City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01090 5/28/2024 Discussion Item 13.
City Auditor’s Proposed Work Plan for Fiscal Year 2024/25 File ID: 2024-01090
Location: Citywide
Recommendation: Adopt a Resolution approving the City Auditor’s Proposed Work Plan for Fiscal Year (FY) 2024/25.
Contact: Farishta Ahrary, Interim City Auditor, (916) 808-7266, [email protected], Office of the City Auditor
Presenter: Farishta Ahrary, Interim City Auditor, (916) 808-7266, [email protected], Office of the City Auditor
Attachments:
1-Description/Analysis
2-City Auditor’s Proposed Work Plan for Fiscal Year 2024/25 3-Resolution
Description/Analysis
Issue Detail: The mission of the Office of the City Auditor is to provide a catalyst for improvements of municipal operations, promote credible, efficient, effective, fair, focused, transparent, and a fully accountable City Government. The Office of the City Auditor conducts performance audits, research, analysis projects, and is responsible for managing the City’s Whistleblower Hotline. City Code Section 2.18.030 requires that the City Auditor submit an annual work plan to the City Council for approval. This report sets forth the City Auditor’s Annual Work Plan for FY2024/25.
Policy Considerations: The City Auditor’s presentation of the annual work plan is consistent with the Mayor and City Council’s intent to have an independent audit, research, and analysis function for the City of Sacramento.
Economic Impacts: None.
Environmental Considerations: None.
File ID: 2024-01090 5/28/2024 Discussion Item 13.
Sustainability: None.
Commission/Committee Action: On April 9, 2024, the Budget and Audit Committee passed a motion to bring the City Auditor’s Annual Work Plan for FY2024/25 back to the Budget and Audit Committee with revisions. On May 7, 2024, the Budget and Audit Committee passed a motion to accept the City Auditor’s Annual Work Plan for FY2024/25 and to forward to City Council for approval.
Rationale for Recommendation: This staff report provides the City Council with an opportunity to provide comments and feedback before approving the City Auditor’s proposed annual work plan.
Financial Considerations: This report does not have any financial impact. Once the workplan is approved, the costs of the audits will be funded out of the Office of the City Auditor operating budget.
Council authority for any additional appropriation authority necessary to complete the workplan will be brought back to Council.
Local Business Enterprise (LBE): None.
INSIDE
Our Mission
Performance Audit Plan
Cannabis Compliance Audit Plan
DOU Audit Plan
Research & Analysis Work Plan
Whistleblower Investigative Audits
Audit Selection Process
Auditor’s Authority
2024/25 WORK PLAN
Office of the City Auditor
OUR MISSION
The Office of the City Auditor is an essential element of the City of Sacramento's public accountability. Our mission is “To provide a catalyst for improvements of municipal operations, promote credible, efficient, effective, equitable, fair, focused, transparent, and a fully accountable City Government.“
The Office of the City Auditor provides independent, objective, and reliable information regarding the City's ability to meet its goals and objectives, and establish an adequate system of internal controls. In many cases, this involves verifying compliance with laws and regulations, assessing the efficiency and effectiveness of the City's operations, and identifying internal control weaknesses and failures. As part of our work, we provide recommendations to improve City services, root out improper governmental activities (i.e., fraud, waste, or abuse), and assess racial, gender, and ethnic inequities.
City Code Section 2.18.030 requires that the City Auditor submit an Annual Work Plan to the City Council for approval. This report sets forth the City Auditor’s Annual Work Plan for FY 2024/25.
Our risk-based work plan is designed using a combination of qualitative and quantitative measures. By considering a wide variety of information sources, the intent is to submit to the City Council for its approval a work plan that promotes fairness and ensures the City Auditor’s Office will continue to be value-added for the City of Sacramento by focusing its resources on areas with the highest audit potential.
The results of this process form the basis for the City Auditor’s Annual Work Plan.
In a nticipation of Council requests for analysis and information, we have reserved some of our Office’s resource capacity so we can respond to those requests in a timely manner.
I am pleased to present you the Proposed Annual Work Plan for FY 2024/25. My team and I look forward to providing the City Council and the public with recommendations on improving the efficiency and effectiveness of City operations.
Sincerely,
Farishta Ahrary
Interim City Auditor
FY2024/25 Work Plan | Office of the City Auditor | Sacramento, CA
PERFORMANCE AUDITS (4 FTE)
Audits in Progress
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA Fire
Department
Emergency Medical
Services
This audit will evaluate service delivery and general EMS operations to determine if adequate controls are in place to ensure efficient and effective performance.
Police
Department
Evidence and
Property Division
This audit will determine whether appropriate controls exist over property and evidence room inventory including intake, disposition, storage, preservation, and security.
Human
Resources
Complaint
Investigation and
Resolution Practices
The City’s complaint investigation and resolution process involves allegations of workplace discrimination, harassment, and employee wrongdoing. We will partner with the Office of Public Safety Accountability to evaluate the City’s processes related to complaint intake, investigation, and disposition.
