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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Santa Cruz County Grand Jury
• 2001-2002
Grand Jury Review of Periodic Audits of Local Government Entities in Santa Cruz County
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 10 findings
F1
Page 46
The cost of an annual audit for some small entities is a financial burden.
F2
Page 46
The law allows for less frequent audits for smaller entities.
F3
Page 46
There is a perception among special districts that there is a lack of choice in Certified Public Accountant (CPA) firms willing to audit special districts in Santa Cruz County.
F4
Page 46
Guidelines for the audit of special districts state that cost should not be the sole factor in choosing an auditor.
F5
Page 46
The responses of some local government entities to the Grand Jury’s survey of procedures followed in the selection of an auditor leaves the appearance that they use price as the sole criterion for selecting an auditor.
F6
Page 46
Other than school districts, most special districts in Santa Cruz County use one of two auditing firms among the several available choices.
F7
Page 46
Many small firms decline to do local school and government audits because of the special requirements of these audits.
F8
Page 46
There is no legal requirement to change auditors.
F9
Page 46
Many financial professionals believe a periodic change of auditor should be a requirement in order to ensure the independence of the audit.
F10
Page 46
Most special districts do not have a term limit policy for changing auditors. Conclusions
Recommendations 6
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R1Page 44The retention of an auditor should be reviewed at least every 3 years and changed at least every 6 years.
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R2Page 44The County Auditor/Controller should develop and publish guidelines for: A. Frequency of audit for special districts for which an annual audit is a financial burden; and B. Alternate safeguards in lieu of an annual audit for entities for which a formal audit is not warranted. 2001–2002 Santa Cruz County Grand Jury Final Report -4 Grand Jury Review of Periodic Audits of
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R3Page 44The Auditor/Controller should take an active role in encouraging competition among audit firms by: A. Facilitating joint solicitations for audit services; (same comment) B. Soliciting more CPA firms to do business in Santa Cruz County; and C. Apprising Special Districts of their auditing choices. Response Required Entity
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R4Page 44The County Auditor/Controller should create and publish a report describing expenses the County incurs for supporting other entities for which the County is not reimbursed, in order to get an accurate picture of the real cost of the services provided by these entities.
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R5Page 44Each city should create a report detailing expenses it incurs for supporting other entities such as joint ventures and redevelopment agencies for which the city is not reimbursed, in order to gain an adequate picture of the real costs of these entities.
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R6Page 44Local government entities should include in their annual budgets a summary of services provided to them by other local government entities without reimbursement in order to reflect better the actual costs of their programs. 2001–2002 Santa Cruz County Grand Jury Final Report -8 Grand Jury Review of Periodic Audits of