Approve returning the administrative support for the County's Internal Audit function to the Chief Financial Officer. (No general fund impact) (Brazil/Bryan)

Approve returning the administrative support for the County's Internal Audit function to the Chief Financial Officer.

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 adoption 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. 

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.

On February 13, 2024, the Board of Supervisors approved moving the administrative support of the Internal Audits from the Department of Financial Services/Chief Financial Officer (DFS/CFO) to the Clerk of the Board, and this change in administrative support was subsequently implemented. However, the change has not proved conducive to efficiency for the Internal Audit team. The topic was discussed with the Audit Subcommittee on February 13, 2025. Staff, including the Audit Manager, Chief Financial Officer, and Deputy County Administrator, recommended to the Subcommittee that the administrative support function be returned to DFS/CFO. The Audit Subcommittee agreed with the recommendation and directed staff to take the necessary steps to accomplish the change. 

It is recommended that staff continue to work with the Audit Subcommittee to resolve any questions regarding the roles and responsibilities pertaining to the administrative support for the Internal Audit function.

The proposed return of the administrative support for Internal Audits to DFS/CFO was discussed by the Audit Subcommittee on February 13, 2025 and the Audit Subcommittee supported the proposed action.