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Internal audit presents CDD and vendor‑file findings; committee asks for written reports and agency response
Summary
Internal Audit reported on a completed performance audit of the Community Development Division and a vendor master file review, identifying weaknesses in tax handling, reporting deadlines, subrecipient eligibility and vendor record hygiene; staff said written reports will be provided and CDD leadership outlined steps to address findings.
The Finance Committee on July 28 received an update from the internal audit unit on its first‑half 2025 work plan, including a completed performance audit of the Community Development Division (CDD) and a vendor master file review.
Kola (internal audit) summarized key findings from the CDD audit: instances where charges included sales or withholding taxes (which the city typically does not pay), delays in grant report submissions that could risk grant funding, awards to ineligible subrecipients in at least one instance, and out‑of‑date or missing standard operating procedures. Audit recommendations included regular staff training on procurement/tax treatment, stronger vetting of subrecipients, implementing reporting calendars or automated reminders, and establishing routine SOP review/update protocols.
The vendor master file review found 9,027 inactive vendor records (as of Jan. 31, 2025), duplicate or temporary vendor entries, excessive or redundant user access privileges and no formal SOP for vendor file maintenance. Audit recommended deactivating inactive/duplicated vendors with management approval, an annual vendor cleanup and role‑based access controls.
Committee members requested the audit’s written reports; Kola and staff said a written CDD report exists in the packet and would be re‑attached and made available on the internal audit web page. Jim O’Keefe (CDD staff) responded to the performance audit findings, noting the division is experienced with audits and has already started corrective steps on tax treatment and reporting issues. He said the ineligible‑recipient finding involved a small state grant focused on employment training and clients experiencing housing instability; CDD will redouble its vetting for eligibility. Jim and staff described ongoing efforts to formalize SOPs across CDD program areas.
Alders asked about the scope and selection process for ALRC‑requested audits of licensees; staff explained the Alcohol License Review Committee has authority under ordinance to request audits of license holders and that two requested audits (restaurant operators) were underway.
Internal Audit said it will continue with in‑progress audits (fleet services and cash counts), begin Q3 and Q4 audits (parking division, employee assistance program and an annual risk assessment), and monitor implementation of recommendations.
