City of Santa Clara
Meeting Agenda
Audit Committee
Hybrid Meeting
Council Conference Room/Virtual
City Hall - East Wing
1500 Warburton Avenue
Santa Clara, CA 95050
3:00 PMWednesday, November 15, 2023
The City of Santa Clara is conducting the Audit Committee meetings in a hybrid manner (in-person and continues to have methods for the public to participate remotely).
Join from a PC, Mac, iPad, iPhone or Android device:
Please click this URL to join: https://santaclaraca.zoom.us/j/99199624617 Webinar ID: 991 9962 4617
Or join by phone:
US: +1 669 900 6833
CALL TO ORDER AND ROLL CALL
CONSENT CALENDAR
1. Audit Committee Minutes23-1289
Approve the Audit Committee minutes of June 28,
2023.
Recommendation:
PUBLIC PRESENTATIONS
[This item is reserved for persons to address the body on any matter not on the agenda that is within the subject matter jurisdiction of the body. The law does not permit action on, or extended discussion of, any item not on the agenda except under special circumstances. The governing body, or staff, may briefly respond to statements made or questions posed, and appropriate body may request staff to report back at a subsequent meeting.]
GENERAL BUSINESS
2. Action to Accept Report of Whistleblower Hotline Activity as of September 30, 2023
23-1268
Accept the report on the Whistleblower Hotline activity as of September 30, 2023.
Recommendation:
Audit Committee Meeting Agenda November 15, 2023
3. Action to Accept Audit Work Plan Status Update Report as of September 30, 2023
23-1283
Accept the City Auditor’s Office Work Plan Status
Update Report as of September 30, 2023 and
recommend the report be forwarded to the full City
Council for note and file at a future Council and
Authorities Concurrent meeting.
Recommendation:
ADJOURNMENT
The next scheduled meeting is on Monday, November 27, 2023 in the Council Conference Room.
MEETING DISCLOSURES
Audit Committee Meeting Agenda November 15, 2023
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision. Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. If a person wishes to challenge the nature of the above section in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Santa Clara, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.
If a member of the public submits a speaker card for any agenda items, their name will appear in the Minutes. If no speaker card is submitted, the Minutes will reflect "Public Speaker."
In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("ADA"), the City of Santa Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum extent feasible. The City of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can participate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people with disabilities have an equal opportunity to enjoy all of its programs, services, and activities.
Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternative format.
Contact the City Clerk’s Office at 1 408-615-2220 with your request for an alternative format copy of the agenda or other written materials.
Individuals who require an auxiliary aid or service for effective communication, or any other disability-related modification of policies or procedures, or other accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408-615-3000 as soon as possible but no later than 48 hours before the scheduled event.
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1289 Agenda Date: 11/15/2023
REPORT TO AUDIT COMMITTEE
SUBJECT
Audit Committee Minutes
RECOMMENDATION
Approve the Audit Committee minutes of June 28, 2023.
City of Santa Clara Printed on 11/9/2023Page 1 of 1
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City of Santa Clara
Meeting Minutes
Audit Committee
Draft
2:00 PM Hybrid Meeting
Council Conference Room/Virtual
City Hall - East Wing
1500 Warburton Avenue
Santa Clara, CA 95050
06/28/2023
The City of Santa Clara is conducting the Audit Committee meetings in a hybrid manner (in-person and continues to have methods for the public to participate remotely).
Join from a PC, Mac, iPad, iPhone or Android device:
Please click this URL to join: https://santaclaraca.zoom.us/j/99199624617 Webinar ID: 991 9962 4617
Or join by phone:
US: +1 669 900 6833
CALL TO ORDER AND ROLL CALL
Chairperson Park called the meeting to order at 2:08 PM.
Kathy Watanabe, Kevin Park, and Suds JainPresent 3 -
GENERAL BUSINESS
06/28/2023Audit Committee Meeting Minutes
1. 23-833 Overview of the Contracted Analysis of Past Stadium Construction Fund and Public Safety Transactions
Recommendation: Accept the report from J.S. Held LLC based on their review of construction fund and public safety transactions for the period November 10, 2013 through October 11, 2015, and recommend that these reports be forwarded for note and file to the full Council at a future Joint Council and Authorities Concurrent and Stadium Authority Meeting.
