2024-031 FY 2024 Informal Audit Follow-Up Report August 16,2024 Report No. 2024-031
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Fiscal Year 2023-24 Internal Audit Informal Follow-Up Review Report
BACKGROUND:
The City Auditor's Office has completed informal follow-up reviews of the audit projects listed
below. We conducted this performance audit per generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and conclusions based on our
audit objectives.We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
Previously, the City Auditor's Office completed formal follow-up reviews of the following audit
projects and found that only a few recommendations were outstanding:
Project 005—Audit of Utility Street Cuts;
Project 012—Audit of Economic Development: Recruitment& Expansion;
Project 014—Facilities Maintenance;
Project 016—COVID-19 Response: Pandemic Preparedness;
Project 019—Municipal Court Payments; and
Project 022—Building Permit Processes.
This report intends to provide an update on the 11 outstanding recommendations from each project.
Audit fieldwork was conducted during Dec. 2023 and Jan., March, April, May, July and Aug.
2024. The scope of the review varied depending on the procedure being performed. The following
list summarizes major procedures performed during this time:
• Reviewed documentation from the issued audit and follow-up reports relevant to the 11
outstanding recommendations;
• Examined right-of-way permit inspection documentation and the City's 2024 Standard
Construction Details;
• Interviewed Economic Development Department management and reviewed the City's
amended contract with the Chamber of Commerce;
• Compared facility access card users with active employees and reviewed available
timeliness and work order reports;
• Interviewed Fire management regarding the Business Continuity Plan;
• Reviewed new manual citations standard operating procedure and observed citation
database; and
• Examined building permit quality control inspection documentation and related standard
operating procedures.
City management is responsible for ensuring that resources are appropriately managed and used
in compliance with laws and regulations;programs are achieving their objectives; and services are
being provided efficiently, effectively, and economically.
August 16,2024 Report No. 2024-031
DISCUSSION:
Project 005—Audit of Utility Street Cuts
Previously, the City Auditor's Office completed a follow-up review of the Audit of Utilit.. Street
Cuts in Dec. 2020 and a second follow-up review of the Audit of Utility Street Cuts in Aug.
2023. At the time of the second review, Staff found that 11 of the issued 13 recommendations
had been implemented. The remaining recommendations and the follow-up results are shown
below:
2. Develop patch ride quality testing criteria.
Management Response: Concur
Staff will adopt later this summer [2019] a standard procedure for determining the level of
ride quality required when assessing a patch. Staff will review other agencies and city's
requirements as a reference for the City of Denton's standard procedure.
Audit Follow-Up Finding: Implemented
The City's Standard Construction Specifications require utility cut patches to meet certain
ride quality standards; however, Public Works Inspections staff did not verify that patches
met ride quality standards during the original audit period. For reference, utilities must
occasionally cut into streets to perform work on utility lines that run underneath the City's
roadway network, as illustrated in Figure 1.
Figure 1: Utility Street Cut Illustration
Patch
Pavement Surface
r
Road Base Trench
Backfill
Road Subgrade •
Since then, a procedure to test ride quality after a street is patched was adopted in Aug. 2023.
Based on a review of 15 right-of-way permits with forms inspections performed during June
and July of 2024, six of nine that required a ride quality test were completed appropriately.
Based on a discussion with management,the missing tests were due to inspector uncertainty
around whether ride quality tests should be performed on restorations completed by the
Street Division only. Public Works Inspections Division management stated they will update
the standard operating procedure to ensure these restorations are tested for ride quality in the
future.
4. Require all restoration contractors to comply with City standards.
Management Response: Concur
August 16,2024 Report No. 2024-031
The Utility has begun requiring adherence to City Standards on non-emergency work. Staff is
working with engineering and inspections to determine if alternative standards are
acceptable. If so, these will be noted in later revisions of the standard details.
Audit Follow-Up Finding: Implemented
During the original audit,the City's Standard Picture 1: Flexbase Backfi111vlaterial
Construction Details required utilities to backfill the
top of their utility trenches with a concrete
"flowable"backfill. The original audit found that the
City's Water Utilities were not using this required
backfill material and instead would often use the
material that had been excavated or a crushed -
aggregate material known as "flexbase" as shown in -
Picture 1.
As reported in the original audit, flexbase is generally used when constructing large sections
of roadway and is not necessarily an inappropriate backfill material for utility street cut
trenches. However, requiring external utilities to meet a different standard than internal
utilities creates inequities. In June 2024, the City updated its standard details to allow
external utilities to use flexbase when restoring utility street cuts.
