80 FAIR OAKS LANE | ATHERTON, CALIFORNIA 94027 | PH: (650) 752-0500 www.ci.atherton.ca.us
September 19, 2024
Honorable Amarra A. Lee
Judge of the Superior Court
c/o Bianca Fasuescu
Hall of Justice
400 County Center, 2nd Floor
Redwood City, CA. 94063-1655
Re: San Mateo County Civil Grand Jury Report titled: “Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts” issued on June 27, 2024.
Dear Judge Lee:
The Town of Atherton received the San Mateo County Civil Grand Jury Report titled, “Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts” on June 27, 2024. The report instructed the Town to respond to Findings 2 and 3 and Recommendations 2 and 3.
Pursuant to Penal Code § 933, the following response to the Grand Jury was reviewed and approved by the City Council at its meeting on September 18, 2024:
Findings
F2. When an entity does not periodically assess its internal controls and the entity cannot demonstrate that it is monitoring its internal controls, the likelihood of a failure in internal controls that results in fraud or waste increases.
Response: The Town agrees with the finding. However, the Town regularly assesses its internal controls and monitors its processes and procedures. The Town conducts an annual audit that includes a high-level review of internal controls by an outside auditing firm.
F3. When management does not report the results of its assessments of internal controls to its governing board and the entity has not communicated externally, the likelihood that others see this as an opportunity to commit fraud or waste increases.
Response: The Town agrees with the finding. However, the Town assesses and reports its internal controls process through its Fiscal Year end Memorandum of Internal Controls reporting with its reporting of
TOWN OF ATHERTON
OFFICE OF THE MAYOR
80 FAIR OAKS LANE
ATHERTON, CALIFORNIA 94027
(650) 752-0500
80 FAIR OAKS LANE | ATHERTON, CALIFORNIA 94027 | PH: (650) 752-0500 www.ci.atherton.ca.us
Annual Basic Financial Statements. The Town conducts an annual audit that includes a high-level review of internal controls monitoring of it processes and procedures by an outside auditing firm.
Recommendations:
R2. Beginning by no later than March 31, 2025 and at least annually thereafter, each governing board will require its management to complete its annual assessments of internal controls.
Response: Staff will strive to schedule annual reporting of assessment of internal controls by March 31, 2025 or a future date in 2025.
R3. Beginning by no later than June 30, 2025 and annually thereafter, each governing board will require management to report the results of its annual assessment of the entity’s internal controls.
Response: Staff will strive to report results of its annual assessment of internal controls by June 30, 2025 or a future date.
With respect to all recommendations, the Town believes that its current process to review and plan for its internal controls is adequate for our agency profile. The Town does have procedures to help prevent fraud and waste, including separation of duties, limit on access to financial software, public reporting of all warrants, IT overview assessment, risk management, and routine reconciliations. In addition, the City prepares an Annual Basic Financial Statement Report that is audited by an independent auditor using generally accepted government auditing standards and performs internal control environment review and questionnaires on Town accounting processes and procedures. A Memorandum of Internal Controls report is produced and reviewed during review of the Audited Basic Financial Statements.
Should you have any questions concerning the response, please contact City Manager, George Rodericks at (650) 752-0504.
Sincerely,
Diana Hawkins-Manuelian, Mayor
TOWN OF ATHERTON