10B
Date: November 4, 2025
To: Honorable Mayor and Members of the City Council
From: Tim Goodrich, City Treasurer
By: Jasmine Allen, Deputy City Treasurer | [email protected] Subject: City Treasurer – Accept and File the 2025 Audit of City Treasurer Operations.
Expenditure: None.
RECOMMENDATION
Recommendation of the City Treasurer that City Council accept and file the 2025 Audit of City Treasurer Operations.
FUNDING
None required.
DISCUSSION
As part of the Fiscal Year 2024–25 budget review process, City Treasurer Tim Goodrich requested $70,000 from City Council for an Internal Control Audit of City Treasurer Operations, which was approved.
On September 9, 2024, the City issued a Request for Quote (RFQ) for a review of City Treasurer and Finance functions and procedures. The City received ten proposals from qualified firms. A three-member evaluation panel reviewed and rated all proposals and subsequently conducted interviews with top three firms. Upon conclusion of the evaluation process, BDO USA, P.C., based in Los Angeles, California, was identified as the most qualified firm to conduct the audit.
In September 2025, BDO completed the third-party, independent assessment of the City of Torrance’s City Treasurer and Finance functions. The assessment was designed to provide objective insights into current practices and identify opportunities for improvement. The final report issued by BDO is attached to this staff report and contains detailed analysis of existing processes, along with findings and recommendations. Below is a summary of BDO’s findings from their report:
•The report detailed the following STRENGTHS:
oDepartmental collaboration has improved process consistency and accountability.
oFormalized investment policy reviewed and amended annually. 1 City Council
November 4, 2025
• BDO concluded there was one KEY GAP:
o The City Treasurer function is highly centralized, with the Deputy Treasurer responsible for the day-to-day operation of investment activities, cash flow forecasting, deferred compensation and much of the reporting, resulting in limited segregation of duties.
• BDO identified areas for further improvement and made the following RECOMMENDATIONS:
o Implement secondary support for day-to-day treasury operation strengthening segregation of duties within the City Treasurer Office. o Formally document roles and responsibilities across all treasury functions and all relevant departments.
o Implement periodic user access review of banking and investing applications. • Finally, BDO has created the following RECOMMENDATION ROADMAP:
o Cash Flow Forecast: Implement a formal, documented review and approval process for the cash flow forecast, with regular (e.g., monthly) senior management oversight. Create written procedures for preparation and review. o User Access Management: Implement a secondary review and approval process for user access changes in the SymPro application, ensuring all changes are independently reviewed and documented. Conduct periodic user access reviews by someone other than the Deputy Treasurer.
o Treasury Management and Oversight: As resources allow, expand City Treasurer staffing or reallocate responsibilities to further improve segregation of duties and independent oversight. Consider temporary or part-time contracted treasury and/or investment subject matter experts to support day-to-day treasury operations and to enhance segregation of duties.
It is the recommendation of the City Treasurer that City Council accept and file the 2025 Audit of City Treasurer Operations.
ATTACHMENT
1. 2025 Audit of City Treasurer Operations
2 City Treasurer
Operations
CITY OF TORRANCE
OCTOBER 13, 2025
ATTACHMENT 1
3 CITY TREASURER OPERATIONS ASSESSMENT 2
We have performed consulting services for City of Torrance (“Client” or “you”) as outlined in our Agreement and Statement of Work dated February 3, 2025. This engagement was performed in accordance with consulting guidelines established by the American Institute of Certified Public Accountants.
The sufficiency of the services is solely the responsibility of the management of the Client.
For the purpose of this engagement, we have accepted as accurate the accounting records of the Company and therefore, we are not responsible for such accuracy. Similarly, we have relied on the accuracy of the representations provided to us by the Management of the Company. Except as otherwise stated, we did not corroborate such representations and information.
We were not engaged to, and did not perform an audit, the objective of which would be an expression of an opinion on the specific elements, accounts, or items. Accordingly, we do not express such an opinion. Also, we express no opinion on the Company’s internal control systems over financial reporting or any part thereof. Had we performed additional procedures; other matters might have come to our attention that would been reported to you.
The procedures performed and related findings are presented in the attached report and appendices.
