Our work matters. We serve the people of Denver by championing accountability in our audit work and through education and enforcement of wage law on behalf of everyone who lives and works here. After another year of meaningful work by the Auditor’s Office, I am pleased to present the 2019 Annual Report.
In this report, you will find summaries of our audits and highlights and impacts identified from our follow-up work, as well as the achievements of my exemplary staff as they serve the people of Denver, further their professional development and represent our office in the community. This report showcases the many accomplishments of Audit Services and Denver Labor’s Prevailing Wage and Minimum Wage divisions.
Let me first extend my appreciation to the mayor, the City Council, the Audit Committee and members of the city’s operational management for supporting our mission throughout the year.
As an independent agency, we take an objective look at how public money is used and how efficient and effective the city’s services are for the people of Denver. Our work is performed on behalf of everyone who cares about the city, including its residents, workers and decision-makers. Our mission is to deliver independent, transparent and professional oversight in order to safeguard the public’s investment in the City and County of Denver.
In the past year, we took meaningful and extensive looks at several programs the public told us were of high importance to them. This year the mayor created a new agency to address some concerns identified in our homeless services audit. Members of the community from across the city reached out to call for the hotel at the airport to uphold the Auditor’s authority. And we found some agencies are doing a better job than others at following through on needed improvements identified in audit recommendations. Cybersecurity remains a priority for my team, as well as data analytics and continuous auditing.
One of the most notable areas of concern the public shared with me was Denver’s services for people experiencing homelessness. We conducted an audit and found a lot of money and good intentions, but not enough organization. The lack of a cohesive overall strategy along with unclear authority and understaff- ing hindered the city’s ability to comprehensively address homelessness or measure the effectiveness of its efforts. After the audit, the mayor announced plans to form the new Department of Housing and Homeless- ness. I am interested to see what our team finds when we follow up on this audit report in the future.
We heard from many members of the community after we attempted to examine the Westin Hotel’s revenue reporting to Denver International Airport. Unfortunately, the audit team could not access needed information. Marriott International impeded audit efforts by deeming as “proprietary” the information necessary for the audit. I called on the mayor and City Council to fix this in the city’s contract with Marriott, and I hope my team will be able to finally conduct the revenue audit in the future.
That conflict — which related to access to third-party information that should be required in every contract — illustrates the importance of other contract compliance audits we completed in 2019. For instance, our audit team looked at the Denver Preschool Program to see how the city oversees the nonprofit organization managing dedicated sales tax funds. We found the nonprofit might have been able to help more kids and preschool providers if it did not save more than necessary and if it invested more money in expanding the preschool program, or if it at least invested its millions of dollars in reserves more profitably.
Meanwhile, we also took another look at Denver’s affordable housing program after continued concerns from our first audit in 2018 and after ongoing concerns expressed by members of the community. We found weaknesses in how the city makes sure affordable homes stay in the affordable housing inventory. We also found issues with how the city makes sure the affordable housing program is not abused through illegal rentals and other violations.
I was very concerned with management of jail safety, and so I was disappointed after our 2019 audit that the Sheriff Department did not respond with quick agreement and improvement after we made our recommendations. We found the department lacks a comprehensive and systematic approach to identifying risks, ensuring the safety of deputies and inmates, and responding to incidents related to assault, sexual assault, or uses of force. I believe the department must take action to better protect the public, staff, and inmates.
This year, I also placed more emphasis on financial auditing activities. We checked the city’s math on the valuation of the Denver Employees Retirement Plan. We made sure the city was following requirements to secure and use grant funding. And we examined the city’s contract procurement process and found a need for more transparency to avoid conflicts of interest or favoritism in the process.
The Audit Committee continues to contribute valuable feedback on findings from performance and financial audits and risks found through continuous auditing work. I’m also pleased with my team’s continued innovation in data analytics and continuous auditing techniques.
Our Prevailing Wage Division, as part of the new Denver Labor, continued to work extensively with employers and employees to ensure everyone is compensated according to the law. My team more than doubled the amount of money recovered on behalf of workers, collecting $655,000 in restitution, and they also expanded efforts to work with employers to educate them and explain the process.
We also expanded our wage enforcement work for the Denver contractor minimum wage. In July, the city increased the pay for all workers paid using Denver tax dollars or on city property. The minimum applies to all future contracts for city work — including concessions, catering, maintenance, ramp and cargo work, hospitality, security, and other jobs. Our minimum wage team did in-person outreach and created a process for complaint-based investigations. In 2020, the team will continue to expand its work for enforcement for the new citywide minimum wage. All city wage enforcement work is now consolidated within the Denver Auditor’s Office as “Denver Labor.”
We are continuing to work hard to engage the people we work for: the public. Our “Ask the Auditor” video series walks the community through audits and basic functions of the office. I attended more than 50 neighborhood and community events and meetings to talk about what I do and to answer questions. And we reached thousands of people through social media on Nextdoor, Facebook, Twitter, Instagram, and LinkedIn. Sign up for our newsletter to read about our latest findings or email us at email@example.com to share your thoughts, concerns or questions.
I am very proud of our employees’ accomplishments and of our efforts to work with city agencies and residents, employers and employees, to ensure a better Denver for everyone.
Timothy M. O’Brien, CPA, Denver Auditor