Ci
ty Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00842 May 10, 2022 Discussion Item 21
Ti
tle: City Auditor’s Proposed Annual Work Plan for Fiscal Year 2022/23 Locati
on: Citywide
Recom
mendation: Adopt a Resolution approving the City Auditor’s Proposed Annual Work Plan for Fiscal Year (FY) 2022/23.
Cont
act: Jorge Oseguera, City Auditor, (916) 808-7270, [email protected], Office of the City Auditor
Pr
esenter: Jorge Oseguera, City Auditor, (916) 808-7270, [email protected], Office of the City Auditor
At
tachments:
1-Description/Analysis
2-City Auditor’s Proposed Annual Work Plan for Fiscal Year 2022/23 3-Resolution
Description/Analysis
Issue Detail: The mission of the Office of the City Auditor is to provide a catalyst for improvements of municipal operations, promote credible, efficient, effective, fair, focused, transparent, and a fully accountable City Government. The Office of the City auditor conducts performance audits, research, analysis projects, and is responsible for managing the City’s Whistleblower Hotline. City Code Section 2.18.030 requires that the City Auditor submit an annual work plan to the City Council for approval. This report sets forth the City Auditor’s Proposed Annual Work Plan for FY2022/23.
During the April 5, 2022 Budget and Audit Committee meeting, the Budget and Audit Committee requested the Office of the City Auditor expand the scope of the Audit of Homeless Response to include not only the Department of Community Response, but also to evaluate the broader Citywide response to homelessness. This more holistic approach would include multiple departments and external stakeholders. This could include evaluating homeless efforts related to code enforcement and cleanup efforts, police and medical response, outreach operations, and sheltering and re-housing programs.
The Budget and Audit Committee also requested the Office of the City Auditor prioritize projects based on available staff resources. The City Auditor’s Proposed Annual Work Plan for FY2022/23 lists projects in priority order along with the anticipated start dates.
The proposed work plan currently includes an audit of the Recycling and Solid Waste Division.
The Auditor’s Office would require a budget augmentation of approximately $150,000- $200,000 from the Solid Waste Fund in order to contract with a third-party vendor to perform this audit. We will request this funding from the City Manager at a later date, when we have staff resources available to start the project.
• The Recycling and Solid Waste Division is responsible for recycling and refuse collection, yard waste collection, household hazardous waste collection, household junk pickup, street sweeping, illegal dumping cleanup, and landfill post-closure maintenance and monitoring. One-time funding for the Recycling and Solid Waste Division Audit would allow us to contract with a third-party vendor, managed by our office, to complete this audit.
Project Supported Amount Funding Type Funding Source
Audit of the Recycling and
Solid Waste Division
$150,000 -
$200,000
One-Time Cost Solid Waste Fund
Policy Considerations: The City Auditor’s presentation of the proposed annual work plan is consistent with the Mayor and City Council’s intent to have an independent audit, research, and analysis function for the City of Sacramento.
Economic Impacts: None.
Environmental Considerations: None.
Sustainability: None.
Commission/Committee Action: On April 5, 2022, the Budget and Audit Committee voted to forward the City Auditor’s Proposed Annual Work Plan for Fiscal Year (FY) 2022/23 to the full City Council for approval with the added direction that the City Auditor revise the scope of the Audit of Homeless Services and prioritize proposed projects.
Rationale for Recommendation: This staff report provides the City Council with an opportunity to provide comments and feedback the City Auditor’s proposed annual work plan or to provide comments and feedback before it is presented to the City Council.
Financial Considerations: The costs of the audits listed in the proposed FY2022/23 Work Plan will be funded out of the Office of the City Auditor FY2022/23 budget.
Local Business Enterprise (LBE): None.
INSIDE
Our Mission
Performance Audit Plan
Cannabis Compliance Audit Plan
DOU Audit Plan
Research & Analysis Work Plan
Whistleblower Investigations
Audit Selection Process
Auditor’s Authority
2022/23 WORK PLAN
Office of the City Auditor
OUR MISSION
The Office of the City Auditor is an essential element of the City of Sacramento's public accountability. Our mission is “To provide a catalyst for improvements of municipal operations, promote credible, efficient, effective, fair, focused, transparent, and a fully accountable City Government.“
The Office of the City Auditor provides independent, objective, and reliable information regarding the City's ability to meet its goals and objectives, and establish an adequate system of internal controls. In many cases, this involves verifying compliance with laws and regulations, assessing the efficiency and effectiveness of the City's operations, and identifying internal control weaknesses and failures.