Timothy Gillihan, Senior Vice President of J.S. Held presented results.
Committee Members' questions and comments followed.
Audit Manager Noce and Timothy Gillihan addressed the Committee Members' questions and comments.
A motion was made by Member Jain, seconded by Chair Park, to accept the report from J.S. Held and recommend that these reports be forwarded for note and file to the full Council at a future Joint Council and Authorities Concurrent and Stadium Authority Meeting.
Member Watanabe did not support Member Jain's motion because the Harvey Rose report is not complete and there are still outstanding questions. The motion carried by the following vote:
Aye: Park, and Jain2 -
Nay: Watanabe1 -
06/28/2023Audit Committee Meeting Minutes
2. 23-669 Accept the Report on the Santa Clara Stadium Authority’s Non-NFL Events’ Documents by JS Held, LLC and Refer the Report to the Stadium Authority Board for Acceptance
Recommendation: Accept the Report on the Santa Clara Stadium Authority’s Non-NFL Events’ for fiscal years 2018, 2019, and 2020 by JS Held, LLC and recommend that this report be forwarded for note and file to the full Council at a future Joint Council and Authorities Concurrent and Stadium Authority Meeting.
Timothy Gillihan, Senior Vice President of JS Held gave a Powerpoint presentation.
Committee Members' questions and comments followed.
Audit Manager Noce and Timothy Gillihan addressed the Committee Members' questions.
A motion was made by Member Jain, seconded by Chair Park, to accept the report and direct staff to update information and examples in the presentation indicating why examples are from an earlier period and/or provide newer examples and refer the report for note and file at a future Joint Council and Authorities Concurrent and Stadium Authority Meeting. Member Watanabe did not support Member Jain's motion due to an incomplete report. The motion carried by the following vote:
Aye: Park, and Jain2 -
Nay: Watanabe1 -
06/28/2023Audit Committee Meeting Minutes
3. 23-742 Accept the Report on the Review of the 2019 College Football Playoff Game Revenues and Expenses Performed by the PUN Group and Refer the Report to the Stadium Authority Board for Acceptance Recommendation: Accept the report from The PUN Group based on their review of the revenues and expenses related to the 2019 College Football National Championship Game and recommend that the report be forwarded for note and file to the full Council at a future joint Council and Authorities Concurrent and Stadium Authority Meeting.
A motion was made by Member Watanabe to not accept the report and explore additional procedures and look further into the findings for a clearer report. The motion failed due to a lack of a second.
A motion was made by Member Jain, seconded by Chair Park, to accept the report from the PUN Group and recommend that the report be forwarded for note and file to the full Council at a future joint Council and Authorities Concurrent and Stadium Authority Meeting with clarification on public safety costs and that they were reimbursed. The motion carried by the following vote:
Aye: Park, and Jain2 -
Nay: Watanabe1 -
ADJOURNMENT
Chair Park adjourned the meeting at 4:56 PM.
Meeting was adjourned by consensus.
Future Audit Committee Meetings will be scheduled at a later date.
MEETING DISCLOSURES
06/28/2023Audit Committee Meeting Minutes
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision. Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. If a person wishes to challenge the nature of the above section in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Santa Clara, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.
If a member of the public submits a speaker card for any agenda items, their name will appear in the Minutes. If no speaker card is submitted, the Minutes will reflect "Public Speaker."
In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("ADA"), the City of Santa Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum extent feasible. The City of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can participate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people with disabilities have an equal opportunity to enjoy all of its programs, services, and activities.
Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternative format.
Contact the City Clerk’s Office at 1 408-615-2220 with your request for an alternative format copy of the agenda or other written materials.
Individuals who require an auxiliary aid or service for effective communication, or any other disability-related modification of policies or procedures, or other accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408-615-3000 as soon as possible but no later than 48 hours before the scheduled event.
