AGENDA TITLE:
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Receive City-Wide Internal Controls Review Report (CM)
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MEETING DATE:
June 10, 2025
PREPARED BY:
James Lindsay, Acting City Manager
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RECOMMENDED ACTION:
Receive City-Wide Internal Controls Review Report.
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BACKGROUND INFORMATION:
On September 17, 2024, the City entered into an Agreement for Professional Services with Moss Adams LLP ("Moss Adams") to perform an evaluation of the City's internal controls framework. This review took place between September 2024 and January 2025, and focused on assessing key controls for protecting the City's assets and resources, as well as timely processing and reporting of financial information. Moss Adams completed its review and has now submitted its findings to the City in the "Final Report, City of Lodi, City-Wide Internal Controls Review" dated June 6, 2025 ("Final Report"), a copy of which is included as Attachment 1 to this item.
Moss Adams reviewed internal controls in General City Operations; Accounts Receivable; Cash Management; Financial Reporting, Close, and Reconciliations; Fixed Assets and Asset Management; Inventory; Payroll and Timekeeping; Purchasing and Accounts Payable; and Revenue and Billing. The Final Report concluded that the City has well designed internal controls in the following areas:
* Documented approvals in Munis for CAL-Card expenditures
* Time entry approvals, and
* Documentation and retention of purchase order approvals within the Munis workflow
Similar to most cities, the Final Report shows that Lodi has an opportunity to strengthen controls, policies, procedures, and systems. The evaluation discovered gaps in internal controls of varying degrees across multiple departments and the Final Report suggests the City adopt the following priorities to address over the next 6-12 months:
* Implement a fraud, waste, and abuse hotline
* Establish an internal audit function
* Establish a backup for the Management Analyst position within the Fi...
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