Audit 07-16-03
City of Cupertino
Audit Committee
Regular Meeting
July 16, 2003
1.
CALL TO ORDER
At 5:12 p.m., Carol Atwood called the meeting to order in Conference Room A of
Cupertino City Hall, 10300 Torre A venue.
2.
ROLL CALL
Committee members: Michael Chang (arrived at 5:33 p.m.); Tom Hall; Gillian Enos
City Staff: Carol Atwood; Carol Ferrell
Guests: Cory Biggs, Maze and Associates; Terry Greene, City Architect
Absent: Dolly Sandoval
3.
APPROVAL OF MINUTES
Hall moved to approve the minutes of the regular meeting of May 7, 2003. Enos
seconded and motion passed unanimously with Sandoval absent.
4.
ORAL COMMUNICATIONS
None
5.
NEW BUSINESS
A.
Library Expenditure Report
Terry Green reviewed the Library project stating that he anticipates completion in
October 2004. Savings have been realized at bid opening for approximately
$1.5M and staff will propose uses of these funds for value engineering items at
the City Council August 4th meeting. Approximately $17M will be expended over
the next 16 months for construction in increments ranging from $400,000Imonth
to $1M/month. Carol Ferrell explained that the city investments had been tiered
to accommodate the construction drawdowns. Discussion followed.
B.
Interim Audit Report \
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Cory Biggs discussed the interim audit findings noting that there were no major
issues and no issues on investments or with the construction fund. He stated that
the audit approach is somewhat different this year with the implementation of
GASB 34. In summary, it entails 1) Routine Interim work, 2) GASB 34 impacts,
3) Final work, and 4) MBMA work required by GASB 34. Cory stated that this
year will require more time at both the audit and staff level, but that Cupertino has
been working on the conversion for over a year now and should be in good shape.
July 16, 2003
Audit Committee
Page 2
C.
Approval of Sales Tax Audit
Cory explained that even though the committee had expressed an interest in a
separate sales tax audit for the Blue Pheasant Restaurant, his initial
recommendation would be to perform a cursory review of the operations for a
couple of days which would cost the City between $1,600 - $2,000. He stated that
a full-fledged sales tax audit starts at $5,000 and may not be necessary. Tom
asked about doing a gross purchases test and Cory suggested the more
conservative approach with the cursory review first. Discussion followed. The
committee approved such a review with a 3-0 vote with the inclusion of an
internal control questionnaire.
D.
Investment Report for May 2003
Carol Ferrell reviewed the current investment rates and the performance of our
portfolio in regards to the LAIF benchmark.
E.
Other Committee UpdateslReports
The Committee approved on a vote of 3-0, four additional services to be
performed by the audit firm this year 1) City Controllers Report at $5,000, 2)
RDA Controllers Report at $750, 3) Financing Corporation Controllers Report at
$750, and the 4) preparation of the financial statements and footnotes for GASB
34 at $5,000.
The Committee discussed adding a fifth member to ensure a quorum. The
community members felt that it was very important to always have a council
member in attendance at the meetings, and all agreed that they would stay with
four members and work around everyone's schedules if a conflict arose.
6.
ADJOURNMENT
The meeting was adjourned at 6: 12 p.m.
~d.~
Carol Atwood, Director of Administrative Services