CITY COUNCIL STAFF REPORT
DATE: MAY 27, 2026 CONSENT CALENDAR
SUBJECT: ESTABLISH A POLICY MANDATING AN INDEPENDENT AUDITING
FIRM TO CONDUCT AN AUDIT EVERY TWO FISCAL YEARS FOR CITY
GRANTS AND CONTRACTS
FROM: Scott C. Stiles, City Manager
BY: Department of Finance and Treasury
SUMMARY:
On June 23, 2025, the City of Palm Springs received a Riverside County Civil Grand Jury report with a recommendation (R7) that the Palm Springs City Council establish a policy by June 30, 2026, that mandates an independent auditing firm to conduct an internal operational audit (key processes, procedures, and internal controls) every two fiscal years (Attachment A).
RECOMMENDATION:
By motion, approve a policy mandating an independent auditing firm conduct an internal operational audit over City-funded grants and contracts (key processes, procedures, and internal controls) every two fiscal years.
BACKGROUND:
On June 23, 2025, the Riverside County Grand Jury issued its report entitled “City of Palm Springs Lacked Proper Procedures for Vetting and Monitoring of Grants” (“Report”). The Report focuses on the alleged lack of adequate policies and procedures for processing and monitoring grants and contracts to ensure public funds are used appropriately. This investigation was initiated at the request of the District Attorney after the indictment of the CEO of Queer Works. The City entered a Memorandum of Understanding with Queer Works and Desert AIDS Project to provide financial support for the purpose of conducting due diligence in pursuing a State grant for a possible guaranteed income pilot program targeting transgender and/or non-binary individuals.
On September 10, 2025, a staff report was brought before City Council to approve the response to the Riverside County Civil Grand Jury that accompanies this staff report as Attachment A.
City Council Staff Report
May 27, 2026 -- Page 2
Approval of an Audit of City Grants and Contracts Every Two Years ENVIRONMENTAL ASSESSMENT:
None.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the City Council’s Strategic Plan Broad Goal of Public Safety and Community Services, and the Foundation of Financial and Organizational Well-Being.
FISCAL IMPACT:
The estimated annual cost associated with implementing an independent audit is $24,000.
REVIEWED BY:
Department Director: Kristopher J. Mooney
City Manager: Scott Stiles
ATTACHMENTS:
A. Staff Report Approving Response to Civil Grand Jury Report