FROM: Amy McInerny, Chief Financial Officer
SUBJECT: FY 2020-21 Audit Workplan and Agreed Upon Procedures Reports
RECOMMENDATION:
title
Discuss FY 2020-21 Audit Workplan and determine three areas to contract for Agreed Upon Procedures Reports during FY 2020-21.
body
BACKGROUND:
In March 2018, the SBCERA Board approved a three-year Internal Audit Plan for Fiscal Years 2019, 2020 and 2021 (the "Plan"). At the time the Plan was approved, the expectation was that the Plan would be executed by an SBCERA internal auditor. That staff member was not able to complete any of the planned reports, and has left SBCERA's employment. As discussed with the Board on a number of occasions, the Plan is generally sound, and covers the areas of risks throughout most of the organization in categories of high, medium, and low. The Chief Executive Officer and Chief Financial Officer, both of whom were hired into their roles subsequent to the Plan's approval, believe that modifying how the Plan is implemented is appropriate:
1. Many of the Plan's work activities surround processes within the organization that are in the process of changing to improve efficiency, lower costs, and improve member service. The activities, particularly many of those in Fiscal Services and Member Services, are the subject of the ongoing "Pension Gold Refresh Project", which is using Lean Six Sigma tools to re-examine key work activities and implement process improvements. To audit these process areas at this time would likely be wasteful, as any findings on needed process improvements would be redundant to the ongoing project work.
2. The Board's Triennial Strategic Plan and Strategic Priorities establishes other projects, such as the telephone system replacement, which should be deferred from an audit perspective until they are in place and stabilized.
3. The work can be performed on a contract basis through Agreed Upon Procedures reports by independent accounting firms at a subs...
Click here for full text