City Code Section 2.18.030 requires that the City Auditor submit an Annual Work Plan to the City Council for approval. This report sets forth the City Auditor’s Annual Work Plan for FY 2022/23.
Our risk-based work plan is designed using a combination of qualitative and quantitative measures. By considering a wide variety of information sources, the intent is to submit to the City Council for its approval a work plan that promotes fairness and ensures the City Auditor’s Office will continue to be value-added for the City of Sacramento by focusing its resources on areas with the highest audit potential.
The results of this process form the basis for the City Auditor’s Annual Work Plan.
In anticipation of Council requests for analysis and information, we have reserved some of our Office’s resource capacity so we can respond to those requests in a timely manner.
I am pleased to present you the Proposed Annual Work Plan for FY 2022/23. My team and I look forward to providing the City Council and the public with recommendations on improving the efficiency and effectiveness of City operations.
Sincerely,
City Auditor
Jorge Oseguera
FY2022/23 Work Plan | Office of the City Auditor | Sacramento, CA PERFORMANCE AUDITS (4 FTE)
Audits in Progress
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA Fire
Department
Emergency Medical
Services
This audit will evaluate service delivery and general EMS operations to determine if adequate controls are in place to ensure efficient and effective performance.
Police
Department
Evidence and
Property Division
This audit will determine whether appropriate controls exist over property and evidence room inventory including intake, disposition, storage, preservation, and security.
Citywide Assessments of
Revenues and
Expenses Associated
with the City’s
COVID-19 Response
These assessments will help the City prepare for Federal or State audits of the City’s use of emergency funding. We will provide proactive and real-time assistance in complying with regulatory requirements, securing reimbursements, tracking disaster recovery costs, and evaluating whether funds are being used efficiently and effectively.
Citywide Language
Accessibility for
Community
Engagement
In partnership with the City Manager’s Office, we have
contracted with a third-party vendor to perform a gap analysis and conduct surveys. This work will help to inform the City Manager’s development of a language access policy.
Human
Resources
Complaint
Investigation and
Resolution Practices
The City’s complaint investigation and resolution process involves allegations of workplace discrimination, harassment, and employee wrongdoing. We will partner with the Office of Public Safety Accountability to evaluate the City’s complaint intake, investigation, resolution, and employee discipline practices. These practices will also be assessed using a racial disparity lens.
Priority I Audits (with anticipated start date)
Citywide Homeless Response
(August 2022)
The City’s response to homelessness includes a variety of departments and external stakeholders working together to implement innovative solutions to meet the needs of those experiencing homelessness. This audit will evaluate the costs and effectiveness of the Citywide response to homelessness.
Community
Development
Department
Planning Division
(September 2022)
The Planning Division provides permit services to customers seeking a building permit. This audit will review compliance with applicable laws and regulations, evaluate efficiency of application submittal and permit review cycle operations, and assess permit review programs such as the Expedited Plan Review program.
PERFORMANCE AUDITS
Priority I Audits, Continued from Previous Page
Citywide Pedestrian Safety
(April 2023)
One of the City’s most important responsibilities is to ensure the safety of residents and visitors. With regard to the safety of pedestrians—some of the most vulnerable
users of the City’s roadways—this responsibility has grown even more critical in recent years. The objective of this audit is to evaluate the enforcement, education, and
engineering of the City’s programs responsible for
pedestrian safety.
Public Works
Department
Recycling & Solid
Waste
($150,000)
The Recycling and Solid Waste Division is responsible for recycling and refuse collection, yard waste collection, household hazardous waste collection, household junk
pickup, street sweeping, illegal dumping cleanup, and
landfill post-closure maintenance and monitoring. This audit would be paid for by Solid Waste Funds and contracted out to a third-party vendor.
Community
Development
Department
Animal Care Services
(June 2023)
The City’s Animal Care Services Division provides animal care services including sheltering, adoption, community outreach, code enforcement, and abuse investigations. This audit will assess compliance with applicable laws and
evaluate shelter practices aimed at protecting the health, safety and welfare of shelter animals, staff, volunteers, and the public.
Council
Requests
Council
Requests
In anticipation of Council requests for analysis and
information, we have reserved some of our resource
capacity so we can respond to those requests in a timely manner.
