Title
Consider receiving an update on recommendations from the July 22, 2024, GPP Analytics, Inc. Expense Audit of the Water Recycling Agreement with Monterey One Water.
Report
RECOMMENDATION:
It is recommended that the Monterey County Water Resources Agency Board of Supervisors:
Consider receiving an update on recommendations from the July 22, 2024, GPP Analytics, Inc. Expense Audit of the Water Recycling Agreement with Monterey One Water.
SUMMARY/DISCUSSION:
At the request of the Monterey County Water Resources Agency (“Agency”), the County of Monterey Auditor-Controller’s Office (“ACO”) engaged GPP Analytics, Inc. (“GPP”) to conduct a financial audit to assess the accuracy and compliance of expenses reported by Monterey One Water (“M1W”) over four fiscal years (FY 2018–19 to FY 2021–22), the audit period, in accordance with the Amended and Restated Water Recycling Agreement Between Monterey Regional Water Pollution Control Agency [now M1W] and Monterey County Water Resources Agency (the “Agreement”). The Agreement was entered into by the Agency and M1W on November 3, 2015, to incorporate and restate agreements that had been developed over the years since the establishment of the Castroville Seawater Intrusion Project (“CSIP”), the Salinas Valley Reclamation Project (“SVRP”), and the Salinas River Diversion Facility (“SRDF”). Subsequently, there have been three minor amendments to the Agreement related to the New Source Water Facilities and more recently a fourth amendment to address multiple Audit recommendations.
The Audit's objectives were to evaluate M1W’s expenses for compliance with the provisions of the Agreement. This work was completed through verifying if expenses for the SVRP, CSIP, and the SRDF were reasonably incurred, verifying direct and indirect costs were accurately documented, and assessing financial systems and internal controls. The Audit aimed to verify proper record keeping, accurate reporting, accurate reconciliations, and compl...
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