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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.