Cupertino council approves renaming audit panel, asks committee to expand financial oversight

The Cupertino City Council voted unanimously Wednesday evening to endorse changes to the city's audit committee scope and to send follow-up directions back to the committee.

The council approved a package of changes that renames the audit committee to the Audit and Finance Committee, asks the committee to consider holding more regular meetings, directs staff to place monthly treasurer and investment reports on the council consent calendar, and asked the committee to study possible expanded financial oversight duties, including a potential budget subcommittee. Those measures passed by a unanimous roll-call vote.

Council members said the changes reflect the committee's work in recent years and the city's growing financial oversight needs. Council Member Rajen Mohan, who also serves on the audit committee, said the recommendations were a unanimous product of the committee's deliberations. "This was a unanimous decision," Mohan said, "and the name change reflects the committee's existing and evolving role in reviewing broader financial matters."

Administrative Services staff briefed the council that the audit committee compared its duties to Government Finance Officers Association best practices and recommended three amendments: changing the committee's name to better reflect finance-related work; clarifying authority to review internal controls and internal audit reports; and adding a responsibility to review the city's use of artificial intelligence in financial reporting and controls. Staff said the council could amend municipal code section 2.88.100 to implement the changes and planned a first reading to move the ordinance forward.

Council discussion focused on meeting frequency, member recruitment and the best home for regular reports. Vice Mayor Kitty Moore urged moving monthly treasurer and investment reports to the council consent calendar so those reports are plainly available to the full council and public without requiring extra audit-committee meetings. Staff said audit committee meeting frequency has averaged about six meetings a year and that the committee could set an annual schedule so members know meeting dates in advance.

Ezeno Schmidt, chair of the audit committee, joined the meeting to support flexibility in scheduling and said recruiting volunteer members is a challenge. "I think the more flexibility we have, the more chance people see that they can be contributing by being on the committee," Schmidt said.

Council directed staff to transmit the council's questions and priorities to the audit committee for consideration and asked the committee to return recommendations on (1) meeting cadence and scheduling; (2) specific financial oversight tasks the committee could take on; and (3) the feasibility of forming a budget subcommittee.

The council voted 5-0 to adopt the direction. Staff said it will prepare municipal-code changes to reflect any code-level decisions and bring forward items for first and second reading as needed.