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ADOPT THE FISCAL YEAR 2024-25 INTERNAL AUDIT PROGRAM
recommended action
RECOMMENDATION
The Council Audit Committee recommends that City Council adopt by motion, the Fiscal Year (FY) 2024-25 Internal Audit Program.
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Summary
The Internal Audit function of the City is designed to provide objective analysis, evaluation, and recommendations for improvements to City systems and activities. This is accomplished through an annual Internal Audit Plan that tests internal controls, evaluates processes, and completes projects to improve operations. This function is distinct from the annual review of City financial statements conducted by external financial auditors.
DISCUSSION
Background
As a City Charter Appointed Office, the City Auditor assesses performance and provides recommendations to mitigate risk and optimize business processes. The City Auditor completes triennial enterprise risk assessments and develops an annual Internal Audit Plan to address identified risks, test internal controls, assess efficiency and effectiveness, support development of necessary City policy and closure of audit findings, and carry out special projects that will facilitate the City Council’s Priority Goals.
Stemming from the City Council Strategic Initiatives adopted in 2011, designed to attain fiscal sustainability and address a multitude of audit findings, the City Council decided in 2012 to solicit Internal Audit Services by contract.
Moss Adams LLP has served as the City’s internal auditor since early 2013. The recommendations resulting from initial enterprise risk and internal controls assessments were translated into a multi-year Internal Audit Plan designed to strengthen internal controls and processes for the City, as well as make improvements to priority programs and initiatives of the City Council. In subsequent years, Moss Adams recommended and implemented annual audit plans to continue strengthening controls and processes of the City. During the FY2018-19, the City conducted a competitive Request for Proposals process to identify an audit firm to continue providing services for the City. Moss Adams was selected as the winning firm given their vast experience in municipal internal audit services, quality of work, and strategic fit with the City. Council approved a contract extension through FY2025-26 on May 21, 2024.
Regular progress updates have been provided at monthly Council Audit Committee meetings. Project reports and recommendations from Moss Adams have also been provided to City Council as information items in regular City Council agenda packets.
Present Situation
The FY2024-25 Internal Audit Plan maintains focus on improvement to citywide policies, processes, and controls The proposed plan includes seven internal controls and performance projects, as well as continued general program management, audit findings validation, and ethics hotline administration.
At its July 2024 meeting, the FY2024-25 Internal Audit Plan was presented to the Council Audit Committee for discussion and recommended for Council adoption on August 20, 2024.
FINANCIAL SUMMARY
The recommended FY2024-25 Internal Audit Plan has a budget of $365,000 and is within the budget allocation for Internal Audit Services. There are sufficient funds in the Auditor’s Special Services account for these purposes.
Attachment A - Fiscal Year 2024-25 Internal Audit Plan