Audit 01-23-2018CALL TO ORDER
City of Cupertino
Audit Committee
January 23 , 2018
At 4:0lp.m ., Chairman Eno Schmidt called the meeting to order at Conference Room A,
Cupertino City Hall, 10300 T01Te Avenue, Cupertino CA 95014.
ROLL CALL
Committee Members Present: Chairman Eno Schmidt, Jim Luther, Council member
Chang and Mayor Paul
City Staff Present: Kristina Alfaro, Zach Korach, Beth Viajar, and David Brandt
Absent: Mark Zavislak
Guests: Kathy Lai, Crowe Horwath
Chairman Schmidt warmly welcomed Mayor Paul and Council member Chang as
previous members of the Committee and newly appointed for 2018. He also welcomed
Zach Korach, who recently joined the City as Finance Manager.
APPROVAL OF MINUTES
Committee member Luther motioned to approve the October 23, 2017 meeting minutes,
Council member Chang seconded and the motion passed with Mayor Paul abstaining.
ORAL COMMUNICATIONS
OLD BUSINESS
NEW BUSINESS
1. Review the Treasurer's Investment Report Quarter Ending December 2017
Korach gave a presentation of the quarter ending December 31, 201 7 Treasurer's
Investment Report to the committee. Kathy Lai of Crowe Horwath addressed
Chairman Schmidt and the committee's inquiry regarding possible relevant liquidity
ratios that could be added to the report. Lai responded that this kind of question has
been asked by other cities and she did not know of any easy answer. As indicated in
the Minutes of the October 23, 2017 meeting, City Staff will look into possible ratios
or other information that can be added to the liquidity section of the Treasurer's Report
and include this information as appropriate in the next Treasurer's Report. Council
member Chang motioned to approve the report, committee member Luther seconded
and the motion passed unanimously.
2. Review the FY2016-17 Draft CAFR
Korach provided an overview of the City's financial position as of June 30, 2017 and
Kathy Lai of Crowe Horwath reviewed her firm's independent audit opinion issued in
the City's FY2016-17 Comprehensive Annual Financial Report draft. Korach
discussed management's responses to findings. After extensive dialog among
Cupe1iino Audit Committee
committee members , City staff, and Lai of Crowe and Horwath, 1) a special meeting in
February was scheduled to conduct a final review and approval, and 2) City Staff
agreed to provide to the Audit Committee at a future meeting in 2018 a) a review of
the City's approach to integrating the approximate five modules developed by the City
to interface with New World Systems (the City 's ERP) and allow monthly bank
reconciliations (reference MOIC 2017-002) and b) a review of the City's training
policy being adopted and implemented in order to accomplish the training necessary
for the proper identification and recording of capitalizable costs (reference MOIC
2017-003).
3. Review and Approve the Crowe Horwath AUP on Investment Policy
Lai reviewed the AUP and in regard to Procedure 10 will check why Duration was not
included on the check list. Council member Chang motioned to approve, committee
member Luther seconded and the motion passed unanimously.
4. Establish meeting date for February Special meeting
The committee chose to schedule a special meeting on February 15 111 at 4:00pm. Staff
will try to post agenda and associated packet items to Legistar by February 8111 and
email the committee members the link once posted.
5. ADJOURNMENT
Chairman Schmidt adjourned the meeting at 5 :50pm.
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