Amended Agenda Packet 6/20/2024CITY OF CUPERTINO
AUDIT COMMITTEE
AGENDA
10185 North Stelling Road, Quinlan Conference Room
Monday, June 24, 2024
3:00 PM
Amended - Special Meeting
Amended on 6/20/2024 at 5:15 p.m. to add attachments A & B for Agenda Item #4.
Members of the public wishing to observe the meeting may do so in one of the following
ways:
1) Attend in person at Quinlan Community Center, 10185 North Stelling Road
2) The meeting will also be streamed live on and online at
https://youtube.com/@cupertinocitycommission
Members of the public wishing to comment on an item on the agenda may do so in the
following ways:
1) Appear in person at Quinlan Community Center.
2) E-mail comments by 3:00 p.m. on Monday, June 24 to the legislative body at
auditcommittee@cupertino.gov. These e-mail comments will also be posted to the City’s
website after the meeting.
Oral public comments may be made during the public comment period for each agenda
item.
Members of the audience who address the legislative body are requested to complete a
Speaker Card and identify themselves. Completion of Speaker Cards and identifying
yourself is voluntary and not required to attend the meeting or provide comments.
NOTICE AND CALL FOR A SPECIAL MEETING OF THE CUPERTINO AUDIT
COMMITTEE
NOTICE IS HEREBY GIVEN that a special meeting of Cupertino Audit Committee is
hereby called for Monday June 24, 2024, commencing at 3:00 p.m. at the Quinlan
Community Center Conference Room, 10185 North Stelling Road, Cupertino, California
95014. Said special meeting shall be for the purpose of conducting business on the subject
matters listed below under the heading, "Special Meeting."
SPECIAL MEETING
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ROLL CALL
ORDERS OF THE DAY
APPROVAL OF MINUTES
1.Subject: Approve Minutes of Regular Meeting on April 22, 2024
Recommended Action: Approve Minutes of Regular Meeting on April 22, 2024
A - Draft Minutes
POSTPONEMENTS
ORAL COMMUNICATIONS
This portion of the meeting is reserved for persons wishing to address the Committee on any matter
within the jurisdiction of the Committee and not on the agenda. Speakers are limited to three (3)
minutes. In most cases, State law will prohibit the Commission from making any decisions with respect
to a matter not on the agenda.
OLD BUSINESS
NEW BUSINESS
2.Subject: ACTION ITEM Receive the Enterprise Risk Assessment Final Report and FY
2024-25 Internal Audit Work Plan
Recommended Action: 1. Receive the Enterprise Risk Assessment Final Report and
Forward to City Council
2. Receive the FY 2024-25 Internal Audit Work Plan and Forward to City Council
Presenter: Thomas Leung, Budget Manager and Moss Adams
3:15(10)
Staff Report
A – City of Cupertino Enterprise Risk Assessment Final Report
B – FY 2024-25 Internal Audit Work Plan
3.Subject: ACTION ITEM Status update for prior Internal Audit Work Plans in Fiscal
(FY) 2021-22 and FY 2022-23
Recommended Action: Receive status update report for prior Internal Audit Work
Plans in FY 2021-22 and FY 2022-23 and forward to City Council
Presenter: Toni Oasay-Anderson
3:25(10)
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Staff Report
A – Procurement Operational Review - Audit Recommendation Update
B – Fiscal Policy Inventory & Gap Analysis - Audit Recommendation Update
C – Capital Program Effectiveness - Audit Recommendation Update
D – Fraud, Waste, and Abuse Program - Audit Recommendation Update
E – Budget Process Review - Audit Recommendation Update
F – Enterprise Leadership Assessment - Audit Recommendation Update
G – Library Expansion Construction - Audit Recommendation Update
4.Subject: INFORMATIONAL ITEM Review the Draft FY 2022-23 Annual
Comprehensive Financial Report (ACFR) and Supplemental Reports Memo
Recommended Action: Review the Draft FY 2022-23 Annual Comprehensive Financial
Report (ACFR) and Supplemental Reports Memo
Presenter: Jonathan Orozco, Finance Manager and The Pun Group
3:35(25)
A - ACFR Memo
B - Draft FY 2022-23 Annual Comprehensive Financial Report (ACFR)
5.Subject: INFORMATIONAL ITEM Receive the proposed Audit Committee 2024
Schedule and Workplan
Recommended Action: Receive the proposed Audit Committee 2024 Schedule and
Workplan
Presenter: Jonathan Orozco, Finance Manager and The Pun Group
4:00(10)
A - Proposed Audit Committee 2024 Schedule and Work Plan
STAFF AND COMMITTEE REPORTS
FUTURE AGENDA SETTING
ADJOURNMENT
In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this
meeting who is visually or hearing impaired or has any disability that needs special assistance should
call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for
assistance. In addition, upon request, in advance, by a person with a disability, meeting agendas and
writings distributed for the meeting that are public records will be made available in the appropriate
alternative format.
