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4 City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Auditor
Meeting Date: August 10, 2026
Report #:2606-6475
TITLE
Recommend City Council Approval to Extend Certain FY 2026 City Auditor Task Orders with No Impact to Task Order Budgets
RECOMMENDATION
The City Auditor recommends that the City Council approve timeline extensions for the following FY 2026 task orders with a net zero impact to the Office of the City Auditor’s (OCA) contracted budget:
Task Order 4.35 – Below Market Rate Housing
Task Order 4.36 – Fleet Resources & Sustainability & Climate Action Plan (SCAP) Task Order 4.37 – Traffic Safety Improvements
Task Order 4.38 – CPAU Utility Program Reserves Advisory Project: this audit was presented to P&S in April 2026 and will be presented to the Utility Advisory Commission in September 2026 and later to the Finance Committee.
Task Order 4.41 – Follow-up Activities
FY26 Task 6 – Evaluation & Benchmarking
BACKGROUND
In accordance with our agreement with the City, Baker Tilly is required to conduct recurring activities each year. Task 4 – Execute the Annual Audit Plan comprises the majority of OCA’s budget and time. Specific audit task orders are approved annually by the City Council and executed by the Policy & Services Committee (P&S) Chair as the Project Manager for the Baker Tilly contract as stipulated in the contract terms.
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4 ANALYSIS
OCA is seeking to extend task order timelines for the first five task orders which are all associated with Audit Plan projects that are underway and at various stages of either fieldwork or reporting. All reports should be completed by the end of the calendar year. Work on both the CPAU Utility Program Reserves Advisory Project and the Audit Follow-Up Activities Project are complete and in final stages of reporting expected in August/September 2026.
The three remaining audits are in various stages of fieldwork and reporting. The Below Market Rate Housing Audit is with management for their review and response and is scheduled for presentation at the September P&S meeting. The Fleet Resources & SCAP and Traffic Safety Improvement Audits both experienced delays due to audit staff turnover. New teams have been assigned and both audits are in fieldwork. No additional funds are anticipated to complete this work.
For Task 6 – Evaluation & Benchmarking, Baker Tilly is in the process of initiating a third-party assessment of the City’s Audit function through the Institute of Internal Auditor.
FISCAL/RESOURCE IMPACT
Extension of these Tasks and Task Orders will not impact the approved scope or compensation for these audits and audit activities included in the FY26 Baker Tilly contract’s operating budget for the OCA.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the audit activities do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQ Guidelines section 15378(b)(4).
ATTACHMENTS
Attachment A: Task Orders 4.35, 4.36, 4.37, 4.38, 4.41, and FY26 Task 6 APPROVED BY: Kate Murdock, City Auditor