DENVER – Follow-up audit work shows some agencies have taken recommendations for improvement more seriously than others, according to three new reports out this month from Denver Auditor Timothy M. O’Brien, CPA.
“Our audit work is a great tool to help agencies do even better work on behalf of our community,” Auditor O’Brien said. “When agencies implement our recommendations, we all win, but when they fail to implement recommendations, the people of Denver lose.”
Our office followed up on audits of Denver County Court’s operations, the management of Urban Area Security Initiative grant money, and on-call construction with a city contractor.
Denver County Court failed to implement two of our recommendations and only partially implemented another. However, five other recommendations from our 2019 audit were fully implemented.
In 2019, our audit team found incomplete documentation in case files and more than 4,000 case files closed in error. We found several case files with missing documentation of key courtroom actions, including the suspension of fines and penalties, the cancellation and reinstatement of a protection order, and defendants’ acknowledgements of their terms of probation.
Since then, court officials have improved policies and procedures for quarterly case file reviews and reviews for closed case files. The new policies and procedures should help confirm complete and accurate records.
However, because the court does yet not perform and document reviews of individual transactions and end-of-shift deposit drops, misuse or errors by cashiers could still occur without detection.
Court administrators also failed to create audit logs for key systems. These logs could help identify unauthorized changes that would otherwise be missed due to a lack of segregation of duties. By not creating and reviewing audit logs, the court remains exposed to fraud or errors. Court administrators said they do plan to implement this recommendation; however, they couldn’t prioritize it this year due to the COVID-19 pandemic. They said they had to prioritize other information technology projects instead, such as finding ways to do virtual trials.
“The pandemic has interrupted work all over Denver,” Auditor O’Brien said. “I applaud the court’s efforts to innovate, and I expect to see that same effort applied to avoiding errors and misuse in the future.”
Meanwhile, the Department of Transportation & Infrastructure implemented all recommendations from a 2019 examination calling for improvements to contract bidding competitiveness and controls on construction costs.
In 2019, our office worked with CliftonLarsonAllen LLP to complete a third-party examination with a limited scope of the city’s on-call contract with Halcyon Construction Inc. The team found the city needed to expand its pool of on-call contractors to allow for a more competitive environment and for more opportunities for other contractors to be considered for work.
At the time of our follow-up, we found the department took steps to improve the process by working to increase the number of small businesses that can participate in mini-bids. The department also updated on-call construction contract language, and it now tracks information to compare change orders for each project to their original work orders.
“These changes are good news for Denver,” Auditor O’Brien said. “The city is now doing more to ensure more small businesses can participate in bidding for city construction projects, and the city is keeping a closer eye on construction costs and extra charges.”
Lastly, another follow-up report out this month shows the Office of Emergency Management and Homeland Security failed on almost every count to improve accounting and reporting on a grant from the state.
In 2019, our audit team found a risk for errors in spreadsheets, failures to effectively use the city’s accounting system of record, and a lack of comprehensive policies and procedures that prevent the loss of institutional knowledge in the event of key personnel turnover. Although the office previously disagreed with some of our recommendations, officials said they expected to complete the other recommendations by January or February of this year.
At the time of our follow-up, we found the office did improve its on-time reporting to the state for the grant. However, the office remains at risk of introducing errors in its calculations and data entry. The office also lacks proper accounting of assets and installation costs. Records should accurately reflect asset custodians, locations, identification numbers, and values.
“Tracking and accounting for assets correctly is a basic step for accountability,” Auditor O’Brien said. “I don’t think these recommendations were big challenges, and I am disappointed they have not yet been implemented. They should be completed by now.”
Denver County Courts: Read the Follow Up Report
Denver County Courts: Read the Audit
Halcyon On-Call Construction Contract: Read the Follow Up Report
Halcyon On-Call Construction Contract: Read the Examination
Urban Area Security Initiative: Read the Follow Up Report
Urban Area Security Initiative: Read the Audit