UPDATE II: This is why the Sioux Falls City Council internal audit division is important

UPDATE II: It is interesting that someone can be PUBLICLY appointed but when they depart from their job it is all of a sudden a personnel issue;

Sioux Falls’ former internal audit manager, whose appointment drew controversy and conflict of interest claims from city councilors three years ago, has been serving in a different position since August, according to city officials.

But the reason for the move isn’t clear.

Asked whether she had applied for the position or been moved to it, and whether the move had anything to do with her spouse’s position in the city, O’Toole said that the city could not release confidential personnel information.

The city council publicly appointed her and they have a duty to tell the public why she decided to leave council to work for the mayor. It could be as simple as a press release.

But three years after her appointment divided the council, Nelson is now serving as a housing compliance manager for the city, according to Human Resources Director Bill O’Toole

The topic was raised in an informational meeting of the council on Tuesday, as the city’s internal audit program presented findings from several recent audits.

Starr asked about the lack of a statement from Nelson in a damage recovery billing audit, saying it needed to be more clear that she had not been involved in the audit.

During the discussion, Starr said, “the public doesn’t know she’s gone, so we can’t use that as an excuse.”

The hatefest towards transparency continues in city government.

You have to wonder why the mayor would hire Nelson while she was serving as the Internal Audit Manager? Did the council approve of this? It would be one thing if she quit to run her pet store or she was terminated, but if she quit on her own fruition why would the mayor promote her and take a council employee? Weird stuff.

UPDATE: During the informational meeting today, Councilor Starr did mention that the internal audit manager was no longer working for the city council. During public input I asked how long the council was going to wait before they told the public.

Even though it seems the department is without management (still waiting for the city council to tell us if a very publicly appointed ‘Rockstar’ internal audit manager has left us) the two internal auditors still working for the city council seem to be accomplishing the important work. They did two audits, one on using Lewis Drug for Falls Community Health pharmacy needs;

Finding 1: Lewis doesn’t implement any inventory optimization processes, such as product
minimum/maximum levels, which makes it hard to ensure sufficient inventory levels.
Finding 2: Lewis does not utilize a ‘tracking system’ to retrospectively review dispensing
reports and verify patient eligibility, which is a requirement of the agreement.
Finding 3: 20% of prescriptions tested did not have a designation that the patient was
eligible for 340B drugs. It is a requirement of the agreement that Lewis only dispenses
340B drugs when the prescription form designates the patient as 340B-eligible.
Finding 4: Lewis is not currently providing all of the required quarterly reports listed in the
agreement.

The other audit was on how the city invoices damage repair to city property;

Finding 1: Materials invoiced with an overhead charge in one City department
Finding 2: Estimated labor rates utilized for invoicing in one City Department
Finding 3: Billing for damages to City property claims procedures not formally
documented

Once you read the details of the audits (that reveal NO fraud) you can assess there are many operational issues that needed to be addressed. Besides the city pulling damage repair estimates from their butts you kind of wonder how Lewis manages their private clientele if they do this poor of a job with Falls Community Health?

Just looking at these two audits shows us why internal audits are important, with or without management.



4 comments ↓

#1 D@ily Spin on 09.26.22 at 2:29 pm

These 2 instances are not auditing. It’s more like critique. Projects are insider awarded cost plus profit without open competitive bidders. They should be very busy exposing outright fraud.

#2 Fear & Loathing in Sioux Falls on 09.26.22 at 9:34 pm

Lewis having the contract, isn’t that like Nelson’s Concessions having the Arena contract?…. Then Skyforce came to town. It’s nice to buy local, but there’s a reason why I use the Walmart pharmacy. #Cha-ching

#3 WillyNilly on 09.28.22 at 6:06 pm

DS: You have to read the entire report to understand the methodology, the scope and the risk assessment. Pulling out a list of findings from the report really doesn’t tell you enough. In addition, having an independent channel to report findings is important.

#4 The Guy From Guernsey on 10.02.22 at 7:28 pm

Seems there is egg on Greg Neitzert’s face.
From April 2019, recall the sanctimony with which Neitzert poured scorn upon anyone who requested transparency in process for appointment of the Internal Audit Manager at that time?
Can we we now say with certain clarity – this appointment is “Neitzert’s Mistake”.