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Palo Alto audit office presents FY25 risk assessment and audit plan; committee approves with referral to study procurement and customer‑service audits
Summary
The City Auditor presented a citywide risk assessment and a proposed FY25 audit plan (five audits plus follow-up). The committee approved the plan and asked the auditor to consider procurement performance and a customer‑service performance audit for FY26, and to return to Policy & Services with those scopes if desired.
The Office of the City Auditor presented its citywide risk assessment and proposed fiscal year 2025 audit plan and the Policy and Services Committee voted to recommend the plan to the City Council while asking the auditor to consider additional performance audits on procurement and customer service for the FY26 work plan.
City Auditor Kate Murdoch described the risk assessment process, which included document review, interviews with nearly all council members and the executive leadership team, and a SWOT analysis. The auditor identified 28 high‑risk areas across budget, operational and regulatory categories and proposed five audits to be performed January–June 2025: building permit and inspection fees, junior museum and zoo operations, equipment and materials inventory management, purchasing card program (deferred previously), and public safety staffing and overtime. Murdoch said the dispatch center assessment is underway and that a follow‑up on prior audit recommendations will be provided at fiscal year end.
Committee members pressed the auditor on selection criteria. Murdoch said choices balanced inherent risk, prior audits, work already underway and department change activity; for example, some IT and procurement topics were not selected this year because prior audits or management changes mean an immediate audit might simply capture processes in mid‑change. Several council members urged the auditor to include performance‑oriented work (benchmarking efficiency and customer service) and suggested swapping or deferring lower‑priority items. Council Member Tanaka endorsed a customer service performance audit focused on development services, utilities and other high‑contact departments; other members suggested procurement performance benchmarking as a FY26 item.
To preserve audit schedule continuity, staff proposed approving the FY25 plan but referring consideration of procurement performance and a customer service audit to Policy and Services (or to include one in FY26). The committee approved the FY25 audit plan as presented and asked the auditor to return with scope or include procurement performance and customer service audits in the next annual planning cycle so the new committee and council can weigh tradeoffs.
