Semi-Annual Audit Status Report – Fiscal Year 2022/23
As of September 30, 2022
OVERVIEW
The mission of the City Auditor’s Office is to promote honest, efficient, effective, and fully accountable city government through accurate, independent, and objective audits. We conduct performance audits and reviews of City departments, programs, and services. We provide oversight of external auditors regarding the City’s annual financial audit, single audit, annual compliance review with the City’s Investment Policy, performance audits and related financial audits.
The Audit Committee and City Council approve a flexible annual Audit Work Plan with a risk- based methodology. The most recent Semi-Annual Status Report (as of June 30, 2021) was delivered to the Audit Committee in September 2021. The internal audit work has had some delays due to internal staff availability and contracted audit firms scheduling issues.
The Auditor’s Office also would like to formalize the the semi-annual reporting timeline to the Audit Committee, to align with the September and March meeting dates, where other financial reporting requirements already trigger Audit Committee meet ings. For the current reporting period, the Auditor’s Office will also come before the Committee in December of 2022 to review and seek approval of additional audit work that is recommended as part of the Citywide risk assessment project. This will set the Annual Audit Work Plan for calendar year 2023.
This Semi-Annual Audit Status Report summarizes the status of items from the previously approved Annual Audit Workplan and includes other items that have been proposed for review.
ACTIVITY HIGHLIGHTS – PERIOD ENDING SEPTEMBER 30, 2022:
Completed a review of the City’s Conference and Travel Policy. Changes were made to bring the City into compliance with GSA guidelines and strengthen controls around pre- travel approvals as well as clarify previously inconsistent language.
“Launched Speak Up Santa Clara” the City’s whistleblower hotline for employees to report anything related to fraud, waste, and abuse or other areas of concern they feel the Auditor’s Office needs to know about. The hotline was authorized in relation with the Fraud, Waste, and Abuse Policy that was also approved by Council during this reporting period.
Over the previous year, the Auditor’s Office staff has placed an emphasis on training related to internal audit functions and have attended a number of training events offered by the Institute of Internal Auditors (IIA) and the Association of Local Government Auditors (ALGA) to strengthen core internal audit skills.
Completed the procurement of Maze & Associates to perform the annual external financial audit and Single Audit of federal funds for the City for a period of five years.
Audit Status Report – Fiscal Year 2022/23 As of September 30, 2022 (continued)
ASSIGNMENTS COMPLETED SINCE PREVIOUS STATUS REPORT
The following table lists completed assignments from the previous Audit Work Plan:
Project Name Project Description Start
Date
(1)
Status Issuance /
Completion
Date
1. Fraud, Waste, and
Abuse Policy
(Fraud Policy)
The Policy sets out policies and procedures to encourage and facilitate the reporting of fraud, waste, or abuse and any other questionable practices.
June 2021 Completed January 2022
2. Update of the City’s
Travel Policy
The City Auditor’s Office reviewed the City Travel Policy to define the City’s expectations regarding employees
who travel in connection with their work responsibilities.
The update brings the policy in line with US General
Services Administration (GSA) guidelines and clears up
previous inconsistencies.
June 2021 Completed July 2022
3. Annual Review of
Internal Audit
Charter
The City Auditor’s Office reviewed the Internal Audit
Charter in conjunction with its ongoing citywide risk
assessment project and determined no revisions were
necessary at this time. Charter is reviewed annually, and any proposed revisions are subject to review and
approval by the Audit Committee.
June 2021 Completed June 2022
4. Fraud, Waste, and
Abuse - Whistle
Blower Hotline
The City has retained a third-party vendor to provide a comprehensive solution for employees to report any
concerns related to fraud, waste, or abuse. This function provides continuous monitoring of any issues raised and provides a case management platform to track reported
issues and produce statistical reporting which will help inform areas of focus for future audit plans.
June 2021 Completed September 2022
5. Annual External
Financial Audit and
Single Audit for the
City (contracted
audit service)
The City Charter requires an annual external audit of the City’s financial transactions to be performed by an
independent certified public accountant. The City
Auditor’s Office administers the audit contract and works with the Finance Department and the external audit firm to coordinate this effort.
June 2021 Completed December 2021
Audit Status Report – Fiscal Year 2022/23 As of September 30, 2022 (continued)
Project Name Project Description Start
Date(1)
Status Issuance /
Completion
Date
6. Annual External
Financial Audit for
the Stadium
Authority
(contracted audit
service)
The Santa Clara Stadium Authority (Stadium Authority),
the Stadium Funding Trust, and Goldman Sachs Bank
USA entered into a Credit Agreement on June 19, 2013
to finance the stadium. Section 5.1(a) of the Credit
Agreement requires that the Stadium Authority Annual
Financial Statements be audited by independent certified public accountants within 180 days after the end of each fiscal year. The City Auditor’s Office administers the audit contract and works with the Finance Department
and the external audit firm to coordinate this effort.
June 2021 Completed September 2022
ASSIGNMENTS IN PROCESS:
The following table lists all Assignments in Process from the previous Audit Work Plan:
Project Name Project Description Start
Date
(1)
Status Issuance/
Completion
Date
7. Review of Financial
Procedures and
Controls for the
Santa Clara Stadium
Authority (contracted
service)
Review past Construction Fund and Public Safety
transactions and provide feedback on the allocation of
staff charges. Contracted to JS Held. This report was just received by the Auditor’s Office and will be presented at the next Committee meeting in December 2022.
