HomeMy WebLinkAboutStaff Report 2310-21833
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Policy & Services Committee
Staff Report
From: City Auditor
Report Type: ACTION ITEMS
Lead Department: City Auditor
Meeting Date: December 12, 2023
Report #:2310-2183
TITLE
Office of the City Auditor Presentation of the Investment Management Audit Report; CEQA
Status - Not a Project
RECOMMENDATION
The City Auditor recommends that the Policy and Services Committee recommend the City
Council approve the Investment Management 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
Investment Management.
ANALYSIS
The objectives of this review were to:
1) Determine whether adequate controls are in place and working effectively to ensure
that investments are properly managed in accordance with the investment policy.
2) Assess the efficiency and the effectiveness of the investment portfolio management
against the best practice.
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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The OCA evaluated the processes and controls that safeguard the City’s investment of pooled
idle cash to which the City’s Investment Policy is applied to and tested the selected controls by
reviewing a sample of investment activities between July 1, 2020, to March 26, 2023.
The OCA used the California Debt and Investment Advisory Commission (CDIAC) and the
Government Finance Officers Association (GFOA) as best practices.
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. The City management requires no
additional resources to implement the recommended corrective actions identified in the report.
STAKEHOLDER ENGAGEMENT
The OCA worked primarily with 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 – Investment Management
APPROVED BY:
Adriane D. McCoy, City Auditor