Introduce by title only, waive first reading, receive public comment on ordinance amending Title 2, Chapter 2 of the Yolo County Code to add Article 40 establishing the County’s Audit Committee, and continue the item to the December 9, 2025 Board of Supervisors meeting for a second reading and adoption. (No general fund impact) (Lugo) (Est. Staff Presentation: 5 min)

On November 4, 2014, the Board of Supervisors adopted Ordinance No. 1450 establishing the position of Chief Financial Officer, the Department of Financial Services, and the Financial Oversight Committee (FOC). The FOC was created to provide fiscal oversight of treasury operations, budget compliance, property tax distribution, and audit activities following the consolidation of the Auditor, Controller, Treasurer, and Tax Collector functions under an appointed Chief Financial Officer.

An Audit Subcommittee of the FOC has existed since approximately 2015 to support oversight of the County’s internal audit function. In February 2021, the FOC amended its charter to clarify the Subcommittee’s responsibilities and membership, and in July 2023, the Board of Supervisors approved an updated FOC Charter incorporating those provisions.

During 2024-2025, the Audit Subcommittee and Internal Audit Division reviewed the existing governance structure and identified several issues limiting the effectiveness and independence of audit oversight. These included:

To address these issues, the Audit Subcommittee directed staff to review governance options and propose a structure that would strengthen independence and clarify oversight authority. Staff worked closely with County Counsel and kept the Chief Financial Officer and County Administrator’s Office informed, soliciting feedback throughout the process. The Audit Subcommittee received regular updates and provided input on the proposed structure and overall direction. The proposed ordinance reflects the results of this review and the Subcommittee’s support to move the recommendation forward to the Board of Supervisors.

Proposed Ordinance Summary:
The ordinance establishes a permanent, standalone Audit Committee responsible for overseeing the Internal Audit function. Key provisions include:

The Audit Committee will serve in an advisory capacity to the Board of Supervisors and will replace the Audit Subcommittee as the primary governance body for Internal Audit. The FOC will continue to fulfill its fiscal oversight responsibilities, including oversight of the County’s external financial and Single Audits.

The ordinance was reviewed and approved as to form by County Counsel and endorsed by the Audit Subcommittee on September 26, 2025, for consideration by the Board of Supervisors. The ordinance will be introduced for initial consideration on November 18, 2025, and will return for adoption on December 9, 2025.

This item was developed in close coordination with County Counsel. Staff also provided regular updates and solicited feedback from the Chief Financial Officer and the County Administrator’s Office during the review process. The Audit Subcommittee received periodic updates and endorsed the proposed ordinance for Board consideration.