In 2012, Yolo County voters approved Measure H, which consolidated the elected offices of Auditor-Controller and Treasurer-Tax Collector, and other countywide fiscal functions, into a single department under the direction of an appointed Chief Financial Officer. To maintain an assurance of accountability, Measure H also provided for the creation of an independent Financial Oversight Committee, which was formally created by the Board of Supervisors in 2014 with the passage of Ordinance No. 1450. The Financial Oversight Committee (FOC) replaced and absorbed the duties of the County’s Treasury Oversight Committee and Audit Committee.
Historically, independence of the County’s Internal Audit function was achieved by reporting to the elected Auditor-Controller. However, with the approval of Measure H, a new means of assuring independence was required. As such, in 2015, the Internal Audit charter was updated to reflect bifurcated reporting lines for the Audit Manager, who would report functionally to the Audit Subcommittee of the FOC and administratively to the Chief Financial Officer. Those reporting lines remain in place today.
On November 9, 2023, the Audit Subcommittee discussed a proposal to restructure the administrative reporting lines of the County’s Internal Audit function. Under the proposed structure, the Audit Manager would continue to report functionally to the Audit Subcommittee, consistent with best practices to ensure independence of the Internal Audit function. However, the Audit Manager would no longer report administratively to the Chief Financial Officer but instead would receive administrative support from the Clerk of the Board’s Office. The Clerk of the Board’s Office currently provides administrative support to the Board of Supervisors, including purchasing of supplies, entry and approval of timesheets, and payment of claims and invoices.
Following discussion, the Audit Subcommittee referred the item to the Board Governance Session on December 12, 2023. During the Board Governance Session, the Board of Supervisors expressed interest in moving forward with the proposed restructuring.
Should the Board elect to move forward with the proposed restructuring, a number of subsequent actions would need to be taken, including revision to the Internal Audit Charter and possibly to Chapter 5, Article 20 of the Yolo County Code. Staff will bring any required revisions back to the Board for approval in the near future.
In addition, with no department head to provide administrative support, several logistical issues will need to be considered, including:
- Responsibility for the completion of the Audit Manager’s performance evaluation,
- Approval process for the Audit Manager’s timesheet and personnel actions,
- Authority for approving purchases and invoice payments,
- Authority for approving personnel actions for Internal Audit staff,
- Update the County website to reflect the new structure.
It is recommended that staff work with the Audit Subcommittee to resolve these logistical issues and document roles and responsibilities as it pertains to administrative support for the Internal Audit function.
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