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1268 Agenda Date: 11/15/2023
REPORT TO AUDIT COMMITTEE
SUBJECT
Action to Accept Report of Whistleblower Hotline Activity as of September 30, 2023
BACKGROUND
Per Section 909 of the City Charter, and SCCC Section 2.29.010, the City Auditor’s duties and responsibilities include conducting in-depth financial and performance audits, overseeing the City’s performance management system, auditing and approving all bills, invoices, payrolls, demands or charges against the City government before payment and, with the advice of the City Attorney, making reports to the City Council as to the regularity, legality and correctness of such claims, demands or charges. The City Auditor’s Office conducts its work under the auditing standards prescribed by the Institute of Internal Auditors (IIA). The IIA International Standards for the Professional Practice of Internal Auditing (Standards) requires the City Auditor to periodically report to the Audit Committee on the internal audit activity’s performance relative to the Audit Work Plan.
DISCUSSION
In January 2022, the City Council approved the City’s first Fraud, Waste, and Abuse Policy (Fraud Policy). The policy defines unacceptable behaviors, assigns oversight responsibility, and provides direction for reporting suspected fraud. Together with the City’s Code of Ethics and Values, a fraud policy raises awareness and helps the City set a tone of oversight and commitment to combating fraud and corruption.
With the acceptance of the policy, and pursuant to California Government Code Section 53087.6, the City Council authorized the use of a whistleblower hotline that allows for anonymous reporting of suspected fraud, waste, unethical or illicit activity. After a competitive procurement process, the City Auditor’s Office implemented a third-party whistleblower hotline “Speak Up Santa Clara” in September 2022. As part of the Fraud Policy, the Auditor’s office reports to the Audit Committee a summary of all claims received. If a claim is substantiated, an additional report will be issued and presented to both the Audit Committee and City Council.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project”within the meaning of the California Environment Quality Act (“CEQA”)pursuant to CEQA Guidelines section 15378(a)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
Costs associated with the preparation of this report were included in the City’sFY 2023/24 Adopted Operating Budget.
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23-1268 Agenda Date: 11/15/2023
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Accept the report on the Whistleblower Hotline activity as of September 30, 2023.
Reviewed and Approved by: David Noce, Audit Manager
ATTACHMENTS
1. Report of Whistleblower Activity as of September 30, 2023 City of Santa Clara Printed on 11/9/2023Page 2 of 2
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Report on Whistleblower Activity
– As of September 30, 2023
City Auditor’s Office
Whistleblower Hotline Report – As of 9/30/23
About the Whistleblower Hotline:
The City Auditor’s Office administers the City’s Whistleblower Hotline program. The primary objective of the Hotline is to provide a means for any City employee to confidentially report any activity or conduc t related to, or involving City personnel, resources, or operations for which he or she suspects instances of fraud, waste, or abuse.
The City’s Hotline is operated as approv ed by its Fraud, Waste, and Abuse Policy pursuant to California Government Code §53087.6. The Statute defines fraud, waste, or abuse as “any activity by a local agen cy or employee that is undertaken in the performance of the employee’s official duties, including activities deemed to be outside the scope of his or her employment, that is in violation of any local, state, or federal law or regulation relating to corruption, malfeas ance, bribery, theft of government property, fraudulent claims, fraud, coercion, conversi on, malicious prosecution, misuse of government property, or willful omission to perform duty, is economically wasteful, or involves gross misconduct.”
The Statute also requires that investigat ions conducted pursuant to its authority be confidential, except to issue any report of an investigati on that has been substantiated, or to release any findings resulting from a completed investi gation that are deemed necessary to serve the interests of the public. In any event, the identity of the individual or individuals reporting the improper government activity, and the subject employee or employees, shall be kept confidential.
An independent third-party provider accepts hotline allegations from employees through an online reporting module available on the City’s CSI or via web address of the provider.
Whistleblowers can choose to remain anony mous and all information provided via the hotline will remain confidential. The Auditor’s Office can investigate claims, or they can be turned over to another City department for investigation.
