Entries Tagged 'Audit' ↓

Sorry Rick, public input is our time, not yours. Figure it out.

Week after Week we have to listen to Mr. Kiley bloviate, blubber and evaluate. So when we get a chance he has to try to cut us off because of some ‘rule’ he pulled from his ass. It’s an audit meeting, Bruce is talking about audit standards (that was covered by Oksol). Rick, STFU.

From Bruce;

Here is what I was ready to say when Mr. Kiley decided to interrupt me at the April 22, 2019 Sioux Falls City Council Audit Committee meeting.

No Disrespect for the persons here or the person this board is hiring, but…

How does transferring an entrenched city employee into the internal audit department accomplish the board’s original purpose?

I have 40+ years of internal and external audit experience. In one job, I was part of an effort to save 1,000 jobs while uncovering $500 million in schemes running in 22 different scenarios. I understand auditing.

Why is this body willing to put each individual on this board in a potential legal liability by ignoring several legitimate fiduciary questions?

Why would the chosen new hire be willing to be put in a position of having to recuse from audits involving her prior work?

Why would a person accepting an audit job accept a potential conflict of interest involving a family member?

With multiple city projects being questioned and this board should be reviewing, why is this choice being considered?

A person who trained city staff on the use of a computer program is now setup to audit her own work product?

A person who gave approvals for projects in the city’s largest department now is to audit her own work product?

By ignoring the warnings, the members of the committee and others could be opened to investigations, who wants that?

The persons in charge and accomplishing proper audits should have one trait, curiosity, insatiable curiosity.

Curiosity to ask questions no one wants asked.

You can have all kinds of data but if you are part or were part of the process you are tasked with, you lose your ability to ask the simple questions. You do not ask the simple questions possibly out of embarrassment, maybe out of your need to give all the answers. You don’t have curiosity because you may know everything before the audit begins. Hard to ask the questions when you already know the answers. Since you already have all the answers and know how to find your own data, you know which file cabinet drawers should not be opened?

Only an outsider will ASK others WHY, instead of TELLING others why. There is a difference between ASKING versus TELLING answers.

As members of this Audit Committee, ask the question, “Does this process meet any standards required in any Fortune 500 company?”

As members of this Audit Committee, ask also this question, “Does this process meet any standards required in any not for profit organization?”

The two answers will be a resounding “NO”.

Citizens know of problems in city processes. How does this choice meet any recognized standard necessary to meet legal, financial and moral codes of conduct or ethics to keep citizens in believing in this government?

You are forewarned, the questions we ask are the basis for possible RICO investigations. Is this rush to transfer a potential employee to be involved in auditing her own previous work worth the wrath of future investigations?

There are too many problems and no logical answers.

Sioux Falls City Council Agenda, April 22-23, 2019

Audit Committee Meeting, 4 PM (4/22)

External Audit Reports; This is where an external auditing firm (the same one we have been using for years and years) looks at our financial statements from the previous year. This is NOT a thorough independent, forensic audit.

Public Assurance Alliance does a presentation on Trends and Risks. New director, David Fiddle-Faddle returns to the Chambers to enlighten us with his immense wisdom. Make sure the security cameras are turned off or scrubbed later.

Audit report of the Zoo. Still one of the tightest ships ran in the city. I still think the Director of the Zoo should run for Mayor.

Fill-In, and Previous Internal Auditor, Oksol is going to tell us how to measure performance out of an internal audit staff. First step; make sure you have a staff to measure.

They finish with giving Oksol a gold star for helping to fill in while looking for a new internal auditor manager. He must have been volunteering his time? Who knew?

City Council Informational, 4 PM (4/23)

March Financial Update

Overview of Spring Flood Recovery

Use of unobligated capital funds

City Council SPECIAL Meeting, 5:30 PM (4/23)

I noticed that the special council meeting is missing Public Input at the beginning. I’m not sure they can skirt public input at the beginning just because it is a special meeting. I think the new changes in state law say they must provide public input at all public meetings.

Item#3, Approval of Contracts,

Seems we are buying two new Harley’s for the SFPD. I find this interesting since the last couple of bikes we bought were NOT Harley’s (I think they were Triumphs).

Items #4-5, supplemental appropriations for the Rose/Lotta neighborhood homes. I think this will pass with full support of the council, besides some bickering about where the money is coming from.

Item #6, Motion, Appointing Shana Nelson as the new Internal Auditor Manager. As I suspected they are plucking Shana from the Finance Department where she works as a business analyst creating a conflict of interest between the administration and city council. Shana’s husband, Matt Nelson is the Director of the Parking Department. So how does she audit that department fairly? Further more, with some pending issues with the DT parking ramp, will we ever get a fair audit of the department?

