1 ORDINANCE NO. 26‐2285
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING MUNICIPAL CODE CHAPTER 2.88 TO RENAME THE AUDIT COMMITTEE AS THE AUDIT AND FINANCE COMMITTEE, UPDATE ITS DUTIES, POWERS, AND RESPONSIBILITIES, AND UPDATE THE DIRECTOR OF FINANCE TITLE
The City Council of
the City of Cupertino finds that:
1. On May 20, 2025, the City Council directed the Audit Committee to consider amendments to its duties, powers, and responsibilities and recommend changes for City Council consideration.
2. On July 28, 2025, the Audit Committee unanimously recommended amendments to Chapter 2.88 of the Cupertino Municipal Code to: (1) rename the “Audit Committee” as the “Audit and Finance Committee”; (2) clarify Section 2.88.100(g) regarding oversight of the City’s internal controls and internal audit reports; and (3) add a new provision regarding the review of artificial intelligence as it relates to financial management, internal controls, risk, and compliance.
3. On October 7, 2025, the City Council considered the proposed amendments and referred additional matters to the Audit Committee for further consideration, including meeting frequency and potential expanded financial oversight responsibilities.
4. On April 27, 2026, the Audit Committee considered the additional matters referred by the City Council and unanimously recommended retaining the three previously proposed Municipal Code amendments and maintaining the Committee’s existing meeting frequency.
5. The City Council subsequently renamed the Department of Administrative Services as the Department of Finance and retitled the Director of Administrative Services as the Director of Finance. Section 2.88.110 is amended to reflect the current position title.
Ordinance No. 26‐2285
6. The proposed amendments modernize and clarify the Audit Committee’s duties, powers, and responsibilities and reflect its broader role in financial and audit‐ related oversight.
NOW, THEREFORE, THE CITY COUNCIL OF THE OF CITY OF CUPERTINO DOES ORDAIN AS FOLLOWS:
SECTION 1. Adoption.
The Cupertino Municipal Code is hereby amended as set forth in Attachment A.
SECTION 2: Severability and Continuity.
The City Council declares that each section, sub‐section, paragraph, sub‐paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub‐section, paragraph, sub‐paragraph, sentence, clause and phrase of this ordinance. If any section, sub‐section, paragraph, sub‐paragraph, sentence, clause or phrase of this ordinance is held invalid, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of such portion, and further declares its express intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated. To the extent the provisions of this Ordinance are substantially the same as previous provisions of the Cupertino Municipal Code, these provisions shall be construed as continuations of those provisions and not as an amendment to or readoption of the earlier provisions.
SECTION 3: California Environmental Quality Act.
This Ordinance is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. In this circumstance, the proposed action would have Ordinance No. 26‐2285
no or only a de minimis effect on the environment. The foregoing determination is made by the City Council in its independent judgment.
SECTION 4: Effective Date.
This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.
SECTION 5: Publication.
The City Clerk shall give notice of adoption of this Ordinance as required by law.
Pursuant to Government Code Section 36933, a summary of this Ordinance may be prepared by the City Clerk and published in lieu of publication of the entire text. The City Clerk shall post in the office of the City Clerk a certified copy of the full text of the Ordinance listing the names of the City Council members voting for and against the ordinance.
INTRODUCED at a regular meeting of the Cupertino City Council on September 1, 2026 and ENACTED at a regular meeting of the Cupertino City Council on ______, 2026 by the following vote:
Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
______________________
Kitty Moore, Mayor
City of Cupertino
________________________
Date
ATTEST:
_______________________
Lauren Sapudar, City Clerk
________________________
Date
Ordinance No. 26‐2285
APPROVED AS TO FORM:
_______________________
Floy Andrews, Interim City Attorney
Aleshire & Wynder, LLP
________________________
Date
Attachment A –
Amendments To Municipal Code Section 2.88 Title and Sections 2.88.010, 2.88.020,
2.88.030, 2.880.60, 288.070, 2.88.100, 2.88.110, and 2.88.120
CHAPTER 2.88: AUDIT AND FINANCE COMMITTEE
2.88.010 Established–Composition.
A. The Audit and Finance Committee of the City is established. The Audit and Finance Committee shall consist of five
members as follows:
1. Two City Council members;
2. A minimum of Two and a maximum of three at large members who are not officials or employees of the City nor cohabit with, as defined by law, nor be related by blood or marriage to, any member of the committee, the City Manager or the staff person or persons assigned to the committee.