On the following pages, Table 1 summarizes the types of claims received during Fiscal Year 2023 while Table 2 summarizes the status of the hotline investigations including the incident type, claim number, date the r eport was received, a general description of the report, claim status, and final resolution date.
Whistleblower Hotline Report – As of September 30, 2023 (continued)
Table 1:
Reported Cases Qtr 1 Qtr 2 Qtr 3 Qtr 4
City Auditor Investigations
Abuse - - - -
Waste 1 - - -
Fraud - - - -
Subtotal City Auditor Investigations 1 - - - Other City Department Investigations
Abuse - - 1 -
Waste - - - -
Fraud - - - -
Subtotal Other City Department Investigations - - 1 - Reports not in Purview of Hotline - - - - Total Reports Received in Purview of Hotline 1 - 1 - Reports Received in Fiscal Year 2023
Table 2:
No. Incident Type Report # Date Received Status/Outcome Res. Date Allegtion/Outcome
1 Waste 0001aa22 11/30/2022 Unsubstantiated 1/20/2023
2 Abuse 0001aa23 7/21/2023 Unsubstantiated 9/5/2023
Status of Auditor Hotline Investigations
An allegation of waste regarding use of City vehicles was investigated and determined to be unsubstantiated.
An allegation of abuse of discretion by a department's management was investigated and determined to be unsubstantiated.
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1283 Agenda Date: 11/15/2023
REPORT TO AUDIT COMMITTEE
SUBJECT
Action to Accept Audit Work Plan Status Update Report as of September 30, 2023
BACKGROUND
Per Section 909 of the City Charter, and SCCC Section 2.29.010, the City Auditor’s duties and responsibilities include conducting in-depth financial and performance audits, overseeing the City’s performance management system, auditing and approving all bills, invoices, payrolls, demands or charges against the City government before payment and, with the advice of the City Attorney, making reports to the City Council as to the regularity, legality and correctness of such claims, demands or charges. The City Auditor’s Office conducts its work under the auditing standards prescribed by the Institute of Internal Auditors (IIA). The IIA International Standards for the Professional Practice of Internal Auditing (Standards) requires the City Auditor to periodically report to the Audit Committee on the internal audit activity’s performance relative to the Audit Work Plan.
In accordance with the adopted Internal Audit Charter, the City Auditor’s Office prepares an annual work plan and reports to the City Council via the Audit Committee describing the status and progress towards completion of the work plan. This report summarizes reports issued, other activities, assignments in process, and the status of the current work plan as of September 30, 2023.
DISCUSSION
The role of the Audit Committee is to provide oversight of the City’s financial reporting processes, internal controls and audits, and independent auditors. The City Auditor’s Office will present the audit status report as of September 30, 2023. Staff will provide an update of the audit projects within the existing work plan.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project”within the meaning of the California Environment Quality Act (“CEQA”)pursuant to CEQA Guidelines section 15378(a)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
Costs associated with the preparation of this report were included in the City’sFY 2023/24 Adopted Operating Budget.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
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23-1283 Agenda Date: 11/15/2023
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Accept the City Auditor’s Office Work Plan Status Update Report as of September 30, 2023 and recommend the report be forwarded to the full City Council for note and file at a future Council and Authorities Concurrent meeting.
Reviewed and Approved by: David Noce, Audit Manager
ATTACHMENTS
1. Audit Status Report as of September 30, 2023
City of Santa Clara Printed on 11/9/2023Page 2 of 2
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Audit Status Report - as of
September 30, 2023
City Auditor’s Office
2023 Audit Status Report
As of September 30, 2023
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 Audit Workplan Report was delivered to the Audit Committee in March of 2023 and was accepted by City Council in June of 2023. The Auditor’s Office began working with consultant Baker Tilly, Inc. on the projects approved by the Committee and continued to finalize outstanding projects from the previous workplan.