Citywide Homeless Response
– Part 1
The audit will evaluate whether the set -up of the City’s homeless data system as well as the data currently collected and reported across the homeless system to meet the
objectives for achieving these respective missions and
determine whether gaps exist between interdepartmental or interagency coordination that create barriers to ensuring clean and clear streets while also supporting successful exists from homelessness.
Police
Department
Military Equipment
Use Policies and
Inventory Practices
The audit will evaluate whether the Sacramento Police
Department’s military equipment inventory
management policies and procedures comply conform
with best practices, state and city laws.
Community
Development
Department
Animal Care Services The City’s Animal Care Services Division provides animal care services including sheltering, adoption, community outreach, code enforcement, and abuse investigations. This audit will assess compliance with applicable laws and
evaluate shelter practices aimed at protecting the health, safety and welfare of shelter animals, staff, volunteers, and the public.
Planned Audits
Citywide Homeless Response
– Part 2
The audit will evaluate whether a sample of City contracts with homeless service providers are designed consistently and administered efficiently and effectively.
PERFORMANCE AUDITS
Planned Audits, Continued from Previous Page
Citywide Pedestrian Safety One of the City’s most important responsibilities is to ensure the safety of residents and visitors. The objective of this audit is to evaluate the enforcement, education, and operations of the City’s programs responsible for pedestrian safety.
Community
Development
Department
Planning Division The Planning Division provides permit services to customers seeking a building permit. This audit will review compliance with applicable laws and regulations, evaluate efficiency of application submittal and permit review cycle operations, and assess permit review programs such as the Expedited Plan Review program.
Council
Requests
Council
Requests
In response to new Council requests for analysis and
information, we will postpone or remove existing projects and present the amended Work Plan to City Council for
approval so we can respond to those requests in a timely manner.
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA
CANNABIS COMPLIANCE WORK (1 FTE)
Police
Department
Illegal Cannabis
Cultivation
Unlicensed and criminal cannabis activity continues to run rampant throughout the state. This audit will evaluate the City’s ongoing efforts to crack down on illegal cannabis grow
operations.
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA Work in Progress
The Cannabis Auditor developed a multi-year cannabis work plan that was approved by City Council in May 2023.
Planned Audits
Citywide Audited CBOT
Amount for
Sacramento
Children’s Fund
In accordance with the Sacramento Children and Youth Health and Safety Act (Measure L), the City Auditor will annually publish an audited amount of Cannabis Business Operations Tax (CBOT) by January 15th, starting in 2025.
Citywide Continuous
Monitoring
The Cannabis Auditor performs ongoing monitoring of
Cannabis Policymaking, Education, and Outreach; Cannabis Business Operation Tax; and Cannabis Code Enforcement
Activities.
DEPARTMENT OF UTILITIES AUDITS (1 FTE)
Planned Audits
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA Energy Use The City of Sacramento aims to mitigate negative impacts such as greenhouse gas emissions, pollution, dependence on non-renewable resources, and over - or excessive use of natural resources. This audit will evaluate the feasibility of DOU operations moving to 100% electric. This will include a cost -benefit analysis of DOU’s solar power purchase agreements, evaluating use of solar shares, cost - benefit analysis of participating in SMUD’s automated demand response program, and review of the impacts of fleet electrification on department operations and emergency responses.
Utility Invoices In March 2020, the Citywide Innovation and Efficiency Assessment, Potential Strategies recommended third-party audits of utility invoices to potentially identify cost savings. This internal audit will analyze the utility invoices received by DOU such as electricity, telecommunications, gas, recycling, solid waste, and organic waste to determine if charges appear appropriate.
Special Projects
Succession
Planning and
Turn-over
Analysis
Due to the number of ongoing vacancies and anticipated retirements, it is critical that DOU be adequately prepared to address staffing challenges. This project will analyze the department’s turnover and succession planning practices and identify potential strategies for DOU to consider.
Audits in Progress
The DOU Auditor has developed a multi-year audit plan that includes Audits and Special Projects. Items listed below are anticipated to be initiated in FY 2024/25.
Water and
Wastewater Fund
Reviews
These reviews will analyze the fiscal sustainability of the Water Fund and the Wastewater Fund and forecast future revenues based on various scenarios, including potential rate increases.
RESEARCH & ANALYSIS WORK PLAN (3 FTE)
Audits in Progress
Ethics
Commission
Ethics Commission
Assessment
The City Auditor will perform an assessment of the Ethics Commission’s ability to meet the purpose and duties established by the City Council. This may include an assessment of relevant processes and policies, review of complaint intake procedures, and a benchmark study to identify best practices.
Citywide Audit of the
Transient
Occupancy Tax
A Transient Occupancy Tax (TOT) of 12% is charged for all people who exercise occupancy at a hotel in the City of Sacramento (City Code 3.28). This audit will evaluate
compliance, enforcement, and revenue collection associated with TOT.
Citywide Triennial Diversity
Review of
Employment
Applications and
Separations
This triennial review will assess the diversity of City job applicants, hired employees (new hires, re-hires, and
promotions), and former employees as it compares to the diversity of City of Sacramento residents. The review will also analyze trends to identify potential equity concerns.
