HomeMy WebLinkAbout04-03-2024 Audit Ad Hoc Committee Meeting Complete Agenda Packet
SPECIAL NOTICE
PUBLIC ATTENDANCE & PARTICIPATION AT PUBLIC MEETINGS
Audit Ad Hoc Committee Meeting
Wednesday, April 3, 2024
3:30 p.m.
Your participation is always welcome. OC San offers several ways in which to interact during meetings. You will find information as to these opportunities below. IN-PERSON MEETING ATTENDANCE
You may attend the meeting in-person at the following location: Orange County Sanitation District Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708 ONLINE MEETING PARTICIPATION
You may join the meeting live via Teams on your computer or similar device or web browser by
using the link below: Click here to join the meeting
We suggest testing joining a Teams meeting on your device prior to the commencement of the
meeting. For recommendations, general guidance on using Teams, and instructions on joining a Teams meeting, please click here. Please mute yourself upon entry to the meeting. Please raise your hand if you wish to speak
during the public comment section of the meeting. The Clerk of the Board will call upon you by
using the name you joined with. Meeting attendees are not provided the ability to make a presentation during the meeting. Please contact the Clerk of the Board at least 48 hours prior to the meeting if you wish to present any
items. Additionally, camera feeds may be controlled by the meeting moderator to avoid
inappropriate content.
HOW TO PARTICIPATE IN THE MEETING BY TELEPHONE To join the meeting from your phone: Dial (213) 279-1455
When prompted, enter the Phone Conference ID: 585 268 184# All meeting participants may be muted during the meeting to alleviate background noise. If you are muted, please use *6 to unmute. You may also mute yourself on your device.
Please raise your hand to speak by use *5, during the public comment section of the meeting. The Clerk of the Board will call upon you by using the last 4 digits of your phone number as identification. NOTE: All attendees will be disconnected from the meeting at the beginning of Closed
Session. If you would like to return to the Open Session portion of the meeting, please login or dial-in to the Teams meeting again and wait in the Lobby for admittance. WATCH THE MEETING ONLINE
The meeting will be available for online viewing at:
https://ocsd.legistar.com/Calendar.aspx SUBMIT A COMMENT
You may submit your comments and questions in writing for consideration in advance of the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx or sending them to OCSanClerk@ocsan.gov with the subject line “PUBLIC COMMENT ITEM # (insert the item number relevant to your comment)”
or “PUBLIC COMMENT NON-AGENDA ITEM”.
You may also submit comments and questions for consideration during the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx. The eComment feature will be available for the duration of the meeting.
All written public comments will be provided to the legislative body and may be read into the record or compiled as part of the record.
For any questions and/or concerns, please contact the Clerk of the Board’s office at
714-593-7433. Thank you for your interest in OC San!
March 22, 2024
NOTICE OF REGULAR MEETING
AUDIT AD HOC COMMITTEE
ORANGE COUNTY SANITATION DISTRICT
Wednesday, April 3, 2024 – 3:30 P.M.
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
ACCESSIBILITY FOR THE GENERAL PUBLIC
Your participation is always welcome. Specific information as to how to
participate in this meeting is detailed on the Special Notice attached to
this agenda. In general, OC San offers several ways in which to interact
during this meeting: you may participate in person, join the meeting live
via Teams on your computer or similar device or web browser, join the
meeting live via telephone, view the meeting online, and/or submit
comments for consideration before or during the meeting.
The Regular Meeting of the Audit Ad Hoc Committee of the Orange County
Sanitation District will be held at the above location and in the manner
indicated on Wednesday, April 3, 2024 at 3:30 p.m.
ROLL CALL AUDIT AD HOC COMMITTEE
Meeting Date: April 3, 2024 Time: 3:30 p.m.
