Staff Report - City Auditor’s Recommendation Follow-Up Report for the Six-Month Period Ending June 30, 2022 — Sacramento City Council, October 11, 2022

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01684 10/11/2022 Consent Item 02.

City Auditor’s Recommendation Follow-Up Report for the Six-Month Period Ending June 30, 2022
File ID: 2022-01684
Location: Citywide
Recommendation: Pass a Motion approving the City Auditor’s Recommendation Follow-Up Report for the January 1, 2022 to June 30, 2022 period.

Contact: Jorge Oseguera, City Auditor, (916) 808-7270, [email protected], Office of the City Auditor
Presenter: None.

Attachments:
1-Description/Analysis
2-City Auditor’s Recommendation Follow-Up Report for the Six-Month Period Ending June 30, 2022 Description/Analysis
Issue Detail: According to the City Council Rules of Procedures, the Budget and Audit Committee shall receive, review, and forward to the council as appropriate, reports, recommendations, and updates from the City Auditor. This report details the implementation status of open audit recommendations during the second half of fiscal year (FY) 2021/22.

Policy Considerations: The City Auditor’s presentation of the Recommendation Follow-Up Report is consistent with the Mayor and the City Council’s intent to have an independent audit function for the City of Sacramento.

Economic Impacts: None.

Environmental Considerations: None.

Sustainability: None.

City of Sacramento Page 1 of 2
File ID: 2022-01684 10/11/2022 Consent Item 02.

Commission/Committee Action: On September 6, 2022, the Budget and Audit Committee passed a motion to accept the City Auditor’s Recommendation Follow-Up Report for the Six-Month Period Ending June 30, 2022 and to forward to the City Council for approval.

Rationale for Recommendation: This staff report provides the City Council with information that may be used to meet its responsibility to provide oversight and supervision of the City Auditor.

Financial Considerations: The cost of the Recommendation Follow-Up Report was funded out of the FY2021/22 Office of the City Auditor budget.

Local Business Enterprise (LBE): Not applicable.

City of Sacramento Page 2 of 2

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Report #
2022/23-02
City Auditor’s Semi-Annual
Recommendation Follow-Up Report:

January – June 2022

Jorge Oseguera
City Auditor
September 2022

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Table of Contents
Recommendation Follow-Up Process .............................................................................................................................................. 4 Recommendation Progress ................................................................................................................................................ 4 Benefits of Implementing Recommendations ............................................................................................................................... 4 Recommendations that Resulted in Cost Savings During This Follow Up Period .............................................................. 6 Recommendation that Would Result in Cost Savings, If Implemented ............................................................................. 6 Recommendations that Would Improve Administration of Citywide Policies .................................................................. 7 Implementation Progress of Recommendations ......................................................................................................................... 8 79% of All Recommendations Have Been Closed .............................................................................................................. 8 Status of Open Recommendations .................................................................................................................................... 9 The Number of Recommendations Issued and Closed Per Year ...................................................................................... 10 Open Recommendations by Department ........................................................................................................................ 11 Post Audit Recommendation Follow Up Status by Audit ......................................................................................................... 12 Audit of City Policies and Procedures .............................................................................................................................. 12 Audit of City Light-Duty Vehicle Use ................................................................................................................................ 13 Audit of Citywide Purchase-Card Use .............................................................................................................................. 14 Audit of City Employee Supplemental Pay ....................................................................................................................... 15 Audit of the Fire Department Inventory Systems & Narcotics - Part 2 of 2 ..................................................................... 16 Audit of Citywide Wireless Communications ................................................................................................................... 17 Audit of the Department of Utilities Labor Reporting ..................................................................................................... 18 Audit of the City's Risk Management Division ................................................................................................................. 19 Audit of Fire Department Overtime Use .......................................................................................................................... 20 Audit of the Department of Utilities Inventory ................................................................................................................ 21 Audit of Procurement for Services of $25,000 or Less..................................................................................................... 22 Audit of YPCE’s Strategic Planning and Part-time Employee Benefits Management ...................................................... 23

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the Department of Utilities Workplace Safety ................................................................................................... 25 Audit of On-Street Parking Meters .................................................................................................................................. 27 Audit of Retiree Health Benefits ...................................................................................................................................... 27 Audit of the 911 Emergency Communications Center ..................................................................................................... 28 Audit of the Department of Utilities Vehicle Fleet .......................................................................................................... 29 Audit of City-Owned and Leased Real Property ............................................................................................................... 30 Audit of the City's Green Efforts ...................................................................................................................................... 34 Vendor Management ....................................................................................................................................................... 42 Vendor Audit of the Roberts Family Development Center .............................................................................................. 43 Audit of Cannabis Dispensary Permitting ........................................................................................................................ 44 Continuous Cannabis Monitoring .................................................................................................................................... 46 Diversity Review of City Employment Applications, Hires, and Separations ................................................................... 51 Audit of the Sacramento Community Police Review Commission ................................................................................... 52

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups Recommendation Follow-Up Process
The Office of the City Auditor (Office) makes recommendations to strengthen accountability and improve the efficiency and effectiveness of City programs. In many cases, this involves verifying compliance with laws and regulations, identifying internal control weaknesses and failures, and assessing whether the City has acquired and used its resources efficiently. The Office monitors the implementation of all recommendations, and reports on the status of open recommendations every six months with a semiannual report.

In
accordance with the City Auditor’s approved Fiscal Year (FY) 2022/23 Audit Plan, we have prepared a report on the status of open recommendations for the six-month period ending June 2022. To prepare this report, we met with department staff, reviewed documentation provided by departments, and performed testing to evaluate implementation progress. We would like to express our appreciation to City staff for their cooperation and assistance during our reviews.

Recommendation Progress
We classified recommendations based on the responsible party’s progress:
 N
ot started – The responsible party temporarily postponed implementing the audit recommendation or did not demonstrate sufficient progress toward implementing the recommendation.
 Started – The responsible party began implementing the recommendation, but considerable work remains.  Partly Implemented – The responsible party satisfied some elements of the audit recommendation, but additional work and testing remains.
 Implemented – The responsible party provided documentation and the Auditor verified the satisfactory implementation of the audit recommendation.
 Dropped – The auditor recommends eliminating the recommendation since a change in circumstances rendered it unnecessary.

Benefits of Implementing Recommendations
One of the goals in performing our work is to identify areas in which the City could reduce expenses or increase revenues. However, in some cases it can be difficult to calculate the financial benefit that a recommendation could produce. For example, it would be difficult to determine avoided costs of potential workers’ compensation claims in the future.

W
hile much of our work aims to identify financial benefits, recommendations are not solely focused on identifying savings. Sometimes they focus on areas that identify key benefits that are not easily quantifiable. For example, it could be difficult to quantify the value of increased residents’ satisfaction with City services due to implementation of recommendations, or the benefits of having policies in place that reduce the City’s overall risk.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

We expect that most of our work will yield both financial and non-financial benefits. Some examples of benefits captured include identifying revenue the City should have collected, errors that led the City to overpay expenses, and potential savings by modifying practices or agreements.

Figure 1 illustrates the potential financial benefits identified in our reports as well as the estimated realized financial benefits resulting from the implementation of all recommendations made by the Office of the City Auditor.

Figure 1: Potential Financial Benefit Identified and Estimated Financial Benefit Realized Since Establishment of the Office of the City Auditor

Source: Auditor generated.

As the figure above covers various types of potential benefits and relies on decisions and agreements that may or may not be made, it does not represent an expectation that the City will necessarily save or recover the full amount identified. For example, although the Audit of the Community Development Department identified $2.3 million in fees that the City did not collect, recovering those fees may prove difficult due to barriers to collection.

Potential Benefit
$98.0 Million
Realized Benefit
$41.7 Million

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Recommendations that Resulted in Cost Savings During This Follow Up Period Figure 2 summarizes audit recommendations that resulted in cost savings identified during this follow up period. The Continuous Cannabis Review of Business Operations Tax (BOT) identified four cannabis businesses were operating without a BOT certificate, which resulted in identification of uncollected tax revenue. In addition, the Audit of the Department of Utilities Vehicle Fleet identified opportunities to correct errors in fueling records, resulting in an estimated $47,000 in error reductions.

Figure 2: Summary of Cost Savings Recognized During this Follow Up Period Recommendation Update
The Revenue Division bring
identified cannabis businesses
into compliance with the
City’s BOT regulations and
collect past due taxes.

All four businesses that were identified as not having
a BOT Certificate are now in compliance with the
City's cannabis BOT requirements. Past due taxes
have been collected and the businesses are now
current.

Work with AssetWorks to
identify and resolve or
minimize system issues
related to fuel transactions.

The Fleet Management Division implemented
processes to review and correct fueling transactions.

We estimate these processes correct approximately
$47,000 in fueling transactions per year.

Recommendation that Would Result in Cost Savings, If Implemented Figure 3 highlights an audit recommendation that, if implemented, would result in cost savings for the City. The Audit of Fire Department Overtime Use identified considerable weaknesses in the Fire Department’s tracking and monitoring of overtime. Strengthening accountability of overtime use should result in significant cost savings.

Figure 3: Implementing This Recommendation Would Result in Cost Savings Audit Recommendation
Fire Department Overtime
Use
Strengthen controls to monitor the use of timecodes
to prevent and detect errors, fraud, and abuse.

Collected $153,000
in taxes
$47,000 in Error
Reduction
For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups Recommendations that Would Improve Administration of Citywide Policies In 2011, our office issued the Audit of Citywide Policies and Procedures report which contained recommendations for improving the administration of citywide policies and procedures. Although the recommendations were issued over ten years ago, some recommendations are still outstanding, and the risks identified are still present. Recently, the responsibility for managing citywide policies has moved from the City Clerk’s Office to the Human Resources Department. The Labor Relations Division in the Human Resources Department oversees the citywide policy program and is currently assessing their policy approval process. Figure 4 highlights three audit recommendations that, if implemented, would improve administration of citywide policies and procedures.

