City of Cupertino
FY 25-26 Internal Audit Program
Audit Committee Meeting
April 2025
• The City retained Moss Adams to serve as the
designated Internal Auditor and conduct projects
focusing on:
• Risks
• Internal controls
• Efficiency and effectiveness
• Best practices
• Compliance
• Work is being completed under appropriate industry
standards (IIA, GAGAS, AICPA)
Internal Audit Overview
2 Role of Internal
Audit
3 Source: IIA
Holistic Internal Audit Program Components
Tracking &
ReportingCOpportunitiesBProgram InputsA
• Enterprise
Assessments
• Employees and
Residents
• Performance
Metrics
• Risks
• Controls
• Compliance
• Performance
• Findings &
Recommendations
• Fraud, Waste, and
Abuse Hotline
• Corrective Actions
• Implementation
• Validation
4 5
Internal Audit Program Components
5 Internal Audit Plan
Risks Internal
Controls Compliance Performance
Accounting and financial reporting, asset management, capital programs, compliance, economics and funding, fraud, governance, human resources, internal controls, maintenance and operations, management, operations and service delivery, organization and staffing, processes and procedures, procurement, public safety, risk management, and technology
Functions Components Plan
City Internal Audit Annual
6 Program Review
Focus Accomplishments
• Enterprise Risk Assessments 2021, 2024
• Internal Controls Projects Completed 2
o Grant Management Internal Controls FY25
• Performance/Efficiency Projects Completed 5
o Special Revenue Fund Process FY25
• Policies Reviewed 139
• Recommendations Delivered 52
• Ethics Hotline Reports Received 33 reports
• Recommendations Validated in FY25 45
6 7
Departments Covered
Department Projects
Administrative Services Procurement (22)
Finance P&Ps (22)
Budget Process Review (23)
Grants Management Internal Control Review (25)
Special Revenue Fund Process (25)
City Clerk
City Manager’s Office FWA Program (22)
Community Development
Communications
Innovation & Technology
Parks & Recreation
Public Works Capital Program (22)
Library Construction Audit (23)
Enterprise Projects: Risk Assessment (21, 24), Enterprise Leadership (23), Policies and Procedures (24), Recommendation Validation (25) Performance Projects
1. Permitting Efficiency Study
2. CIP Implementation
Internal Controls and Compliance Projects
1. Council-Wide Policy Review Inventory
2. City-Wide Internal Controls Review
3. Investment/Cash Flow Policy Review/Recommendation
4. Credit Card Testing
Program Management:
1. Ongoing Internal Audit Services
2. Ongoing Recommendation Validation
Potential FY25-26 Internal Audit Projects
8 1. Council-Wide Policy Review Inventory (already approved by City Council) Review and provide recommendations to
align council policies with best practices(16 weeks, $40,000)
2. City-Wide Internal Control Review Conduct a review of the City’s internal controls framework in key areas that are deemed important to protecting City assets and resources. (16 weeks, $45,000)
3. Investment/Cash Flow Policy Review/Recommendation
Review and provide best practice recommendations over the City’s investment/Cash Flow policy. (8 weeks, $10,000)
4. Ongoing Internal Audit Services Attend Audit Committee and Council meetings, prepare status reports,
recommendation validation manage internal audit program, and monitor FWA hotline. ($25,000)
Recommended FY25-26
Internal Audit Projects
8 The material appearing in this presentation is for informational purposes only and is not legal or accounting advice. Communication of this information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials may have been prepared by professionals, they should not be used as a substitute for professional services. If legal, accounting, or other professional advice is required, the services of a professional should be sought.
10 9
• Government Finance Officer’s Association (GFOA)
• GFOA Best Practices Guide on Audit Committees
• Institute of Internal Auditors
• IIA Publication “The Audit Committee: Internal Audit
Oversight”
• U.S. Government Accountability Office (GAO)
• American Institute of Certified Public Accountants
• Association of Certified Fraud Examiners
11 Resources