Adjourn: COMMITTEE MEMBERS (4)
Jon Dumitru (Orange)
Phil Hawkins (YLWD)
Bob Ooten (CMSD)
Bruce Whitaker (Fullerton) OTHERS
Brad Hogin, General Counsel
STAFF
Rob Thompson, General Manager
Lorenzo Tyner, Assistant General Manager
Wally Ritchie, Director of Finance Kelly Lore, Clerk of the Board
ORANGE COUNTY SANITATION DISTRICT Effective 01/23/2024 BOARD OF DIRECTORS Complete Roster
AGENCY/CITIES ACTIVE DIRECTOR ALTERNATE DIRECTOR
Anaheim
Stephen Faessel
Carlos A. Leon
Brea Christine Marick Cecilia Hupp
Buena Park Joyce Ahn Art Brown
Cypress Scott Minikus Bonnie Peat
Fountain Valley Glenn Grandis Ted Bui
Fullerton Bruce Whitaker Nick Dunlap
Garden Grove Stephanie Klopfenstein John O’Neill
Huntington Beach Pat Burns Gracey Van Der Mark
Irvine Farrah N. Khan Kathleen Treseder
La Habra Rose Espinoza Jose Medrano
La Palma Debbie Baker Mark I. Waldman
Los Alamitos Jordan Nefulda Shelley Hasselbrink
Newport Beach Brad Avery Erik Weigand
Orange Jon Dumitru John Gyllenhammer
Placentia Chad Wanke Ward Smith
Santa Ana Johnathan Ryan Hernandez Benjamin Vazquez
Seal Beach Schelly Sustarsic Lisa Landau
Stanton David Shawver Carol Warren
Tustin Ryan Gallagher Austin Lumbard
Villa Park Robbie Pitts Jordan Wu
Sanitary/Water Districts
Costa Mesa Sanitary District Bob Ooten
Art Perry
Midway City Sanitary District Andrew Nguyen Tyler Diep
Irvine Ranch Water District John Withers Douglas Reinhart
Yorba Linda Water District Phil Hawkins Tom Lindsey
County Areas
Board of Supervisors Doug Chaffee Donald P. Wagner
AUDIT AD HOC COMMITTEE
Regular Meeting Agenda
Wednesday, April 3, 2024 - 3:30 PM
Conference Room A
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
ACCOMMODATIONS FOR THE DISABLED: If you require any special disability related accommodations, please
contact the Orange County Sanitation District (OC San) Clerk of the Board’s office at (714) 593-7433 at least 72
hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of
accommodation requested.
AGENDA POSTING: In accordance with the requirements of California Government Code Section 54954.2, this
agenda has been posted outside the main gate of the OC San's Administration Building located at 10844 Ellis
Avenue, Fountain Valley, California, and on the OC San’s website at www.ocsan.gov not less than 72 hours
prior to the meeting date and time above. All public records relating to each agenda item, including any public
records distributed less than 72 hours prior to the meeting to all, or a majority of the Board of Directors, are
available for public inspection in the office of the Clerk of the Board.
AGENDA DESCRIPTION: The agenda provides a brief general description of each item of business to be
considered or discussed. The recommended action does not indicate what action will be taken. The Board of
Directors may take any action which is deemed appropriate.
MEETING RECORDING: A recording of this meeting is available within 24 hours after adjournment of the
meeting at https://ocsd.legistar.com/Calendar.aspx or by contacting the Clerk of the Board at (714) 593-7433.
NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting, the item must be
submitted in writing to the Clerk of the Board: Kelly A. Lore, MMC, (714) 593-7433 / klore@ocsan.gov at least 14
days before the meeting.
FOR ANY QUESTIONS ON THE AGENDA, BOARD MEMBERS MAY CONTACT STAFF AT:
General Manager: Rob Thompson, rthompson@ocsan.gov / (714) 593-7110
Asst. General Manager: Lorenzo Tyner, ltyner@ocsan.gov / (714) 593-7550
Director of Engineering: Mike Dorman, mdorman@ocsan.gov / (714) 593-7014
Director of Environmental Services: Lan Wiborg, lwiborg@ocsan.gov / (714) 593-7450
Director of Finance: Wally Ritchie, writchie@ocsan.gov / (714) 593-7570
Director of Human Resources: Laura Maravilla, lmaravilla@ocsan.gov / (714) 593-7007
Director of Operations & Maintenance: Riaz Moinuddin, rmoinuddin@ocsan.gov / (714) 593-7269
AUDIT AD HOC COMMITTEE Regular Meeting Agenda Wednesday, April 3, 2024
CALL TO ORDER:
ROLL CALL:
Clerk of the Board
PUBLIC COMMENTS:
Your participation is always welcome. Specific information as to how to participate in a meeting is detailed in the
Special Notice attached to this agenda. In general, OC San offers several ways in which to interact during
meetings: you may participate in person, join the meeting live via Teams on your computer or similar device or
web browser, join the meeting live via telephone, view the meeting online, and/or submit comments for
consideration before or during the meeting.
