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Mountain View City Council appoints own finance director as auditor

Original post made on May 28, 2019

To find someone to audit the bookkeeping at City Hall, Mountain View City Council members didn't have to look far. Last week, they voted to give the job to the city's own finance director.

Read the full story here Web Link posted Monday, May 27, 2019, 3:29 PM

Comments (8)

2 people like this
Posted by Bill H
a resident of Old Mountain View
on May 28, 2019 at 1:22 pm

Bill H is a registered user.

I feel that the former finance director is not sufficiently independent to serve as an auditor.

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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on May 28, 2019 at 5:14 pm

The Business Man is a registered user.

This situation very much demonstrates why most cities either have an elected auditor or hire an outside firm to act as an auditor.

This kind of political entanglment causes the City Council to act on propositions and other matters without a clearly independent analysis of the consequences.

Like the proposterous idea that it will cost $700,000 to build a studio apartment in Mountain View when it actually will cost $425,000 to do so based on the Terner Center report found here (Web Link) Somebody is pocketing $275,000 per unit and getting it practically for free becasue they will use the rents of the apartments to pay it back. That action makes this project result in a profit of 40% without even taking the profits made during the operations of this thing.

The City simply doesn't care how much the people are being deceived regarding the cost of housing in the City. They do so so that they can collect the highest property taxes as a result.

So the Auditor's job is to detect this. And as you can see it is simply a corrupted job under these circmustances.

2 people like this
Posted by Rossta
a resident of Waverly Park
on May 29, 2019 at 10:56 am

Rossta is a registered user.

Shame on you, Council. This is not how an audit works. Teachers don't let kids grade their own papers and you cannot audit your own work. This is wasted money because it add no validity to the accounting.
If Mr. Takahashi has done his job properly, it requires no audit. If he hasn't, he isn't going to be able to determine that.

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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on May 29, 2019 at 6:22 pm

The Business Man is a registered user.

When you hear someone go on the record to sate this “

"I don't see the benefit of an outside person doing these roles," said Councilwoman Margaret Abe-Koga. "Someone internally has a better sense of our internal processes and making sure we're collecting what we're supposed to collect."

That means clearly that the City Council is covering up information. The term “making sure we’re collecting what we’re supposed to collect” is a declaration that auditors are NOT inspecting ALL the relevant financial evidence.

The City is doing anything possible to avoid any information that would contradict their interests. That is the job of an auditor. If you read the accepted definition of what the auditor does described as (Web Link):

“Internal Auditors are employed by the organizations they audit. They work for government agencies (federal, state and local); for publicly traded companies; and for non-profit companies across all industries. The internationally recognised standard setting body for the profession is the Institute of Internal Auditors - IIA ( The IIA has defined internal auditing as follows: "INTERNAL AUDITING IS AN INDEPENDENT, OBJECTIVE ASSURANCE AND CONSULTING ACTIVITY DESIGNED TO ADD VALUE AND IMPROVE AN ORGANIZATION'S OPERATIONS. IT HELPS AN ORGANIZATION ACCOMPLISH ITS OBJECTIVES BY BRINGING A SYSTEMATIC, DISCIPLINED APPROACH TO EVALUATE AND IMPROVE THE EFFECTIVENESS OF RISK MANAGEMENT, CONTROL, AND GOVERNANCE PROCESSES".[2]”

Does this definition agree with what Margaret Abe-Koga said? It appears on its face NO. She describes that an auditor is NOT independent, and is there just to “accept the current processes of the City Council”

The Institute of Internal Auditors state the following requirements regarding their code of conduct:

1. Integrity: Internal auditors must act accordingly: They “1.1. Shall perform their work with honesty, diligence, and responsibility.”. They “1.2. Shall observe the law and make disclosures expected by the law and the profession.” They “1.3. Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the profession of internal auditing or to the organization.” They “1.4. Shall respect and contribute to the legitimate and ethical objectives of the organization.”

Does understanding the internal processes contribute to the above, I DON’T THINK SO.

“2. Objectivity: Internal auditors must act accordingy. They “2.1. Shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interests of the organization.” They “2.2. Shall not accept anything that may impair or be presumed to impair their professional judgment.” They 2.3. Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.”

Acceptance of a position of being an auditor simply for the fact that they understand the internal process will violate the Objectivity standards and it is presumed to impair their professional judgment. This person under this code simply can be argued to be forced to refuse the position.

“3. Confidentiality: Internal Auditors must act accordingly. They “3.1. Shall be prudent in the use and protection of information acquired in the course of their duties.” They “3.2. Shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organization.”

However Margaret Abe-Koga has in fact declared that the person hire is using this information regarding the internal processes for that person’s personal gain in this case. So this is another violation of the code of conduct of an internal auditors

“4. Competency Internal Auditors must act accordingly: They “4.1. Shall engage only in those services for which they have the necessary knowledge, skills, and experience.”. They “4.2. Shall perform internal audit services in accordance with the International Standards for the Professional Practice of Internal Auditing.” They “4.3. Shall continually improve their proficiency and the effectiveness and quality of their services.”

This brings up a very simple question. What professional certifications or training did this auditor have to qualify for the position? Is he in fact a certified auditor? If he is NOT, he is NOT have the necessary knowledge, skill, and experience to take such a role. It turns out one performing this work should have the 2019 Auditor Certification as described here (Web Link):

Becoming a Certified Internal Auditor will help you take your audit career to the next level. There are so many opportunities out there for CIA’s. As pressures for the internal audit to contribute to the strategic direction of entities and move away from myopic procedural audit, the need for auditors to advance their competencies and professionalism and provide enhanced value-adding services to management grows.

