TO: Rules & Open Government Committee FROM: Joe Rois,
City Auditor
SUBJECT: Monthly Report of Activities for DATE: May 30, 2024 May 2024
RECOMMENDATION
Approve the Auditor’s Office Monthly Report of Activities for the month of May 2024.
SUMMARY OF RESULTS
Charter Section 8.05(e) requires the City Auditor to submit a monthly report to the City Council of our activities, findings, and recommendations. This report summarizes reports issued, other activities, assignments in process, and the status of the City Auditor’s Fiscal Year (FY) 2023-24 Work Plan during the month of May 2024.
Information on the status of the City Auditor’s FY 2023-24 Work Plan is attached. On behalf of the Auditor’s Office, I would like to express my appreciation to City staff for their cooperation and assistance during our reviews.
Joe Rois
City Auditor
Attachment
RULES COMMITTEE AGENDA: 6/5/2024
ITEM: B.3
RULES AND OPEN GOVERNMENT COMMITTEE
Monthly Report of Activities for May 2024
Status of the City Auditor’s FY 2023-24 Audit Work Plan As of May 2024
Objective Status Issuance
Date
Assignments Completed
1. Integrated Waste Management
Inspection Programs
Evaluation of the Integrated Waste Management (IWM)
Enforcement Program’s service delivery. (IWM ranked high on the Citywide risk assessment; open audit request related to IWM) Completed September
2023
2. Performance measure review
(Housing Department)
Recurring projects to assess the validity and usefulness of performance metrics by City departments, programs, or City Service Areas. This work is intended to be ongoing to augment the Annual Services Report and assist the Administration to enhance the City’s performance management systems in
alignment with the “Outcome, Equity Indicators, and
Performance Management” City Roadmap initiative.
(Councilmembers have made requests about the City’s performance measurement and management in prior years)
Completed September
2023
3. Semi-annual audit
recommendation status report
Report on the implementation status of all open audit
recommendations as of June 30 and December 31, 2023. Completed September
2023 &
March
2024
4. Semi-annual compliance review
of the City’s investment program
(contracted audit service)
The City’s investment policy requires semi-annual compliance audits of the City’s investment portfolio. The City’s outside financial statement auditor, Macias, Gini & O’Connell (MGO), will conduct agreed-upon procedures to test for compliance as of June 30, 2023, and December 31, 2023.
Completed
September
2023 &
April 2024
5. Office of Retirement Services Audit to cover, at a minimum, the following areas: 1. Identifying internal process controls for financial activities such as accounting, purchasing, and contracting; 2. Identifying policies and procedures around information systems and security; 3.
Compliance with City policies for financial activities, information systems and security, and other relevant administrative functions; and 4. A comparison of governance structures of other pension plans, including board oversight of management’s administrative functions and responsibilities. (Added to work plan at August 9 meeting of the Rules Committee based on request from the Mayor and two Councilmembers)
Completed
Interim
Report -
October
2023
Second
report –
April 2024
6. Biennial peer review for
FYs 2021-22 and 2022-23
(contracted audit service)
The City Charter requires a performance audit of the Office of the City Auditor be conducted at least once every two years. To fulfill this requirement, the Office participates in the Association of Local Government Auditors’ peer review program. The last peer review was conducted in 2021.
Completed October
2023
7. Annual audits of voter-approved
bond and parcel tax measures
(contracted audit service)
The independent certified public accounting firm Macias Gini & O’Connell LLP (MGO) will conduct audits of the Branch Library Bond Projects Fund, the Parks and Recreation Bond Projects Fund, the Library Parcel Tax Fund, and the Public Safety and Infrastructure (“Measure T”) Bond Fund satisfying the City’s obligation for guaranteed annual audits.
Completed October
2023
8. Annual performance review of
Team San Jose and the
Convention and Visitors Bureau
Annual review to determine whether Team San Jose met their performance metrics as of June 30, 2023. Completed November 2023
9. Building permitting Assess the timeliness of the building permit process for singlefamily residential additions or alterations, including accessory structures. (Request by Councilmember)
Completed November
2023
RULES AND OPEN GOVERNMENT COMMITTEE
Monthly Report of Activities for May 2024
Objective Status Issuance
Date
10. Compliance review of San José
Clean Energy’s risk management
practices
(contracted audit service)
MGO will conduct tests of San José Clean Energy (SJCE)
investment and risk management practices to ensure compliance with the City’s Energy Risk Management Policy and Energy Risk Management Regulations as of FY Ended June 30, 2023.