INFORMATION ITEMS:
1.2024-3525INTERNAL AUDIT UPDATE
RECOMMENDATION:
Information Item.
Originator:Lorenzo Tyner
Agenda Report
Closeout Memo – Capital Facilities Capacity Charges Internal
Audit
Attachments:
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF
ANY:
ADJOURNMENT:
Adjourn the Audit Ad Hoc Committee Meeting.
Page 1 of 1
AUDIT AD HOC COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2024-3525 Agenda Date:4/3/2024 Agenda Item No:1.
FROM:Robert Thompson, General Manager
Originator: Wally Ritchie, Director of Finance
SUBJECT:
INTERNAL AUDIT UPDATE
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION:
Information Item.
BACKGROUND
The Orange County Sanitation District (OC San)selected the audit firm of Eide Bailly LLP to provide
audits of various OC San programs and processes as selected by the Audit Ad Hoc Committee.
Most recently,the Audit Ad Hoc Committee selected the Capital Facilities Capacity Charges (CFCC)
program for audit.
The auditors were directed to focus their efforts on ensuring controls are designed and operating
over revenue,also accuracy and completeness of Annexation and CFCCs.Additionally,they were
directed to assess processes and controls including identification of annexations and partnering city
CFCC remittance.The auditors will provide an update of those efforts.Additionally,staff and the
auditors will present potential topics for future audit selection.
RELEVANT STANDARDS
·Conduct audits to determine if OC San operations are being conducted in an economical and
efficient manner
·Conduct audits to establish whether specific government programs are effective in meeting
their stated goals and objectives
·Conduct audits to determine if OC San is following policies and procedures in conducting
operations
ADDITIONAL INFORMATION
The audit report covers:
Eide Bailly LLP performed an independent assessment of OC San’s CFCC program.The
engagement focused on assessing controls to ensure completeness,accuracy,and timeliness of
CFCC revenue received by OC San for fiscal years 2019 through 2023.The 13 agencies selectedOrange County Sanitation District Printed on 3/21/2024Page 1 of 2
powered by Legistar™
File #:2024-3525 Agenda Date:4/3/2024 Agenda Item No:1.
CFCC revenue received by OC San for fiscal years 2019 through 2023.The 13 agencies selected
were Anaheim,Brea,Buena Park,Fountain Valley,Fullerton,Huntington Beach,La Palma,Los
Alamitos, Newport Beach, Santa Ana, Seal Beach, Stanton, and Villa Park.
ATTACHMENT
The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda
package:
·Closeout Memo - CFCC Internal Audit
Orange County Sanitation District Printed on 3/21/2024Page 2 of 2
powered by Legistar™
What inspires you, inspires us. | eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE
1
To: Wally Ritchie and Lorenzo Tyner
CC: Ruth Zintzun and Shallee Milligan
From: Eide Bailly
Date: 12/4/2023
Re: Closeout Memo – Capital Facilities Capacity Charges Internal Audit
This memo provides the closeout summary for the Capital Facilities Capacity Charges (CFCC) engagement
commenced by Eide Bailly LLP for the Orange County Sanitation District (OC San). The engagement focused on
assessing controls to ensure completeness, accuracy, and timeliness of CFCC revenue received by the district for
fiscal years 2019 through 2023. The 13 agencies selected were Anaheim, Brea, Buena Park, Fountain Valley,
Fullerton, Huntington Beach, La Palma, Los Alamitos, Newport Beach, Santa Ana, Seal Beach, Stanton, and Villa
Park.