Events Center Campus Book Club Meeting, 8:30 AM, Wed 4/24, Convention Center (we will see if it is filmed this time and if they have any chairs for the public)

Click to Enlarge

We need an Inspector General NOT an Internal Auditor (Guest Post, Bruce Danielson)

The Internal Audit department was established after it was discovered we had an out of control administration. The plan for establishing an Internal Audit department came about because laws were broken by city personnel with no process to make sure it could not happen again (The offenders were never charged with a crime because council chickened out, and the main offender got re-elected to a 2nd term). The framers of our government did not see a leader or employee, willing to destroy the government for the chance to make a personal buck no matter what, in the Home Rule plan they put together.

An Internal Audit department was developed to be a place to go, to verify projects were completed on the up and up. If the City Council wanted to check a contract or process, they were able to have it added to the audit schedule for the year. The Internal Audit staff was not to change the mission or the audit plan for the year. What we have learned over time is how the Internal Audit staff either changed the audit plan because the work was “too hard”, complicated or they didn’t want to do it.

What we have found since the Internal Audit office was set up, staff has never functioned as it was proposed. Internal Audit has become a place of semi-retirement with no expectation of getting any meaningful work done. Internal Audit should not be the go along, get along function as it has been for many years. The Internal Auditor staff or its function should not be feared. If the office or function being audited is on the up and up, an audit should be welcomed. If the department has no issues, they should be recognized for running a tight ship.

The Internal Auditor should never be transferred from a Sioux Falls city department staff. An Internal Auditor staff member should never be put into the position of auditing their prior office, co-workers, family or friends. To think anyone in the Internal Auditor office would be hired out of the finance or public works or city attorney office or any other office now or in the future is just plain wrongheaded and presents a huge conflict of interest.

The Internal Auditor office in Sioux Falls must be a true auditor office. It should not be led by a CPA with bookkeeper bees for staff. The Internal Auditor office could be led by an engineer with a bookkeeper and an investigator. It could be a mix of any number of people from many different types of backgrounds. Curiosity and the ability to think outside the box are probably more important than their ability to build a spreadsheet.

I firmly believe we need an Inspector General office more than a happy clappy Internal Auditor cheering on questionably legal city government actions many of us have seen over the years. The citizens need to have an office they can approach with questionably illegal issues and not have them buried in a bureaucracy, never to see the light of day.

Internal Audit should not be the resting spot of guilty consciences, it should be the blunt force that would come down on a wrong process or person because curiosity ruled the day and found a hidden issue. Finding problems and fixing them is a good thing, it shouldn’t be perceived as a ‘bad cop’. As citizens WE own the government, it’s our money. Anything we can do to save taxpayers money by fixing or streamlining processes should be the ultimate goal. If someone’s feelings are hurt in that process, maybe they need to find another job in the private sector.

UPDATE: More like 15 months w/o internal auditing

UPDATE: Just for clarification, what I posted here are the WORDS of the COMMITTEE members, they are NOT mine. Just watch the video. Also, in NO WAY do I hold the city internal audit employees accountable for what ‘hasn’t been being done’. They have had to deal with a lack of a leadership, and that’s on the committee, as they stated in the video.

I stand corrected about what I said at Public Input the other night at city council. I guess a city councilor said I misspoke the other night by saying we went 9 months w/o internal auditing, and they were right. After watching the audit meeting (Dec 3, 2018 meeting, BELOW, FF: 1:20:00) it will be more like 15 months before we have a fully functional audit department.

Committee member Dean Buckneberg asks, “When was the last time we had a fully staffed audit department?” Neitzert replies, “June (2018).” Dean replies, “It will be another 9 months before we are fully staffed.”

So it seems it is even longer than I originally thought.

 

City of Sioux Falls has had no internal auditing activity for 9 months

I guess the first question I have is, what has the remaining staff been doing after they lost leadership?

Besides the fact they were collecting a pay check for doing nothing for 9 months, one of the audit committee members expressed dismay in this revelation. I think his words were, “That’s not a good thing.” Especially with the change of power at city hall, not having an internal control like that doesn’t bode well for the taxpayer.

I was glad to hear they are back on track, but this should have never happened.

Sioux Falls School District responds to Open Records request

The SFSD has responded to Bruce Danielson, Citizens for Integrity and our media partners. Bruce received a packet over the weekend from the District with bond election documents and resources. We are going to review with our partners and let you know what we find.

Stay tuned!

OPEN ENROLLMENT CHANGES

I also found the agenda interesting tonight, Item#13 is 1st Reading of stricter open enrollment rules (Which I 100% support). But I find it interesting that NONE of these changes were discussed BEFORE the election. If you look at the red notes in the exhibit you can tell they probably have been working on these changes for MONTHS. Makes you wonder if they knew showing these proposed changes to parents before the election would have affected the outcome? Slippery Petes.