2.88.020 At Large Member–Qualifications.
An Audit and Finance Committee at large member is not required to be a Cupertino resident. In selecting an at large member, the City Council shall give priority to individuals who have substantial accounting, audit, or investment experience, preferably in connection with a governmental agency.
2.88.030 Terms of Office.
A. Audit and Finance Committee members serve at the pleasure of the City Council.
The term of office of the members of the Audit and Finance Committee shall be for four years commencing on the
date of their respective appointments to the Audit and
Finance Committee and shall end on January 30th of the year the terms are due to expire. No Audit and Finance Committee member shall serve more than two consecutive terms unless he or she has been appointed to the committee to fill an unexpired term of less than two years.
B. The appointment, reappointment and rules governing incumbent members of the Audit and Finance Committee are governed by the Resolution of the City Council which governs advisory bodies.
2.88.040 Members–Vacancy Prior to Expiration of a Term.
If a vacancy occurs other than
by expiration of a term, it shall be filled by the City Council’s appointment for the unexpired portion of the term.
2.88.050 Chairperson.
The committee shall elect its chairperson and vice chairperson from among its members and shall appoint a secretary. Terms of the chairperson and vice chairperson shall be for Ordinance No. 26‐2285
one year. Upon approval of the City Council, the City Manager may appoint a secretary who need not be a member of the committee.
2.88.060 Meetings.
A. The Audit and Finance Committee shall establish a regular time and place of meeting and rules of conduct thereof and shall hold at least one regular meeting quarterly.
B. A majority of the Audit and Finance Committee shall constitute a quorum for the purpose of transacting the business of the committee.
2.88.070 Compensation–Expenses.
Members shall serve on the Audit and Finance Committee without compensation, but all necessary expenses reasonably incurred by them while acting in their official capacity shall be paid by appropriate action of the City Council.
2.88.080 Majority Vote Required.
A majority vote of the quorum is required to approve a recommendation on any matter that is presented to the committee which requires a vote.
2.88.090 Records.
The committee shall keep
an accurate record of its proceedings and transactions and shall render such reports to the City Council and Planning Commission as may be required. These records shall be filed with the City Clerk.
2.88.100 Duties–Powers–Responsibilities.
The powers and functions of the Audit and Finance Committee shall be as follows:
A.
To review the annual audit report and management letter; B. To recommend appointment of auditors;
C. To review the Quarterly Treasurer’s investment report; D. To recommend a budget format;
E. To review City investment policies and internal controls of such policies; F. To recommend appointment of internal auditors;
G. To review the City’s internal controls and internal audit reports; H. To review quarterly Fraud, Waste, and Abuse Program reports; I. To review the use of emerging technologies such as artificial intelligence in the City’s financial reporting, internal controls over financial reporting, risk management, and compliance.
2.88.110 City Staff Assistance.
Ordinance No. 26‐2285
The Audit and Finance Committee shall have available to it such assistance of City staff as may be required to perform its functions, the staff assignments and administrative procedures to be under the general direction and supervision of the Director of Finance.
2.88.120 Procedural Rules.
The Audit and Finance Committee
may adopt from time to time such rules of
procedure as it may deem necessary to properly exercise its powers and duties. Such rules shall be subject to approval by the Council before becoming effective. All such rules shall be kept on file with the chairperson of the Audit and Finance Committee, the Mayor, and the City Clerk and a copy thereof shall be furnished to any person upon request.
2.88.130 Effect.
Nothing in this chapter shall be construed as restricting or curtailing any powers of the City Council or City officers.