SAIF Corporation, Board of Directors Audit Committee Meeting Minutes  for December 9, 2009
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SAIF Corporation, Board of Directors Audit Committee Meeting Minutes for December 9, 2009

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SAIF CORPORATION BOARD OF DIRECTORS AUDIT COMMITTEE Wednesday SAIF Corpration December 9, 2009 400 High Sreet SE9:0 a.m alem, Oregon After determining a quorum was present, the meeting was called to order at 9:00 a.m. Roll Call: John Endicott Catherine Travis (via phone) SAIF Corporation Personnel Present: Brenda JP Rocklin, President and CEO Mike Mueller, Senior Vice President of Claims and Legal Services Chris Davie, Vice President of Corporate Policy and External Affairs John Gilkey, Vice President of Policyholder Services Michelle Graham, Vice President of Claims Michael Hartman, Vice President of Underwriting Services Theresa McHugh, Vice President of Financial Services Colleen Sealock, Vice President of Operations and Human Resources Garry Robinson, Vice President of Information Services Casey Baumert, Corporate Internal Auditor Jerry Dykes, Chief Financial Officer Cathy Pollino, Chief Internal Auditor Shawn Wright, Chief Actuarial Officer Sara Bayes, Executive Assistant Approval of Audit Committee Minutes Motion Mr. Endicott, second Ms. Travis to approve the minutes of the September 16, 2009 meeting. The vote was unanimous, and the motion was carried. Regional Operations: Branch Office Review Cathy Pollino reported on an internal audit that reviewed SAIF branch office security and tested controls over cash handling, emergency check processing, and check stock storage. Internal Audit staff ...

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Nombre de lectures 66
Langue English