Completed November
2023
11. Annual Report on City Services
2022-23
16th annual report providing data about the cost, quality, quantity, and timeliness of City services. The report incorporates existing performance measurement data, showing ten-year historical trends, a variety of comparisons to other cities, and the results of a resident survey. The Office will also maintain an online dashboard of CSA dashboard measures.
Completed December
2023
12. Non-management employee
performance appraisals
“% of Non-Management Employee Performance Appraisals Completed on Schedule” is a dashboard performance measure in the Adopted Operating Budget’s Strategic Support City Service Area.
According to data provided to the City Auditor’s Office for the Annual Services Report, just 52 percent of non-management employees had on-time performance appraisals in FY 2020-21. (Open audit request and the Lead and Manage the Organization core service ranked high on the Citywide risk assessment)
Completed February
2024
13. Language Accessibility Assess City communications for compliance with the City’s Language Access Policy (now the Language Equity Policy and Guidelines). (CMO’s Lead and Manage the Organization core service ranked high on the Citywide risk assessment)
Completed March
2024
14. Annual external financial audit
and single audit
(contracted audit service)
The City Charter requires an annual audit of the City’s financial transactions. MGO will conduct the annual audits of the Annual Comprehensive Financial Reports of the City and the Airport.
MGO will also conduct audits of the financial statements of the Successor Agency to the Redevelopment Agency, Convention Center, Deferred Compensation, Tier 3 Defined Contribution Plan, Voluntary Employee Beneficiary Association (VEBA), Metropolitan Transportation Commission (MTC) grant
compliance, South Bay Water Recycling, San José Clean Energy (SJCE), and the Single Audit (including Airport passenger facility charges and customer facility charges). An audit of expenditures under a California Violence Intervention & Prevention Grant was added in November 2023.
Completed
September
2023 –
March
2024
Assignments in Process
15. San José Animal Care and
Services
(Added on October 11, 2023)
Audit covering various aspects of Animal Care and Services’ operations and comparisons against industry standards, as directed by the Mayor and multiple Councilmembers. (Added to the work plan by the Rules Committee on October 11, 2023) In process
October
2024
(projected)
16. Tenant Protection Ordinance Review the assessment and use of Tenant Protection Ordinance fees. (Councilmember request) In process
October
2024
(projected)
17. Encumbrances Review encumbrances for compliance with the City’s Encumbrance Policy (CPM 5.1.12). The General Fund had a $53 million Encumbrance Reserve in the FY 2023-24 Proposed
Operating Budget. This is nearly 40 percent higher than five In process TBD
RULES AND OPEN GOVERNMENT COMMITTEE
Monthly Report of Activities for May 2024
Objective Status Issuance
Date
years ago. (Outstanding request from a resident)
18. Access to and use of critical
services by traditionally
marginalized communities
Assess and provide recommendations related to departmental efforts around progress on Racial Equity Action Plans, resources available for equity-related work, collection of data on participants or parties impacted by services, and/or other related areas. (Mayor provided direction to explore an audit scope in this area in the March 2023 Budget Message)
Update: The Office intends this to be a series of audits focusing on different programs or services provided by the City. The first project will focus on services within BeautifySJ in the Department of Parks, Recreation and Neighborhood Services.
In process TBD
Assignments Not Yet Started
19. Park in-lieu fees Assessment of collection, tracking, and use of park in-lieu fees. (Outstanding requests from resident and former Mayor)
Not
started TBD
20. Police overtime follow up
report
Assess controls around overtime in the Police Department. This is a follow up to the City Auditor’s 2016 Police Overtime and 2021 Police Staffing, Expenditures, and Workload audits. (Outstanding audit request)
Not
started TBD
The City Auditor’s Fiscal Year 2023-24 Work Plan is online at:
https://www.sanjoseca.gov/your-government/appointees/city-auditor/annual-work-plans