Report 2015-116 Recommendation 2 Responses

Report 2015-116: City of Irvine: Poor Governance of the $1.7 Million Review of the Orange County Great Park Needlessly Compromised the Review's Credibility (Release Date: August 2016)

Recommendation #2 To: Irvine, City of

To improve fiscal accountability and to ensure that audits are performed to appropriate standards, Irvine should adopt an internal audit function by December 2017.

Agency Response*

The status of the recommendations the City of Irvine has indicated it will not implement has not changed.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date:
  • Response Date: October 2017

California State Auditor's Assessment of Status: Will Not Implement

We remain disappointed that Irvine has chosen not to adopt an internal audit function, but acknowledge that the city remains open to reconsidering such a function in the future. With regard to the Great Park review itself, as we note on pages 22-23 of the audit report, an internal auditor could have ensured that audits performed by an external auditor had an appropriate scope and that contracts were subject to rigorous monitoring. Such activities could have eliminated the expressed concerns of the city manager and one subcommittee member about the appearance of a conflict of interest that prevented staff from helping to manage the park review and simultaneously functioning as subjects of that same review.


Agency Response*

Please see the City's 60-day response

  • Response Type†: 1-Year
  • Response Date: August 2017

California State Auditor's Assessment of Status: Will Not Implement

We remain disappointed that Irvine has chosen not to adopt an internal audit function, but acknowledge that the city remains open to reconsidering such a function in the future. With regard to the Great Park review itself, as we note on pages 22-23 of the audit report, an internal auditor could have ensured that audits performed by an external auditor had an appropriate scope and that contracts were subject to rigorous monitoring. Such activities could have eliminated the expressed concerns of the city manager and one subcommittee member about the appearance of a conflict of interest that prevented staff from helping to manage the park review and simultaneously functioning as subjects of that same review.


Agency Response*

Please see the City's 60-day response.

  • Response Type†: 6-Month
  • Response Date: February 2017

California State Auditor's Assessment of Status: Will Not Implement

We remain disappointed that Irvine has chosen not to adopt an internal audit function, but acknowledge that the city remains open to reconsidering such a function in the future. With regard to the Great Park review itself, as we note on pages 22-23 of the audit report, an internal auditor could have ensured that audits performed by an external auditor had an appropriate scope and that contracts were subject to rigorous monitoring. Such activities could have eliminated the expressed concerns of the city manager and one subcommittee member about the appearance of a conflict of interest that prevented staff from helping to manage the park review and simultaneously functioning as subjects of that same review.


Agency Response*

As noted in the City's June 28, 2016 response to the California State Auditor, it is not apparent that an internal auditor would have performed unfilled functions or added demonstrable value to the Great Park Review. The Great Park Review was unique and the city is unlikely to conduct a review of that scope and magnitude with regularity. Irvine does not agree that the atypical experiences and challenges posed by the Great Park Review form a sufficient basis to create an on-going expenditure of public resources on permanent internal audit function. Although the City is not opposed to reconsidering in the future whether an internal audit function would be beneficial, the City currently prefers the flexibility to retain audit/review services on an as-needed basis.

Further, In the case of the Great Park Review, external professionals fulfilled the functions that an internal audit control may have performed. For example, the Great Park Review was conducted by a public accounting firm and a law firm, in accordance with agreed-upon standards and procedures that had been developed with the guidance and advice of external public accountants and auditors. After the City received this outside professional input, the City Council approved the RFP through which HSNO was retained.

  • Response Type†: 60-Day
  • Response Date: October 2016

California State Auditor's Assessment of Status: Will Not Implement

We are disappointed that Irvine has chosen not to adopt an internal audit function, but acknowledge that the city remains open to reconsidering such a function in the future. With regard to the Great Park review itself, as we note on pages 22-23 of the audit report, an internal auditor could have ensured that audits performed by an external auditor had an appropriate scope and that contracts were subject to rigorous monitoring. Such activities could have eliminated the expressed concerns of the city manager and one subcommittee member about the appearance of a conflict of interest that prevented staff from helping to manage the park review and simultaneously functioning as subjects of that same review.


All Recommendations in 2015-116

†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.


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