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Acting city auditor reports on ongoing audits; fraud hotline has logged eight reports since September
Summary
Acting City Auditor Brian Smith briefed the Audit Oversight Committee on active audits across multiple departments and on fraud hotline activity: the hotline, launched Sept. 23, produced eight reports (seven via hotline, one via email); three were referred to HR, one was closed unsubstantiated, two remain under investigation.
Acting City Auditor Brian Smith told the Audit Oversight Committee on Jan. 6 that the city has multiple active audits in progress and that the city’s fraud hotline, which went live Sept. 23, 2024, has produced eight reports since launch.
Smith summarized current audits and their stages: an audit of the youth development and social initiatives department (including a program the auditor referred to as "Batteries Included") is in the reporting phase with Nancy Cardoza as lead auditor and expected to be released within four to five weeks; a business licensing compliance audit in the Department of Community Development (lead auditor James Burnett) is in field work; a fire-department audit of controlled-substances management (lead Joe Throneberry) is in field work; a Human Resources audit of the employee separation process (lead Nancy Cardoza) is in planning; and an IT audit of mobile communication devices (lead Louis Allad) is in planning. Smith said the office continues to verify completion of prior audit recommendations and will invite departments with incomplete recommendations to the committee’s April meeting to report on progress.
On the fraud hotline, Smith said the city distributed "Speak Up" posters in November and has a fraud committee, composed of the city manager, the city attorney and the acting city auditor, that meets monthly to review reports. Since the hotline launched on Sept. 23, the office has received eight reports (seven through the hotline and one via city email). Five of the reports were not actionable by the city because they did not involve the city or lacked sufficient information. Three reports were referred to Human Resources; one of the three has been closed with fraud not substantiated and personnel issues addressed, while two remain under investigation. Smith said reporters who use the hotline but report matters that do not involve the city are given contact information for the appropriate external agency.
Committee members asked about outreach for the posters and whether communications followed up to ensure posters were posted across city locations. Smith said the Office of Communications distributed about 100 posters citywide and that follow-up to confirm posting remains an item for the fraud committee to address. The item was a staff report only and required no committee action.