Listed below are activity highlights from the audit work plan during the reporting period. The 2023 update to the risk assessment is currently underway and when completed, those results will be presented to the committee with the goal of identifying future audit projects as well as make any necessary revisions to previously suggested projects. The audit work plan is a flexible process that may recommend projects based on the results of the annual risk assessment or other projects that the committee would like to recommend. The Audit Committee has the discretion to propose changes to the plan as it deems necessary.
This Audit Status Report summarizes the standing 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, 2023:
Completed the City’s first annual risk assessment and provided recommendations to the committee to prioritize the audit work plan. The annual work plan is designed to improve the effectiveness of risk management, internal controls, and governance processes. Completed a review of past Stadium Authority Construction Fund and Public Safety transactions during the time of stadium construction.
Completed an analysis of the revenue and expense classification and review of the completeness of the supporting documents for the 2019 College Football Playoff game. Completed a review of the year-end net income for Non-NFL events for fiscal years 2018, 2019, and 2020 to identify any 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.
Continued detailed monitoring of all City expenses related to Accounts Payable, Payroll, Purchase Card Charges, and employee travel and MOU reimbursements to ensure proper supporting documentation and approvals by management.
2023 Audit Status Report - As of September 30, 2023 (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. 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.
July 2022 Completed December 2022
2. 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.
March 2023 Completed September 2023
3. 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 presented to the City Council on September 26, 2023.
June 2023 Completed December 2022
2023 Audit Status Report – As of September 30, 2023 (continued)
ASSIGNMENTS COMPLETED SINCE PREVIOUS STATUS REPORT (Cont.)
Project Name Project Description Start
Date(1) Status
Issuance /
Completion
Date
4. 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 PUN Group staffing issues that had to be addressed with the time extension of the PUN Group contract.
June 2021 Completed June 2023
5. Review of SCSA net
income related to Non-
NFL events. (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 an initial three-year period (2015, 2016, 2017). Amendment #3 of this contract was been
approved to allow for additional reviews of fiscal years 2018, 2019, and 2020. 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. This report was presented to the Stadium
Authority Board on September 26, 2023.
June 2021 Completed May 2023
6. Annual Risk
Assessment and
Development of Internal
Audit Annual Workplan -
Year 1
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 work plan is designed to
improve the effectiveness of risk management, internal
controls, and governance processes. The City contracted with Baker Tilly, Inc. to perform the risk assessment for a period of five years. They are a nationally respected firm with many municipal internal audit clients. The Year 1 risk assessment and audit work plan was accepted by the City Council on June 27, 2023.
June 2021 Completed February 2023
2023 Audit Status Report – As of September 30, 2023 (continued)
ASSIGNMENTS COMPLETED SINCE PREVIOUS STATUS REPORT (Cont.)
Project Name Project Description Start
Date(1) Status
Issuance /
Completion
Date
7. 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 Completed March &
November 2023
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
8. 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 March 2024
9. 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 Ongoing
10. Annual Risk
Assessment and
Development of Internal
Audit Annual Workplan -
Year 2
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. We are currently in the process of the 2nd year assessment. The updated annual work plan
will be presented to the Audit Committee to recommend to the City Council for approval, which is required prior to the start of any audit work.
October 2023 In Process January 2024
2023 Audit Status Report – As of September 30, 2023 (continued)
ASSIGNMENTS IN PROCESS (Cont.):
Project Name Project Description Start
Date(1) Status
Issuance /
Completion
Date
11. Annual Continuing
Education Training
The City Auditor’s Office attends regular continuing
professional education training and maintaining a
minimum of 40 CPE hours a year for each staff. Audit
staff is attending online trainings for cost effectiveness.
June 2021 In Process Ongoing
12. Review of Silicon
Valley Power (SVP)
Power Purchase
Agreements (Co-sourced
audit process)
The City has contracted Baker Tilly, Inc. to conduct an assessment of the process for evaluating and entering into power purchase agreements as well as assess the
effectiveness of the internal controls in place that oversee the terms and conditions of the agreements.
June 2023 In Process January 2024
13. Review of the City’s
Building Permit Process
in Community
Development (Co-
sourced audit process).
