Agda Pkt 2025.06.23 Joint SA PFA

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Page 2 of 6 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org Further, the report asserted: “All governing bodies and its management have basic responsibilities regarding internal controls, even if the State Guidelines do not specifically refer to those basic responsibilities. Those responsibilities naturally include: Oversight boards must demonstrate its oversight of management’s internal controls, such as clear and timely reporting on its review of internal controls Management’s reports on internal controls should be clearly and readily available to the public Management must be evaluated for its assessments of internal controls and its external reporting.” The report cited examples of fraud and waste found in some government entities other than Redwood City, and presented three findings, with requests for Redwood City to respond to Findings 2 and 3: F1. When an entity does not have a process to identify organizational risks, and the entity does not demonstrate how its internal controls address identified risks, the likelihood of a failure in internal controls that results in fraud or waste increases. F2. When an entity does not periodically assess its internal controls and the entity cannot demonstrate that it is monitoring its internal controls, the likelihood of a failure in internal controls that results in fraud or waste increases. F3. When management does not report the results of its assessments of internal controls to its governing board and the entity has not communicated externally, the likelihood that others see this as an opportunity to commit fraud or waste increases. Redwood City responded to the Grand Jury to communicate its agreement with Findings 2 and 3. The Grand Jury report included three recommendations, with requests for Redwood City to respond to Recommendations 2 and 3: R1. Beginning by no later than December 31, 2024 and at least annually thereafter, each entity will document its organizational risks and address those risks in its annual Assessment of Internal Controls. R2. Beginning by no later than March 31, 2025 and at least annually thereafter, each governing board will require its management to complete its annual assessments of internal controls. R3. Beginning by no later than June 30, 2025 and annually thereafter, each governing board will require management to report the results of its annual assessment of the entity’s internal controls. Redwood City agreed with the recommendations. This staff report serves as City staff’s report to the City Council of its annual assessment of the City’s internal controls, fulfilling Recommendation 3 (R3). 6.C. - Page 2 of 9 72