Throughout the engagement, our team diligently commenced various aspects related to CFCCs. However,
despite our best efforts, we encountered challenges in obtaining comprehensive information essential for a
thorough evaluation and project completion. A significant portion of the required documentation was either
incomplete or unavailable, hindering our ability to assess the data. Discrepancies and inconsistencies in the
provided data further complicated our analysis, preventing us from forming definitive conclusions. Due to these
challenges, we determined along with district management to close out the engagement.
The following are the observations and recommendations provided.
Observations
1.Information Availability: Several agencies faced challenges providing timely information due to staff
turnover, limited resources, access issues to multi-year data, and system changes affecting data
formatting.
2.Remittance Timeliness: Exceptions were noted in the timeliness of remittances to the district for five
agencies: Anaheim, Brea, Buena Park, Fountain Valley, and Fullerton.
3.CFCCs Paid After Permit Issuance: Exceptions were identified in limited testing, specifically with Los
Alamitos and Villa Park, where CFCCs were paid after permit issuance, violating Ordinance No. OCSD-59.
4.Service Fee Concerns: Verbal feedback indicated dissatisfaction with the 5% service fee retained by the
agencies.
5.CFCC Revenue: No exceptions with the district’s revenue data compared to CFCC transaction reports
obtained from agencies.
2
Recommendations:
1. Address challenges faced by agencies in providing timely information. We recommend implementing
enhanced documentation procedures to ensure that all relevant information is systematically recorded
and readily accessible for future audits.
2. Communicate with agencies the importance of adherence to Ordinance No. OCSD-59 and CFCC payment
timelines.
3. Consider a review of the 5% service fee to align with stakeholder expectations.
We appreciate the cooperation extended by OC San and the agencies involved during this process. If you require
further clarification or assistance, please do not hesitate to contact us.
Thank you for your attention to these matters.
ORANGE COUNTY SANITATION DISTRICT
COMMON ACRONYMS
ACWA Association of California
Water Agencies LOS Level Of Service RFP Request For Proposal
APWA American Public Works
Association MGD Million Gallons Per Day RWQCB Regional Water Quality
Control Board
AQMD Air Quality Management
District MOU Memorandum of
Understanding SARFPA Santa Ana River Flood
Protection Agency
ASCE American Society of Civil Engineers NACWA National Association of Clean Water Agencies SARI Santa Ana River Interceptor
BOD Biochemical Oxygen Demand NEPA National Environmental Policy
Act SARWQCB Santa Ana Regional Water
Quality Control Board
CARB California Air Resources
Board NGOs Non-Governmental
Organizations SAWPA Santa Ana Watershed
Project Authority
CASA California Association of
Sanitation Agencies NPDES National Pollutant Discharge
Elimination System SCADA Supervisory Control And
Data Acquisition
CCTV Closed Circuit Television NWRI National Water Research
Institute SCAP
Southern California
Alliance of Publicly Owned Treatment Works
CEQA California Environmental
Quality Act O & M Operations & Maintenance SCAQMD South Coast Air Quality
Management District
CIP Capital Improvement
Program OCCOG Orange County Council of
Governments SOCWA South Orange County
Wastewater Authority
CRWQCB California Regional Water
Quality Control Board OCHCA Orange County Health Care
Agency SRF Clean Water State
Revolving Fund
CWA Clean Water Act OCSD Orange County Sanitation District SSMP Sewer System Management Plan
CWEA California Water Environment Association OCWD Orange County Water District SSO Sanitary Sewer Overflow
EIR Environmental Impact Report OOBS Ocean Outfall Booster Station SWRCB State Water Resources
Control Board
EMT Executive Management Team OSHA Occupational Safety and
Health Administration TDS Total Dissolved Solids
EPA US Environmental Protection Agency PCSA
Professional
Consultant/Construction
Services Agreement
TMDL Total Maximum Daily Load
FOG Fats, Oils, and Grease PDSA Professional Design Services
Agreement TSS Total Suspended Solids
gpd gallons per day PFAS
Per- and Polyfluoroalkyl
Substances WDR Waste Discharge
Requirements
GWRS Groundwater Replenishment
System PFOA Perfluorooctanoic Acid WEF Water Environment
Federation
ICS Incident Command System PFOS Perfluorooctanesulfonic Acid WERF Water Environment & Reuse Foundation
IERP Integrated Emergency
Response Plan POTW Publicly Owned Treatment
Works WIFIA Water Infrastructure
Finance and Innovation Act
JPA Joint Powers Authority ppm parts per million WIIN Water Infrastructure Improvements for the
Nation Act
LAFCO Local Agency Formation
Commission PSA Professional Services
Agreement WRDA Water Resources
Development Act
ORANGE COUNTY SANITATION DISTRICT
GLOSSARY OF TERMS
ACTIVATED SLUDGE PROCESS – A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater.