This report is intended solely for the use of the Management of Client and should not be used by those who have not taken responsibility for the sufficiency of the procedures for their purposes. It may not be released to any third party without our prior written consent.
Very truly yours,
BDO USA, P.C.
October 13, 2025
Tim Goodrich, City Treasurer
City of Torrance
3031 Torrance Blvd.
Torrance, CA, 90503
Re: Report on City Treasurer Operations
Dear Mr. Goodrich,
BDO USA, P.C.
515 S Flower St
Floor 47
Los Angeles, CA
90071
310
-
557 0300
www.bdo.com
4 CITY TREASURER OPERATIONS ASSESSMENT 3
Table of Contents
Executive Summary 4
Current State Maturity Assessment
8 Internal Control Recommendations Roadmap
11 Summary of Recommendations by Process
13 Appendix
20 5
4 Executive Summary
6 CITY TREASURER OPERATIONS ASSESSMENT 5
Executive Summary
BDO conducted a City Treasurer operations assessment for the City of Torrance, benchmarking internal controls against the Capability Maturity Model Integration (CMMI) scale. The assessment found:
Strengths:
Departmental collaboration have improved process consistency and accountability. Formalized investment policy reviewed and amended annually.
Key Gaps:
• The City Treasurer function is highly centralized, with the Deputy Treasurer responsible for the day-to-day operation of investment activities, cash flow forecasting, deferred compensation and much of the reporting, resulting in limited segregation of duties.
Recommendations:
• Implement secondary support for day-to-day City Treasurer operation strengthening segregation of duties within the City Treasurer department. • Formally document roles and responsibilities across all City Treasurer functions and all relevant departments.
• Implement periodic user access review of banking and investing applications.
Addressing these areas will be essential for advancing the City Treasurer’s process maturity, strengthening governance, enhancing risk management, and supporting long-term financial stability.
7 CITY TREASURER OPERATIONS ASSESSMENT 6
Scope
This report presents the results of an independent assessment of the City of Torrance’s City Treasurer functions, as requeste d b y the City Treasurer. The assessment was designed to provide objective insights into current practices, identify opportunities for improvement, and support the City’s commitment to prudent financial management. # Scope Areas Description of the Scope Areas Covered in this Report Excluded from
this Report
1 City Treasurer Process Mapping Documentation and analysis of current City Treasurer processes, including cash management, debt management, and investment strategies.
2 Dependencies and Interactions Assessment of collaboration and hand-offs between City Treasurer and Finance functions. 3 Internal Controls Review Evaluation of existing internal controls against leading practices. 4 Technology Assessment Review of systems and technology supporting City Treasurer operations. 5 Business Continuity Plan Assessment of continuity planning for critical City Treasurer and finance functions. 6 Risk Assessment Identification and analysis of key risks impacting City Treasurer operations. 7 Capability Maturity Assessment Application of the CMMI model to assess process maturity. 8 Recommendations Identification of process, technology, and control improvement opportunities. 9 Finance Process Mapping
Although initial work was performed, detailed mapping of Finance Department processes (debt management and grant management) was removed from scope at the request of the Finance Department. This adjustment was made to ensure the audit remained focused on the City Treasurer department, consistent with the primary objectives of the engagement.
10 Benchmarking Against Other
Cities
Comparative benchmarking with other municipalities was not performed and was removed from scope at the request of the City Treasurer. This was due to the high variability in treasurer structures and responsibilities across cities, which limits the relevance and comparability of such benchmarking. Instead, resources were redirected to more tailored analysis of department workflows and internal processes, which are better aligned with the City’s specific needs.
8 CITY TREASURER OPERATIONS ASSESSMENT 7
Approach
Conducted kick-off with City
Treasurer team:
Tim Goodrich, City
Treasurer
Jasmine Allen, Deputy City
Treasurer
Obtained and reviewed City
Treasurer and City Treasurer-
related process narratives,
policies, and supporting
documentation.
Conducted walkthroughs with
the City Treasurer team,
Finance and Accounting,
Accounts Payable, and Grant
Management team to gain an
understanding of current
processes, procedures,
controls, and technologies
used in City
Treasurer operations.
