To save money, the City Council is considering dramatic reductions or total elimination of a department whose sole objective is to find inefficiencies and waste in city government.
Early in 2013, the council will consider cutting up to $272,971 from the $140 million city budget and eliminate the city’s Internal Audit Department.
During the budget debate last month, Councilman Marty Bender, R-at large, proposed cutting the entire allocation for the department from the 2013 budget and thus shutting down the operation.
We’re already covered by the State Board of Accounts, Bender said at the time. I don’t see a reason to have that particular department.
But the State Board of Accounts examines only the city’s financial statements. Its job is to ensure those statements accurately represent the city’s financial position.
The city’s Internal Audit Department, according to its mission statement, examines financial and operating information, identifies and minimizes risks to the city, ensures regulations, laws, policies and procedures are followed and standards are met and that resources are used efficiently and economically.
Internal Audit is critical in these times, Deputy Mayor Mark Becker said. Without strong internal controls, some bad things could happen.
Bender’s proposal failed, drawing only three of the nine council members’ votes, but Councilman John Crawford, R-at large, then proposed cutting $198,000 from the department’s budget, leaving only enough to pay for it for the first quarter of 2013.
That, he said, would give officials time to revamp their mission or reorganize staff or justify their current makeup and come back to the council for a final decision.
That proposal passed 7-2, meaning the department could cease to exist April 1.
Tracy Neumeier, director of the Internal Audit Department, citing the political situation, said it would be best not to comment for this story.
Carol Helton, city attorney and a member of the Audit Committee the department reports to, said Internal Audit has become more than just a financial watchdog.
A lot of departments use Internal Audit as a resource, Helton said. If they’re getting a new computer system, or they have some specific issue, or they want Internal Audit to look at a process and see if it can be done better, they go to them.
There is no way to know how much fraud and waste have been prevented by the department, but just this year its auditors found issues with take-home cars; found that Animal Care & Control had no way to track pet licenses sold by veterinarians; that City Utilities had paid more than $7,000 a year for data lines it wasn’t using; and that unauthorized users might still have access to city computer systems.
Most recently, auditors found that high-risk buildings – those holding 1,000 or more people, schools, hospitals, nursing homes, child-care centers and high rises – were not getting their required fire inspections because of a shortage of inspectors. That situation also led to a lack of emergency plans and fire drills for those buildings.
Even though the audits often show problems with city government, Mayor Tom Henry’s administration said pointing out such flaws is critical for improvement.
In the public sector, you have the importance of transparence, Becker said. In the private world, internal audit departments are doing the same thing, but you’re not reading about it on the front page of the newspaper. (Publicizing it) is a good thing, though, because it keeps us accountable.
Helton said much of the value of Internal Audit’s work can’t be quantified because it prevents things from happening. Its main focus, she said, is to ensure controls are in place to avoid problems.
It’s absolutely crucial to have those controls in place, Helton said. They’re really the eyes and ears into the administration what we’re doing on a day-to-day basis and how we do it.
Still, Becker said, the council’s scrutiny gives the city a chance to do for Internal Audit what the department does for the city: make sure it is operating in the most effective and efficient way possible.
It’s a good opportunity for us to kind of step back, Becker said. The ordinance (creating and governing the department) probably hasn’t been looked at for many years. This provides us with an opportunity to see if we can do it better.
Becker said the city is in the process of appointing a committee to study the issue and has already begun examining almost 20 other cities of similar size to see how they handle internal auditing functions. Of those cities, he said, only one does not have an internal audit department.