Figure 4: Recommendations to Improve Administration of Citywide Policies Original Recommendation Benefit
Strengthen the language in AP-1001 to
require department directors and division
managers who manage citywide
processes to establish Administrative
Policies over key operational areas.

An adequate body of administrative policies and administrative procedures that address key areas of operations and employer expectations is essential to the effective management of any organization. Additionally, employees can be held accountable for their responsibilities and duties if administrative policies and administrative guidelines exist.

Formally document the roles,
responsibilities and processes of area
experts.

Assign roles and responsibilities to employees that oversee Citywide policy approval processes. By developing and documenting the roles and responsibilities of these employees, they will have a consistent body of information to turn to and rely less on trainings, phone calls and e-mails to understand or explain processes. Furthermore, failing to document the roles and responsibilities of these positions exposes the City to unnecessary losses of institutional knowledge.

Design a control to ensure outdated
policies and procedures are removed
from CityNet and the City’s public
website.

Outdated policies and procedures put the City at risk of inconsistent direction, miscommunications, and wasting time looking for the current policy.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Implementation Progress of Recommendations
79% of All Recommendations Have Been Closed
Since the establishment of the Office of the City Auditor in 2010, the Office has issued over 60 reports and made 707 recommendations. At the end of this recommendation follow-up period, 561 (79% of) recommendations had been closed. Figure 5 illustrates the number of recommendations open compared to the number of recommendations closed as of June 30, 2022.

Figure 5: Recommendation Status

Source: Auditor generated.

146
561
Open
Closed

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Status of Open Recommendations
Open recommendations are classified based on the responsible party’s progress towards implementation. Figure 6 illustrates the progress of all open recommendations.

Figure 6: Status of Open Recommendations

Source: Auditor generated.

In addition to reporting on the current progress of open recommendations, our Office tracks whether notable new progress has been made towards implementing recommendations during the review period.

28 46
72 Not Started
Started
Partly Implemented
For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups The Number of Recommendations Issued and Closed Per Year Figure 7 illustrates the number of recommendations issued and closed in the last seven fiscal years. The average number of recommendations closed per year is 55.

Figure 7: Recommendations Issued Compared to Recommendations Closed by Fiscal Year Source: Auditor generated.
51 62
120
10 69
58 27
57 47
40 54
80 75
34 0
20 40
60 80
100
120
140
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Recommendations Issued Recommendations Closed Average Closed (55)

For interactive dashboards and copies of past reports, visit our website:
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Open Recommendations by Department
Recommendations made by the Office of the City Auditor are directed towards specific departments or entities. In some cases, implementation requires extensive coordination between multiple parties. Recommendations directed towards multiple parties are listed under the lead department. Figure 8 illustrates the outstanding recommendations by department. For context, the number of closed and total recommendations issued to each department is also listed.

Figure 8: Recommendations by Department
Department Open Closed Total % Closed
City Council 16 6 22 27%
Youth, Parks, and Community Enrichment 8 11 19 58%
Public Works 24 42 66 64%
City Manager 18 33 51 65%
Fire 17 41 58 71%
Office of Cannabis Management 7 21 28 75%
Police 3 10 13 77%
Finance 23 78 101 77%
Human Resources 14 96 110 87%
Utilities 13 91 104 88%
Information Technology 3 45 48 94%
Community Development 0 40 40 100%
Non-City Organization 0 21 21 100%
Roberts Family Development Center* 0 12 12 100%
Sacramento Housing and Redevelopment Agency 0 12 12 100% City Clerk 0 1 1 100%
City Attorney 0 1 1 100%
Total 146 561 707 79%
Source: Auditor generated.
*Vendor audit

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Post Audit Recommendation Follow Up Status by Audit
The following tables provide the status of audit recommendations, by audit report, in the order the audits were issued. Please note that recommendations closed in a prior period are not listed.

Audit of City Policies and Procedures

Finding # Recommendation Status Update

While the City has a System for
Establishing Policies & Procedures,
it is Generally Circumvented
5 Update AP-1001 to clearly describe the
mechanism for updating Administrative
Policies
Partly
Implemented
The Human Resources Department did not
provide an update for this period.

While the City has a System for
Establishing Policies & Procedures,
it is Generally Circumvented
7 Formally document the roles,
responsibilities and processes of area
experts.

Partly
Implemented
The Human Resources Department did not
provide an update for this period.

While the City has a System for
Establishing Policies & Procedures,
it is Generally Circumvented
8 Analyze roles and access privileges of
area experts to determine whether any
are incompatible with others, to ensure
segregation of duties and prevent
conflicts of interest.

Partly
Implemented
The Human Resources Department did not
provide an update for this period.

The Inventory of Citywide Policies
Could be More Complete and
Organized
10 Strengthen the language in AP-1001 to
require department directors and
division managers who manage citywide
processes to establish Administrative
Policies over key operational areas.

Partly
Implemented
The Human Resources Department did not
provide an update for this period.

The Inventory of Citywide Policies
Could be More Complete and
Organized
14 Update PR-1001-01 to include a clear
description of how Administrative
Policies and Procedures are integrated
and accessed in CCM.

Partly
Implemented
The Human Resources Department did not
provide an update for this period.

The Inventory of Citywide Policies
Could be More Complete and
Organized
17 Design a control to ensure outdated
policies and procedures are removed
from CityNet and the City’s public
website.

Partly
Implemented
The Human Resources Department did not
provide an update for this period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of City Light-Duty Vehicle Use

Finding # Recommendation Status Update

The lack of a detailed City take-
home vehicle policy has allowed the
City to approve almost 250 take-
home vehicles, resulting in a
substantial cost
10 Revise the City’s transportation policy to
consolidate City direction and enhance
criteria for allocating take-home vehicles.

Started No progress was made during the period. The
Transportation Policy is in the approval
process.

The lack of a detailed City take-
home vehicle policy has allowed the
City to approve almost 250 take-
home vehicles, resulting in a
substantial cost
11 Require employees who receive a take-
home vehicle to maintain a log of call
back events.

Partly
Implemented
No progress was made during the reporting
period.

The lack of a detailed City take-
home vehicle policy has allowed the
City to approve almost 250 take-
home vehicles, resulting in a
substantial cost
13 Work towards incorporating into all City
labor agreements language that clearly
states the City’s rights and authority over
vehicle assignments and removals.

Started The Labor Relations Division did not respond to our request for a status update.

The lack of a detailed City take-
home vehicle policy has allowed the
City to approve almost 250 take-
home vehicles, resulting in a
substantial cost
14 Enforce the current take-home vehicle
distance limitation that restricts take-
home vehicle assignments to employees
that live within thirty-five (35) air miles
from the freeway interchange at W-X,
29th-30th Streets.

Started The Labor Relations Division did not respond to our request for a status update.

The lack of a detailed City take-
home vehicle policy has allowed the
City to approve almost 250 take-
home vehicles, resulting in a
substantial cost
15 Work towards reducing the allowable
distance for assigning a take-home
vehicle so
as to promote reasonable response times
to emergency call backs.

Dropped The Human Resources Department believes
reducing the allowable distance for assigning a
take-home vehicle would negatively impact
the City's recruitment and retention of
employees and that this would overshadow
any benefits derived from implementing this
recommendation.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups Audit of Citywide Purchase-Card Use
Finding # Recommendation Status Update
While transactions reviewed did not
reveal extensive personal
purchases, some charges violated
policy and lacked complete support
3 Establish a consistent form and guidance
to departments for processing lost
receipt justifications.

Partly
Implemented
The department is developing a Purchasing
Card Procedure Handbook to serve as a
guidance for processing lost receipt
justifications.

The purchase card program lacked
complete policy guidance and
oversight
5 Update the Purchasing Card Policy to
make it consistent with other City
policies.

Partly
Implemented
The Purchasing Card Policy update is under
development and will be consistent with other
City policies.

The purchase card program lacked
complete policy guidance and
oversight
6 Create an authoritative document that
clearly states what types of purchasing
card transactions are allowable and
prohibited, and distribute it to all
cardholders and approving officials.

Partly
Implemented
The department is updating the Purchasing
Card Procedure Handbook to reflect the types
of transactions that are allowable and
prohibited. Once the handbook is formally
adopted, it will be distributed to all
cardholders and approving officials.

The purchase card program lacked
complete policy guidance and
oversight
7 Ensure that the document is updated
annually to reflect policy changes.

Partly
Implemented
The Purchasing Card Policy, once formally
adopted, will be reviewed annually to reflect
applicable policy change.

The purchase card program lacked
complete policy guidance and
oversight
8 Provide mandatory annual purchasing
card-use training for cardholders and
require them to sign a form agreeing to
program terms and acknowledging their
responsibilities.

Partly
Implemented
Training has been updated and is being
provided to new cardholders. Once the new
Purchasing Card Manual is complete and
published, the training will be pushed to the
City's training system and cardholders will be
required to complete it annually.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The purchase card program lacked
complete policy guidance and
oversight
9 Provide mandatory annual purchasing
card-approval training for approving
officials and require them to sign a form
agreeing to program terms and
acknowledging their responsibilities
Partly
Implemented
Training has been updated and is being
provided to new cardholders. Once the new
Purchasing Card Manual is complete and
published, the training will be pushed to the
City's training system and cardholders will be
required to complete it annually.

The purchase card program lacked
complete policy guidance and
oversight
12 Strengthen controls that are already in
place and consider adding controls that
are in line with best practices.

Partly
Implemented
Clarification on allowable charges has been
included in new training material and is
included in the Purchasing Card Policy draft.

Code restrictions on merchant categories were
implemented to restrict purchases from
vendors that there would not typically be a
business purpose to purchase from.

Audit of City Employee Supplemental Pay

Finding # Recommendation Status Update

Controls Over Employee Time
Reporting Must be Improved
9 Create a policy and procedure for
recording supervisor approval of
individual employee time.

Partly
Implemented
No progress made during this
recommendation follow up period.

