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Page 3 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />Findings <br />F1. When an entity does not have a process to identify organizational risks, and the entity does not <br />demonstrate how its internal controls address identified risks, the likelihood of a failure in internal <br />controls that results in fraud or waste increases. <br />No response requested from Redwood City to F1. <br />F2. When an entity does not periodically assess its internal controls and the entity cannot demonstrate <br />that it is monitoring its internal controls, the likelihood of a failure in internal controls that results in fraud <br />or waste increases. <br />Response: The City agrees with the finding. <br />F3. When management does not report the results of its assessments of internal controls to its governing <br />board and the entity has not communicated externally, the likelihood that others see this as an <br />opportunity to commit fraud or waste increases. <br />Response: The City agrees with the finding. <br />Recommendations <br />R1. Beginning by no later than December 31, 2024 and at least annually thereafter, each entity will <br />document its organizational risks and address those risks in its annual Assessment of Internal Controls. <br />No response requested from Redwood City to R1. <br />R2. Beginning by no later than March 31, 2025 and at least annually thereafter, each governing board will <br />require its management to complete its annual assessments of internal controls. <br />Response: The recommendation has not been implemented but will be implemented by March 31, <br />2025. <br />R3. Beginning by no later than June 30, 2025 and annually thereafter, each governing board will require <br />management to report the results of its annual assessment of the entity’s internal controls. <br />Response: The recommendation has not been implemented but will be implemented by June 30, 2025. <br />FISCAL IMPACT <br />The development and preparation of an annual report on internal controls will require staff time and <br />resources not yet quantified. The bulk of this additional burden is anticipated to fall to executive <br />leadership positions such as department directors and their assistants, deputies and/or senior managers. <br />6.C. - Page 3 of 22 <br />82