Audit 10-13-2016 (Cancel) OFFICE OF ADMINISTRATIVE SERVICES
CITY HALL
, 10300 TORRE AVENUE •CUPERT�NO, CA 95014-3255
C U P E RT 1 N O TELEPHONE: (408)777-3200• FAX: (408)777-3109
AUDIT COMMITTEE
NOTICE OF CANCELLATION
NOTICE IS HEREBY GIVEN that the regular meeting of the Audit Committee meeting
scheduled for Thursday, October 13, 2016 was cancelled due to a lack of noticing. A I
special meeting will be called far Thursday, October 13, 2016 beginning at 3:01 p.m.
Dated this 12th day of October, 2016
� _
Lisa Taitano
Finance Manager
�
Cupertino Audit Committee
that he emailed to Taitano and Maze put on record as types of questions for the committee
and Maze to deliberate on. Here are Committee Chair Schmidt's questions :
o Was any cash discovered to be missing?
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o Why did the audit procedures and the changes in internal control by City staff
resulting from the identification of the previous fiscal year prior period
adjustment (the error), not uncover the current prior period adjustment in the
same account category?
o Is the financial impact limited only to developer deposits?
o Do bond holders of the City's debt need to be notified or are there any other
legal implications of this prior period adjustment?
• Does the City's legal counsel need to be informed and opine on this
issue?
o What are the extra costs involved to the City resulting from the uncovering of
this prior period adjustment ( error)?
o What assurance can be provided that there will not be a p1ior period
adjustment (error) in accounting in this same c~tegory uncovered in future
• by the independent auditor?
• by City staff?
Chair Schmidt asked the Committee to direct their questions via email to Redwine and
Taitano , and copy Schmidt, and to create a comprehensive list for Taitano to have and
coordinate with Maze to obtain consensus responses for the committee.
C. Review of Progress on Uncompleted Action Items from Previous meetings
Meeting adjourned before reaching item , moving to subsequent Audit Committee meeting.
D. Treasurer's Investment Reports for QE June 30 and September 30, 2016
Taitano discussed the reports which included duration calculations. Chairman Schmidt
suggested a motioned to have City staff come back with interpretation or proposed
recommendation addressing the issue reported in item #4 of Maze's Interim Accounting
Issues Memo. Zavislak motioned, Shin seconded and passed unanimously. Shin raised a
series of issues relating to internal control on investment schedule. Committee member
Zavislak motioned to forward the reports to Council, Committee member Shin seconded and
the motion passed unanimously.
E. Overview of Auditor RFP process
Mark Wong and Grace Zhang of Maze left the meeting. Taitano discussed the upcoming
Auditor RFP process. Taitano provided background on what the audit subcommittee role and
duties were for the Auditor RFP process. She also explained that staffs management of the
process was essential to maintain proper procurement standards , as the contract would be
executed by the City Manager and compliance with the requirements of the contract would
rest with City staff. Committee decided to have a special meeting of two members with three
constituting a quornm. A meeting quornm would require public noticing and hinder the
subcommittee from accomplishing its work efficiently. The Committee asked Redwine to
check committee members schedules for this special meeting to discuss the RFP issue to
occur in the next two weeks. Committee member Zavislak motioned to schedule this special
meeting and committee member Shin seconded the motion and the motion passed
unanimously.
ADJOURNMENT
The meeting was adjourned at 5:35pm by Zavislak motion and seconded by
Schmidt with a unanimous approval.