Administrative
Report
N.4., File # 22-3850 Meeting Date: 4/5/2022
To: MAYOR AND CITY COUNCIL
From: JENNIFER PAUL, FINANCE DIRECTOR
TITLE
DISCUSSION AND POSSIBLE ACTION REGARDING AN UPDATE ON THE STATUS OF THE MOSS ADAMS REPORT.
EXECUTIVE SUMMARY
One of the objectives in the City’s Strategic Plan is to report to Council on the status of the Moss Adams report findings and the current next steps. This item provides an update on the work that has been completed thus and the current active projects.
BACKGROUND
On June 7, 2016, the City Council contracted with Moss Adams to serve as its internal auditor and conduct projects focusing on risks, internal controls, compliance, performance, and best practices.
On October 1, 2017, Moss Adams finalized an Internal Controls Review and Financial Risk Assessment report. The City of Redondo Beach asked Moss Adams to review its internal controls framework and conduct a financial assessment. The review took place from October 2016 to April 2017. The internal controls review focused on assessing select key controls in areas deemed important to protecting the City’s assets and resources and processing and reporting timely financial information. The risk assessment focused on evaluating uncertainty related to manageable City financial functions and processes. City staff responded to the report findings after finalization and implemented recommended changes where staff resources permitted.
In FY 2019-2020, the focused projects were policy development (based on priorities); fraud, waste, and abuse program development/training; and ongoing internal audit services. In response, the City ensures the operation of a Fraud Hotline to help prevent fraud, waste and abuse. Currently, all new hires including both full and part-time, receive the City’s Fraud, Waste, and Abuse hotline flier with their new employee orientation materials. At orientation, employees are provided with information on the hotline’s purpose as well as instructions for its use. The hotline is operational 24 hours per day, 7 days per week. Employees or others who suspect any fraud, waste or abuse can leave anonymous messages on the hotline which will be investigated by Human Resources. The Human Resources Analyst responsible for Risk Management serves as the primary monitor of the messages, with the remaining staff serving as backup when needed. Messages received are documented by date and time and followed up on as needed in accordance with City policies.
In FY 2020-2021, Moss Adams recommended purchasing process improvements, policy development, and ongoing internal audit services. The majority of these projects were put on hold due to the COVID-19 pandemic. However, Financial Services staff and the City Clerk were able to review and implement a revised Cal Card policy in response to the recommended purchasing
N.4., File # 22-3850 Meeting Date: 4/5/2022
review and implement a revised Cal Card policy in response to the recommended purchasing process improvements.
Currently, in FY 2021-2022, Moss Adams is working on the following projects: additional fraud, waste, and abuse (FWA) program training and development; Internal Service Fund (ISF) review; procurement operational review; and policy training.
COORDINATION
Financial Services Department is working with the City Clerk, City Treasurer, and Human Resources to provide Moss Adams with any support and information that they request.
FISCAL IMPACT
There is no fiscal impact as this is an update.
ATTACHMENTS
FY21-22 Fraud, Waste, and Abuse Program
FY21-22 Internal Audit Program Presentation-for reference FY21-22 City of Redondo Beach Internal Audit Status Report