(FF: 45:00)

It only took 14 years, but the audit committee is finally talking about the Phillips to the Falls fiasco

Funny how these things work? Councilor Kavanaugh was going to file charges against Mayor Munson for violating ordinance and state law for the cost overruns on Phillips to the Falls, but somehow those intentions mysteriously disappeared and Munson successfully ran for a 2nd term.

Now the Audit committee brings it up;

Read the whole thing here (Interesting we spent over $10 million to date on Phillips to the Falls): Audit-history

Not only was there internal city violations, we sat on the property for over 10 years basically holding it for a private developer without any good faith money, than we handed them TIFs. Funny how none of this was brought up when the developer was asking for the TIFs and the council approved them. But hey, we got some FREE dirt for the Levitt.

Also, and something I have known about for awhile, they are bringing back the former auditor Rich Oskol as an independent contractor (I assume) until a new auditor can be hired. Essentially double dipping (getting a city pension). Would be curious what we are paying him. They did the same thing in the city attorney’s office with a former city attorney that was retired to fill in until Stacy Koistra was hired. I don’t understand why the assistant auditors can’t handle the workload until a replacement is hired. That is how it is handled in the private sector, but hey, why am I bitching? I always say we can’t run government like private business 🙂

City Auditor realizes job is boring, quits

Well, I’m not sure if that is the real reason, but I guess the rumor going around the council chambers is she didn’t do much. Well neither did the past auditor. I have known for awhile that she was considering leaving and there was a bit of ‘drama’ going on in the auditor’s office.

So essentially now we have an auditor-less auditor’s office, and the city councilor in charge of that office, Neitzert, has requested to go to ‘management training’ to deal with them.

They need to hire a real Hard-Ass that will take the city books and turn them upside down.

I’m finding out post Bucktooth & Bowlcut that not to many things have changed.

Rose Grant. Elect an Auditor, Auditor

A Democratic candidate for Minnehaha County Auditor, Rose Grant will be running. Rose serves on the City of Sioux Falls Audit Advisory Committee, and has practiced as a CPA in Sioux Falls since 2000. She worked with East, VanDerWoudie and currently with her own firm Grant & Williams.

 

Sloppy Executive Order Management?

You can read the Audit Committee’s conclusion on Sioux Falls City Hall’s handling of executive orders: (DOC: Exec-order)

While they don’t use the word ‘Sloppy’ it’s kind of obvious.

Here are some highlights;

BACKGROUND

The City does not currently have a centralized process in place for maintaining written policies and procedures.

RESULTS

We interviewed management, reviewed a sample of Executive Orders and written policies and procedures, and researched best practices for policy maintenance. We identified the following best practices for policy maintenance:

• Policies should be consolidated, maintained, and managed in a centralized location

• Policies should be kept current and changes should be communicated timely

• Policies should have an official custodian

• Employees should attest to policies and procedures that guide their job duties

Policies and Procedures

We found that policies and procedures are accurate and up-to-date, with a few exceptions. We also determined that routine maintenance and employee access could be improved. Following are the results of our testing.

• We found no references to incorrect or outdated fees.

• We noted 6 documents that made references to specific employee names instead of job titles.

• We identified 4 documents that included either outdated references, outdated processes, unnecessary requirements, or conflicting information.

• Of the 273 total documents gathered, 35 (13%) documents are more than 5 years old and 9 (16%) documents are more than 10 years old.

• 23 documents did not have a date listed regarding when it was either created, last reviewed, or last updated.

• Policies and procedures are stored in different areas. Some departments store their policies and procedures on their own shared site on InSite and some departments store them on the department’s shared network drive. In both situations, employees must be granted access to be able to view them.

• There is currently no overarching procedure for maintaining departmental policies and procedures. Each department is ultimately responsible for their own maintenance responsibilities and maintenance schedule. Maintenance of policies and procedures vary widely across all departments.

RECOMMENDATIONS

We made the following recommendation to address the results above.

1) We recommend the City establish and document a plan for managing the approval, issuance, and revision of internal policies and procedures. This should include defining a custodian at the departmental level, requiring scheduled reviews that are dated and initialed to demonstrate completion, and requiring policies to be maintained in an easily accessible, centralized location.

OPPORTUNITIES FOR IMPROVEMENT

The following are opportunities for improvement that were identified during the course of the audit. These opportunities will provide oversight to the policy and procedure documentation processes.

City management should continue to work toward documenting, in writing, policies and procedures that guide specific job roles in the organization. Additionally, policies and procedures should be consolidated as much as practicable to eliminate duplication or unnecessary documents.

Management should consider adding an attestation section to the employee performance evaluation to obtain annual certification from employee’s that they have been trained and understand departmental policies in addition to the certification that they have reviewed the Executive Orders identified in the policy review checklist.

The City should consider providing a formal ethics training for all employees on a recurring basis. The last citywide ethics training was conducted in December 2007. Additionally, the City’s fraud hotline should be more publicized on the City’s intranet so that all employees are aware of how to report fraudulent, illegal, or unethical activities.