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA Ad Hoc Audits
Citywide Potential Cost Savings
and Revenue Recovery
Audit Services
In March 2020, the Citywide Innovation and Efficiency
Assessment, Potential Strategies recommended third-party audits to potentially identify cost savings. In alignment with this recommendation, we will explore entering into contingency contracts with a vendor to conduct these and/or other audits to recover potential past taxes or any other monies or revenue owed to the City that were not properly attributed to the City or were not properly paid/collected and to determine potential future taxes and other monies owed to the City not previously counted.
Council
Requests
Council
Requests
In response to new Council requests for analysis and
information, we will postpone or remove existing projects and present the amended Work Plan to City Council for approval so we can respond to those requests in a timely manner.
RESEARCH & ANALYSIS WORK PLAN
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA Recurring Reports
Citywide Sacramento
Children’s Fund -
Baseline Funding
Verification
(Annually)
City Charter section 120(e)(1)(c) requires that by January 15 th
of each year, the City Auditor verifies that the baseline funding amount for the Sacramento Children’s Fund was expended in the previous fiscal year.
Citywide Biannual Community
Survey
(FY 2026)
This project may be used to prioritize community issues and services that respondents feel need the most improvement.
Repeating this survey annually will allow the City to identify trends and gauge whether policy changes and priorities are improving residents’ quality of life and their opinions regarding various issues and City services.
Citywide Triennial Review of
City Employee
Diversity, Equity, and
Inclusion
(FY 2025)
This triennial review will assess the diversity of City of Sacramento employees as it compares to the diversity of City of Sacramento residents. The review will also analyze trends to identify potential equity concerns. We will continue to update the City of Sacramento Gender and Ethnic Diversity Dashboard annually.
Citywide Triennial Diversity
Review of
Employment
Applications, Hires,
and Separations
(FY 2026)
This triennial review will assess the diversity of City job applicants, hired employees (new hires, re-hires, and
promotions), and former employees as it compares to the diversity of City of Sacramento residents. The review will also analyze trends to identify potential equity concerns.
WHISTLEBLOWER INVESTIGATIVE AUDITS (ALL STAFF)
Citywide 140 Whistleblower Tips Based on historical trends, we anticipate receiving approximately 140 whistleblower tips in FY2024/25. We will report the results of these tips in our Semi -Annual Whistleblower Hotline Activity Reports.
Projected Whistleblower Tips
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA Whistleblower Tips in Progress (as of January 1, 2024)
Citywide 3 Whistleblower Tips Open whistleblower tips include: insufficient action by the City, safety and sanitation issues, and unrelated to the City.
Historic Information (as of January 1, 2024)
AUDIT SELECTION PROCESS
The City Auditor’s Work Plan is developed on an annual basis; however, the City Council may add projects to the work plan during the year and the City Auditor may propose additional work should new risks emerge.
Audit topics are selected using a combination of quantitative and qualitative factors that come from a variety of sources. Areas of risk that may be assessed when evaluating risks related to a department or division include, but are not limited to:
Annual Budget
Number of Employees
Funding Sources
Age of Programs
Fiscal Sustainability
Customer Satisfaction
Regulatory Compliance
Significant Changes
Criticality
Emerging Areas of Risk
Input from elected officials, city management, the whistleblower hotline, and the public is also taken into account when developing the annual work plan.
AUDITOR’S AUTHORITY
The City Council appoints the City Auditor to promote efficient, effective, transparent, and accountable City government. The City Auditor reports directly to City Council and has full responsibility for the direction and management of the Office of the City Auditor. The City Auditor works closely with the City Council, Budget and Audit Committee, Charter Officers, Department Directors, and Division Managers when conducting audits and evaluating programs.
The City Auditor conducts audits in accordance with Generally Accepted Government Auditing Standards (GAGAS) and provides City Council and the public with objective, timely, and accurate information about the City government. Findings and recommendations are designed to save tax dollars and improve City operations.
In November 2018, the Sacramento City Government Accountability and Efficiency Act (Measure K) was passed by voters. This established the City Auditor as a charter officer and combined the duties of the City Auditor and the Independent Budget Analyst. City Code 2.18 Office of the City Auditor outlines the office’s duties and establishes the City Auditor’s access to information.
FY 2024/25 Work Plan | Office of the City Auditor | Sacramento, CA RESOLUTION NO.
Adopted by the Sacramento City Council
APPROVING THE CITY AUDITOR’S ANNUAL WORK PLAN FOR FISCAL YEAR (FY) 2024/25
BACKGROUND
A. City Code Section 2.18.030 requires that the City Auditor submit an Annual Work Plan to the City Council for approval.
B. The Annual Work Plan contains the planned projects to be completed during the upcoming fiscal year.
C. Significant audit fieldwork cannot proceed without the adoption of the work plan by a majority of the City Council.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Auditor’s Work Plan for FY2024/25, attached as Exhibit A, is approved.
Section 2. Exhibit A is a part of this Resolution.