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA
PERFORMANCE AUDITS
Police
Department
Body-worn
Cameras
($150,000)
Body-worn cameras provide greater transparency and
accountability in interactions with the public. This audit will evaluate the policies, training, and technology of the Police Department’s body-worn camera program to verify compliance and evaluate opportunities for improvement.
Information
Technology
Department
Information
Technology
($150,000)
The Information Technology (IT) Department manages a full range of information technology and related services for all City Departments and the public. These systems, infrastructure, and information range from relatively simple to extremely complex.
This audit will evaluate whether IT controls protect City assets, ensure data integrity, and align with the City’s overall goals.
Community
Development
Department
Code Enforcement
Division
($150,000)
Services offered by the Code Enforcement Division include neighborhood and business code compliance, graffiti abatement, weed abatement, substandard/dangerous and vacant buildings, and rental housing inspection. This audit will review compliance with applicable laws and regulations, evaluate efficiency of enforcement operations, and assess the complaint resolution process.
Youth, Parks,
& Community
Enrichment
Department
Park Operations
($150,000)
In 2017, the Office of the City Auditor performed a department - wide risk assessment of YPCE. Park operations were identified as an area that could benefit from further review and analysis.
Priority II Audits (Additional resources needed to complete) FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA Historic City Hall
CANNABIS CONTINUOUS MONITORING (1 FTE)
Office of
Cannabis
Management
Cannabis
Policymaking,
Education and
Outreach
The Office of Cannabis Management (OCM) develops cannabis policy and provides education and outreach in the City of Sacramento. This review will continuously monitor new cannabis policy and OCM’s education and outreach efforts.
Finance
Department
Cannabis
Business
Operations Tax
(CBOT)
Cannabis businesses pay a four percent business tax on monthly gross receipts. This review will continuously monitor monthly tax payments made by cannabis businesses and industry compliance with the CBOT program.
Community
Development
Department
Cannabis Code
Enforcement
Activities
The Cannabis Code Enforcement Unit (CCEU) assists the Office of Cannabis Management with the enforcement of commercial
cannabis regulations. This review will continuously monitor the CCEU’s enforcement activities.
Office of
Cannabis
Management
Business
Permitting
The Office of Cannabis Management manages the business
permitting process for cannabis businesses in the City. This review will continuously monitor the efficiency and effectiveness of the permitting processes.
Cannabis Activities that Have Already Received an Initial Review or are in the Process of Being Reviewed
Office of
Cannabis
Management
Cannabis
Opportunity
Reinvestment
and Equity
(CORE) Program
The CORE program was created to assist individuals who face barriers to entering the cannabis industry due to historical disparate enforcement of cannabis crimes. This review will continuously evaluate the effectiveness of the City’s social equity program.
Cannabis Activities scheduled for Continuous Review
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA The Cannabis Auditor is working to build an ongoing monitoring program that includes the five key areas listed below.
CANNABIS COMPLIANCE AUDITS
Priority I (with anticipated start date)
Police
Department
Illegal Cannabis
Cultivation
(November 2022)
Unlicensed and criminal cannabis activity continues to run rampant throughout the state. This audit will evaluate the City’s ongoing efforts to crack down on illegal cannabis grow
operations. We will also compare the City’s efforts with other local jurisdictions.
Office of the
City Attorney
Cannabis
Administrative
Penalty Appeal
Process
(June 2023)
A unique process has been established to conduct appeals for cannabis administrative penalties. This audit will review the efficiency and effectiveness of the cannabis administrative penalty appeal process.
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA Community
Development
Department
Cannabis Code
Enforcement Unit
The Cannabis Code Enforcement Unit assists the Office of Cannabis Management with the enforcement of commercial
cannabis regulations. This audit will assess the adequacy of cannabis code enforcement activities over local cannabis businesses.
Audits in Progress
Community
Development
Department
Cannabis-Related
Conditional Use
Permits (CUP)
(2024)
The City requires that cannabis businesses obtain a
Conditional Use Permit (CUP). This audit will assess the efficiency and effectiveness of the cannabis CUP process.
Citywide Impact of Cannabis
Business Operations
on the Community
(2024)
This audit will seek to evaluate potential community impacts associated with cannabis business activities.
Priority II Audits (with anticipated start date)
The Cannabis Auditor has developed a multi-year audit plan that includes Priority I and Priority II audits, in tentative order.
