Audit 01-22-98
City of Cupertino
CUPERTINO AUDIT COMMITTEE
Regular Adjourned Meeting
January 22,1998
MINUTES
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Cupertino
1.
CALL TO ORDER
Carol Atwood called the meeting to order at 8:09 a.m. in Conference Room A of Cupertino
City Hall, 10300 Torre Avenue.
2.
ROLL CALL
Council members: Sandy James, Wally Dean
City Staff: Don Brown, Carol Atwood and Jennifer Chang
Community Representatives: Tom Hall, Emily Wagner
Absent: None
3.
APPROVAL OF MINUTES - Postponed until next meeting
4.
ORAL COMMUNICATIONS
None
5.
NEW BUSINESS
Purpose of the Committee - Carol Atwood reviewed the purpose of the audit committee
(formed in early 1995) for the benefit of the two new council members.
Status of passed management letter comments - Jennifer Chang discussed the three
passed management letter comments as a result of the FY 1996/97 audit. She gave a
background of the finding and what had been done to correct the situation. Comments
concerned stale dated checks which are now reviewed monthly, Accounts Payable backup
documentation and review of the deposit account to ensure that all deposits are current and
identified as to their purpose.
Investment Policy Review - Carol explained that an investment policy must be adopted by
the City Council every year per state law and that there were no proposed changes to the
policy for 1998. Emily Wagner suggested that the FHLMC investment exception approved
by Council in 1993 be modified to eliminate any additional long-term investments in that
category. The committee concurred. Wally Dean asked several questions concerning
compliance with State law and City policy. Carol explained that the independent auditors
are now required to audit the investments in regards to compliance for the entire year. In
addition, we now have our investments with a third party custodian who ensures that the
investments delivered to their custody agree with what the City has purchased. A third
control is the audit committee itself, who reviews the investment reports during the year.
Page 2
Sales Tax Update - Carol Atwood gave an update on sales tax denoting new companies,
gains & declines of major contributors from one year to the next and losses from closed
businesses. Apple Computer had the highest increase as a result of our sales tax incentive
agreement. Power Computing was our biggest loss with the Apple clone agreements
eliminated.
Future Projects and Meeting Dates - Tom Hall requested that the independent auditor
still meet annually with the audit committee even though they issue a clean opinion and no
formal management letter. Wally Dean requested that the committee review the most
recent investment report quarterly.
ADJOURNMENT
At 9:21am the committee adjourned to April 16, 1998 at 8:00am, Conference room A .
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Carol Atwood, Chair
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