FINANCE DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3120
CUPERTINO.GOV
CITY COUNCIL STAFF REPORT
Date: September 15, 2026
Subject
Receipt of Grants Management Internal Controls Review Final Report Recommended Action
Receive the Grants Management Internal Controls Review Final Report Background
The City of Cupertino’s Fiscal Year (FY) 2024-25 Internal Audit Program recommended a project to assess internal controls over the City’s grants management activities, including compliance with policies, procedures and best practices. The City’s internal auditor, Baker Tilly conducted a review between June and October 2025 and tested procedures in FY 2025-26. The Finance Department provided feedback on the initial report in March and July 2026. The final Grants Management Internal Controls Review R eport (Attachment A) was received in July 2026 and presented to the Audit Committee on July 28, 2026, resulting in a recommendation for the City Council to accept the final report.
Reasons for Recommendation and Available Options
Citywide s taff, including management and Finance , participated in a thorough grants management review conducted by Baker Tilly. Combined with the management responses in 2026, this resulted in a detailed final report that guides opportunities for enhancing the City’s grants management policies, procedures and implementation of best practices. Enhancing grants management systems builds opportunities for revenue increase and reduces risk due to errors.
As discussed at the July Audit Committee meeting and noted in the final Grants Management Internal Controls Review report (“report”), the City resolved some recommendations following the testing period through changes to personnel, policy, and procedures, including hiring a Grants Analyst in December 2025.
The report commends the City on several well-designed internal controls including:
• Executive oversight and approval for grant applications • Record retention that indicates audit readiness
• Segregation of duties in invoice processes, reducing risk of errors • Hand-offs designed to reduce risk associated with staff transitions
Key recommendations from the report for the coming 6 to 18 months are also identified with the City’s current progress and planned actions towards resolution:
• Develop and implement standardized grants management policies and procedures and continuity plans. Standardize grant documentation and recordkeeping. o Standardized citywide grants management procedures are in development with an anticipated release in Fall 2026. This includes delineated roles, standardized documentation and procedures for the full grants lifecycle. • Centralize grant opportunity identification and monitoring o Primarily led by the Grant Analyst and continued grant identification through department staff
• Enhance grant tracking and documentation practices
o Grant tracking procedures are in development, with the possibility of advancements through the City’s upcoming Tyler Technologies Enterprise Resource Planning system with planned go-live in Fall 2027 • Implement structured grant management training
o Training under development with an anticipated rollout in Fall 2026 • Formalize grant application and approval workflow
o The Council Grants Policy was updated in May 2026, governing approval of application, acceptance and reporting of grants
• Establish consistent internal review and approval processes for grant reporting o Staff are establishing standardized citywide grants management procedures • Strengthen subrecipient monitoring and documentation
o The City imple mented a solution for data management support including data storage and compliance documentation for subrecipients that will be utilized by the Housing Division.
By accepting the report, C ouncil will allow staff to use the recommendations as a guide for ensuring robust grants management systems that reduce risks for the City and align with departmental needs.
Sustainability Impact
No sustainability impact
Fiscal Impact
There is no fiscal impact on this item.
To follow -up on outstanding recommendations and as sess pr ogress in implementing grants management recommendations, please refer to the separate staff report item that will be presented to Council this evening on FY 2026-27 Internal Audit Work Plan.
City Work Program (CWP) Item/Description
FY 25-26 Grants Analyst: Explore a Grants Analyst position Council Goal:
Fiscal Strategy
TBD Item:
No.
California Environmental Quality Act
The proposed action does not constitute a “project” subject to CEQA _____________________________________
Prepared by: Veena Raghavan, Grants Analyst
Reviewed by: Jonathan Orozco, Director of Finance
Floy Andrews, Interim City Attorney (As needed)
Kirsten Squarcia, Deputy City Manager
Approved for Submission by: Tina Kapoor, City Manager
Attachments:
A – Grants Management Internal Controls Review Report