HomeMy WebLinkAboutCC 09-15-2026 Item No. 16 FY 2026-27 Internal Audit Work Program_PresentationCC 09-15-2026
#16
FY 2026-27 Fourth
Amendment to
agreement with Baker Tilly
Presentation
City of Cupertino
FY 26-27 Internal Audit Program
Audit Committee Meeting / July 2026
City of Cupertino FY 26- 27 Internal Audit Program2
•The City retained Baker Tilly to serve as the designated Internal Auditor and conduct projects focusing on:
•Risks
•Internal Controls
•Efficiency and effectiveness
•Best practices
•Compliance
•Work is being completed under appropriate industry standards (IIA, GAGAS, AICPA)
Internal Audit Overview
Role of
Internal Audit
City of Cupertino FY 26- 27 Internal Audit Program3
City of Cupertino FY 26- 27 Internal Audit Program4
A. Program Inputs
•Enterprise
Assessments
•Employee and
Residents
•Performance
Metrics
B. Opportunities
•Risks
•Controls
•Compliance
•Performance
C. Tracking &
Reporting
•Findings &
Recommendations
•Fraud, Waste, and
Abuse Hotline
•Corrective Actions
•Implementation
•Validation
Holistic Internal Audit Program Components
City of Cupertino FY 26- 27 Internal Audit Program5
Internal Audit Program Components
Internal Audit Plan
Risks Internal
Controls Compliance Performance
Accounting and financial reporting, asset management, capital programs, compliance,
economics and funding, fraud, governance, human resources, internal controls, maintenance
and operations, management, operations and service delivery, organization and staffing,
processes and procedures, procurement, public safety, risk management, and technology
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City of Cupertino FY 26- 27 Internal Audit Program6
Focus Accomplishments
Enterprise Risk Assessments 2021, 2024
Internal Controls Projects Completed
•Citywide Internal Control Review
3
FY 26
Performance/Efficiency Projects Completed 5
Policies Reviewed
•City Council Review
•Investment/Cash Flow Policy Review
147
FY 26
FY 26
Recommendations Delivered 79
Ethic Hotline Reports Received 39 reports
Recommendations Validations in FY26 7
Program Review
Departments Covered
Name of Presentation / XX.XX.XX7
Department Projects
Administrative Services Procurement (22)
Finance Policy and Procedures (22)
Budget Process Review (23)
Grants Management Internal Control Review (25)
Special Revenue Fund Process (25)
Investment/Cash Flow Policy Review (26)
Council- Wide Policy Review (26)
City Clerk
City Manager’s Office FWA Program (22)
Community Development
Communication
Innovation & Technology
Parks & Recreation
Public Works Capital Program (22)
Library Construction Audit (23)
⇒ Enterprise Projects: Risk Assessment (21, 24), Enterprise Leadership (23), Policies and Procedures (24),
Recommendation Validation (25), Internal Control Review (26)
Name of Presentation / XX.XX.XX8
Potential FY26-27 Internal Audit Projects
Project Title Project Description Estimated Fee
Code Enforcement – 311 Response
Time Review
Evaluate the City's code enforcement complaint response process, with a
focus on response times, staffing availability, and service delivery. $45,000
Property Tax Review
Inventory property tax revenues and compare to relevant legislation and
interlocal agreements to identify opportunities to improve understanding of
tax revenue distributions, county service delivery, and intergovernmental
funding.
$35,000
Investment/Cash Flow Review Compare existing investment and cash flow processes to the City's existing
policy to assess alignment with the policies.$35,000
Permitting Efficiency Study
Evaluate the efficiency and effectiveness of the City's permitting process to
identify opportunities to streamline workflows, reduce processing times,
improve customer service, and enhance overall service delivery.
$50,000
Grant Management Follow-up Follow up on outstanding recommendations and assess what progress the
City has made to address recommendations.
$30,000
Recruitment and Retention Study
Assess the City’s recruitment and retention practices to identify opportunities
to improve hiring efficiency, enhance the City’s ability to attract and retain
qualified employees, and support long-term organizational stability.
$45,000
Recommendation Validations Continue to track and validate recommendation implementation.$10,000
Program Management Support ongoing program management activities.$20,000
Resources
•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
9
FY 26-27 Internal Audit Program - Tiers
Audit Committee’s Tiered Recommendation
Baseline
Recommendation Validations 10,000.00
Program Management 20,000.00
Subtotal 30,000.00
Tier 1
Code Enforcement - 311 Response Time Review 45,000.00
Permitting Efficiency Study 50,000.00
Recruitment and Retention Study 45,000.00
Subtotal 140,000.00
Tier 2
Property Tax Review 35,000.00
Investment/Cash Flow Review 35,000.00
Grant Management Follow-Up 30,000.00
Subtotal 100,000.00
Grand Total 270,000.00
Recommended Actions
1.Accept the FY 2026-27 Internal Audit Work Program
2. If accepted, authorize the City Manager to execute a Fourth
Amendment with Baker Tilly to extend the agreement through
June 30, 2027; and
3. Adopt Resolution No. 26-XXX approving Budget Modification
No. 2627-449, increasing appropriations by an amount to be
determined by Council at tonight's meeting
Questions?