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Exhibit CC 7-15-14 Item #4 Audit Committee PowerPoint AUDIT COMMITTEE REPORT ON ACTIVITIES JULY 15, 2014 BY ENO SCHMIDT AUDIT COMMITTEE -2014  Members: Angela Chen, At Large Member  Mark Santoro, Council Member  Eno Schmidt, At Large Member  Rod Sinks, Council Member  Raymond Yin, At Large Member   City Staff Liaison: Lisa Taitano, Finance Manager  2 Audit Committee -Responsibilities  Review Annual Audit Report & Management Letter;  Recommend Appointment of Auditors;  Review Monthly Treasurer’s Report;  Recommend Budget Format; and  Review City Investment Policies & Internal Controls. (Extracted from Cupertino, CA Municipal Code Chapter 2.88) 3 Audit Committee –Highlights 1.Annual Audit Report  City’s Fiscal Year Ended June 30, 2013  Reviewed Maze & Associates in November 2013  Q&A with Mark Wong CPA and City Staff  Clean Opinion Comprehensive Annual Financial Report (CAFR) http://www.cupertino.org/index.aspx?page=176 4 Audit Committee –Highlights 2.New Investment Manager for City’s Post- Employment Benefits (OPEB) Funds  Identified the Need for a New Investment Manager  Coordinated with City Staff and Public Agency Retirement Services (PARS)  Interviewed A Number of Qualified Investment Managers  Recommended U.S. Bank –Early 2014 5 Audit Committee –Highlights 2.New Investment Manager for City’s Post-Employment Benefits (OPEB) Funds -Continued U.S. Bank Investment Manager Qualifications  Ability to Formulate & Articulate an Investment Strategy and Be Responsive to City’s Directions  Clear Appreciation for Risk-Return Target Consistent with Fund’s Very Long Time Horizon  Flexibility in Offering Many Investment Choices  Responsive Realignment to Market Conditions  No Increase in Fees 6 Audit Committee –Highlights 3.New Budget Summary Format  Identified the Need for Summary Format Consultation and Collaboration with City Staff   New Summary Format To Be Implemented Mid-2014 Key Revenue and Expenditures  Year-to-date Percentage Measures   Possible Implementation of New Flow Diagrams SankeyDiagrams  7 Audit Committee –Q&A Q&A 8