BENTHOS – The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone.
BIOCHEMICAL OXYGEN DEMAND (BOD) – The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water.
BIOGAS – A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used
as a fuel.
BIOSOLIDS – Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farmland or further processed as an earth-like product for
commercial and home gardens to improve and maintain fertile soil and stimulate plant growth.
CAPITAL IMPROVEMENT PROGRAM (CIP) – Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities.
COLIFORM BACTERIA – A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater.
COLLECTIONS SYSTEM – In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water.
CERTIFICATE OF PARTICIPATION (COP) – A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues.
CONTAMINANTS OF POTENTIAL CONCERN (CPC) – Pharmaceuticals, hormones, and other organic wastewater contaminants.
DILUTION TO THRESHOLD (D/T) – The dilution at which the majority of people detect the odor becomes the D/T for that air sample.
GREENHOUSE GASES (GHG) – In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming (“greenhouse effect”).
GROUNDWATER REPLENISHMENT SYSTEM (GWRS) – A joint water reclamation project that proactively responds to Southern California’s current and future water needs. This joint project between the Orange County Water District and OCSD provides 70
million gallons per day of drinking quality water to replenish the local groundwater supply.
LEVEL OF SERVICE (LOS) – Goals to support environmental and public expectations for performance.
N-NITROSODIMETHYLAMINE (NDMA) – A N-nitrosamine suspected cancer-causing agent. It has been found in the GWRS
process and is eliminated using hydrogen peroxide with extra ultra-violet treatment.
NATIONAL BIOSOLIDS PARTNERSHIP (NBP) – An alliance of the NACWA and WEF, with advisory support from the EPA. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance.
PER- AND POLYFLUOROALKYL SUBSTANCES (PFAS) – A large group (over 6,000) of human-made compounds that are resistant to heat, water, and oil and used for a variety of applications including firefighting foam, stain and water-resistant clothing, cosmetics, and food packaging. Two PFAS compounds, perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA) have been the focus of increasing regulatory scrutiny in drinking water and may result in adverse health effects including developmental effects to fetuses during pregnancy, cancer, liver damage, immunosuppression, thyroid effects, and other effects.
PERFLUOROOCTANOIC ACID (PFOA) – An ingredient for several industrial applications including carpeting, upholstery, apparel, floor wax, textiles, sealants, food packaging, and cookware (Teflon).
PERFLUOROOCTANESULFONIC ACID (PFOS) – A key ingredient in Scotchgard, a fabric protector made by 3M, and used in numerous stain repellents.
PLUME – A visible or measurable concentration of discharge from a stationary source or fixed facility.
PUBLICLY OWNED TREATMENT WORKS (POTW) – A municipal wastewater treatment plant.
SANTA ANA RIVER INTERCEPTOR (SARI) LINE – A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment.
SANITARY SEWER – Separate sewer systems specifically for the carrying of domestic and industrial wastewater.
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (SCAQMD) – Regional regulatory agency that develops plans and
regulations designed to achieve public health standards by reducing emissions from business and industry.
SECONDARY TREATMENT – Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater.
SLUDGE – Untreated solid material created by the treatment of wastewater.
TOTAL SUSPENDED SOLIDS (TSS) – The amount of solids floating and in suspension in wastewater.
ORANGE COUNTY SANITATION DISTRICT
GLOSSARY OF TERMS
TRICKLING FILTER – A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them.
URBAN RUNOFF – Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans.
WASTEWATER – Any water that enters the sanitary sewer.
WATERSHED – A land area from which water drains to a particular water body. OCSD’s service area is in the Santa Ana River Watershed.