Project 012—Audit of Economic Development: Recruitment & Expansion
Previously, the City Auditor's Office completed a follow-up review of the Audit of Economic
Development: Recruitment&Expansion in September 2022. At that time, Staff found that ten of
the issued 11 recommendations had been implemented. The remaining recommendation and the
follow-up results are shown below:
5. Require Economic Development and Chamber staff to report the outcomes of their marketing
effort to achieve program objectives as established by the City Council.
Management Response: Concur
Both the City's Economic Development Department and the Chamber's economic
development staff will be engaged in the strategic planning process, which will include the
development of new metrics and performance measures. Management concurs that both City
and Chamber staff should report and focus on efforts to meet the goals and outcomes
established in that process. In addition, as the Chamber provides a service to the City under a
contract, the Chamber should also comply with metrics and performance measures
established in that agreement.
Audit Follow-Up Finding: Obsolete
Since the original audit, the City has amended its agreement with the Chamber of Commerce
to shift the responsibility for economic development marketing activities from the Chamber
to the City. Due to staff vacancies,performance measures to track economic development
including recruitment and marketing, small business support,workforce development, and
downtown initiatives have not yet been developed.
August 16,2024 Report No. 2024-031
Project 014—Audit of Facilities Maintenance
Previously, the City Auditor's Office completed a follow-up review of the Audit of Facilities
Maintenance in February 2022 and a second follow-up review of the Audit of Facilities
Maintenance in September 2023. At the time of the second review, Staff found that four of the
issued seven recommendations had been implemented. The remaining recommendations and the
follow-up results are shown below:
3. Formalize facility access procedures.
Management Response: Concur
Management agrees and is currently transitioning the security access request process to the
TMA Work Order system. This system will centralize and ensure tracking and
documentation retention for each request. While the Audit was specific for access cards.
Management also recommends evaluating a centralized city-wide key management program
for all city facilitates. The currently used TMA software has a Key Management Module that
can be added to ultimately facilitate this program if warranted. Management would anticipate
a city-wide evaluation of implementing a key management program would be conducted in
FY20-21.
Audit Follow-Up Finding: Implemented
Since the original audit, the Facilities Management has substantially completed transitioning
the City's physical security access control to a new system and has established standard
operating procedures that adequately detail physical security access system management. In
addition, actual system access management has significantly improved since the second
follow-up review was conducted in 2023 as detailed in Table 1.
Table 1: Access Review Results
Potential Issue 2023 2024
Users Percent Users Percent
All City Users 1,940 69.1% 2,399 78.8%
No Issue 1,753 90.4% 2,365 98.6%
Potentially Terminated 136 7.0% 4 0.2%
Potential Inappropriate Access 51 2.6% 30 1.3%
Non-City Users 866 30.9% 646 21.2%
All Users: 2,806 100.0% 1 3,045 100.0%
5. Investigate ways to more accurately report on the timeliness of work order completion in
TMA.
Management Response: Concur
Management agrees and will be updating the reporting system to appropriately reflect when
the technician completes the repairs and not when the work order is closeout after receipt of
invoices.
Audit Follow-Up Finding: Implemented
Since the original audit, Facilities has transitioned work order management to a different
asset management system that the City already owned, which appears to have improved
reporting capabilities. In addition, a timeliness goal of closing work orders within ten days of
August 16,2024 Report No. 2024-031
the request has been established and Facilities has begun reporting on compliance with this
goal to City management quarterly. Based on the available reports, Facilities meet this goal
about 88 percent of the time.
6. Explore the reporting capabilities of TMA to improve the Division's ability to identify
equipment with repeat repair issues.
Management Response: Concur
Management agrees and will be training staff to utilize the enhanced reporting capabilities
within TMA. The TMA system is being setup to include monthly asset reports that will be
reviewed during staff meeting to identify any equipment or assets that have numerous work
orders.
Audit Follow-Up Finding: Implemented
Similar to the original audit, there is currently no systematic process to review assets to
identify repeat repair issue trends, instead technician judgement is relied on. However, the
new Facilities work order management system's improved reporting capability allows
technicians to easily verify if their judgement is correct and provides better insight into the
type and frequency of repairs occurring by asset when queried—improving the Division's
ability to identify repeat repair issues.