DEPARTMENT OF UTILITIES AUDITS (1 FTE)
Prioritized Audits (with anticipated start date)
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA Security and
Emergency
Preparedness
(March 2023)
DOU’s Security and Emergency Preparedness Unit was created to protect employees and facilities, and to better prepare DOU to respond to various types of emergencies. This audit will review security protocols and assess the department’s ability to respond to emergencies in a safe, efficient, and effective manner.
Asset
Management and
Preventative
Maintenance
(June 2024)
DOU’s infrastructure is vital to maintaining clean drinking water and other essential services. Inadequate maintenance can significantly increase the cost of this vital infrastructure. This audit will evaluate DOU’s asset replacement cycles and preventative maintenance schedules for optimization and economic impact.
Special Projects (with anticipated start date)
Succession
Planning and
Turn-over
Analysis
(October 2022)
Due to the number of on-ongoing vacancies and anticipated retirements, it is critical that DOU be adequately prepared to address staffing challenges. This project will analyze the department’s turnover and succession planning practices and identify potential strategies for DOU to consider.
Hiring/
Recruitment
(January 2024)
Hiring and recruitment are core processes in any organization. Due to the critical nature of DOU’s services, it is important for the department to utilize efficient and effective hiring and recruitment practices to ensure continuity of services. This project will evaluate the efficiency and effectiveness of the hiring and recruitment practices and identify potential strategies for consideration.
Audits in Progress
Supervisory
Control and
Data Acquisition
(SCADA)
Supervisory Control and Data Acquisition (SCADA) is a computer -based industrial control system that allows staff to remotely control operations, monitor equipment status, and analyze historical and real -time data. The audit will review authoritative guidance to determine best practices and complete a risk assessment of DOU’s SCADA practices to assess the adequacy of internal controls. It will also consider cybersecurity risks and the impacts of staffing and funding.
The DOU Auditor has developed a multi-year audit plan that includes Audits and Special Projects, with tentative start dates.
RESEARCH & ANALYSIS WORKPLAN(3 FTE)
Audits in Progress
Vendor Audit Wide Open Walls
and David Sobon
Events, Inc.
The City has provided grants, sponsorships, and small business loans to Wide Open Walls and David Sobon Events, Inc. to produce Wide Open Walls mural festivals over the years. This audit will evaluate vendor compliance with City contracts.
Citywide 2022 Community
Survey
This project may be used to prioritize community issues and services that respondents feel need the most improvement.
Repeating this survey annually will allow the City to identify trends and gauge whether policy changes and priorities are improving residents’ quality of life and their opinions regarding various issues and City services.
Citywide 2021 City
Employee
Diversity, Equity,
and Inclusion
This annual review will assess the diversity of City of Sacramento employees as it compares to the diversity of City of Sacramento residents. The review will also compare the current year’s analysis with employee demographics reported in
previous years’ diversity reviews.
Citywide Analysis of the
City’s Financial
Condition
The analysis will review the fiscal sustainability and financial condition of the City of Sacramento by analyzing trends in the City’s financial data over a 10-year period. The analysis will include calculating financial ratios and benchmarking with other similar-sized cities.
Citywide 2022 Diversity
Assessment of
Boards,
Committees, and
Commissions
We published the first bi-annual Diversity Assessment of Boards, Commissions, and Committees in April 2017 under the direction of the City Council. The report assessed the diversity of City of Sacramento boards, committees, and commissions and
compared them to the demographics of the City’s residents. The report includes demographics related to age, ethnicity, gender, and sexual orientation. As we continue to conduct the audit, we will continue to review trends and compare data.
Ethics
Commission
Ethics Commission
Assessment
The City Auditor will perform an assessment of the Ethics Commission’s ability to meet the purpose and duties established by the City Council. This may include an assessment of relevant processes and policies, review of complaint intake procedures, and a benchmark study to identify best practices.
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA
RESEARCH & ANALYSIS WORKPLAN
Citywide Risk Assessment of the
City’s Revenue Sources
(May 2022)
This assessment will identify potential risks and controls in place that impact the City’s various revenue sources. A risk assessment of the City’s revenue sources will be used by the Office of the City Auditor to help identify, measure, and prioritize areas to conduct further analysis and research based on the level of risk to the City.
