City of Stockton
FY 24-25 Internal Audit Program
Audit Committee Meeting
July 2024
ATTACHMENT A
• The City retained Moss Adams to serve as the
des
ignated Internal Auditor and conduct projects
focusing on:
• Risks
• Internal controls
• Efficiency and effectiveness
• Best practices
• Compliance
• Work is being completed under appropriate industry
st
andards (IIA, GAGAS, AICPA)
• We have served as the City Auditor since 2013, with
par
tner rotation in 2022
Internal Audit Overview
City of Stockton Internal Audit Program2
ATTACHMENT A
Role of Internal
Audit
3 City of Stockton Internal Audit Program
ATTACHMENT A
Holistic Internal Audit Program Approach
4 Tracking &
ReportingCOpportunitiesBProgram InputsA
• Enterprise
Assessments
• Employees and
Community
• Performance
Metrics
• Risks
• Controls
• Compliance
• Performance
• Findings &
Recommendations
• Fraud, Waste, and
Abuse Hotline
• Corrective Actions
• Implementation
• Validation
City of Stockton Internal Audit Program
ATTACHMENT A
Internal Audit Program Review
5 Focus Accomplishments
Enterprise Risk Assessments 2013, 2016, 2019, 2022
Enterprise Internal Controls Review 2013, 2024
Functional Internal Controls Reviews 12 design reviews
Functional Internal Controls Testing 14 areas tested
Policy Review & Development 31 Citywide policies and procedures Performance Projects 27 performance and efficiency studies Findings Closed % Tracked 384 / 485 (79%)
Ethics Hotline 188 reports since 2007
City of Stockton Internal Audit Program5
ATTACHMENT A
1. Grants Management Risk Assessment and Implementation Roadmap: Follow up on the 2022 grant management study, identify remaining gaps i
n City processes and rate according to risk levels, develop a prioritized implementation plan to address gaps, and provide support to City staff to reduce risk.
2. Cash Management Internal Controls Review: Review processes and test key controls related to cash management across City functions.
3. Payroll Internal Controls Review: Conduct a review of controls and processes related to payroll, including the recently implemented payroll ERP module.
4. Property Management Review: Inv entory City-owned properties that are currently leased and review property management policies and practices.
5. HUD Findings Implementation Support: Support the City’s response to HUD findings and address opportunities for improvement in advance of future audits.
6. Community Services Organizational Assessment: R eview the department’s organizational structure and functions and recommend options for more effective service delivery. Assess progress toward implementation of 2019 Strong Communities efficiency study.
7. Human Resources Org Assessment Update: Assess progress toward implementation of recommendations from 2020 study, with a focus on rec
ruiting processes.
8. Audit Findings Tracking Validation & Reporting: Continue to support and validate audit findings closure.
9. Policy Update Ongoing Support: Continue to support citywide policy and procedure update to address audit findings, efficiency, and compliance.
10. Internal Audit Program Management: C ity Auditor activities including overseeing the internal audit program and managing the fraud, waste, and abuse hotline.
Proposed FY24-25 Internal Audit Projects
City of Stockton Internal Audit Program6
ATTACHMENT A
FY24-25 Internal Audit Budget and Timing
City of Stockton Internal Audit Program7
Project Budget 7-9/24 10-12/24 1-3/25 4-6/25
Grant Management Risk Assessment &
Implementation Roadmap $50,000
Cash Management Internal Controls Review $35,000
Payroll Internal Controls Review $40,000
Property Management Review $35,000
HUD Findings Implementation Support $30,000
Community Services Efficiency Study $40,000
Human Resources Org Assessment Update $35,000
Audit Findings Validation & Reporting $20,000
Policy Update Ongoing Support $25,000
Ongoing Internal Audit Services $40,000
Total $365,000
ATTACHMENT A
• Government Finance Officer’s Association (GFOA)
• GFOA Best Practices Guide on Audit Committees
• Institute of Internal Auditors
• IIA Publication “The Audit Committee: Internal Audit
Oversight”
• U.S. Government Accountability Office (GAO)
• American Institute of Certified Public Accountants
• Association of Certified Fraud Examiners
8 City of Stockton Internal Audit Program
ATTACHMENT A
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City of Stockton Internal Audit Program9
ATTACHMENT A