DENVER – The city has become better-prepared to resume normal operations after emergencies. Red Rocks, the Denver Performing Arts Center and the Coliseum have increased oversight of contracts. And the airport improved how it manages construction projects. However, there’s still more work needed to ensure short-term rentals such as Airbnb are regulated properly across the city.
Those are the results we found after checking up on how agencies responded to several of our audits, according to follow-up reports released today from Denver Auditor Timothy M. O’Brien, CPA.
“We’re wrapping up the year with several rewarding follow-ups this December, reports that show the city has taken our recommendations and used them to improve operations,” Auditor O’Brien said. “Ensuring short-term rental licensing is done effectively and with the integrity of our neighborhoods in mind is the last piece the city needs to continue to improve upon.”
Upon follow-up on our short-term rental audit, we found only two of eight recommendations implemented. Three were partially implemented, one was not implemented, and the agency disagreed with two and took no action.
The Department of Excise and Licenses did not complete our recommendation to ensure it chose a compliance software provider using the city’s contracting policies for competitive selection. Competitive selection through the bidding process ensures the best value for the city. We found Excise and Licenses did not use a competitive process, and instead, officials chose to keep using the agency’s current vendor by extending the contract. Excise and Licenses did obtain written proposals from two other service providers but did not get a full proposal from the current vendor.
The city still has work to do on the two partially implemented recommendations. The first recommendation calls for a more complete assessment of how well the city is actually enforcing short-term rental licensing rules. Excise and Licenses has taken several steps to improve its process, including requiring proof of possession of the home. However, the department still needs to establish a process for preventing issuance of licenses to people who are not qualified due to overdue fees, fines or outstanding warrants.
Excise and Licenses also needs to continue working on specific measures, strategies and tactics for short-term rental enforcement, as well as a business-case analysis of the online enforcement software.
The departments did not agree to our recommendation to analyze the neighborhood impact of short-term rentals, including the effect on housing affordability. The departments also disagreed with our recommendation to review and update rules for enforcement practices and citations. As a result, the departments did not take any action at all on these recommendations.
In the second follow-up report this month, the Office of Emergency Management and Homeland Security and the Office of Human Services worked quickly to make many improvements after last December’s audit found gaps in how the city plans to continue normal business operations in the event of a disaster. Our follow-up report shows all our recommendations were implemented, and we noted the agencies began working to make improvements even before our original audit work was completed last year.
“I applaud the efforts to make quick and effective change to emergency preparedness,” Auditor O’Brien said. “This is how all agencies should handle audits, with whole-hearted efforts to embrace change and improve our city.”
The implemented improvements include a plan to regularly review and confirm updates to each agency’s continuity of operations plans. The audit found many agencies had not updated their plans in years. Now, Emergency Management is tracking and reporting on agencies’ compliance with updated plan requirements.
The city is also working to improve plans for where agencies should relocate to after a disaster to resume normal business operations. Several working group meetings focused on alternate facilities plans, including the priorities and needs of all agencies. Emergency Management is conducting coordinated testing and training to ensure preparedness.
Two more follow-up reports checked in on progress after audits at Red Rocks, the Coliseum and the Denver Performing Arts Center.
Officials with Denver Arts & Venues and Red Rocks fully implemented all but one of our recommendations and partially implemented the remaining one. Improvements included better documentation of contracts and signature pages. Arts & Venues also improved documentation of waived interest penalties.
The Coliseum and the Denver Performing Arts Center implemented three of our five audit recommendations. Arts & Venues standardized documenting deviations from or waivers of venue fees. Arts & Venues also improved contract monitoring and developed standards for waiving interest penalties for venue users.
However, Arts & Venues still needs to work on confirming event insurance coverage and reporting on the reliability of systems recording labor costs and timekeeping.
“Arts & Venues had a lot of work to do when it came to monitoring contracts at these three popular venues,” Auditor O’Brien said. “The agency worked hard and made significant progress to improve accountability this year. I am confident Arts & Venues is moving in the right direction as it continues to work on the few incomplete recommendations.”
Finally, Denver International Airport worked to improve how it manages projects such as runway construction. Our audit found problems with flawed project specifications in past requests for proposal, which led to more than $1 million in waste when the airport had to repave runways that cracked. Now, a technical specification writer will help ensure accuracy and completeness of project specifications.
“It is more important than ever for the airport to be accurate when planning out construction work,” Auditor O’Brien said. “With bond money on the way to build more runways and gates, I am pleased to see the airport making sure it is clear in stating what it needs to achieve the most effective results from these projects.”
This month, our office will release a total of nine follow-up reports. Seven were published today and two more will be published on Dec. 20, the day the Audit Committee meets. See the list below for information on each report and where to read more.
Real Estate Leases Follow-Up Report – Coming Soon
Payroll System Conversion Follow-Up Report- Coming Soon