Citywide Audit of the Transient
Occupancy Tax
(January 2023)
A Transient Occupancy Tax (TOT) of 12% is charged for all people who exercise occupancy at a hotel in the City of Sacramento (City Code 3.28). This audit will evaluate
compliance, enforcement, and revenue collection associated with the tax.
Council
Requests
Council
Requests
In anticipation of Council requests for analysis and information, we have reserved some of our resource capacity so we can respond to those requests in a timely manner.
Ad Hoc Audits (with anticipated start date)
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA Recurring Reports (with anticipated start date)
Citywide Biennial Diversity
Review of
Employment
Applications and
Separations
(July 2022)
This project will analyze the diversity of City employment applicants and former employees to identify trends and
potential equity concerns
Citywide 2023 Community
Survey
(October 2022)
This project may be used to prioritize community issues and services that respondents feel need the most improvement.
Repeating this survey annually will allow the City to identify trends and gauge whether policy changes and priorities are improving residents’ quality of life and their opinions regarding various issues and City services.
Citywide Biennial Review of
City Employee
Diversity, Equity, and
Inclusion
(June 2023)
This biennial review will assess the diversity of City of Sacramento employees as it compares to the diversity of City of Sacramento residents. The review will also compare the current year’s analysis with employee demographics reported in previous years’ diversity reviews.
WHISTLEBLOWER INVESTIGATIONS (ALL STAFF)
Citywide 160 Whistleblower
Investigations
Based on historical trends, we anticipate receiving
approximately 160 whistleblower tips in FY2022/23. We will report the results of these investigations in our Semi -Annual Whistleblower Hotline Activity Reports.
Projected WhistleblowerReports
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA Cases in Progress (as of January 1, 2022)
Citywide 15 Whistleblower
Investigations
Open whistleblower investigations include: contested City charges, corruption/bribery/kickbacks, employee relations, fraud, insufficient action by City, payroll/timecard issues, theft of goods/services, and violate City policy/local/state/federal law.
Historic Information (as of January 1, 2022)
AUDIT SELECTION PROCESS
The City Auditor’s Audit Plan is developed on an annual basis; however, the City Council may add audits to the workplan during the year and the City Auditor may propose additional audits should new risks emerge.
Audit topics are selected using a combination of quantitative and qualitative factors that come from a variety of sources. Areas of risk that may be assessed when evaluating risks related to a department or division include, but are not limited to:
Annual Budget
Number of Employees
Funding Sources
Age of Programs
Fiscal Sustainability
Customer Satisfaction
Regulatory Compliance
Significant Changes
Criticality
Emerging Areas of Risk
Input from elected officials, city management, the whistleblower hotline, and the public is also taken into account when developing the annual audit plan.
AUDITOR’S AUTHORITY
The City Council appoints the City Auditor to promote efficient, effective, transparent, and accountable City government. The City Auditor reports directly to City Council and has full responsibility for the direction and management of the Office of the City Auditor. The City Auditor works closely with the City Council, Audit Committee, Charter Officers, Department Directors, and Division Managers when conducting audits and evaluating programs.
The City Auditor conducts audits in accordance with Generally Accepted Government Auditing Standards (GAGAS) and provides City Council and the public with objective, timely, and accurate information about the City government. Findings and recommendations are designed to save tax dollars and improve City operations.
In November 2018, the Sacramento City Government Accountability and Efficiency Act (Measure K) was passed by voters. This established the City Auditor as a charter officer and combined the duties of the City Auditor and the Independent Budget Analyst. City Code 2.18 Office of the City Auditor outlines the office’s duties and establishes the City Auditor’s unrestricted access to information, unless prohibited by law.
FY 2022/23 Work Plan | Office of the City Auditor | Sacramento, CA RESOLUTION NO.
Adopted by the Sacramento City Council
APPROVING THE CITY AUDITOR’S ANNUAL WORK PLAN FOR FISCAL YEAR 2022/23
BACKGROUND
A. City Code Section 2.18.030 requires that the City Auditor submit an Annual Work Plan to the City Council for approval.
B. The Annual Work Plan contains the planned projects to be completed during the upcoming fiscal year.
C. Significant audit fieldwork cannot proceed without the adoption of the work plan by a majority of the City Council.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Auditor’s Work Plan for Fiscal Year 2022/23, attached as Exhibit A, is approved.
Section 2. Exhibit A is a part of this Resolution.