Issue | Background | Findings | Conclusions | Recommendations | Responses | Attachments Audit and Review of County

R1

The Grand Jury recommends that the San Mateo County Board of Supervisors: Establish an Audit Committee to advise the Board of Supervisors regarding the selection of San Mateo County’s independent auditors and regarding a review of the County’s financial statement auditing process. The Audit Committee should be composed solely of members of the Board of Supervisors.

R2

The Grand Jury recommends that the San Mateo County Board of Supervisors: Establish an Audit Committee pursuant to a resolution containing substantially the matters set forth in Exhibit A to this report. The Grand Jury recommends that the San Mateo County Controller:

R3

The Grand Jury recommends that the San Mateo County Controller: Work with the independent auditors to ensure that the Report to Supervisors (management letter) is delivered promptly following completion of the audit. The Grand Jury recommends that future San Mateo County Civil Grand Juries establish an audit committee. This audit committee should advise the entire Grand Jury regarding its duties under California Penal Code Sections 925 and 926 and shall have the objectives and responsibilities as set forth in Exhibit B of this report. The Grand Jury should establish procedures for reviewing the financial reports of the approximately 90 governmental entities operating in the County to identify actual and potential financial problems. EXHIBIT “A” Board of Supervisors Audit Committee Resolution COMMITTEE The Board of Supervisors (the “Board”) of San Mateo County (the “County”) has established a standing committee to be known as the Audit Committee (the “Committee”). OBJECTIVES The purpose of the Committee is to act in an advisory capacity to the Board, recommending the selection of the County’s independent auditors and reporting annually to the Board of Supervisors and to the Grand Jury regarding the County’s auditing, accounting and control functions and financial reporting process. COMPOSITION The Committee’s composition shall consist of two (2) members of the Board. One of the members so appointed will be designated by the Board as the Chairperson of the Committee. It is desirable for one member of the Committee to have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication. SCOPE OF ACTIVITIES The Committee shall exercise the following powers and duties: (a) Recommend to the Board and the Grand Jury the firm of independent auditors to be selected to audit the County financial statements; (b) Meet with the County’s independent auditors at least annually and review the scope of the annual audit (inclusions and exclusions), any open questions as to the choice of acceptable accounting principles to be applied and all other matters relating to the auditors’ relationship with the County; (c) Advise the Board as to the auditors’ performance, including the scope and adequacy of the auditors’ review; (d) Recommend, where appropriate, the removal or replacement of the independent auditors; (e) Review the County’s annual financial statements, including the footnotes, and discuss such statements with the auditors prior to release of the County’s annual report; (f) Receive and consider the auditors’ comments and suggestions as to internal audit and control procedures, adequacy of staff, and other matters; (g) Receive and review periodic reports of the County’s Controller and internal audit staff; meet with the Controller and internal audit staff to review and approve the internal audit staff to examine and approve the internal audit programs; review the executive management’s responses to internal audit staff reports; review the adequacy of the County’s internal audit staff and report thereon to the Board; (h) Approve non-audit services to be rendered to the County by the independent auditors, if any, after considering the effect on audit independence; (i) Meet with and obtain reports and information from such County officials, employees, suppliers and others as the Audit Committee shall determine to be necessary in carrying out their duties as set forth above; (j) Take, or recommend that the Board take, appropriate action to oversee the independence of the outside auditors; (k) Receive and review periodic written statements from the independent auditors delineating all relationships between the auditors and the County; and (l) Engage in an active dialogue with the auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditors. MEETINGS The Committee shall hold regular meetings on such days as it shall determine. Other meetings of the Committee will be held at the request of the Chairperson of the Committee. Minutes shall be regularly kept of the Committee proceedings, by a person appointed by the Committee to do so. AGENDA Prior to each regularly scheduled meeting, the Committee will receive a prepared agenda for the meeting. Other topics for