June 2021 In Process
October 2022
8. Audit of the 2019
College Football
Playoff National
Championship Game
(contracted audit
service)
An analysis of the revenue and expense classification and review of the completeness of the supporting documents
for the 2019 College Football Playoff game. Contracted to The PUN Group. This had been delayed due to a need
for a non-disclosure agreement between MANCO and
The PUN Group as well as contractual and staffing issues that had to be addressed with the time extension of the PUN Group contract. The PUN Group has identified the
staff resource needed and has communicated to MANCO
the documentation they require finish the review.
June 2021 In Process December 2022
Audit Status Report – Fiscal Year 2022/23 As of September 30, 2022 (continued)
Project Name Project Description Start
Date(1)
Status Issuance/
Completion
Date
9. Annual Risk
Assessment and
Development of
Internal Audit Annual
Workplan
The City Auditor’s Office is to perform an annual risk
assessment as required by internal audit standards to
identify and prioritize the potential audit subjects for the Audit Work Plan. The annual workplan is designed to
improve the effectiveness of risk management, internal
controls, and governance processes. The City contracted with Baker Tilly, Inc. to perform the assessment. They are a nationally respected firm with many municipal internal audit clients. The initial data gathering, and interviews have recently completed, and a draft of both the risk
assessment report and proposed annual audit work plan
are in process.
June 2021 In Process December 2022
10. Semi-Annual Audit
Status Report
The City Auditor’s Office prepares and issues semi-
annual status and progress update reports on the
approved audit assignments in the audit work plan. The
staff also reports on any changes (e.g. assignment
addition or deletion) to the audit work plan.
June 2021 In Process September
2022 &
December 2022
11. Annual Audit
Recommendation
Status Report
The City Auditor’s Office tracks audit recommendations
and issues reports on the implementation status of all
open audit recommendations. The staff also meets with
the auditee to discuss the progress of the audit
recommendations.
June 2021 In Process December 2022
12. City Auditor’s Cash
Disbursement Audit
The City Charter requires the City Auditor to audit and approve bills, invoices, payrolls, demands or charges
against the City before payment.
June 2021 In Process December 2022
Audit Status Report – Fiscal Year 2022/23 As of September 30, 2022 (continued)
Project Name Project Description Start
Date(1)
Status Issuance/
Completion
Date
13. Internal Audit Annual
Work Plan
The City Auditor is responsible for developing an annual internal audit work plan based on the results of an annual citywide risk assessment designed to improve the
effectiveness of risk management, internal control, and governance processes.
The annual work plan is presented to the Audit Committee to recommend to the City Council for approval, which is required prior to the start of any audit work.
June 2021 In Process December 2022
14. Annual Continuing
Education Training
The City Auditor’s Office is committed to attending regular continuing professional education (CPE) training and
maintaining a minimum of 40 CPE hours a year for each
staff.
June 2021 In Process Ongoing
ASSIGNMENTS NOT YET STARTED:
The following table lists all Assignments Not Yet Started as of September 30, 2022 for the current Audit Work Plan:
Project Name Project Description Start
Date
(1)
Status Projected
Issuance /
Completion
Date
15. Review of Financial
Procedures and
Controls for the
Santa Clara Stadium
Authority (contracted
service)
Staff has asked the City Auditor’s Office to provide
advice on several policies, procedural and internal
control issues for the Stadium Authority. Proposed
reviews include:
Analyzing the Stadium Authority’s review
procedures for Non-NFL Event revenues and
provide feedback on procedure and control
issues, if any.
Reviewing the Stadium Authority Financial
Reporting Policy with staff and external auditors
and providing feedback on best practices
June 2021 Deferred until
the SCSA
implements
the new
financial
management
system.
Spring 2023
Audit Status Report – Fiscal Year 2022/23 As of September 30, 2022 (continued)
Project Name Project Description Start
Date(1)
Status Projected
Issuance /
Completion
Date
16. Performance Audit of
Vendor Master File
and 1099 Reporting
The purpose of this audit is to assess and evaluate
whether the City has adequate controls regarding its
master vendor file setup and if the City is effectively monitoring and maintaining its vendor information.
This audit has been deferred due to conflicts of interest with current audit staff having been in accounting
operations. We plan to co-source this audit with an
external CPA firm.
June 2021 Per IIA
Standards,
project has to
wait until at
least a year
has passed
since current
audit staff
was in
operations.
Summer 2023
17. Citywide Fraud Risk
Assessment
(contracted service)
This is a citywide fraud risk assessment for all the
departments including utility departments. This is
separate from the annual Citywide risk assessment. An
RFP is planned for early 2023 after the Citywide risk
assessment has been completed.
June 2021 Pending Summer 2023
18. Review of SCSA net
income related to
Non-NFL events.
(NEW - contracted
audit service)
The City Auditor’s Office originally contracted with JS Held to perform a review of the year-end net income for Non-NFL events for a three-year period. Amendment #3
of this contract has been approved to allow for additional reviews. The review is to identify reasons for the
differences in overall net income versus the sum of net income for individual events, while also determining if revenues and expenditures for each event were
recorded accurately.
June 2021 Pending Spring 2023
Notes:
(1) The start date column indicates the period where the project was either re-started from the original work plan (June 2021) after the Auditor’s Office was staffed again, or the date where new projects were added to the audit work plan.