Reviewed observations and
improvement
opportunities with City
Treasurer team.
Prepared and reviewed draft
report with
City Treasurer
team.
Finalized report,
incorporating the City’s
feedback, and issued the City
Treasurer process assessment
report.
Prepared a Risk and Control
Matrix (RCM)
focusing on City
Treasurer areas under scope.
Assessed the maturity of
internal controls over City
Treasurer processes against
leading practices.
Requested evidence to
validate City Treasurer and
other related controls.
PLAN WALKTHROUGH CONFIRM REPORTPERFORM ASSESSMENT
9 8
Current State Maturity
Assessment
10 CITY TREASURER OPERATIONS ASSESSMENT 9
Current State
Maturity Scale
The below maturity scale (based
on Capability Maturity Model
Integration [CMMI]) was used as a
high-level guideline for identifying
the maturity of the overall City's
processes and internal controls.
LEVEL 5 - OPTIMIZED
Focus is on continually improving internal controls through strategic measurement, key performance indicators, innovative changes, and continual analyses/assessments. Internal controls are integrated into organization values, culture, strategy, planning, development, and services, reinforced through training.
Processes are continuously improving, tested, and benchmarked . Organizational processes are aligned with strategies, controls and metrics/KPIs. Internal controls are documented, communicated, tested, and discussed transparently up, down, and across the organization, reinforced through training. Internal control mindset is a part of leadership discussions and day - to-day operations and is incorporated into performance management objectives.
Organizational processes and controls are documented, standardized, communicated, and easily accessible to all stakeholders.
Executive management receive internal control risk overviews and reports. Policies and processes are well established, enforced, and provide guidance across projects, programs and portfolios; supported by training.
Organizational processes and controls are generally not documented, there may be some standard practices communicated on the job. Would likely not be replicated if knowledgeable individuals were to leave.
Some departments may have undocumented, but partially standardized processes. Risks and corresponding controls are not generally defined. Controls are generally not consistently performed, reliable, or repeatable.
Processes and controls are not in place; are localized (if at all), ad hoc, unpredictable, and reactive which increases risk and inefficiency.
Processes and controls likely to depend on individual efforts and not considered to be repeatable.
Would not be replicated if individuals were to leave.
LEVEL 1 - INITIAL
LEVEL 2 - INFORMAL
LEVEL 3 - DEFINED
LEVEL 4 - MANAGED
Note: The assignmentof maturityscores is basedon BDOs industryexperienceand subject matterspecialization. 11 CITY TREASURER OPERATIONS ASSESSMENT 10
Current State
Maturity Scale
LEVEL 5 - OPTIMIZED
LEVEL 1 - INITIAL
LEVEL 2 - INFORMAL
LEVEL 3 - DEFINED
LEVEL 4 - MANAGED
Note: The assignmentof maturityscores is basedon BDOs industryexperienceand subject matterspecialization.
Expected State
Current State Maturity Summary
Overall Maturity Assessment currently rests between a level 2 and 3 maturity as the city’s City Treasurer process is supported by strong internal controls and an internal audit function, with key processes regularly updated and subject to audit, which is typical of many public sector organizations.
However, the function remains highly centralized with
limited segregation of duties—particularly in investment activities —and lacks comprehensive written policies, creating risks of inconsistent practices and unclear responsibilities that should be addressed through secondary review and formal policy development.
Cash Flow Forecasting
Investment Management
Annual Operating Budget
Cash Handling & Reconciliation
Bank Account Management
12 11
Internal Control
Recommendations Roadmap
13 CITY TREASURER OPERATIONS ASSESSMENT 12
Prioritized Recommendation Roadmap
Do NOW
(0-6 Months)
Do NEXT
(6-12 months)
Do LATER
(12 months +)
Implementation of the following is critical in establishing foundational controls, immediate oversight and transparency.
Implementation of the following is essential to enhance collaboration, integrate tools, and standardize advanced controls.
Implementation of the following is important to optimize, automate, and sustain best practices.
• Cash Flow Forecast: Implement a formal, documented review and approval process for the cash flow forecast, with regular (e.g., monthly) senior management oversight. Create written procedures for preparation and review.
