COMMITTEE AGENDA MEMORANDUM
Board Audit Committee
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: title
Discuss Potential Audit Topics for 2027 Annual Audit Plan, and Provide Further Guidance as Needed.
End
RECOMMENDATION:
Recommendation
Discuss potential audit topics for 2027 Annual Audit Plan, and provide further guidance as needed.
Body
SUMMARY:
The purpose of this agenda item is to discuss the potential audit topics to be proposed as the 2026 Annual Audit Plan, discuss any new related information as appropriate, and provide any guidance the BAC deems appropriate.
The BAC Charter, Article I, Paragraph 4 states, “The Committee shall assist the Board, consistent with direction from the full Board, by identifying potential areas for audit and audit priorities, and to review, update, plan and coordinate execution of Board audits.” To that end, the Board’s Chief Audit Executive (CAE) conducted a risk assessment in FY 2023 to identify key areas of risk that could be considered for auditing.
The 2023 Risk Assessment Final Report dated November 2023 (Attachment 1) is attached for reference. The Risk Assessment includes heat maps of Valley Water’s operational areas based on risk impact (low, moderate, and high risk). The results of the risk assessment included input from Valley Water’s Board of Directors (the Board), executives, and management and was used to help develop the proposed 2024-2026 Audit Plan, included as Appendix B of Attachment 1. Based on this risk assessment and subsequent committee meeting discussions, the BAC recommended to the Board, and the Board approved the completion of performance audits on the following topics:
• Information Technology / Cybersecurity
• Human Resources
• Board Policies
• Capital Project Delivery
• Contracting Practices
• Water Conservation Strategies
• Water Usage and Demand Forecasting
• Asset Management
• Investigations Process
• Pacheco Reservoir
The last of these performance audits (Pacheco Reservoir) is projected to be completed in Q1 of Calendar Year 2027.
At the December 5, 2025, Board meeting, the Board also directed the Chief Audit Executive to complete a new Risk Assessment that will be used to inform the proposed 2027-2029 Audit Plan. This Risk Assessment is scheduled to commence in August 2026.
The BAC Audit Charter (Article III, Paragraph 7.2) requires that, by November 30 of each year, the BAC shall submit its recommended Annual Audit Plan to the full Board for consideration and direction.
The purpose of this meeting is to begin discussion of potential audit topics and the schedule for completing the proposed Annual Audit Plan for the full Board’s consideration.
ENVIRONMENTAL JUSTICE IMPACT:
The Annual Audit Plan is not subject to environmental justice analysis. The Annual Audit Plan serves as a tool for communicating audit priorities as determined by the BAC and the Board of Directors.
ATTACHMENTS:
Attachment 1: 2023 Risk Assessment Final Report.
UNCLASSIFIED MANAGER:
Manager
Darin Taylor, 408-630-3068