Controls Over Employee Time
Reporting Must be Improved
10 Discontinue allowing any employee to
have administrative access to both
Telestaff software and server, and create
a policy to prevent it in the future.

Partly
Implemented
No progress made during this
recommendation follow up period.

Controls Over Employee Time
Reporting Must be Improved
11 Develop controls to monitor the activity
of those provided with administrative
rights to Telestaff.

Started No progress made during this
recommendation follow up period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the Fire Department Inventory Systems & Narcotics - Part 2 of 2

Finding # Recommendation Status Update

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
1 Assign responsibility for managing
inventory and develop policies to provide
clear and consistent direction.

Partly
Implemented
No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
2 Establish performance goals to
determine if the system is functioning
properly.

Started No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
3 Determine a schedule for regular and
random inventory counts to ensure
accuracy and identify outages.

Partly
Implemented
No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
4 Require supervisory approval of
inventory count adjustments and
document the cause of the variance.

Started No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
5 Develop a mechanism to track discarded
or expired medication.

Partly
Implemented
No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
6 Develop a process to track actual usage
of supplies.

Partly
Implemented
No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
7 Work with the IT Department to
implement system access best practices,
including the concept of “least
privileges.”
Partly
Implemented
No progress made during this
recommendation follow up period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
8 Develop a formal process for approving
new user access and changes to access
levels.

Started No progress made during this
recommendation follow up period.

The Fire Department should
implement inventory management
best practices to improve
accountability and accuracy
9 Perform ongoing reviews of system
access.

Partly
Implemented
No progress made during this
recommendation follow up period.

Audit of Citywide Wireless Communications

Finding # Recommendation Status Update

Wireless Device Policies are
Insufficient
15 Submit a new wireless communication
device request form for all existing
employees with City-issued devices.

Partly
Implemented
According to the Information Technology
Department, this will be implemented once
the integration between the Telecom Expense
Management Systems (TEMS) and ServiceNow
is completed. TEM and ServiceNow integration
project in in progress and is expected to be
completed in September 2022.

Inventory Records are Incomplete
and Inconsistent
18 Update inventory records and ensure
complete and up-to-date inventory is
maintained.

Partly
Implemented
According to the Information Technology
Department, the Telecom Expense
Management (TEM) and ServiceNow
integration project is in progress and is
expected to be completed in September 2022.

The new integration will eliminate manual
processes that lead to discrepancies between
the asset inventory system (ServiceNow) and
the TEM system (CLM).

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the Department of Utilities Labor Reporting

Finding # Recommendation Status Update

Policies Can Be Improved and
Opportunities for Cost Savings
Through Renegotiation Exist
8 Review the existing employee user access
to pay types and restrict access to only
those pay types for which an employee is
eligible.

Started No progress was made during the period due
to labor contract implementation.

Policies Can Be Improved and
Opportunities for Cost Savings
Through Renegotiation Exist
14 Review and update all Department of
Utilities internal policies related to labor
reporting.

Partly
Implemented
No progress was made during the reporting
period. Policies and Procedures manuals
remain with Labor Relations for review.

The Finance Department Uses an
Excessive Number of Time
Reporting Codes and Earn Codes as
well as Complex Calculation
Methodologies and Distribution
Methods for Supplemental Pay that
May Not Align with Labor
Agreements or Tax Laws
24 Review the labor agreements and update
the calculation methodology for the
appropriate supplemental pay types so
that they are compounded correctly, if
necessary.

Partly
Implemented
No progress was made during the period. The
Payroll Division is awaiting direction from the
Labor Relations Division.

The Finance Department Uses an
Excessive Number of Time
Reporting Codes and Earn Codes as
well as Complex Calculation
Methodologies and Distribution
Methods for Supplemental Pay that
May Not Align with Labor
Agreements or Tax Laws
25 Review and update which pay types
should have compounding pay
components.

Partly
Implemented
No progress was made during the period. The
Payroll Division is awaiting direction from the
Labor Relations Division.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Finance Department Uses an
Excessive Number of Time
Reporting Codes and Earn Codes as
well as Complex Calculation
Methodologies and Distribution
Methods for Supplemental Pay that
May Not Align with Labor
Agreements or Tax Laws
26 Establish written policies and procedures
for periodically reviewing and updating
the earn codes and time reporting codes,
checking for duplicates and active earn
codes that should be deactivated.

Partly
Implemented
No progress was made during the period due
to labor contract implementation.

Audit of the City's Risk Management Division

Finding # Recommendation Status Update

The City May Reduce Risk and
Liability by Making Improvements
to Some Programs and Policies
13 Consider monitoring the drivers’ licenses
of all employees that drive City vehicles
or receive City vehicle allowances.

Started No progress was made on this
recommendation during this reporting period.

The City May Reduce Risk and
Liability by Making Improvements
to Some Programs and Policies
16 Continue to work towards implementing
the updated draft of the Transportation
Policy to increase the insurance
requirement of employees driving their
personal vehicles for City business.

Started According to the Human Resources' Risk
Management Division, the Transportation
Policy has not yet been adopted.

The City May Reduce Risk and
Liability by Making Improvements
to Some Programs and Policies
17 Work together to develop a monitoring
mechanism to ensure employees
maintain the required minimum
insurance coverage when receiving a
vehicle allowance.

Started No progress was made on this
recommendation during this reporting period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of Fire Department Overtime Use

Finding # Recommendation Status Update

Negotiated Overtime and Incentive
Provisions May Have
Unintentionally Increased Payroll
Costs
6 Evaluate the necessity of Primary
Paramedic Pay.

Not Started No progress made during this
recommendation follow up period.

The Fire Department Lacks
Sufficient Controls Over the
Administration and Use of Overtime
7 Establish policies on the administration
and use of overtime.

Started No progress made during this
recommendation follow up period.

The Fire Department Lacks
Sufficient Controls Over the
Administration and Use of Overtime
8 Document the purpose for overtime use
in a consistent and retrievable format.

Started No progress made during this
recommendation follow up period.

The Fire Department Lacks
Sufficient Controls Over the
Administration and Use of Overtime
9 Document supervisory approval of
overtime use in a consistent and
retrievable format.

Started No progress made during this
recommendation follow up period.

The Fire Department Lacks
Sufficient Controls Over the
Administration and Use of Overtime
11 Develop, document, and enforce system
access controls for Telestaff users.

Started No progress made during this
recommendation follow up period.

The Fire Department Lacks
Sufficient Controls Over the
Administration and Use of Overtime
12 Strengthen controls to monitor the use of
timecodes to prevent and detect errors,
fraud, and abuse.

Started No progress made during this
recommendation follow up period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the Department of Utilities Inventory

Finding # Recommendation Status Update

Strengthening the Physical Security
of Department of Utilities Inventory
Could Reduce the Risk of Fraud,
Waste, and Abuse
3 Review the number and appropriateness
of employees with access to the
inventory warehouse and formalize
which positions can be granted access to
each warehouse in the inventory policies.

Partly
Implemented
After evaluation and research, DOU
Engineering Services estimates the total cost to
develop a secure storage area for DOU
outdoor inventory materials is $220,000 and
will take approximately seven months to
complete. The Project Report, outlining the
scope, timeline, cost and funding source is
currently routing through the DOU internal
approval process. The report is expected to
complete routing by the end of June with an
anticipated project start date of July 2022.

Strengthening the Physical Security
of Department of Utilities Inventory
Could Reduce the Risk of Fraud,
Waste, and Abuse
5 Establish a policy that prohibits
employees from borrowing City-owned
tools and equipment for personal use
and document employee
acknowledgement.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

While the Department of Utilities’
Inventory Count Procedures Appear
Robust, the Execution Breaks Down
7 Develop a process to ensure all
warehouses are included in the inventory
counts.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

While the Department of Utilities’
Inventory Count Procedures Appear
Robust, the Execution Breaks Down
9 Formalize specific count methodologies
in a written policy.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

While the Department of Utilities’
Inventory Count Procedures Appear
Robust, the Execution Breaks Down
11 Formalize a procedure for accurately
recording inventory count adjustments in
a written policy.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

While the Department of Utilities’
Inventory Count Procedures Appear
Robust, the Execution Breaks Down
13 Add an additional step to the water
meter serial number count that
reconciles the Water Meter Receipt and
Issue Log with Cityworks.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

While the Department of Utilities’
Inventory Count Procedures Appear
Robust, the Execution Breaks Down
14 Review, update, and enforce inventory
policies related to the tracking of water
meters.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

The Department of Utilities Lacks
Formal User Access Policies and
Procedures Regarding Their
Inventory Systems
22 Formalize logical access to the inventory
systems in a written policy.

Partly
Implemented
No progress was made during the period. The
draft Inventory Policy remains with Labor
Relations for review.

Audit of Procurement for Services of $25,000 or Less

Finding # Recommendation Status Update

Procurement Guidance and Training
were Insufficient to Ensure
Employees Properly Procured
Services on Behalf of the City
2 Update EBO policies, templates, and
other guidance for accuracy and
consistency.

Started The City's EBO policy is a duplication of the
State of California's Equal Benefits Ordinance,
which was adopted in 2007. The Procurement
Division will be working with the City
Attorney's Office to determine how to reduce
redundancies between State laws and City
policies.

Procurement Guidance and Training
were Insufficient to Ensure
Employees Properly Procured
Services on Behalf of the City
3 Develop processes to ensure EBO
analysis and reports are completed as
required by City policy.

Procurement Guidance and Training
were Insufficient to Ensure
Employees Properly Procured
Services on Behalf of the City
4 Determine the City’s intent regarding bid
protests and update policies, templates,
and other guidance for consistency.

Partly
Implemented
Bid protests have been clarified and published
in the Procurement Policy Manual, which is
currently undergoing legal review. After
review, the Procurement Policy Manual will be
submitted for formal adoption as a city policy.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Procurement Guidance and Training
were Insufficient to Ensure
Employees Properly Procured
Services on Behalf of the City
5 Define and publish specific roles and
responsibilities of procurement
stakeholders.

