TO: RULES AND OPEN FROM: Joe Rois,
GOVERNMENT COMMITTEE City Auditor
SUBJECT: Monthly Report of Activities for DATE: October 2, 2024 September 2024
RECOMMENDATION
Approve the Auditor’s Office Monthly Report of Activities for the month of September 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) 2024-25 Work Plan during the month of September 2024.
Activities During the Month of September:
1. Issued Encumbrances: Departments Should Regularly Review All Encumbrances to Ensure Timely Liquidation. The report is online at: https://www.sanjoseca.gov/home/showpublisheddocument/114405.
2. Issued Status of Open Audit Recommendations as of June 30, 2024.
The report is online at:
https://www.sanjoseca.gov/home/showpublisheddocument/114417/. The office also updated the online interactive dashboards of audit recommendations. These can be found at:
https://www.sanjoseca.gov/your-government/appointees/city-auditor/auditrecommendations.
3. Macias, Gini & O’Connell (MGO issued two of the City’s annual financial audits. The reports are online at: https://www.sanjoseca.gov/yourgovernment/appointees/city-auditor/external-financial-audits Information on the status of the City Auditor’s FY 2024-25 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
ROGC AGENDA: 10/9/24
ITEM: B.3
RULES AND OPEN GOVERNMENT COMMITTEE
10-2-24
Monthly Report of Activities for September 2024
Status of the City Auditor’s FY 2024-25 Audit Work Plan As of September 2024
Objective Status Issuance
Date
Assignments Completed
1. 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 years ago.
(Outstanding request from a resident)
Completed September
2024
2. Semi-annual audit
recommendation status
report
Report on the implementation status of all open audit
recommendations as of June 30, 2024. Completed September 2024
3. 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 independent certified public accounting firm
Macias Gini & O’Connell LLP (MGO) will conduct the
agreed-upon procedures as of June 30, 2024.
Completed September
2024
Assignments in Process
4. Tenant Protection
Ordinance
Review the assessment and use of Tenant Protection
Ordinance fees. (Councilmember request) In process
October
2024
(projected)
5. Annual audits of voterapproved bond and parcel
tax measures (contracted
audit service)
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.
In process
October
2024
(projected)
6. San José Animal Care and
Services
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
November
2024
(projected)
7. 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, 2024.
In process
November
2024
(projected)
RULES AND OPEN GOVERNMENT COMMITTEE
10-2-24
Monthly Report of Activities for September 2024
Objective Status Issuance
Date
8. Access to and use of
critical services by
traditionally marginalized
communities –
neighborhood blight
reduction programs
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)
Note: 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 neighborhood
blight reduction and beautification programs in the
Department of Parks, Recreation and Neighborhood
Services.
In process
December
2024
(projected)
9. Annual services report 17th 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.
In process
December
2024
(projected)
10. 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).
In process
(one
project
complete)
September
2024
– February
2025
(projected)
Assignments Not Yet Started
11. Annual performance
review of Team San José
and the Convention and
Visitors Bureau
Annual review to determine whether Team San José
met their performance metrics as of June 30, 2024. Not
started
November
2024
12. Semi-annual audit
recommendation status
report
Report on the implementation status of all open audit
recommendations as of December 31, 2024. The
office will also maintain an online dashboard of audit
recommendations
Not
Started
March
2025
RULES AND OPEN GOVERNMENT COMMITTEE
10-2-24
Monthly Report of Activities for September 2024
Objective Status Issuance
Date
13. 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.
MGO will conduct the agreed-upon procedures as of
December 31, 2024.
Not
started
March
2025
14. Park in-lieu fees Assessment of collection, tracking, and use of park inlieu fees. (Outstanding requests from resident and former Mayor)
Not
started TBD
15. 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
16. Access to and use of
critical services by
traditionally marginalized
communities
(traffic safety)
The second project in this series will focus on Traffic Safety programs or services in the Increasing
Community Safety City Council focus area. Not
Started TBD
17. Homelessness Audit to explore the City’s internal department structure related to homelessness response, including
assessing coordination of activities and benchmarking
with other jurisdictions. (Per City Council direction at the June 11, 2024 City Council meeting)
Not
Started TBD
18. Procurement Assess the efficiency of the City’s procurement processes for goods and services, not including public
works projects. (Outstanding audit requests from a
Councilmember and the Mayor)
Not
started TBD
19. City costs for special
events
Assess City-required security or other costs to
organizers for special events. (Request from the
Mayor)
Not
started TBD
Note: The approved work plan includes 17 projects. The two semi-annual recommendation status reports are listed as one project but separated here to show progress. Similarly, the two semi-annual compliance reviews of the City’s investment program are listed as one project on the work plan but separated here.
The City Auditor’s Fiscal Year 2024-25 Work Plan is online at:
https://www.sanjoseca.gov/your-government/appointees/city-auditor/annual-work-plans