• User Access Management: Implement a secondary review
and approval process for user access changes in the SymPro application, ensuring all changes are independently reviewed and documented. Conduct periodic user access reviews by someone other than the Deputy Treasurer (i.e. Treasurer, IT personnel, etc.)
• City Treasurer Management and Oversight: As resources allow, expand City Treasurer staffing or reallocate
responsibilities to further improve segregation of duties and independent oversight. Consider temporary or part-time
contracted City Treasurer and/or investment subject matter experts to support day-to-day City Treasurer operations and to enhance segregation of duties.
None noted.
14 13
Summary of Recommendations
by Process Area
15 CITY TREASURER OPERATIONS ASSESSMENT 14
Cash Flow Management
1 City Treasurer proactively monitors, forecasts, and analyzes cash inflows and outflows to ensure sufficient liquidity, support strategic initiatives, and maintain financial stability.
Process Narrative Conclusion Recommendations
Cash Flow Forecasting
The cash flow forecasting process for the City of Torrance is managed almost exclusively by the Deputy Treasurer, who is responsible for both preparing and maintaining the forecast.
Due to the nature and predictability of cash flows within the city, this process is primarily manual and relies heavily on historical data from previous years, encompassing both
expenditures and revenues to establish a baseline.
Adjustments to the forecast are made daily as new information becomes available, such as notifications of upcoming payments or changes in revenue expectations.
The Finance Department supports this process by sending automated emails before most payments are made, except
payroll, which is communicated after payment. For significant items like debt payments and major expenses, updates are requested annually to ensure the forecast remains accurate.
Despite the accessibility of the forecast to others within the organization, there is no formal review or approval process in place. The Deputy Treasurer does not submit the forecast for independent review, nor is there a requirement for secondary authorization. This means that the entire process—from
preparation to ongoing adjustments—is concentrated in the hands of a single individual. The lack of segregation of duties is a notable internal control gap, as it increases the risk of errors or omissions going undetected. While the transparency of the forecast and the ability for others to review it provide some mitigation, the absence of formal oversight or periodic independent review remains a potential unmitigated risk in the cash flow forecasting process.
The City’s cash flow forecasting process is characterized by a high degree of centralization and reliance on the Deputy Treasurer. While the process benefits from timely information flow and historical data, the lack of formal review, approval, and segregation of duties presents a control risk. Periodic oversight through meetings and report accessibility provides some mitigation, but additional controls would strengthen the process.
We recommend implementing a formal, documented review and approval process for the cash flow forecast, with regular (e.g., monthly) review by senior management such as the Treasurer or independent party within the City Treasurer’s Office. Consider contracted resources (i.e. temporary, part-time, consulting services etc.). This review should verify key assumptions, major inflows and outflows, and ensure all relevant departmental information is included, with documentation of the review for accountability. Additionally, the City should develop written procedures detailing the preparation, update, and review steps for the forecast, including roles, required documentation, and timelines. Leveraging technology to automate data integration from the general ledger and banking systems is also recommended to reduce manual effort and errors.
As resources allow, expanding City Treasurer staffing or reallocating duties should be considered to improve segregation of duties and oversight. As noted above, consider temporary and/or contracted resources, as necessary.
16 CITY TREASURER OPERATIONS ASSESSMENT 15
Cash Flow Management
1 City Treasurer proactively monitors, forecasts, and analyzes cash inflows and outflows to ensure sufficient liquidity, support strategic initiatives, and maintain financial stability.
Process Narrative Conclusion Recommendations
Annual Operating Budget
The City of Torrance’s annual operating budget process is a structured, multi-step approach that begins at the division level, where department leaders identify and prioritize their needs for the upcoming year. These requests are reviewed and
consolidated by management, then submitted to the Finance Department for evaluation against city policies and financial objectives. The Finance Department coordinates the
development of the overall budget, ensuring accuracy and consistency before presenting it to senior management and, ultimately, the City Council for approval.
Key internal controls include segregation of duties—different individuals are responsible for identifying needs, authorizing expenditures, and reviewing transactions—as well as multiple levels of review and periodic reconciliations. This process ensures transparency, accountability, and effective stewardship of public funds.