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SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
SAIF CORPORATION
BOARD OF DIRECTORS AUDIT COMMITTEE
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After determining a quorum was present, the meeting was called to order at 9:00 a.m.
Roll Call:
John Endicott
Catherine Travis (via phone)
SAIF Corporation Personnel Present:
Brenda JP Rocklin, President and CEO
Mike Mueller, Senior Vice President of Claims and Legal Services
Chris Davie, Vice President of Corporate Policy and External Affairs
John Gilkey, Vice President of Policyholder Services
Michelle Graham, Vice President of Claims
Michael Hartman, Vice President of Underwriting Services
Theresa McHugh, Vice President of Financial Services
Colleen Sealock, Vice President of Operations and Human Resources
Garry Robinson, Vice President of Information Services
Casey Baumert, Corporate Internal Auditor
Jerry Dykes, Chief Financial Officer
Cathy Pollino, Chief Internal Auditor
Shawn Wright, Chief Actuarial Officer
Sara Bayes, Executive Assistant
Approval of Audit Committee Minutes
Motion Mr. Endicott, second Ms. Travis to approve the minutes of the September 16,
2009 meeting. The vote was unanimous, and the motion was carried.
Regional Operations: Branch Office Review
Cathy Pollino reported on an internal audit that reviewed SAIF branch office security
and tested controls over cash handling, emergency check processing, and check stock
storage. Internal Audit staff visited all eight SAIF branch offices and found that the
overall physical security of the buildings was sound, with minor exceptions in the
Pendleton and Baker City branches that have since been fixed. Internal Audit
concluded, however, that the benefits from maintaining check stock, petty cash, and
disaster hot sites at the branch offices were not worth the risks. Management concurred
and has since removed the check stock and petty cash from the branch offices. In
addition, management is currently exploring alternatives to the disaster hot sites.
Internal Audit also suggested, and branch office managers agreed, that all high-risk
check out equipment should be locked up when not in use.
Board Audit Committee Minutes
December 9, 2009
Page 2
SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
Garry Robinson noted that the IS Division is researching alternatives for the disaster
hot sites that would allow for the printing of benefit checks in the event that check
printing capabilities in the Salem office are not available.
Mr. Endicott asked if the field office laptops contain sensitive information on injured
workers. Mr. Robinson reported that laptops are generally used for presentations and to
access information stored on SAIF’s network. Employees are told that they should not
be storing any sensitive information on the laptops.
Fraud and Investigations Division: Compensability, Activity Check,
Surveillance, and Fraud File Reviews
Ms. Pollino reported that this series of audits was conducted at the request of SAIF
management. The purpose of the file reviews was to evaluate the quality of the
investigations and identify opportunities for improvement.
Internal Audit found that, overall, investigators were doing a good job, but there were
opportunities to improve the quality of investigations. Internal Audit met with the
investigators at a statewide meeting in November to discuss the findings.
Mike Mueller advised board members that FID management will continue to review case
files to ensure consistency between regions, and to ensure prompt and appropriate
handling of investigations.
2009 Risk Assessment
Ms. Pollino provided the Committee with a copy of the 2009 operational risk assessment
and reported that the purpose of the risk assessment was to provide the Audit
Committee and SAIF management with a detailed list of potential risk areas and
Internal Audit’s assessment of those risks. The risk assessment was used to develop
Internal Audit’s 2010 audit plan.
Draft Annual Audit Activity Report
A draft report on SAIF’s 2009 Audit Activity was reviewed by the Committee. Ms. Pollino
asked the Committee if they would like to see the final report before it was presented to
the full Board at the January meeting. Ms. Travis and Mr. Endicott agreed that there
was no need to see the final report before the January meeting.
2010 Internal Audit Plan
Ms. Pollino summarized the 2010 Internal Audit Plan, which proposes audits in the
following areas:
Corporate Pricing Data Quality
Permanent Total Disability Payments
Reimbursable Programs
Reserve Data Quality
Service Delivery and Staff Deployment
Information Technology General Controls
2009 Internal Audit Follow-Up Audits
Board Audit Committee Minutes
December 9, 2009
Page 3
SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
Motion Ms. Travis, second Mr. Endicott, to approve the 2010 Internal Audit Plan as
outlined. The vote was unanimous, and the motion was carried.
2010 Internal Audit Budget
The Audit Committee reviewed the 2010 proposed budget. The Committee members
were satisfied with Internal Audit’s budget as presented.
Mr. Endicott expressed concern that Internal Audit did not anticipate visiting all of the
regional offices again in 2010. Ms. Pollino agreed that comprehensive visits of all field
offices are not currently on the audit plan; however, spot checks at the regional offices
may be done.
Internal Audit Quality Assessment Review and Survey
Ms. Pollino reported that the Institute of Internal Auditor’s (IIA) Quality Assessment
Manual requires SAIF to conduct a quality assessment check of its Internal Audit
Division by an independent assessor at least once every five years. Internal Audit
passed all standards, but the evaluator made three recommendations:
1.
Enhance organizational independence
by adding to the Audit Committee’s
functional duties the responsibility to provide input on the Chief Internal Auditor’s
performance evaluation and approve the evaluation rating and corresponding
salary adjustment
.
(Practice Advisory 1110-1)
2.
Improve internal communications and information flows
by providing
the Chief Internal Auditor with copies of the SAIF management teams’ meeting
agendas and allow the Chief Internal Auditor to provide information for
management to consider, with a report back to the Chief Internal Auditor on the
outcome of those discussions
.
(Practice Advisory 1110-1)
3.
Improve the internal audit charter
by adding a statement regarding the
mandatory nature of conforming to the Institute of Internal Auditors’ code of ethics
and standards. (Standard 1010)
The Committee was comfortable implementing all three recommendations.
The Audit Committee was also provided with a copy of the results of an independent
survey of SAIF managers that was conducted as part of the IIA Quality Assessment
review.
Changes to Audit Charter
Ms. Pollino reported that the purpose of the changes to both the Internal Audit and
Audit Committee charters was to reflect the best practices outlined in the model
charters developed by the Institute of Internal Auditors.
Audit Committee members agreed with the Audit Charter changes.
Board Audit Committee Minutes
December 9, 2009
Page 4
SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
Motion Mr. Endicott, second Ms. Travis, to approve the changes to both the Internal
Audit Charter and the Audit Committee Charter as reviewed by Ms. Pollino. The vote
was unanimous, and the motion was carried.
Ms. Pollino noted that changes to the Audit Committee Charter need to be approved by
SAIF’s Board of Directors. The Committee agreed, and Ms. Pollino will present the
updated charter to the full Board at its January 27, 2010 meeting.
External Audit Scope
Ms. Pollino reported that while SAIF has not met with the Secretary of State’s chosen
external auditor, Moss Adams, she has received their scope and action plan, a copy of
which was provided to the Committee. Jerry Dykes reported that the scope and action
plan is similar to previous external auditors but this external auditor will be relying on
outside actuarial reviews for the evaluation of loss reserves.
Future Meetings
The next Audit Committee meeting will be on March 10, 2010 in conjunction with the
Board of Directors’ meeting at SAIF’s Salem office.
Committee members agreed that quarterly meetings are sufficient. If business needs
require, the Committee will meet outside regularly scheduled meetings.
Other Business
The Audit Committee members met with SAIF’s Internal Audit staff, without other SAIF
employees present.
There being no further business, the meeting adjourned at 9:49 a.m.
_________________________________________
Sara Bayes, Executive Assistant to the Board
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