Partly
Implemented
The role of the Department Contract
Administrator, a procurement stakeholder
within the City, has been clarified and
published in the Procurement Policy Manual,
which is currently undergoing legal review.

After review, the Procurement Policy Manual
will be submitted for formal adoption as a city
policy.

Procurement Guidance and Training
were Insufficient to Ensure
Employees Properly Procured
Services on Behalf of the City
12 Determine the intent and purpose of
purchase orders, and clarify their
requirements and use in City guidance
and templates.

Partly
Implemented
Purchase orders have been clarified and
published in the Procurement Policy Manual,
which is currently undergoing legal review.

After review, the Procurement Policy Manual
will be submitted for formal adoption as a city
policy.

Audit of YPCE’s Strategic Planning and Part-time Employee Benefits Management Finding # Recommendation Status Update

The Department of Parks and
Recreation Has Not Updated Key
Strategic Planning Guidance
1 Update the Parks and Recreation Master
Plan.

Started The “Parks Plan 2040” is on scheduled to be
completed by Spring of 2023. The Parks Plan
2040 team is currently in the Needs
Assessment phase of the process. Chapters in
this section of the document will cover park
equity and access, facilities and programs, and
updated level of service goals for park facilities
and recreation programming.

The Department of Parks and
Recreation Has Not Updated Key
Strategic Planning Guidance
6 Define when it is appropriate to use the
“General Info” or “Other” call categories.

Partly
Implemented
YPCE continues to work with 311 on the
appropriate use of the 'General' and 'Other'
categories.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Developing a Formal Cost Recovery
Philosophy May Help the
Department of Parks and
Recreation Better Align Its Pricing
Practices with Its Mission and Core
Values
9 Develop department-specific policies and
procedures.

Started YPCE continues to work on drafting
department specific policies and procedures,
to be reviewed and approved by respective
labor bargaining units and the Department of
Human Resources.

Developing a Formal Cost Recovery
Philosophy May Help the
Department of Parks and
Recreation Better Align Its Pricing
Practices with Its Mission and Core
Values
10 Define the department’s cost recovery
goals and objectives.

Started YPCE is continuing to develop a comprehensive
scope of work for a fees and charges study.

One of the objectives in the scope of work is to
formulate cost recovery objectives.

Developing a Formal Cost Recovery
Philosophy May Help the
Department of Parks and
Recreation Better Align Its Pricing
Practices with Its Mission and Core
Values
11 Evaluate the department’s fees and
charges to determine if they are in
alignment with the department’s
mission, vision, and cost recovery goals.

Started YPCE still working on the finalized draft of a
comprehensive fees and charges study. The
Fees and Charges study will allow YPCE to align
updated fee schedules to mission, vision, and
set cost recovery goals.

Developing a Formal Cost Recovery
Philosophy May Help the
Department of Parks and
Recreation Better Align Its Pricing
Practices with Its Mission and Core
Values
12 Comply with the Citywide Fees and
Charges Policy by establishing cost
recovery goals and identifying cost
recovery levels.

Developing a Formal Cost Recovery
Philosophy May Help the
Department of Parks and
Recreation Better Align Its Pricing
Practices with Its Mission and Core
Values
14 Consider updating the fee structure for
some programs and services to include a
non-resident fee.

Started YPCE is working on drafting a comprehensive
fees and charges study. The Fees and Charges
study will allow YPCE to align updated fee
schedules to mission, vision, and set cost
recovery goals.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Nearly Half of the Supervisors
Responsible for Administering and
Monitoring Part-Time Employee
Hours and Benefits Have Not
Received Labor Relations Training
18 Develop policies and procedures on part-
time employee reporting, responsibility,
and training.

Partly
Implemented
YPCE continues to work with Human Resources
to strategize and develop procedures
surrounding part time employees. YPCE is
working with Human Resources to ensure the
onboarding of seasonal part time employees is
comprehensive. YPCE is using the City's
Acumen software system to coordinate
onboarding training.

Audit of the Department of Utilities Workplace Safety

Finding # Recommendation Status Update

The Department of Utilities Lacks
Sufficient Controls Over the
Administration and Use of Safety
and Personal Protective Equipment
1 Review and update existing policies and
procedures concerning safety and
personal protective equipment to fill in
gaps and clarify its appropriate use.

Partly
Implemented
The Department of Utilities completed a
formal Request for Qualifications process to
hire a consultant to ass in the 170 remaining
Standard Operating Procedures that still need
review. The department anticipates a contract
will be in place and work will begin in fiscal
year 2023.

The Department of Utilities Lacks
Sufficient Controls Over the
Administration and Use of Safety
and Personal Protective Equipment
2 Establish policies and procedures
concerning safety and personal
protective equipment where none
currently exist.

Implemented While there remain glitches with the City's Learning Management System, we verified the
Department of Utilities has established training
protocols for employees and that employees
are being trained on requirements and
appropriate use of personal protective
equipment.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Department of Utilities Lacks
Sufficient Controls Over the
Administration and Use of Safety
and Personal Protective Equipment
4 Consider negotiating a more restrictive
and thorough reimbursement or other
process for providing PPE in all of the
City’s labor agreements.

Dropped While the City negotiated a more restrictive
and thorough reimbursement process for PPE
with most unions, after implementation, it
became apparent that the process introduced
new risks that management believed
outweighed the benefits. Therefore, the City
will revert to the old PPE reimbursement
process; this will happen over time as the City
negotiates with the various unions.

The Department of Utilities Lacks
Sufficient Controls Over the
Administration and Use of Safety
and Personal Protective Equipment
8 Perform periodic audits of gas
monitoring data to ensure employees
use gas monitors in accordance with
departmental policies.

Partly
Implemented
The Department of Utilities' Safety Specialist is
working with the vendor to understand device
operation to minimize recurring alerts and
alarms. The department is currently reviewing
iNET reports to refine frequency of reports and
to define report review responsibilities that
will be updated in the standard operating
procedures.

The Department of Utilities Should
Implement Health and Safety Best
Practices to Reduce Risks and
Improve Accountability
21 Develop a formal management of change
process.

Partly
Implemented
A draft Management of Change procedure was
completed and sent to Labor Relations for
review.

The Department of Utilities Should
Implement Health and Safety Best
Practices to Reduce Risks and
Improve Accountability
22 Review and update departmental safety
policies and procedures.

Partly
Implemented
The Department of Utilities is in the process of
reviewing and updating policies and
procedures. According to the department, this
work is expected to be completed in the next
2-3 years.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of On-Street Parking Meters

Finding # Recommendation Status Update

Improving Vehicle-Detection Sensor
Accuracy Rates and Meter Battery
Life Could Reduce the Potential for
Erroneous Citations and Slow the
Rate of Incoming Citation Disputes
1 Continue to work with the vendor to
achieve contracted vehicle-detection
sensor accuracy rates or consider
switching to a vendor that will meet the
desired standard.

Started The parking meter shop is focused on battery
replacement and plans to resume accuracy
testing once the batteries are replaced.

Improving Vehicle-Detection Sensor
Accuracy Rates and Meter Battery
Life Could Reduce the Potential for
Erroneous Citations and Slow the
Rate of Incoming Citation Disputes
3 Address deficiencies identified with
parking meter sensor-accuracy and
battery life to improve the customer
service experience and reduce the
number of incoming citation disputes.

Partly
Implemented
The parking meter shop is focused on battery
replacement and plans to resume accuracy
testing once the batteries are replaced.

Audit of Retiree Health Benefits

Finding # Recommendation Status Update

Recordkeeping of Retiree Benefit
Eligibility and Elections Could be
Strengthened
3 Work with the IT department to identify
and resolve eCAPS health benefit report
errors for retirees.

Started Department did not provide a response.

Performing Dependent Verifications
Ensures Qualified Dependents are
Enrolled in City-Sponsored Health
Plans and Could Save the City up to
$600,000 Annually
6 Establish a process to perform regular
dependent eligibility verification reviews
that includes procedures on how to
address instances of non-compliance
with verification requests.

Not Started No progress on this item during the reporting period.

Performing Dependent Verifications
Ensures Qualified Dependents are
Enrolled in City-Sponsored Health
Plans and Could Save the City up to
$600,000 Annually
7 Review and address HMS’ active
employee dependent eligibility
verification results.

Not Started No progress on this item during the reporting period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Performing Dependent Verifications
Ensures Qualified Dependents are
Enrolled in City-Sponsored Health
Plans and Could Save the City up to
$600,000 Annually
8 Perform a retiree dependent verification
review for participants of City-sponsored
plans.

Started No progress on this item during the reporting
period.

Audit of the 911 Emergency Communications Center

Finding # Recommendation Status Update

Call Answer Times Have Improved
and Are Exceeding State Standards
2 Consider improving the supervisor-to-
dispatcher ratio to provide better
supervisory coverage.

Started Improving the supervisor-to-dispatcher ratio
remains a priority of the 911 Communication
Center. The 911 Communications Center will
continue to request additional Dispatcher III
(Supervisor) positions in the future.

Quality Assurance and Disaster
Preparedness Could Be Improved by
Adopting Industry Best Practices
7 Develop and document a continuous
quality assurance program based on
industry standards that includes
reviewing a percentage of all calls and
incorporates an evaluator calibration
process.

Started Progress remains slow in this area due to the
911 Communication Center's ability to commit
the two supervisors working on this program
full time. The 911 Communication Center will
continue to seek additional supervisor
positions.

Quality Assurance and Disaster
Preparedness Could Be Improved by
Adopting Industry Best Practices
10 Establish the 911 Center as a Critical
Facility on Sacramento County’s Local
Hazard Mitigation Plan.