The annual budgeting process demonstrates strong internal controls through multiple levels of review, segregation of duties, and structured authorization points. Department leaders identify and prioritize needs, which are then reviewed by management and consolidated by the Finance Department
before final approval by the City Council. This layered approach supports transparency and accountability.
No process improvement opportunities were identified.
17 CITY TREASURER OPERATIONS ASSESSMENT 16
Bank Account Management
2 Safeguard cash assets, ensure only authorized access and activity, maintain accurate records, and support efficient, compliant, and transparent banking operations.
Process Narrative Conclusion Recommendations
User Access Management
Bank account management and access controls in the City of Torrance vary by account type. For operating accounts
managed through Bank of America’s CashPro, access is tightly controlled by a small group, with changes requiring approval from another administrator using multi
-
factor authentication.
The accounting manager oversees daily access, and user access reviews are performed at least annually to ensure only
authorized personnel have access, maintaining strong
segregation of duties.
For investment accounts managed through Sympro, the Deputy Treasurer has primary responsibility for account management and access, with no periodic access and permissions review.
This concentration of duties and lack of independent review is a control weakness, as all key functions are handled by one individual. While oversight is provided ultimately through monthly reporting to City leadership, controls for investment account access are less robust than those for operating accounts.
Finance maintains strong access controls as it relates to the City’s operating accounts through Bank of America including segregation of duties, multi - factor authentication and dual authorization controls for access changes and transaction processing.
However, for the City’s investment accounts through the investing platform, Sympro, the Deputy Treasurer is primarily responsible for managing user access and all related activities, with no formal independent access review. This lack of
segregation of duties and independent review creates a control weakness for SymPro.
We recommend that the City implement a secondary review and approval process for user access management for the Sympro application. Specifically, any changes to user access—such as granting, modifying, or removing access—should require review and approval by a second individual who is independent of the day-to-day SymPro operations. This can be accomplished by designating another administrator or the Treasurer to review and formally approve all user access changes. Additionally, periodic user access reviews should be documented and include verification by someone other than the Deputy Treasurer to ensure only authorized personnel retain access.
These steps will strengthen segregation of duties, reduce the risk of unauthorized access, and enhance the overall control environment for investment account management.
18 CITY TREASURER OPERATIONS ASSESSMENT 17
Cash Handling and Reconciliation
3 Safeguard physical cash assets through secure storage, dual custody, and documented access, while ensuring all cash movements are accurately recorded and reconciled to prevent loss, theft, or misstatement.
Process Narrative Conclusion Recommendations
Cash Collection & Recording
The monthly bank reconciliation process for the City of Torrance involves comparing bank activity to internal
accounting records to ensure accuracy and completeness within two days of the end of the month. An accountant performs the initial reconciliation, identifying and resolving any
discrepancies. The completed reconciliation is then reviewed by the accounting manager or finance leadership, providing an additional layer of oversight and ensuring segregation of duties.
This process is documented and forms part of the City’s routine City Treasurer operations, supporting timely detection and correction of errors and maintaining the integrity of financial records.
Strong internal controls are implemented, including dual custody for vault access, documented adjustments for check deposit errors, electronic check scanning, and monthly
reconciliations with clear segregation of duties between preparer and reviewer. These controls provide accountability, security, and timely error correction.
No process improvement opportunities were identified.
19 CITY TREASURER OPERATIONS ASSESSMENT 18
Cash Handling and Reconciliation
3 Safeguard physical cash assets through secure storage, dual custody, and documented access, while ensuring all cash movements are accurately recorded and reconciled to prevent loss, theft, or misstatement.
Process Narrative Conclusion Recommendations
Cash Payments & Authorization
The City of Torrance’s cash payment and authorization process begins with payment batches approved in the accounts payable (AP) system. Once approved, checks are printed onto blank check stock, which is securely stored in a locked location with access limited to authorized personnel and tracked via a log.
The check run process is supervised, and printed checks are matched to supporting documentation for accuracy. Voided or spoiled checks are documented and retained for audit
purposes.