Project 016—Audit of COVID-19 Response: Pandemic Preparedness
Previously, the City Auditor's Office completed a follow-up review of the Audit of COVID-19
Response: Pandemic Preparedness in May 2023. At that time, Staff found that eight of the issued
nine recommendations had been implemented. The remaining recommendation and the follow-
up results are shown below:
7. Incorporate planning for telework during pandemics into the existing Business Continuity
Plan.
Management Response: Partially Concur
Technology Services partially concurs. Technology Services agrees that very specific and
unusual department needs for remote work should be included in the business continuity plan
(BCP). For example,providing Engineering access to their desktops to run applications too
powerful for their laptops was outside of normal operations and should be included. Remote
work technology(work from home) is considered a normal day to day technology
function/service and not something utilized just in an emergency situation. For instance,
we've always provided corporate Wi-Fi and corporate VPN prior to the pandemic. During
the beginning stages of the pandemic, Technology Services was busier than normal, but did
not provide services beyond normal operations. As a result, Technology Services did not
activate the Technology Services BCP plan.
Audit Follow-Up Finding: In Progress
During the original follow-up review, staff reported that the responsibility for maintaining
the city's Business Continuity Plan had been transitioned from Technology Services to the
Fire City's Emergency Management Office within the Fire Department. Since then, the
Emergency Management Office has determined that the Business Continuity Plan will be
August 16,2024 Report No. 2024-031
incorporated into the City's Continuity of Operations Plan, which is being updated with
expected completion in October 2024.
Based on this, Audit believes the risk will be addressed in early Fiscal Year 2024-25 and
feels comfortable recommending this project be considered complete with an 89 percent
Implementation rate.
Project 019—Audit of Municipal Court Payments
Previously, the City Auditor's Office completed a follow-up review of the Audit of Municipal
Court Pam in April 2023. At that time, Staff found that ten of the issued twelve
recommendations had been implemented. The remaining recommendations and the follow-up
results are shown below:
1. Develop a process in consultation with the City's public safety agencies for timely
submission of manual citations with the Municipal Court Administration.
Management Response: Concur
The Records Management Division will electronically scan manual citations to Municipal
Court during business hours to expedite the internal process. A Standard Operating Procured
pertaining to this procedure will be added to the Records Management SOP manual.
Audit Follow-Up Finding: In Progress
Occasionally,public safety agencies in the City of Denton must issue manual citations. The
original audit found that manual citations were supposed to be recorded in the Municipal
Court's case management system within five days of being issued; however, manual citations
were not always recorded within that timeframe.
In August 2024, the Police Department implemented a standard operating procedure
outlining the manual citation process as illustrated in Figure 2. While this process has been
created, no manual citations have been submitted since implementation, so the impact on
timeliness could not be evaluated.
Figure 2: Manual Citation Process
Records
•Issue Manual Division Process Citations
Citation into Courts
r-Verify citation informations stem
•Drop Citation and Yany voided citations mpleteness
in mailroom -Log citation in
database
•Submit to Courts
Officer Courts
August 16,2024 Report No. 2024-031
Based on this, Audit believes the risk will be addressed in early Fiscal Year 2024-25 and
feels comfortable recommending this project be considered complete with a 92 percent
Implementation rate.
2. Maintain a database of manual citations received and create a process for reconciliation of
manual citations in consultation with the public safety agencies.
Management Response: Concur
The Police Quartermaster will maintain a database to record the number of manual citation
books issued,unused and destroyed inventory. The Records Management Division will
maintain an electronic database of manual citations issued, connected, voided and/or
returned. The division will disseminate this information to Municipal Court for
reconciliation.
Audit Follow-Up Finding: Implemented
The original audit found that manual citations were issued by the Municipal Court
Administration Division to different public safety agencies but did not track to whom each
citation book was issued. In addition, there were often gaps in citation numbers increasing
the risk that citations could be lost or abused.
As part of its new standard operating procedure, the Police Department has created a
database to log manual citations received, allowing for easy reconciliation. In addition,
previous follow-up work found that new citation books were ordered and to whom each book
was issued is now being tracked by the Police Department's quartermaster, increasing
accountability.
Project 022 —Audit of Building Permit Process
Previously, the City Auditor's Office completed a follow-up review of the Audit of Building
Permit Processes in May 2023. At that time, Staff found that nine of the issued eleven
recommendations had been implemented. The remaining recommendations and the follow-up
results are shown below:
5. Develop a formal inspection review process to provide assurance that inspections are being
completed effectively and in accordance with the Division's quality standards.