Partly
Implemented
The City Council passed a critical infrastructure
list in July 2021 that included Police
Communications Facilities. Sacramento County
is still in the process of updating their 2021
critical infrastructure list.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the Department of Utilities Vehicle Fleet

Finding # Recommendation Status Update

The Department of Utilities Can
Realize Cost Savings Through
Improved Management of Their
Vehicle Fleet
6 Work with the Civil Service Board to
review an update Section 13.3 of the City
of Sacramento's Rules and Regulations of
the Civil Service Board. Specifically,
determine the appropriate radius to
ensure 'effective response capability to
emergencies' in statute miles.

The Department of Utilities Can
Realize Cost Savings Through
Improved Management of Their
Vehicle Fleet
8 Formalize the Fleet Engine Idling Limit
Policy and post the policy on the City's
Policies and Procedures webpage.

Started No progress was made during this period. The
policy is still in the approval process.

Excessive Access to the City's
Fueling Islands Created Data
Integrity Issues and May Have
Allowed for Fraud
10 Work with AssetWorks to identify and
resolve or minimize system issues related
to fuel transactions.

Implemented The Fleet Management Division implemented
processes to review and correct fueling
transactions. We estimate these processes
correct approximately $47,000 in fueling
transactions per year.

Excessive Access to the City's
Fueling Islands Created Data
Integrity Issues and May Have
Allowed for Fraud
15 Limit the number of active badges each
employee can use to access the fueling
islands.

Started Due to COVID-19, no progress was made
during this period.

System Access and Data Quality
Could Be Improved to Better Enable
Management to Perform Analyses
and Identify Trends
19 Review the data captured by the M5
system, determine key data fields, and
implement controls to ensure these
fields contain accurate and complete
information.

Partly
Implemented
No progress was made during this period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

System Access and Data Quality
Could Be Improved to Better Enable
Management to Perform Analyses
and Identify Trends
20 Establish a process to verify the accuracy
of vehicle and GPS unit device ID
assignments in the GPS tracking systems.

Partly
Implemented
According to the Fleet Management Division,
there are roughly 200 remaining vehicles with
Zonar installed. The Zonar instruments are
being removed and replaced with Samsara
units.

The City Can Mitigate Risk by Better
Documenting and Tracking
Employee Licensure, Certifications,
and Insurance Information
24 Revise the City Employee's
Transportation Policy and Procedures to
require employees to provide proof of
licensure when using pool vehicles.

Partly
Implemented
No progress was made during this period. The
Transportation Policy is still in the approval
process.

The City Can Mitigate Risk by Better
Documenting and Tracking
Employee Licensure, Certifications,
and Insurance Information
26 Develop a detailed insurance verification
process for employees receiving a vehicle
allowance.

Started No progress was made during this period. The
Transportation Policy is still in the approval
process.

Audit of City-Owned and Leased Real Property

Finding # Recommendation Status Update

The City Has Potential Surplus and
Remnant Parcels That Could Be
Leveraged to Achieve A Variety of
City Goals
1 Review all City-owned property and work
with the City’s asset-managing
departments and divisions to identify and
track the City’s surplus
property.

Not Started According to the Real Estate Services Section, progress on this recommendation has not
started due to staffing and project load. The
Section is taking steps to fill the vacancy and
expect to fill the position in Q3 2022.

The City Has Potential Surplus and
Remnant Parcels That Could Be
Leveraged to Achieve A Variety of
City Goals
2 Develop policies and procedures to
provide guidance on how asset-managing
departments should ensure all City-
owned properties are appropriately
secured and maintained.

Not Started According to the Real Estate Services Section, progress on this recommendation has not yet
started due to staffing and project load.

However, the prior hiring freeze has ended and
the Section is taking steps to fill an outstanding
vacancy. The Section expects to fill the vacancy
in Q3 2022.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The City Has Potential Surplus and
Remnant Parcels That Could Be
Leveraged to Achieve A Variety of
City Goals
3 Identify City-owned surplus and remnant
parcels and consider selling, disposing, or
re-purposing the parcels to reduce
liability and utility and weed abatement
costs.

Started The Sacramento City Council approved an
amendment to sale agreement for the
property located at 3625 Fong Ranch Road on
June 28 2022. The sale will be for a 17.39 acre
portion of the 22.81 acre property for $4m in
cash. The Real Estate Services Section
anticipates it will close escrow in
approximately 6 months.

The City Has Potential Surplus and
Remnant Parcels That Could Be
Leveraged to Achieve A Variety of
City Goals
4 Work with the City’s asset-managing
departments to identify alternative uses
for the City’s undesirable or unsellable
surplus property.

Not Started According to the Real Estate Services Section, progress on this recommendation has not yet
started due to staffing and project load.

However, the prior hiring freeze has ended and
the Section is taking steps to fill an outstanding
vacancy. The Section expects to fill the vacancy
in Q3 2022.

The City Has Potential Surplus and
Remnant Parcels That Could Be
Leveraged to Achieve A Variety of
City Goals
5 Consider selling some of the City’s
surplus property to generate onetime
revenue to achieve other City goals
Started According to the Real Estate Services Section,
the City is evaluating three parcels to be
declared surplus by the City Council. RESS
anticipates bringing these parcels to council in
late Q3 or early Q4 2022.

The City Has Potential Surplus and
Remnant Parcels That Could Be
Leveraged to Achieve A Variety of
City Goals
6 Conduct a staffing analysis to determine
whether resources need to be added to
the Real Estate Services Section to
implement the recommendations made
in this report.

Not Started According to the Real Estate Services Section, no progress has been made during this
reporting period

The City’s Real Property
Management Is Decentralized and
Would Benefit from Detailed Policy
Development
7 Review the Lease Centralization Plan and
determine whether the Real Estate
Services Section should manage all real
property lease management as outlined
in the Lease Centralization Plan.

Started According to the Real Estate Services Section,
no additional progress was made during this
reporting period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The City’s Real Property
Management Is Decentralized and
Would Benefit from Detailed Policy
Development
8 Work with the City Attorney’s Office to
create lease contract templates that
include key contract provisions to ensure
consistency in City lease contracts.

Not Started According to the Real Estate Services Section, progress on this recommendation has not yet
started due to staffing and project load.

However, the Section is taking steps to fill an
outstanding vacancy and expects to fill the
vacancy in Q3 2022.

The City’s Real Property
Management Is Decentralized and
Would Benefit from Detailed Policy
Development
9 Work with departments leasing non-City
property to identify whether the
departments can leverage City-owned
property instead of leasing.

Started According to the Real Estate Services Section,
there are currently no opportunities to
relocate into City owned property. RESS will
continue to review leases with departments as
those leases get close to the end of their
terms.

The City’s Real Property
Management Is Decentralized and
Would Benefit from Detailed Policy
Development
10 Develop a process to regularly review
City-leased property to determine
whether it is an ongoing need and City-
owned property is available to use
instead.

Started The Real Estate Services Section reviewed
existing leases and determined there are
currently no opportunities to relocate into City
owned property. RESS will continue to review
leases as those leases get close to the end of
their terms.

The City’s Real Property
Management Is Decentralized and
Would Benefit from Detailed Policy
Development
11 Work with the Finance Department to
establish a uniform policy that provides
the process and steps required for
acquisition and disposition of City-owned
properties. Procedures should include
details regarding compliance with
Sacramento City Code and California
State Law, financial reporting standards
between the Real Estate Service Section
and the Department of Finance, and the
method of storing documents and
financial records.

Started According to the Real Estate Services Section,
there has been no progress on this
recommendation during the reporting period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Appropriate Management of City-
Owned and Leased Real Property Is
Required to Ensure Financial
Statements Comply with the
Government Accounting Standards
Board
15 Work with other City departments to
identify data elements that may be
helpful or necessary in decision making
or reporting purposes and develop a
process to collect and document the new
data elements in the Asset Database.

Not Started According to the Real Estate Services Section, this recommendation has not yet started due
to staffing and project load. There is an
outstanding vacancy, which should be filled in
Q3 2022.

Appropriate Management of City-
Owned and Leased Real Property Is
Required to Ensure Financial
Statements Comply with the
Government Accounting Standards
Board
16 Work with other City departments to
identify real property tracking needs and
utilize a Citywide software program or
develop another platform to centralize
the management of the City’s real
property
Started A new business analyst recently joined the
Information Technologies Department (IT) and
is getting familiar with the city's business
operation and enterprise software. IT
anticipates restarting the conversation with
business users on this project in the next three
months.

Appropriate Management of City-
Owned and Leased Real Property Is
Required to Ensure Financial
Statements Comply with the
Government Accounting Standards
Board
17 Centralize City lease inventory and
document clear processes for all City
departments to follow to standardize
maintenance of City lease inventory,
including utilizing the Asset Database or
new platform used for real property
inventory to ensure consistent tracking
and consolidation of Citywide lease
inventory.

Started According to the Real Estate Services Section,
no progress has been made on this
recommendation during the reporting period.

Appropriate Management of City-
Owned and Leased Real Property Is
Required to Ensure Financial
Statements Comply with the
Government Accounting Standards
Board
18 Work with the City’s Finance Department
to develop policies and procedures on
lease revenue billing and collection
processes
Not Started According to the Real Estate Services Section, no progress has been made during this
reporting period.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the City's Green Efforts

Finding # Recommendation Status Update

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
1 Evaluate whether more consistent LEED
certification is beneficial to the City’s
reputation as a sustainability leader.

Implemented The Facilities Division Energy Manager has
provided a memorandum outlining the City's
approach to pursuing LEED certification for
new buildings. The current Climate Action Plan
for Internal Operations directs staff to pursue
LEED Silver certification (or higher) for
construction of new City buildings. Staff
continues to work to achieve the LEED Silver
Certification as new facilities are brought on-
line, though in rare occasions a facility’s use is
too specific to qualify for LEED accreditation.

Additionally, City and State Codes have been
recently updated to meet more stringent
sustainability goals, including many of the LEED
Silver Certification requirements.

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
2 Develop a process to monitor completed
LEED buildings post-completion to
accurately capture the benefits of
building to LEED standards and to
quantify their value to the City’s overall
sustainability objectives.

Implemented The Facilities Division Energy Manager has
provided a memorandum explaining that the
Facilities Division's funding mechanisms do not
provide for tracking buildings post completion.