Baker Tilly, Inc. is leading the audit as it related to internal controls to ensure compliance with industry best practices related to rules and regulations. The audit will assess the efficiency and effectiveness of the City’s building permit process from application to issuance and follow up with applicants throughout the process.
June 2023 In Process January 2024
ASSIGNMENTS NOT YET STARTED:
The following table lists all Assignments Not Yet Started as of September 30, 2023 for the current Audit Work Plan:
Project Name Project Description Start
Date
(1) Status
Issuance /
Completion
Date
14. Cybersecurity
Assessment of City and
SVP Information
Technology (Contracted
Service)
Identify risks related to weaknesses in City and SVP
cybersecurity programs. Map current state security
capabilities to industry specific cybersecurity frameworks and evaluate the maturity of current security processes.
June 2023 Postponed (2) TBD
2023 Audit Status Report – As of September 30, 2023 (continued)
ASSIGNMENTS NOT YET STARTED (Cont.):
Project Name Project Description Start
Date(1) Status
Issuance /
Completion
Date
15. City Property
Management Function
(Co-sourced audit
process)
Evaluate the efficiency and effectiveness of the City’s property management.
June 2023 Postponed (3) TBD
16. Review of FMS
Financial Procedures
and Controls for the
Santa Clara Stadium
Authority (contracted
service)
Staff has asked the City Auditor’s Office to provide advice on policies, procedural and internal control issues for the Stadium Authority. Proposed reviews include:
ꞏ Analyzing the Stadium Authority’s review procedures for Non-NFL Event revenues and provide feedback on
procedure and control issues, if any.
ꞏ Reviewing the Stadium Authority Financial Reporting Policy with staff and external auditors and providing
feedback on best practices.
June 2021 Pending - Will be
scoped with
proposed next
phase of Non-NFL
event review
June 2024
17. 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 Pending - Per IIA
Standards, project
has to wait until at
least a year has
passed since audit
staff was previously
involved with
vendor
maintenance
June 2024
18. 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.
June 2021 Pending December 2024
2023 Audit Status Report – As of September 30, 2023 (continued)
ASSIGNMENTS NOT YET STARTED (Cont.):
Project Name Project Description Start
Date(1) Status
Issuance /
Completion
Date
19. Review of SCSA net
income related to Non-
NFL events. (Co-sourced
audit service)
The City Auditor’s Office will contract with JS Held to perform a review of the year-end net income for Non-NFL events for the next three-year period (2021, 2022, 2023) leveraging their previous fiscal year 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 there has been
improvement with the support of revenues and
expenditures for each event. Direction from City Council was to scope this project and return before approval of this project. This is anticipated to be scoped with the above project related to the analysis of the FMS at the stadium. The scope is currently being worked on.
September
2023
Pending June 2024
**See Footnotes on next page**
2023 Audit Status Report – As of September 30, 2023 (continued)
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.
(2) After the recommendation to the Audit Committee that IT Cybersecurity programs be audited; the Auditor’s Office has been made aware of audits that already occur by other agencies that may cover these topics already. In 2019, the City had an external auditor conduct an exhaustive cybersecurity audit and risk assessment of the City against the National Institute of Standards and Technology (NIST) framework and the risk register that resulted from that audit is regularly maintained and actively used by the IT department to manage cybersecurity risks. Additionally, subsequent to the acceptance of the work plan, the City was awarded Super Bowl 60 and FIFA World Cup. As part preparing for those high-profile events, the City is working with the Cybersecurity and Infrastructure Security Agency (CISA) and Department of Homeland Security (DHS) to audit our cyber readiness in preparation for these events. There will be audits associated with these events that cover the areas of interest that were identified in the initial risk assessment and these audits will be free of charge to the City. This work has already begun and will continue to ramp up as the events get closer.
(3) The Auditor’s Office is recommending a postponement of this project since the staff position for property management has been vacant for some time. Recommendation is to perform this audit in 2024 once the staff position has been filled and there is a City contact that can lead the audit.