BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Receive and Discuss the Final Audit Report and Management Response for the Contract Change Order Audit Conducted by TAP International, Inc.
End
RECOMMENDATION:
Recommendation
Receive and discuss the Final Audit Report, and Management Response, for the Contract Change Order Audit conducted by TAP International, Inc.
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 include input from Valley Water's Board of Directors, management, and staff and would be used to assist in the development of an Annual Audit Work Plan. The highest risk areas include procurement, contract change order management, succession planning, and fraud prevention.
On February 26, 2019, the Board approved the Board Audit Committee's recommendation for TAP to conduct three performance audits recommended by the Board Audit Committee. The three audits include performance audits of the District Counsel's office, contract change order management processes (Contract Change Order Audit), and real estate services. An amendment to the Board independent auditing services agreement was completed on June 7, 2019, 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 au...
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