However, other energy monitoring efforts are
underway using EnergyCAP and a new
dashboard in development by IT with the
Office of Climate Action & Sustainability.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
3 Consider participating in the U.S. Green
Building Council’s LEED recertification
option for certified LEED buildings.

Implemented The Facilities Division Energy Manager has
provided a memorandum evaluating LEED
recertification and concluding that pursuing
recertification is not something that staff can
prioritize at this time. The funding mechanisms
of the Facilities Division are not set up to
provide support to buildings post-completion,
absent of a specific request funded by a
department that uses said facility. Recognizing
the constraints in the City budget, no near-
term relief is expected to support additional
recertifications of buildings or expand LEED
certification into existing buildings. As funding
becomes available for energy-related work in
City facilities, the implementation of cost-
saving retrofits and electrification will be
prioritized over project-by-project monitoring.

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
4 Require post-completion monitoring for
all applicable sustainability projects,
programs, and initiatives.

Partly
Implemented
Post-completion project monitoring is
underway across departments and offices. For
example, DOU staff monitor water and dollars
saved through water conservation projects.

The Facilities Energy Manager is preparing for
yearly energy benchmarking of City facilities
using EnergyCAP data reports. Through the
Samsara platform, Fleet tracks vehicle fuel
consumption, including fuel (and dollars)
wasted while idling. The draft sustainability
indicators dashboard in development by the IT
Department and the Office of Climate Action &
Sustainability summarizes some of these
themes at a high level.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
5 Develop a procedure that ensures
internal stakeholders are involved in or
made aware of relevant goals and
performance measures.

Partly
Implemented
The Office of Climate Action & Sustainability
continues to convene the Green Team to
coordinate sustainability work across
departments. The Green Team met six times
during Q1 and Q2 of 2022. Topics included the
Transportation Priorities Plan, shared GIS
resources, State policy updates, and research
on Sacramento's environmental justice
movement.

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
6 Develop and track performance
measures as they relate to published
sustainability goals.

Partly
Implemented
IT has drafted a PowerBI dashboard to display
ten initial sustainability indicators selected
with DOU, YPCE, Fleet, and Facilities staff.

Additional indicators are planned. The Office of
Climate Action & Sustainability has presented
the preliminary dashboard and approach to
department staff and the Green Team.

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
7 Ensure sustainability reports consistently
track and report progress over time.

Started The Office of Climate Action & Sustainability is developing a sustainability 'scorecard' to
discuss with departments on an annual basis.

The 'scorecard' will summarize departments'
performance per fiscal year in terms of energy
and water use, zero-emission fleet adoption,
and other sustainability-related areas.

Additionally, the Office continues to present
quarterly reports on the Climate
Implementation Work Plan and new 2022
tasks.

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
8 Develop a process to check for duplicated
data when it is uploaded to EnergyCAP,
monitor the data for discrepancies, and
notify users of issues in or changes to the
data in the EnergyCAP system.

Implemented The Facilities Division Energy Manager is
actively managing errors in EnergyCAP and
assigning flags to staff. Any issues are
communicated to the relevant departments
and divisions, who are responsible for
resolving the flagged issues.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
9 Review the data captured by the GIS
streetlights system, determine key data
fields, implement controls to ensure
these fields contain accurate and
complete information, and reconcile the
various internal sources of streetlight
counts.

Partly
Implemented
The City regularly updates its streetlight data in
its GIS database. Currently, over 14,200
streetlights have been retrofitted to LED. 2,450
more streetlights have been identified for the
final phase of retrofits.

Improved Monitoring and Reporting
of Sustainability Data, Progress, and
Outcomes Is Essential for Tracking
Impacts and Realizing the Intended
Benefits
10 Develop and implement a process to
reconcile our internal streetlights dataset
with SMUD to ensure that the City is
correctly billed.

Partly
Implemented
The funding for streetlight retrofits has been
exhausted, with the final phase of retrofits to
be completed by December 2022. Delivering
the retrofits has given staff the opportunity to
verify the records and crosscheck City
information with SMUD’s un-metered
streetlight billing records.

Started Work on this item is on hold, as the Office of
Climate Action & Sustainability is focusing on
establishing sustainability performance
indicators and raising awareness of
sustainability goals Citywide.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Centralized Management and
Oversight of the City’s Sustainability
Efforts May Better Position the City
to Establish Sustainability as an
Organizational Priority and Core
Value
13 Establish a Citywide internal
communication strategy and
accountability mechanism for
sustainability goals and priorities.

Partly
Implemented
The Office of Climate Action & Sustainability
staff continue to convene the Green Team and
utilize the Microsoft Teams 'Green Team'
channel to distribute internal information on
sustainability goals and priorities. For example,
staff set up an additional Teams channel
focused on resource-sharing for racial equity
and sustainability. Also in Q2 of 2022, GIS staff
(with Green Team input and Office of Climate
Action & Sustainability coordination) created a
Sustainability Data and Resources Hub with
shared mapping resources to support
sustainability workflows. More work is
outstanding to create additional resources,
such as a Nexus webpage, or new staff report
guidance for the 'Sustainability Section' of staff
reports.

Centralized Management and
Oversight of the City’s Sustainability
Efforts May Better Position the City
to Establish Sustainability as an
Organizational Priority and Core
Value
15 Evaluate new funding strategies and
consider whether additional funding
support can be provided during the City’s
budgeting process.

Implemented In May 2022, the Department of Public Works staff assessed funding options for sustainability
projects and presented alternatives to City
Council as part of the FY2022-23 budget
development process. The Office of Climate
Action & Sustainability staff also contributed
responses on budgeting and staffing issues. In
addition, City staff are continuously evaluating
funding options for sustainability projects.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Centralized Management and
Oversight of the City’s Sustainability
Efforts May Better Position the City
to Establish Sustainability as an
Organizational Priority and Core
Value
16 Review City projects that may have
immediate environmental savings and
cost avoidance that currently lack
funding, such as retrofitting the
remaining streetlights to LED, and assist
with identifying funding sources.

Partly
Implemented
DOU is collaborating with YPCE and DPW on
projects to save water and energy (for
irrigation), as well as to reduce costs. For
instance, YPCE started construction on water-
saving projects at Freeport Park. YPCE will seek
reimbursements from DOU and evaluate
successes and opportunities for improvement.

DPW created a CIP to address drought-tolerant
landscaping in medians, possibly using DOU
water conservation funding. Initial locations
include Mack Road, Franklin Boulevard, and
possibly 21st Avenue (in coordination with
YPCE).

Centralized Management and
Oversight of the City’s Sustainability
Efforts May Better Position the City
to Establish Sustainability as an
Organizational Priority and Core
Value
17 Implement outreach efforts and
programs to City employees to improve
the City’s sustainability culture.

Started The Office of Climate Action & Sustainability
staff continues to facilitate coordination across
departments, including with the Green Team.

The Office of Climate Action & Sustainability
staff also met with Human Resources staff to
discuss the process for developing new
sustainability trainings.

Centralized Management and
Oversight of the City’s Sustainability
Efforts May Better Position the City
to Establish Sustainability as an
Organizational Priority and Core
Value
18 Assist other City departments and offices
with incorporating sustainability into
their department-level operations
through the creation, implementation,
and tracking of specific performance
goals.

Partly
Implemented
In coordination with Fleet, DOU, YPCE, and
Facilities staff, Office of Climate Action &
Sustainability staff identified ten initial
indicators to internally track sustainability of
municipal operations. IT staff have developed a
draft dashboard to display these indicators, to
be updated on a fiscal year basis
Centralized Management and
Oversight of the City’s Sustainability
Efforts May Better Position the City
to Establish Sustainability as an
Organizational Priority and Core
Value
19 Evaluate whether more formalized
Citywide green teams may be beneficial
for supporting the City’s sustainability
culture, programs, and goals.

Partly
Implemented
The Office of Climate Action & Sustainability
has evaluated options to formalize department
engagement in sustainability. In 2022, on
behalf of the City Manager's Office, the Office
of Climate Action & Sustainability is
establishing a Climate Action Task Force with
formalized expectations and responsibilities
for each department.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
20 Develop a process for notifying City
employees of changes to Citywide
sustainability policies, procedures, and
plans and document their
acknowledgement of these changes.

Not Started The Office of Climate Action & Sustainability staff will initiate this effort in conjunction with
policy changes happening through the 2040
General Plan Update and Climate Action and
Adaption Plan Update. The public drafts of
both documents are delayed. As an initial step,
the Green Team discussed the July 2022
release of the draft Climate Action Plan.

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
21 Ensure that the City website and any
internal employee resources are up-to-
date and accurate as they relate to
sustainability policies, procedures, and
plans.

Implemented In January 2022, the Office of Climate Action & Sustainability launched a monthly newsletter.

The newsletter publicizes sustainability
updates from across offices and departments.

The Office of Climate Action & Sustainability
webpage
(www.cityofsacramento.org/climateaction) is
kept up-to-date in conjunction with the
newsletter. Internally, GIS staff have
developed a Sustainability Data Resources Hub
to consolidate mapping resources for
sustainability-related projects, and the Office
of Climate Action & Sustainability staff
continue to build out the resources shared via
the Green Team's Microsoft Teams channels.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
22 Conduct internal outreach efforts to
improve awareness of and facilitate
further reductions in paper consumption.

Dropped With a significant portion of City staff
teleworking and many City processes
transitioned to digital forms due to the COVID-
19 pandemic, this item is now less relevant
than when originally recommended. For
example, in lieu of physical signatures on
printed forms, IT has expanded use of Adobe
Sign. In 2020, City staff made 15,440 digital
signature agreements. In 2021, this ballooned
to 37,071 digital signature agreements. As of
mid-June, in 2022 staff have made 13,992
digital signature agreements. IT has also
converted many formerly printed forms to
digital. IT converted 22 forms to digital in 2020,
20 forms in 2021, and 7 forms in 2022 as of
mid-June. Similarly, IT and CDD collaborated
transition Residential Production Permits from
a paper-based application to a digital
application. With this transition to digital
forms and signatures and away from paper
forms and in-office printing, staff education
around printing reduction is now less relevant.