Any writings or documents provided to a majority of the members after publication of the agenda will
be made available for public inspection. Please contact the City Clerk’s Office in City Hall located at
10300 Torre Avenue, Cupertino, California 95014, during normal business hours.
IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section
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2.08.100 written communications sent to the Cupertino City Council, Commissioners or City staff
concerning a matter on the agenda are included as supplemental material to the agendized item. These
written communications are accessible to the public through the City’s website and kept in packet
archives. Do not include any personal or private information in written communications to the City
that you do not wish to make public, as written communications are considered public records and will
be made publicly available on the City website.
Members of the public are entitled to address the members concerning any item that is described in the
notice or agenda for this meeting, before or during consideration of that item. If you wish to address the
members on any other item not on the agenda, you may do so during the public comment.
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CITY OF CUPERTINO
Agenda Item
24-13239 Agenda Date: 6/24/2024
Agenda #: 1.
Subject: Approve Minutes of Regular Meeting on April 22, 2024
Approve Minutes of Regular Meeting on April 22, 2024
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City of Cupertino
Audit Committee Regular Meeting
Minutes
April 22, 2024
CALL TO ORDER
At 4:00 p.m., Chair Chen called the special meeting to order in the City of Cupertino Conference
Room A, 10300 Torre Avenue.
ROLL CALL
Committee Members Present: Chair Eno Schmidt, Mayor Sheila Mohan, Committee member
Hanyan Wu, Councilmember Hung Wei
City Staff Present: Kristina Alfaro, Thomas Leung, Janet Liang, Matt Morley, Jonathan Orozco
Absent: Committee member Angela Chen
Guests: Carlos Oblites (Chandler), Haile Garcia (Moss Adams), Ryan Maxey (U.S. Bank), Jennifer
Meza (PARS), Will Rogers (PARS), Dennis Mullins (PFM Asset Management), Rick Rosenthal
(PFM Asset Management)
ORDERS OF THE DAY
1. APPROVE MINUTES OF SPECIAL MEETING ON MARCH 21, 2024
Mayor Mohan motioned; Committee member Wei seconded. No public comment. The motion
passes unanimously.
Chair Schmidt motioned an amendment to edit future minutes so that the Audit Committee
members that are on the City Council should be addressed as Council member in the minutes
instead of Committee member. The motion passes as amended unanimously.
POSTPONEMENTS
ORAL COMMUNICATIONS
Rhoda Fry provided comments. Brooke Ezzat provided comments.
OLD BUSINESS
NEW BUSINESS
2. Receive the Internal Audit and Fraud, Waste, and Abuse programs update
Garcia provided an update. Chair Schmidt asked if committee members were interested in seeing
the reports, would it be available to view. Garcia noted that the reports are confidential and is a
requirement of State law and City policy.
No public comment.
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Mayor Mohan motioned to receive the report, Committee member Wu seconded. The motion
passes unanimously.