Fulfill the CIA Exam Work Experience Requirements: Some CIA candidates may also have to complete a work experience requirement before taking the exam. The maximum level of education determines the work experience requirement. Internal audit experience is usually required, but experience in some type of audit or assessment discipline like quality assurance, external auditing, internal control, or compliance also qualify. Since these rules affect individual candidates differently, it’s a good idea to contact your local IIA chapter. Contact IIA and local IIA chapter near you for confirmation of work experience to ensure that work experience falls under the categories recognized by IIA.

Prove Your Moral and Professional Character: In addition to education and experience, a character reference to show a high moral and professional character of the candidate is needed. Character reference of the candidate may be a CIA, CGAP, CCSA, CFSA, CRMA or the candidate’s supervisor.

Get a CIA Review Course: Just like any professional exam, proper studying and preparation is key to your success. You will definitely want to get a CIA review course that fits your learning style in order to make sure you are confident on your exam day.

How to register for the CIA exam: Only upon the submission of required forms, satisfactory supporting documents, and the completion of experience verification will the IIA issue the access to register and schedule for the exam. After you’ve met all these requirements, you can register to take the exam.

Pass the CIA Exam: The CIA exam is divided into 3 parts. Proper scheduling of the exam parts is necessary to provide sufficient time for preparation for the exams. You also have to be aware of the level of difficulty the IIA sets for each topic or concept. Concepts and topics in the CIA exams are tested in 2 levels: (1) Awareness and (2) Proficiency.

CIA Exam Part 1 is entitled Internal Audit Basics. This part consists of 125 questions with a time allotment of 2.5 hours (150 minutes). The topics tested in this part include internal control and risk concepts; aspects of mandatory guidance; and tools and techniques for conducting audit engagements. All items in this section are tested at the Proficiency level unless otherwise stated.

CIA Exam Part 2 is entitled Internal Audit Practice. This part consists of 100 questions with a time allotment of 2 hours (120 minutes). Topics tested include how internal audit functions are managed, fraud risks, and management of individual engagements. Like part 1, topics in this section are tested at the Proficiency level.

CIA Exam Part 3 is entitled Internal Audit Knowledge Elements. This part consists of 100 questions with a time allotment of 2 hours (120 minutes). Topics tested include risk management, governance and business ethics, communication, organizational structure, IT and business continuity, management and leadership principles, financial management, and global business environment. For this part, all items are tested at Awareness level unless otherwise stated.

Fulfill the CIA Continuing Education Requirements: Obtaining the CIA designation is just the start of your career as a world-class internal auditor. Professional standards for Internal Auditing require the continuing professional development and the maintenance of high level of competence in the conduct of an internal audit. As such, continuing professional education (CPE) or continuing professional development (CPD) units have to be earned prior to renewal of the certification.

Just a side note I am a CISSP, an Certified Information Systems Security Professional, and underwent the same standards to become Certified.

If he is NOT certified, he simply is not qualified to do this kind of work.

2 people like this
Posted by Self audit is no audit
a resident of Blossom Valley
on May 30, 2019 at 7:49 am

The Finance Director oversees and controls money. He answers to the City Manager. The purpose of an auditor who is hired by and answers to the City Council is to check on the City Manager and his Finance Director. But this pretense of self-auditing is business as usual at Mountain View City Hall. The top dogs want no real auditor and the politicians here follow like sheep.

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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on May 30, 2019 at 3:54 pm

The Business Man is a registered user.

Simply put:

If this person is NOT a CERTIFIED INTERNAL AUDITOR, they cannot take this job.

That is simply a REQUIRED job qualification.

Otherwise, this person is NOT AN AUDITOR.

What is the city doing? Hiring people not quailfied to do their jobs?

This may explain a lot of problems with the City.

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Posted by Yimby #2
a resident of Another Mountain View Neighborhood
on May 31, 2019 at 9:20 am

The auditor should be external and independent.
The self audit goes against every principle of conducting an audit.
This decision reflect poorly upon the competence of the management of this city
The excuses being providing for not having an external auditor
make the grade of being stunningly incompetent and demonstrate a severe lack of
understanding of the why and hows of conducting an audit.

Security 101 is you don't have the fox guarding the hen house.

Every citizen of the City of MV now has probable cause to question the
financial competence and integrity of the City of Mountain View management.

I can't believe it, I actually agree with the BM on this one.

Like this comment
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on May 31, 2019 at 3:53 pm

The Business Man is a registered user.

In response to Yimby #2:

I know we have had disagreements. But you also have been very constructive in participating in this discussion system. We can disagree with respect for each other.

You said this:

“I can't believe it, I actually agree with the BM on this one.”

It is amazing to me to see this. My education and degree in Business Administration in Human Resources Management at San Jose State University required me to show proficiency in strategic staffing, and establishing proper job skills matching to determine the best fit for positions.

So to hear this news was simply unbelievable.

I researched the gentleman, and yes he has the history of a bachelor’s degree in Business Administration from California State University East Bay (Hayward) with an emphasis on accounting and personnel administration, and became a Certified Public Accountant (CPA) in 1992. But this does not establish the skills to be an auditor. He has no affiliation with any Auditing professional groups from what I can find.

He has done a lot of work in financial work but so far I could not find any auditing work.

If the City does not have a Certified Internal Auditor, then is assumed that they are not in compliance with proper financial and accounting standards. This is because the people are entitled to having everything transparent and validated by a certified expert. Without that, the assumption is that the City is not acting in accordance with the conduct standards.

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