Employees of the firm receive constant training and certification/re-certification through the Jefferson Wells University.


• The firm has a proven audit methodology. The methodology is customizable.

Commissioner Carr asked for information about the firm's presence in Texas. Mr. Spann listed the following cities: Dallas, Ft. Worth, Austin, Houston, and there would be a San Antonio office in the near future. The firm has fifteen (15) professionals working in Austin. Three (3) of those fifteen currently work with state agencies. Commissioner Pickett asked the firm to list the state agencies in Texas they're currently doing internal audit work for. Ms. Land listed the following firms: The University of Texas at Austin, Texas Lottery Commission, Texas Education Agency, and Texas Youth Commission. Commissioner Carr asked the firm if they were the actual internal auditors for those four firms. Mr. Spann responded that, no, each of those firms already have internal auditors and Jefferson Wells has a special contract (to do knowledge transfers) with those internal auditors. The firm does not currently perform the primary internal auditing functions for Texas state agencies.

2. RECOMMENDATION ON THE INTERNAL AUDITING SERVICES CONTRACT AWARD FOR FY02.

Donna Osborne, director, Administrative Services division, outlined the differences between the two firms. The overall difference in cost for the one-year contract would be approximately $4,000. The Commission discussed their impressions of each firm. The Commission asked Ms. Osborne to contact each firm's list of references and report back before the end of the meeting.

After hearing a report from Donna Osborne regarding the two (2) firms' references, Commissioner Carr moved to recommend that the Commission award the contract for one (1) year to Jefferson Wells with the option of extending the contract for another year; Chairman Pickett seconded. Motion passed.

3. REVIEW AND APPROVE THE INTERNAL AUDIT PLAN FOR FY02.

Edward Seidenberg, assistant director, Texas State Library and Archives Commission, summarized the components of the Internal Audit Plan for FY02. The plan proposes to do the following four (4) audits in FY02: Talking Book Program; Alamo Area Library System; Houston Area Library System; and the agency's Purchasing and Inventory Systems and Controls.

Commissioner Carr moved to approve the recommendation for the approval of the Internal Audit Plan for FY02; Commissioner Pickett seconded. Motion passed.

With no further business, at 2:03 p.m., Chairman Pickett recessed the meeting until Donna Osborne could report to the Commission on the internal audit vendors' references. Chairman Pickett reconvened the meeting at 2:45 p.m. to allow Osborne to report her findings. Once reported, Chairman Pickett adjourned the meeting at 2:50 p.m.

Respectfully submitted,

Peggy D. Rudd Director and Librarian


PRD:rmm

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