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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Audit Committee Annual Report and Internal Audit Work Plan
1. Motion to note and file Fiscal Year 2023-24 Audit Committee Annual Report for the period of July 1, 2023 to June 30, 2024
2. Motion to note and file Fiscal Year 2024-25 Internal Audit Work Plan
COUNCIL ACTION
Item Type: Consent Calendar
Approved for August 13, 2024 calendar
EXECUTIVE SUMMARY
Each year, the Audit Committee must report its actions and activities to the City Council per Glendale Municipal Code Section 2.82.100 (D). The Audit Committee met four times during Fiscal Year 2023-24 where they were provided with financial updates and internal audit activity reports. Additionally, each year, Internal Audit must prepare an audit work plan based on a risk assessment per Glendale Municipal Code section 2.08.130 (A). This risk-based work plan is used to identify and prioritize high risk areas to select and schedule audits. The Fiscal Year 2024-25 Internal Audit Work Plan was reviewed by the Audit Committee at its July 25, 2024 meeting as required by Glendale Municipal Code section 2.82.100 (B). This Work Plan is comprised of 19 projects. {{Item.Tracking_Number}}2{{section.number}}{{item.number}} 5 3
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RECOMMENDATION
Note and file the Fiscal Year 2023-24 Audit Committee Annual Report and the Fiscal Year 2024-25 Internal Audit Work Plan.
ANALYSIS
Fiscal Year 2023-24 Audit Committee Annual Report
Each year, the Audit Committee must report its actions and activities to the City Council per Glendale Municipal Code Section 2.82.100 (D). At its July 25, 2024 meeting, the Audit Committee approved its Fiscal Year 2023-24 Report (Exhibit 1), which covers the actions and activities of the Audit Committee for the period of July 1, 2023 through June 30, 2024. Currently, the Audit Committee is presenting this report to the City Council to satisfy the requirements of the Glendale Municipal Code. The Audit Committee met four times during Fiscal Year 2023-24 where they were provided with financial updates and internal audit activity reports:
• The financial activities completed by the Audit Committee include review of the City’s financial statement audit as of and for the year ending June 30, 2023, examination of the external auditor’s communication on significant audit findings, and review of other financial reports provided by Finance staff.
• The internal audit activities completed by the Audit Committee include review of Fiscal Year 2023-24 Internal Audit Work Plan, review of issued internal audit reports, review of the status of audit follow-up activities including discussion of any audit recommendations not being implemented within two and three years of audit report issuance, and the decision of not implementing an audit recommendation by management.
Fiscal Year 2024-25 Internal Audit Work Plan
Each year, Internal Audit must prepare an audit work plan based on a risk assessment per Glendale Municipal Code section 2.08.130 (A). Internal Audit’s plan of engagements is developed following a risk-based model that includes an annual risk assessment process and a quantitative methodology that assigns a weighted risk value to each potential audit subject area in the City. This risk-based work plan is used to identify and prioritize high risk areas to select and schedule audits. This work plan is a flexible and dynamic document that will be amended throughout the year in response to the changes in risks and priorities. The ongoing risk assessment will be performed through a continuous risk assessment approach and regular communications with management and the Audit Committee.
The risk assessment process includes reviewing and updating potential audit topics through discussions with key management personnel by gathering information on the operating environment on a bi-annual basis. These potential audit topics are evaluated and rated for impact and likelihood in the four risk categories of financial, compliance, strategic and operational. The final risk ranking considers factors such as the City’s {{Item.Tracking_Number}}3{{section.number}}{{item.number}} 5 3
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strategic goals and objectives, executive management’s specific concerns, explicit management requests, significant changes in operations, key areas not previously audited, and available staff resources. The plan is reviewed with the City Manager and Audit Committee prior to being presented to City Council.
The Fiscal Year 2024-25 Internal Audit Work Plan (Exhibit 2) was reviewed by the Audit Committee at its July 25, 2024 meeting as required by Glendale Municipal Code section 2.82.100 (B). The Fiscal Year 2024-25 Internal Audit Work Plan is comprised of 19 projects, including one carried-over project, four new and re-selected projects, three recurring projects, and 11 continuous auditing/on-going advisory assignments. In addition, four potential projects are included within this work plan and may be performed due to changes in risks and priorities, or if all the planned audits are completed prior to the next year’s work plan development.
STAKEHOLDERS/OUTREACH
Not Applicable
FISCAL IMPACT
There is no fiscal impact associated with this report.
ENVIRONMENTAL REVIEW (CEQA/NEPA)
Not Applicable
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: Consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Roubik R. Golanian, City Manager
Prepared by:
Natalie Minami-Valdivia, Principal Internal Auditor
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
Exhibit 1 - Fiscal Year 2023-24 Audit Committee Annual Report Exhibit 2 - Fiscal Year 2024-25 Internal Audit Work Plan