COMMITTEE AGENDA MEMORANDUM
Board Audit Committee
SUBJECT:
title
Discuss the Options to Increase the Board Independent Auditing Services Agreement Not-To-Exceed Amount.
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RECOMMENDATION:
Recommendation
A. Discuss the Option to Increase the Board Independent Auditing Services Agreement Not-To-Exceed Amount; and
B. Approve recommendation to the full Board to:
i. Exercise the option to increase the Board Independent Auditing Services Agreement not-to-exceed amount by $500,000 from $1,005,000 to $1,505,000; or
ii. Continue with the current not-to-exceed amount of $1,000,005 for the Board Independent Auditing Services Agreement with TAP International.
Body
SUMMARY:
The Board Audit Committee (BAC) was established to assist the Board of Directors (Board), consistent with direction from the full Board, to identify potential areas for audit and audit priorities, and to review, update, plan, and coordinate execution of Board audits.
On May 23, 2017, the Board, approved an on-call consultant agreement with TAP International, Inc. (TAP) for Board independent auditing services.
On September 26, 2018, TAP presented the final Risk Assessment Model to the BAC assessing operational risks to the Santa Clara Valley Water District ("Valley Water"). The Risk Assessment Model developed heat maps of Valley Water operational areas based on risk impact (low, moderate, and high risk). The results of the risk assessment identified 41 potential audits which included input from Valley Water's Board of Directors, management and staff. The highest risk areas included procurement, contract change order management, succession planning, and fraud prevention.
On February 26, 2019, the Board approved the BAC's recommendation for TAP to conduct three performance audits and to direct staff amend the agreement to increase the not-to-exceed amount from $405,000 to $1,005,000 to complete all three proposed audits and approximately three additional future audits. The three audits include per...
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