Management Response: Concur
Staff ran a test of the new quality control inspection procedures in April 2023. This appears
to meet most of the documentation needed,but not all. Staff is exploring new software to
obtain this needed documentation capability in the reporting structure. A formal policy has
been created to incorporate the rest of the supervising team. Checklists for the supervising
team will follow in the coming months.
Audit Follow-Up Finding: Implemented
The original audit found that building permit scheduling practices might impact inspection
quality as there was no limit on the number of inspections that could be scheduled for one
day. For this reason,Audit recommended a formal inspection review process as a quality
control measure to promote inspection compliance and further safeguard the public's health
and safety.
August 16,2024 Report No. 2024-031
Since then, Development Services has established a quality control policy that requires
building inspections supervisors to complete weekly quality control inspections. Based on
review, these inspections are being performed though the exact method and frequency has
not yet been set.
6. Establish a process to provide assurance that variable daily inspection workload does not
impact the quality of inspections.
Management Response: Concur
New software failed meeting the expectations that was to be up and running by the end of
July, the update was to include time tracking for inspections. Additionally, the Building
Safety Team has a third-party inspection company available if workloads become too heavy
or the team experiences an increase in absences.
Audit Follow-Up Finding: Implemented
Development Services has established an inspections policy that provides guidelines on how
to supplement building permit staff if their workload becomes too great. In addition, the
implementation of the inspection quality control process should help to identify impacts to
quality due to workload.
CONCLUSION:
Based on the information presented in the above Discussion section, the status of each
recommendation is summarized below:
Recommendation Mgmt. Response Status
005 Audit of Utility Street Cuts
2. Develop patch ride quality testing criteria. Concur Implemented
4. Require all restoration contractors to comply
with City standards. Concur Implemented
012 Audit of Economic Development: Recruitment& Expansion
5. Require Economic Development and Chamber
staff to report the outcomes of their marketing Concur Obsolete
efforts to achieve program objective as
established by the City Council.
014 Audit of Facilities Maintenance
3. Formalize facility access procedures. Concur Implemented
5. Investigate ways to more accurately report on
the timeliness of work order completion in Concur Implemented
TMA.
6. Explore the reporting capabilities of TMA to
improve the Division's ability to identify Concur Implemented
equipment with repeat repair issues.
016 Audit of COVID-19 Response: Pandemic Preparedness
August 16,2024 Report No. 2024-031
7. Incorporate planning for telework during
pandemics into the existing Business Partially Concur In Progress
Continuity Plan.
019 Audit of Municipal Court Payments
1. Develop a process in consultation with the
City's public safety agencies for timely
submission of manual citations with the Concur In Progress
Municipal Court Administration.
2. Maintain a database of manual citations
received and create a process for reconciliation Concur Implemented
of manual citations in consultation with the
public safety agencies.
022 Audit of Building Permit Processes
5. Develop a formal inspection review process to
provide assurance that inspections are being
completed effectively and in accordance with Concur Implemented
the Division's quality standards.
6. Establish a process to provide assurance that
variable daily inspection workload does not Concur Implemented
impact the quality of inspections.
Based on the results of this informal follow-up review, Staff is recommending the following:
• Project 005 —Utility Street Cuts be closed and considered formally complete with a 100%
Implementation rate;
• Project 012 Economic Development: Retention & Expansion be closed and considered
formally complete with a 91% Implementation rate;
• Project 014 Facilities Maintenance be closed and considered formally complete with a
100% Implementation rate;
• Project 016 COVID-19 Response: Pandemic Preparedness be closed and considered
formally complete with a 89% Implementation rate;
• Project 019 Municipal Court Payments be closed and considered formally complete with a
92% Implementation rate; and
• Project 022 Building Permit Processes be closed and considered formally complete with a
100%Implementation rate.
If the City Council has any concerns about the above Staff recommendations, please reach out to
the City Auditor before August 30, 2024.
ATTACHMENTS:
None.
STAFF CONTACT:
Madison Rorschach, City Auditor
City Auditor's Office
August 16,2024 Report No. 2024-031
(940) 349-7228
Madison.RorschachkCityofDenton.com
REOUESTOR:
Staff Initiated
PARTICIPATING DEPARTMENTS:
City Auditor's Office, Capital Projects, Economic Development, Fleet&Facilities, Fire, Police,
Development Services
STAFF TIME TO COMPLETE REPORT:
45 Hours (City Auditor's Office only)