3. Receive OPEB & Pension Section 115 Trust Performance Report for Quarter Ending
December 31, 2023 and March 31, 2024
Meza provided an overview of the report. Rosenthal provided an overview of the report. Chair
Schmidt asked what the process is for eliminating certain stocks and if they are in communication
with city staff. Rosenthal noted that they do not communicate trades directly with the City, it is
included in the statements and the report shows the top 5 and bottom 5 contributors. Chair
Schmidt asked if they are worried about regional banking failures. Rosenthal noted that they have
not seen much of it in the last year. Commmittee member Wu asked if they have any
recommendations on the market trend. Rosenthal noted that they do not as they did a through
review not too long ago.
No Public Comment.
Councilmember Wei motioned to receive the report, Committee member Wu seconded. The
motion passes unanimously.
4. Receive the Treasurer's Investment Report for the Quarter Ending December 31, 2023 and
March 31, 2024
Orozco provided an overview. Oblites provided an overview. Chair Schmidt asked if we should
expect the portfolio to vary from the index in the future because of the duration. Oblites noted
yes, particularly on the front end because of the benchmark. Chair Schmidt asked if this leads
into the cash management issue for the City. Oblites noted yes and that there is a liquidity
component at the bank and at the State Pool - LAIF to cover expenditures, payroll runs and AP
runs.
Committee member Wu asked about the $45 million LAIF transfer. Orozco noted that the City
transferred funds out and withholding the funds until then was driven by the unknown of the
CDTFA audit and a few other outstanding liabilities.
Mayor Mohan asked if it is common to move funds to LAIF. Orozco noted that the City
historically has maintained approximately $20 million but with clarity in the CDTFA audit and
repayment portion of it, funds were moved. Alfaro noted that staff looks at it on a regular basis
and make a decision on what we know at a given point in time. Mayor Mohan asked one of our
priorities is liquidity, how does LAIF play into it. Orozco noted that it is relatively liquid and that
it is around 4% return.
Committee member Wu asked what is the composition of the LAIF fund. Orozco noted that LAIF
is administered by the State of California and they set the restrictions and baseline. Oblites noted
that LAIF invests in money market securities and longer treasuries.
Rhoda Fry provided public comment.
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Councilmember Wei motioned to receive the report, Committee member Wu seconded. The
motion passes unanimously.
5. Annual Review of the City’s Investment Policy
Orozco provided an overview. Chair Schmidt asked about the initial allocation of $56.5 million
that was set aside for disputed sales tax revenue , how does it get into the investment policy.
Orozoco noted that the funds are set aside in the City’s accounting software and is unaffected or
may be affected by the investment policy as the City wants to shorten the maturity date.
Rhoda Fry provided public comment.
Mayor Mohan motioned to accept the report and forward to the City Council for approval,
Committee member Wu seconded. The motion passes unanimously.
6. Update on FY 2022-23 ACFR and Supplemental Reports
Orozco provided an overview.
Rhoda Fry provided public comment.
7. Receive the proposed Audit Committee 2024 Schedule and Workplan
Orozco provided an overview.
Govind Tatachari and Rhoda Fry provided public comment.
STAFF AND COMMITTEE REPORTS
COMMITTEEMEMBER ATTENDANCE AT UPCOMING MEETINGS AND EVENTS
FUTURE AGENDA SETTING
ADJOURNMENT
The meeting adjourned at 5:56 p.m.
Recording Secretary:
Janet Liang, Management Analyst
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CITY OF CUPERTINO
Agenda Item
24-13240 Agenda Date: 6/24/2024
Agenda #: 2.
Subject: ACTION ITEM Receive the Enterprise Risk Assessment Final Report and FY 2024-25 Internal
Audit Work Plan
1. Receive the Enterprise Risk Assessment Final Report and Forward to City Council
2. Receive the FY 2024-25 Internal Audit Work Plan and Forward to City Council
Presenter: Thomas Leung, Budget Manager and Moss Adams
3:15(10)
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