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
23 Identify instances of non-compliance
with the Fleet Engine Idling Limit Policy
and hold employees accountable.

Partly
Implemented
Updated idling reports are available in
Samsara. Fleet generates regular reports for
DOU that supervisors review with their staff.

Broader use of the Samsara idling reports is
pending approval of the Idling Policy language
in the Transportation Policy.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
24 Review and update the Sustainable
Purchasing Policy.

Implemented The Sustainable Purchasing Policy has been
updated. Additionally, in March 2022, City
Council adopted an ordinance adding 3.56.075
to the Sacramento City Code, relating to the
procurement of organic mulch and paper (for
compliance with state regulations).

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
25 Develop a process for improving
accountability with the Sustainable
Purchasing Policy.

Partly
Implemented
The Sustainable Purchasing Policy (SPP) has
been updated to include compliance with
Senate Bill (SB) 1383. The K2 Pre-Requisition
and eCAPS Purchase Order tracking sections
are being updated to capture additional
information on City purchases that may be
affected by the SPP and SB 1383 requirements.

Once communication from City management
goes out regarding these requirements, the
Procurement Division will roll out tracking and
reporting procedures Citywide.

Awareness of and Compliance with
Sustainable Policies, Procedures,
and Plans Could Be Strengthened
26 Consider working with applicable City
vendors to implement website controls
that encourage more sustainable
purchases.

Started The Procurement Division is researching ways
to promote sustainable products through
some of the Citywide accounts that use online
platforms (such as Staples and Amazon).

Vendor Management

Finding # Recommendation Status Update

A Centralized Process for Receiving
Grant Applications and Aggregating
Funding Data Could Improve the
City’s Grants Management Practices
19 Develop a centralized process for
receiving grant applications and
aggregating funding data.

Started The IT Department is working with a third-
party vendor to develop and implement a
grants management software solution. They
are preparing to enter into Phase 2 of the
project which includes building, testing, and
deployment.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Vendor Audit of the Roberts Family Development Center

Finding # Recommendation Status Update

RFDC’s Financial Recordkeeping
System is Disorganized and
Contains Significant Material
Weaknesses
4 Document the specific source of funds
for which the State’s debt will be paid
and ensure restricted program funds and
grants are not utilized to make the debt
payments.

Implemented According to RFDC, unrestricted fundraising sources of income have been used to pay the
settlement with the State of California.

According to reports provided by the RFDC
Finance Director, RFDC paid $112,500 in
payments to the State of California and
received more than $215,000 in fundraising
revenue during fiscal year 2022. In July 2022,
RFDC received a letter from the California
Department of Justice confirming that the
settlement agreement amount has been paid
in full and RFDC no longer owes any money to
the Department of Housing and Community
Development in regards to the settlement.

RFDC Should Develop A Robust
System of Internal Controls to
Safeguard Charitable Assets,
Prevent Loss, and Ensure the
Reliability of Financial Records
8 Develop internal policies and procedures
based on best practices.

Implemented RFDC has implemented the Fiscal Policy and
Procedure Manual and updated the policy to
include other key functions such as fundraising
and volunteers.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of Cannabis Dispensary Permitting

Finding # Recommendation Status Update

Ownership of Cannabis Dispensary
Operating Permits were Transferred
Between Individuals and Corporate
Entities as a result of Ambiguity in
the City Code and an Evolving
Regulatory Environment
1 Seek direction from City Council to
determine whether dispensary transfers
should be allowed. The Office of
Cannabis Management in conjunction
with the City Attorney’s Office should
then propose a City Code update that
clearly articulates the policy and legal
goals of the City Council, that are in
conformance with State law.

Partly
Implemented
Proposals on dispensary ownership
recommended by Law & Legislation
Committee were approved by the Council on
May 31, 2022. OCM was directed to return to
Council with ordinances for adoption. OCM is
currently working with the City Attorney on
development of ordinances.

The City Needs to Better Define
Ownership if it Expects to Enforce
City Code Restrictions on
Ownership and Manage who is
Truly Behind its Permitted Cannabis
Related Businesses
2 In conjunction with the City Attorney’s
Office, seek direction from City Council to
determine whether both existing and
new cannabis storefront dispensary
owners must comply with City Code
provision 5.150.355 that states: “No
person who has an ownership interest in
a storefront cannabis dispensary shall
obtain an ownership interest in any other
storefront cannabis dispensary” and
clarify the City’s expectation on how the
code provision will be enforced.

Implemented Proposals on dispensary ownership
recommended by Law & Legislation
Committee were approved by the Council on
May 31, 2022.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The City Needs to Better Define
Ownership if it Expects to Enforce
City Code Restrictions on
Ownership and Manage who is
Truly Behind its Permitted Cannabis
Related Businesses
3 Seek direction from City Council to
determine standards and definitions of
ownership of cannabis dispensaries in
the City. At minimum, these discussions
should include a definition of clear
ownership and limits on ownership for all
cannabis dispensary owners. The Office
of Cannabis Management in conjunction
with the City Attorney’s Office should
then propose a City Code update that
articulates the ownership policy and
goals of the City Council, that are in
conformance with State law.

The City Needs to Better Define
Ownership if it Expects to Enforce
City Code Restrictions on
Ownership and Manage who is
Truly Behind its Permitted Cannabis
Related Businesses
4 In consultation with the Attorney’s
Office, design and implement an internal
control framework over the cannabis
permit application and renewal process
based on best practices. This should
include establishing an organizational
structure, segregate duties, and assign
responsibilities for the Office of Cannabis
Management to carry out the program
objectives. The internal control system
should also be documented and
communicated to those responsible for
performance and training should be
provided.

Partly
Implemented
OCM has developed draft policies and
procedures that provide guidance for the
Business Operations Permits (BOPs) processes
including application and renewal. Ensuring
that policies and procedures are regularly
updated for internal process changes and new
ordinances will be an important part of the
framework. Additionally, OCM is scheduled to
receive an internal controls review of its
permitting processes as part of the City
Auditor's continuous cannabis monitoring
program. As part of this review, internal
controls will be reviewed and
recommendations will be made as to how to
strengthen internal controls over permitting
activities.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Determining Beneficial Ownership
is Critical to Enforcing Ownership
Restrictions in the City’s Cannabis
Regulations
5 Incorporate researching beneficial
ownership into existing operations and
provide training to staff on how to
conduct this research or hire an outside
consultant to conduct this work on the
City’s behalf.

Implemented Proposals on dispensary ownership
recommended by Law & Legislation
Committee were approved by the Council on
May 31, 2022. OCM was directed to return to
Council with ordinances for adoption. OCM is
currently working with the City Attorney on
development of ordinances.

Measured Expansion in the Number
of Dispensary Permits Would be
Consistent with Municipal Best
Practices
6 Perform an economic analysis following
the addition of the 10 permits to
determine local cannabis dispensary
market demand and whether the 40
dispensaries is a sufficient number of
permits.

Started The ten additional storefront applicants have
been selected, however the dispensaries are
not yet operational. More time is needed
before evaluating the impact of these new
permits.

Continuous Cannabis Monitoring

Finding # Recommendation Status Update

The Office of Cannabis
Management Could Enhance Their
Policymaking Process to Ensure
New Policies are Effective at
Addressing Identified Issues.
1 Enhance the current policymaking
process by standardizing and
documenting the approach to policy
formulation and policy implementation.

Partly
Implemented
OCM has developed draft policies and
procedures that provide guidance for its
policymaking activities. Ensuring that policies
and procedures are regularly updated for
internal process changes and new ordinances
is an important part of an internal controls
framework. We are not aware of any updates
that have been made the draft policies and
procedures since February 2021, or whether
these policies and procedures have been
finalized.

The Office of Cannabis
Management Could Enhance Their
Policymaking Process to Ensure
New Policies are Effective at
Addressing Identified Issues.
2 Develop a formal process for policy
evaluation that considers whether the
policy achieved its intended objectives
and identifies unintended consequences.

Not Started OCM respectfully disagrees with this
recommendation and will not be implementing
it at this time. As policy is the subject of the
continuing audit, OCM expects to revisit this
item in the future with the Auditor.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Office of Cannabis
Management Could Better Meet
Their Stated Objectives by Providing
More Focused Education and
Increasing Community Outreach
Activities
4 Increase its youth education and
community outreach efforts to better
meet its stated objective.

Partly
Implemented
OCM has partnered with the City's Youth
Development Policy Office and contractors
PRO Youth and Families (PRO Youth), SCCY,
and the Social Changery in implementing
#SacYouthWorks: Futures (#Futures), a
positive youth development program that
incorporates underage marijuana use
prevention and education, and work-based
learning. #Futures builds on the City of
Sacramento’s successful #SacYouthWorks
program launched in July 2020 as a response
to COVID-19, as well as the SCCY’s Future
Forward campaign - a local underage
marijuana use prevention and education
campaign developed and designed in
partnership with our community’s youth.

Strengthening Security of the BOT
Cash Payment Process Could Help
to Reduce Risk.
5 Ensure staff understand the importance
of maintaining security for large cash
transactions and adhere to the Cannabis
Business Cash Tax Payment Procedures.

Implemented All Permits and Taxes staff in the Revenue
Division performing Cannabis Business
Operations Tax cash deposit intake are trained
in accordance with the Cannabis Business Cash
Tax Payment Procedures.

Strengthening Security of the BOT
Cash Payment Process Could Help
to Reduce Risk.
6 Review and revise policies and
procedures over vault keys and vault key
assignments to ensure that vault keys are
safeguarded at all times.

Partly
Implemented
The Revenue Division is in the process of
working with the City Hall Building Services
Manager to ensure all vault keys are
safeguarded at all times.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Strengthening Security of the BOT
Cash Payment Process Could Help
to Reduce Risk.
7 Review current security badge access
levels for the vault room to ensure all
users are granted access based on a
legitimate business need.