Positive pay files are generated from the accounting system and uploaded to the bank’s cash management system to prevent check fraud. Accountants monitor daily positive pay exceptions, with oversight from the accounting manager.
For wire transfers, initiation and approval require two individuals and multi-factor authentication, ensuring
segregation of duties. User access to banking portals is reviewed at least annually, with all reviews documented.
The cash payments and authorization process for the City of Torrance demonstrates strong internal controls, including multi- level approval within the accounts payable system, segregation of duties between payment initiation and approval, and two- layer authentication for wire transfers. Accountants monitor positive pay exceptions daily, with oversight from the
accounting manager, and user access to banking portals is reviewed at least annually. These controls provide robust safeguards against unauthorized payments and ensure proper authorization and monitoring.
No process improvement opportunities were identified.
20 CITY TREASURER OPERATIONS ASSESSMENT 19
Investment Management
4 Safeguard public funds by ensuring that investment activities are authorized, accurately recorded, independently reviewed, an d c ompliant with applicable policies and regulations.
Process Narrative Conclusion Recommendations
Portfolio Management
Investment management for the City is a highly centralized process overseen by the Treasurer. However, the Deputy
Treasurer manages the day-to-day investment activities for initiating, executing, recording, and reconciling all investment transactions using the SymPro system. Prior to changes in investing activities, formal authorization is required by the Treasurer. The Deputy Treasurer reviews account balances, executes investment decisions, and prepares monthly
reconciliations. There are no additional resources within City Treasurer to provide more independent and secondary review of transactions and reconciliations.
While periodic meetings and report accessibility provide some informal oversight, the lack of segregation of duties and is limited with the current staff and resourcing within the City Treasurer department. This structure places substantial reliance on the integrity and diligence of the Deputy Treasurer, highlighting the need for additional oversight—such as
verification by the independent approver after transactions have been entered in the system — to strengthen the control environment and mitigate risks of error or fraud in the investment process.
Internal control gaps exist in investment management due to minimal staffing and lack of segregation of duties. The Deputy Treasurer is solely responsible for day-to-day investment activities and reconciliations with secondary review by the Treasurer and then the Investment committee monthly.
Increased operational support would allow for enhanced
segregation of duties.
We recommend implementing a secondary review to verify
investment transactions and reconciliations. Specifically, the Treasurer (or another qualified individual not involved in the day-to-day investment process) should be assigned to review and approve the reconciliation work performed by the Deputy Treasurer. This review should be documented, with evidence of the review and approval retained for audit purposes. Additionally, periodic spot checks or audits of investment activities could be introduced to further strengthen oversight and mitigate the risk associated with the current lack of segregation of duties. Consider engaging City Treasurer and/or investment subject matter experts or incremental consulting services to strengthen the structure of the department.
21 CITY TREASURER OPERATIONS ASSESSMENT 20
Appendix
22 CITY TREASURER OPERATIONS ASSESSMENT 21
Acknowledgements
We are pleased to take this opportunity
to thank various management and
personnel of the City Treasurer
department for the courtesies extended
to our representatives and their
considerable cooperation.
NAME GROUP /
DEPT TITLE
DAVID CESSOR Finance Accounting Manager
ERIN AOKI Payroll Sr. Business Manager
TIM GOODRICH City Treasurer City Treasurer
JASMINE ALLEN City Treasurer Deputy City Treasurer
JOSEPH PHAM Finance Revenue Manager
JASON NISHIYAMA Finance Deputy Finance Director
FULTON BELL Finance Accountant Senior
CARLOS HUIZAR Grant
Management
Management Associate
IAN DAILEY Finance Finance Director
NAO PABALAN Finance Assistant Finance Director
23 About BDO USA
At BDO, our purpose is helping people thrive, every day. Together, we are focused on delivering exceptional and sustainable outcomes — for our people, our clients and our communities. Across the U.S., and in over 160 countries through our global organization, BDO professionals provide assurance, tax and advisory services for a diverse range of clients.
BDO is the brand name for the BDO network and for each of the BDO Member Firms. BDO USA, P.C., a Virginia professional corporation, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
www.bdo.com
Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your needs. © 2025 BDO USA, P.C. All rights reserved.
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