HomeMy WebLinkAboutStaff Report 2310-21823
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Policy & Services Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Auditor
Meeting Date: December 12, 2023
Report #:2310-2182
TITLE
Office of City Auditor Presentation of the Wastewater Treatment Plant Agreement Audit
Report; CEQA Status - Not a Project
RECOMMENDATION
The City Auditor recommends that the Policy and Services Committee recommend the City
Council approve the Wastewater Treatment Plant Agreement Audit Report.
BACKGROUND
Baker Tilly, in its capacity serving as the Office of the City Auditor (OCA), performed a citywide
risk assessment that assessed a wide range of risk areas, including strategic, financial,
operational, compliance, technological, and reputation risks. The purpose of the assessment was
to identify and prioritize risks to develop the annual audit plan.
During the FY2022 risk assessment (ID#13914)1, the OCA identified risks associated with
wastewater treatment plant operations.
ANALYSIS
The objectives of this review were to:
1) Determine whether adequate controls are in place and working effectively to ensure
that costs related to the wastewater treatment plant are properly accounted for and
allocated.
2) Determine whether adequate controls are in place and working effectively to ensure the
compliance with contracts and regulations.
The OCA interviewed City employees and reviewed 39 Regional Water Quality Control Plant
(RWQCP) contracts and amendments the City manages. The OCA also reviewed the transactions
1 https://www.cityofpaloalto.org/files/assets/public/v/8/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220404/20220404pccsmamendedlinked1.pdf
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and documents in our audit period (from July 1, 2020, to May 30, 2022) for control testing, such
as billing and compliance monitoring activities.
The attached report summarizes the analysis, audit findings, and recommendations.
FISCAL/RESOURCE IMPACT
The timeline and resource needs for implementation of management’s corrective action plans
are identified by management within the attached report.
STAKEHOLDER ENGAGEMENT
The OCA worked primarily with Public Works Department and Administrative Services
Department and engaged with additional stakeholders, including the City Manager’s Office and
the City Attorney’s Office, as necessary.
ENVIRONMENTAL REVIEW
Environmental review is not applicable to this activity.
ATTACHMENTS
Late Packet Attachment A: OCA - Wastewater Treatment Plant Agreement
APPROVED BY:
Adriane D. McCoy, City Auditor