COMMITTEE AGENDA MEMORANDUM
Board Audit Committee
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: title
Discuss 2026 Annual Audit Plan (Risk Assessment, Asset Management, Pacheco Reservoir Project, and Investigations Process), and Provide Feedback as Needed
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RECOMMENDATION: Recommendation
A. Discuss 2026 Annual Audit Plan; and
B. Provide feedback as needed.
Body
SUMMARY:
On November 19, 2025, the Chief Audit Executive (CAE) presented the proposed topics for the 2026 Annual Audit Plan to the Board Audit Committee (BAC) based on his individual interviews with each of the Board members. The BAC discussed and ultimately agreed to recommend the following topics to the full Board:
1) Risk Assessment, including developing the 2026 Risk Assessment pursuant to Section 7.4 of the BAC Charter for the purpose of identifying and prioritizing potential audit topics and informing future audit plans.
2) Asset Management, including reviewing and evaluating Valley Water’s infrastructure maintenance programs, encompassing various elements related to operations and maintenance. This includes assessing how Valley Water develops and maintains its asset inventories. The evaluation will include:
a. Valley Water’s methods and approach to determining the condition of existing assets.
b. Practices related to scheduling predictive and preventative maintenance, monitoring maintenance backlogs, and work order scheduling.
c. The extent to which Valley Water relies on outsourced service providers to augment in-house resources, and how well inventories are planned, maintained, and optimized to enhance overall operational efficiencies.
d. The use of asset management software or systems to extend the lifespan of critical infrastructure while minimizing operational costs.
3) Pacheco Reservoir Project, including evaluating whether best practices were followed during each phase of the project through termination of the project.
4) Investigations Process, including evaluating the effectiveness, efficiency, and integrity of Valley Water’s processes for investigating allegations of employee, Board officer, and Board member misconduct, including:
a. Adherence to applicable laws, policies, collective bargaining agreements, and ethical standards governing workplace investigations.
b. Appropriate separation of duties and independence in the handling of investigations involving management, senior leadership, or Board members;
c. Timeliness in the initiation, conduct, and resolution of investigations;
d. Consistent standards, procedures, and outcomes across similar cases;
e. Clear roles, responsibilities, and reporting lines for Human Resources staff, investigators, management, legal counsel, and appropriate oversight;
f. Accurate, complete, and secure maintenance of investigation case records;
g. Implementation of recommendations and identification of systemic issues or patterns of misconduct; and
h. Consistency with the practices of other public, private, and non-profit organizations related to complaint intake, investigation processes, and outcomes.
At its meeting on December 9, 2025, the Board approved the audit assignments and respective target start dates for each audit:
1. Risk Assessment
• Assign to the Chief Audit Executive
• Anticipated start date to be determined following the selection of the next CAE
2. Asset Management
• Assign to Plante Moran
• Anticipated start in Q1 of Calendar Year 2026
3. Pacheco Reservoir Project
• Assign to Sjoberg Evashenk Consulting
• Anticipated start in Q3 of Calendar Year 2026
4. Investigations Process
• Assign to Baker Tilly Advisory Group
• Anticipated start in Q2 of Calendar Year 2026
Audits Pending from Prior Years
Several audit projects initiated in the prior year remain in progress:
• The Board Policy Compliance Audit remains in the fieldwork stage due to resource issues on both sides.
• The Capital Project Delivery audit commenced later than anticipated and has progressed to the fieldwork stage, with completion projected for Q2 2026.
• The Centralized and Decentralized Contracting Practices audit has progressed to the fieldwork stage, but experienced delays extending its expected completion to Q1 2026.
• The Water Conservation Strategies audit is currently in the reporting phase. A presentation to the BAC has been provided under a separate agenda item.
• The Water Usage and Demand Forecasting audit is now in the reporting stage. A preliminary draft report for review is anticipated in late January 2026.
The purpose of this agenda item is to present and discuss the 2026 Annual Audit Plan and receive any feedback the Board deems appropriate.
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item. The Annual Audit Workplan serves as a tool for communicating audit priorities as determined by the BAC and the Board of Directors.
ATTACHMENTS:
None.
UNCLASSIFIED MANAGER:
Manager
Darin Taylor, 408-630-3068