Audit 07-11-20171. CALL TO ORDER
City of Cupe1iino
Audit Committee
Special Meeting
July 11 , 2017
At 4:02p.m ., Chairman Eno Schmidt called the meeting to order at Conference Room
EOC , Cupertino City Hall , 10300 Ton-e Avenue, Cupertino CA 95014 .
2. ROLLCALL
Committee Members Present: Chainnan Eno Schmidt, Mark Zavislak, Peter Shin,
Councilmember Steven Scharf, and Councilmember Rod Sinks
City Staff Present: Kristina Alfaro, Beth Viajar, Mary Redwine, and David Brandt
Absent: None
Guests: Kathy Lai, Partner, of Crowe Horwath. Rick Rosenthal and Carolyn Cox of US
Bank and Jennifer Meza from PARS were on the conference call for item 6A.
3. APPROVAL OF MINUTES
Co1mnittee Member Zav islak mo v ed to appro v e the May 1, m eeting minutes. Council
Member Scharf seconded and the motion passed unanimously.
4. ORAL COMMUNICATIONS -NONE
5. OLD BUSINESS -NONE
6. New Business
A. Performance Review of the OPEB Trust a/o 5/31/17
Rick Rosenthal of US Bartle provided a perfonnance review as of May 31, 2017. He will
provide an updated report as of June 30, 2017 when available.
B. Staff Update
i. MOIC Recommendations Focus on Bank Rec status
Alfaro presented a Bank Reconciliation project status as of 7/11/17 . Senior Accountant
Viajar will share template developed with the assistance of VTD . Alfaro will add more of
the backfill costs associated with the project. Alfaro emphasized that she would notify
both Audit C01mnittee and City Council members if the target completion date of the
Bank Rec project slips . The Committee members expressed a hope that no such slippage
would be incun-ed.
ii. Review of Transition Plan for Finance Manager
Alfaro gave an update on the status of the Finance Manager recruitment with an
expectation to onboard by November 1. Alfaro agreed to ask staff to circulate to
Committee members the most recent Standard Work Plan and Progress on Uncompleted
Action Items both of which were updated in the May 1st Committee meeting but not paii
of this meeting's advance packet.
Cupertino Audit Committee
C. Review the Treasurer's Investment Report QE June 2017
Alfaro gave a presentation of the Quaiier Ending June 30 , 2017 Treasurer 's Investment
rep01i to the c01mnittee . Co1mnittee member Shin motioned to approve repo1i subject to
corrections needed to reconci le with the Wells Fargo custodial rep01i by July 21st .
Committee Chair Schmidt seconded the motion and passed unanimously.
D. Interim report by Independent Auditor -Crowe Horwath
Kathy Lai of Crowe Horwath discussed findings of the Interim Audit Results including
Management's Response and Planned Corrective Actions . She discussed the need for
internal controls in the Infonnation System Controls area along with internal control
issues in the timely processing of Bank Reconciliations . As a result of the Interim Audit
Results, Crowe Horwath will not be relying on internal controls and instead will be
performing substantial substantive testing dming fiscal year end auditing.
E. Review and recommend budget format
Alfaro provided samples of other agencies budget brochures and graphics to get some
feedback in connection with the fonnat for the City's Budget at a Glance. There was
discussion of some graphics showing this year versu s last year comparison and adding a
CIP page. Committee liked City of Santa Clara 's budget icons showing what service 's
their revenue buys. Alfaro agreed to check relevant staff availability and sometime over
the next year look into scheduling a special , optional C01mnittee meeting to review
functionality of Open Gov and current City budget infonnation available online.
F. OPEB Actuarial Report Review
Alfaro explained why the OPEB Actuarial report won 't be av ailable until the end of
August and will include it on the next Audit Committee meeting scheduled for October
23, 2017 .
7. ADJOURNMENT
Co1mnittee Chair Schmidt motioned to adjourn with the next regularly scheduled meeting
on October 23rd and add a special meeting whose specific purpose will be to rev iew and
approve the audited CAFR on November 13 th from 4:00pm-6 :00pm.
At 6:00pm Councilmember Zavislak seconded with a unanimous appro v al at 6 :00pm .
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Recording Secretary
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