Implemented The City's Revenue Division worked with the City Hall Building Services Manager to identify
which City personnel had access to the vault in
the secure area of the Revenue Division and
updated access levels to ensure only
appropriate or essential City personnel have
access. It was also verified that there's no vault
badge access bundled in pre-existing packages
or templates when badge access is setup.

Strengthening Security of the BOT
Cash Payment Process Could Help
to Reduce Risk.
8 Implement a periodic review of vault
access to ensure that inappropriate users
are not added without management
approval.

Partly
Implemented
The City's Revenue Division worked with the
City Hall Building Services Manager to verify
who City personnel is with access to the vault
in the secure area of the Revenue Division and
updated access levels only to necessary and
essential City personnel. It was also verified
that there's no vault badge access bundled in
pre-existing packages or templates when
badge access is setup. The City's Revenue
Division will work with the City Hall Building
Services Manager to ensure vault access is
periodically reviewed.

Strengthening Security of the BOT
Cash Payment Process Could Help
to Reduce Risk.
9 Consider implementing additional
security measures identified.

Implemented The recommendation instructed the Revenue
Division to consider additional security
measures identified in the audit. The Revenue
Division has demonstrated that it has
considered the additional security measures
suggested and that they are not feasible at this
time. As such, we will close this
recommendation.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Four Cannabis Businesses Were
Operating Without a BOT
Certificate, Which Has Likely
Resulted in Uncollected Tax
Revenue.
10 The Revenue Division bring identified
cannabis businesses into compliance with
the City’s BOT regulations and collect
past due taxes.

Implemented The Permits and Taxes Team provided an
update on the cannabis businesses identified
in Recommendation #10. As of 7/15/2022, all
four businesses that were identified in the
report as not having a BOT Certificate are now
in compliance with the City's cannabis BOT
requirements.

Four Cannabis Businesses Were
Operating Without a BOT
Certificate, Which Has Likely
Resulted in Uncollected Tax
Revenue.
11 The Revenue Division and the Office of
Cannabis Management work
collaboratively to strengthen controls in
the BOT verification processes during
BOP issuance and renewal.

Partly
Implemented
The Permits and Taxes team in the City's
Revenue Division issues Cannabis Business
Operations Tax Certificates. The Office of
Cannabis Management (City Manager's Office)
issues the cannabis Business Operating
Permits. The two teams communicate
regularly across departments to share
information, report non-compliant businesses,
and inform one another of known new and
closed businesses. The Permits and Taxes team
will work with Office of Cannabis Management
to setup a more streamlined and formal
process to communicate overlapping business
functions to strengthen BOT verification
process controls.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Revenue Division Should
Expand BOT Compliance Audits to
Consider All Cannabis Businesses in
the City to Reduce the Risk of
Noncompliance.
12 Develop and implement a risk-based
approach to selecting cannabis
businesses for BOT compliance audits.

Partly
Implemented
The Permits and Taxes team in the City's
Revenue Division identifies Cannabis Business
Operations Tax audit subjects based on several
factors that includes, but not limited to, the
magnitude of taxes paid, potential problematic
tax reporting history, statute of limitations
status, and (sometimes) random selection. The
selection of Cannabis Business Operations Tax
audit subjects is also done in conjunction with
the City's contracted Cannabis Business
Operations Tax auditor, Avenu Insights and
Analytics, who also recommends audit
subjects. The selection of Cannabis Business
Operations Tax audit subjects incorporates a
risk based component as problematic
businesses and businesses with unexplained
consistent tax reporting variances have a
higher probability of being selected for audit.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Revenue Division Should
Expand BOT Compliance Audits to
Consider All Cannabis Businesses in
the City to Reduce the Risk of
Noncompliance.
13 Expand BOT compliance audits to include
all cannabis business types operating in
the City of Sacramento.

Partly
Implemented
The Permits and Taxes team in the City's
Revenue Division identifies Cannabis Business
Operations Tax audit subjects based on several
factors that includes, but not limited to, the
magnitude of taxes paid, potential problematic
tax reporting history, statute of limitations
status, and (sometimes) random selection. The
selection of Cannabis Business Operations Tax
audit subjects is also done in conjunction with
the City's contracted Cannabis Business
Operations Tax auditor, Avenu Insights and
Analytics, who also provides recommended
audit subjects. The selection of Cannabis
Business Operations Tax audit subjects is not
specific to any one cannabis business type as
the current practice selects audit subjects no
matter the area the business operates in the
cannabis industry.

Diversity Review of City Employment Applications, Hires, and Separations

Finding # Recommendation Status Update

Inconsistencies in How Hired
Applicants are Captured in Both
NeoGov
and eCAPS Creates an Analytical
Limitation
1 Establish controls that would require City
departments to utilize NeoGov for all
vacancies and
recruitments so NeoGov contains
complete recruitment, applicant, and
hire information.

Partly
Implemented
According to the Human Resources
Department, Youth Aide recruitments in the
Youth, Parks, and Community Enrichment
Department still have a hybrid recruitment
process. However, the number of paper
applications compared to online applications in
NeoGov is low.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

Audit of the Sacramento Community Police Review Commission

Finding # Recommendation Status Update

The Lack of Clearly Defined Roles
and Responsibilities has Led to
Confusion and Frustration
1 The City Council should clarify the
purpose, powers, and duties of the
Sacramento Community Police Review
Commission and how it interacts with
other City departments to achieve its
objectives. The City Council should
memorialize the specific purpose,
powers, and duties, through resolution,
ordinance, or codifying the changes in
the City Code.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
2 The City Council should determine the
staffing needs and responsibilities, and
funding for the Sacramento Community
Police Review Commission. The City
Council should memorialize the specific
role of staff provided, the funding source,
and what City office or department will
house the position, through resolution or
codifying the changes in the City Code.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
3 The City Council should determine the
training curriculum that SCPRC
Commissioners should be required to
complete and potential remedies if
training is not completed.

Not Started No progress has been made.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
4 The City Council should codify the
training requirements for the
Sacramento Community Police Review
Commission in, at minimum, City Council
ordinance. The Sacramento Community
Police Review Commission also should
include the training requirements in its
policies and procedures.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
5 Identify resources to provide the
Sacramento Community Police Review
Commission with an increased internet
presence.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
6 Work with the Sacramento Community
Police Review Commission, the City
Manager’s Office and City Council to
develop policies and procedures for
communicating with the public.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
7 Clarify whether the Sacramento
Community Police Review Commission is
responsible for issuing its own annual
report. The clarification should specify
the agency required to complete the
report, the frequency of the report
production and provide direction on the
information that should be included in
the report, such as recommendations,
plans for the upcoming year, and
information about public outreach.

Not Started No progress has been made.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
8 Identify key performance indicators to
gauge the effectiveness of the
Sacramento Community Police Review
Commission in meeting its purpose and
objectives.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
9 Provide secure email accounts for
Sacramento Community Police Review
Commission Commissioners and require
the use of these email addresses to
conduct Commission-related business.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
10 Develop and implement policies for email
use and provide training to the
Sacramento Community Police Review
Commissioners.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission Requires
Resources and Investment from the
City to Effectively Achieve its
Objectives.
11 Determine the level of access to
information across City government
needed by the Sacramento Community
Police Review Commission to fulfill its
City Code mandated duties. The City
Council should memorialize the
Sacramento Community Police Review
Commission’s access to information in
either resolution, ordinance, or in the
City Code.

Not Started No progress has been made.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Sacramento Community Police
Review Commission is in Need of a
Recommendation and Follow-Up
Process to Ensure the
Recommendations are
Documented, Presented to the City
Council, and Recommendations
that are Approved are Implemented
by the Relevant Department.
12 Determine an agreed-upon format for
Sacramento Community Police Review
Commission recommendations. The
format should direct the specific
information to be required in each
recommendation. Finally, the process
should be memorialized in City Council
resolution or ordinance.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission is in Need of a
Recommendation and Follow-Up
Process to Ensure the
Recommendations are
Documented, Presented to the City
Council, and Recommendations
that are Approved are Implemented
by the Relevant Department.
13 Determine whether the Sacramento
Police Department should provide
written responses to Sacramento
Community Police Review Commission
recommendations. This dialogue should
identify the form the response will be
provided in. Finally, the City Council
should consider memorializing the
process in resolution or ordinance.

Not Started No progress has been made.

This dialogue should identify a process
for the presentation of the
recommendations and vote. Finally, the
process should be presented to City
Council to be memorialized in City
Council resolution or ordinance.

Not Started No progress has been made.

For interactive dashboards and copies of past reports, visit our website:
https://www.cityofsacramento.org/Auditor/Reports/Recommendation-Follow-Ups

The Sacramento Community Police
Review Commission is in Need of a
Recommendation and Follow-Up
Process to Ensure the
Recommendations are
Documented, Presented to the City
Council, and Recommendations
that are Approved are Implemented
by the Relevant Department.
15 Determine whether the City should track
and report on the implementation status
of Sacramento Community Police Review
Commission recommendations. The City
Council should consider adopting a
process to track and report on the
implementation status of SCPRC
recommendations that includes the
department responsible. Finally, the City
Council should consider whether to
memorialize the requirement and
process in resolution or ordinance.

Not Started No progress has been made.

The Sacramento Community Police
Review Commission is in Need of a
Recommendation and Follow-Up
Process to Ensure the
Recommendations are
Documented, Presented to the City
Council, and Recommendations
that are Approved are Implemented
by the Relevant Department.
16 Determine whether to provide resources
for making SCPRC recommendation
responses and implementation status
publicly available in a transparent and
timely manner. The City Council should
identify additional funding for the
tracking process. Finally, the City Council
should consider whether to memorialize
the funding provision in resolution or
ordinance.

Not Started No progress has been made.

Sacramento City CouncilOctober 11, 2022

Sacramento City Council
October 11, 2022