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City auditor: Neighborhood Safety Department lacks sufficient contract oversight
Summary
An audit of the Neighborhood Safety Department found insufficient contract oversight, unclear cross-department roles, weak controls for influence/conflicts, inconsistent invoicing and documentation, and gaps in contractor training and site-visit procedures; a corrective action plan targets completion by June 30, 2027.
The Office of City Auditor presented a contract management audit of the Neighborhood Safety Department (NSD) on June 22 and concluded that NSD is not providing sufficient contract oversight and must strengthen cross-departmental alignment and internal controls.
Michael Kuwaters, director of special reviews and advisory services, told the Audit Committee the audit found seven areas of weakness, including inconsistent cross‑department communication that limits timely escalation of concerns; insufficient safeguards to mitigate potential pressure or conflicts of interest when contractors bypass managers; incomplete departmental policies and procedures; invoicing processes that do not meet enterprise or Coppola settlement requirements; inconsistent tracking of required contractor training; absence of standardized, documented site-visit protocols; and no department‑wide standard for preserving contract records.
Kuwaters said the auditors recommend that NSD, the Office of Public Service, the Office of Community Safety, Finance and Property Services, and the City Attorney's Office agree on clear roles, procurement guidance, and documented escalation paths. The audit further recommends that NSD formalize and memorialize training, finalize site-visit procedures with risk-based monitoring schedules, and create a single repository for contract documentation.
The presentation noted NSD contracts account for roughly $8.1 million of the department's $10.5 million 2026 operating budget and that some contract management practices must align with the Coppola settlement agreement. Kuwaters said the administration and partner departments drafted a corrective action plan and expect actions complete by June 30, 2027; the Office of City Auditor will follow up on initial deliverables by Sept. 30, 2026.
Committee members asked whether contract language permits termination for contractor misconduct and whether ethics policy enhancements would help mitigate influence concerns. Kuwaters and other audit staff said this review focused on contract-management controls and procedures rather than the detailed legal termination clauses of individual contracts; they recommended a separate ethics-policy review, which the audit office plans to include in its future work.
The committee voted to receive and file the NSD audit report and directed staff to publish the report. Auditors will track the corrective action plan and may invite departments with outstanding high‑risk items to present remediation plans to the committee.
