Review of Audits and Financial Reports

Fred de Funiak Foreperson Ron R. Layman Foreperson Pro Tem Patricia L. Cunningham Secretary

The internal auditor for the City of Sunnyvale reports to the city manager. Two management/performance audits were terminated in the early stages because of the need for major restructuring of the departments under audit. These were the audits of the Transportation Operations Department and the Roadside and Median Right-of-Way Services Department. Since the audits were terminated without the public receiving the information that would have been available with a direct report to the city council by an independent internal auditor, the public has limited ability to evaluate the operations of the departments and the effectiveness of the restructuring. Not reporting to the city council in open forum provides an opportunity for public perception of a cover up, which negates the value of internal auditors as independent evaluators.

The City of Santa Clara has designated a city auditor function and assigned it to the city clerk, who is independently elected. Current auditing activities are limited to verification of expenditures and associated documentation.

Seven cities/towns did not provide the Grand Jury with management reports or process audits. They are: • Campbell • Gilroy • Los Altos • Los Altos Hills • Los Gatos • Monte Sereno • Santa Clara Milpitas submitted a single audit on internal financial controls. The failure of the smaller cities/towns to perform regular management reports or process audits is understandable. However, for our more moderate-sized or larger cities, such as Campbell, Gilroy, Milpitas and Santa Clara, to ignore these tools of good management is to overlook potential improvements in providing high quality, efficient services to their citizens.