Memorandum

City of Lawrence

City Auditor

TO:	Members of the City Commission
FROM:	Michael Eglinski, City Auditor
CC:	David L. Corliss, City Manager Cynthia Boecker, Assistant City Manager Diane Stoddard, Assistant City Manager Jonathan Douglas, Assistant to the City Manager
Date:	June 20, 2013
RE:	Performance Audit Work Plan

City Code requires the City Auditor to coordinate with the City Manager in creating an annual work program and to present the proposed work program to the City Commission.  The City Commission may amend or alter the work program as it deems appropriate.

The general principles I followed to identify and prioritize audit projects were to look for topics that:

• Are of importance to residents of Lawrence and the organization;
• Could provide information to help develop annual audit plans for future years;
• Encourage and support performance measurement and financial controls;
• Have a defined scope, making the audit work most manageable.

To develop the potential topics, I reviewed previous work and audit plans, reviewed the 2011 citizen survey, discussed audit topics with stakeholders in city government, reviewed suggestions received throughout the year, and discussed proposed topics with the City Manager.

Table 1 lists seven higher priority performance audit projects.  I’ve also included a list of additional potential performance audit topics that were identified but considered lower priority. 

My recommendation to the City Commission would be that the performance audit plan includes the financial indicator (D in table 1) analysis and 3-4 additional projects.  In addition, I will provide 6-month audit recommendation follow-up memos required by the City Code.

Table 1 Potential performance audit projects

	Potential Topic	Details
A	Barriers to more performance measurement and reporting	Measuring and reporting on government performance can help stakeholders evaluate the city’s activities. A performance audit could identify barriers to implementing more measurement and reporting and make recommendations to reduce the effect of those barriers.
B	City Hall safety	A performance audit could address how the city has identified and mitigated hazards that could affect employees and visitors to City Hall.
C	Fats, oils and grease in the sewer system	Fats, oil and grease in waste water cause problems with the sewer collection and treatment system.  A performance audit could look at how the city controls fats, oil and grease and if additional controls are warranted.
D	Financial indicators	Reviewing a set of financial indicators, comparing them over time and with medians, to describe the city’s financial condition and identify “warning trends.” The performance audit would involve updating analyses from prior years.
E	Police workload	When workload and resources balance, the Police Department is in the best position to provide services efficiently and effectively. In March 2011, the Police Department identified a need for about 30 additional positions, a 17 percent increase in the current level of staffing.  In a 2008 employee survey, police employees expressed concern with workload and noted that workload limited their ability to do their jobs right. A performance audit could involve reviewing how management measures workload and matches workload and resources; how initiatives like mobile data computers affect workload; and how the department has managed demand for services.
F	Recreation Center construction invoice controls	A performance audit could review controls the city has established to ensure proper payments.
G	Sidewalks	In the 2011 Citizen Survey, respondents identified the condition of sidewalks in their neighborhood as a medium priority in the public works area.  Respondents also identified the number of walking and biking trails as the top priority in the parks and recreation area. Lawrence, similar to other college towns, has a large portion of the population that walks to school or work. A performance audit could look at the condition of city sidewalks and efforts to maintain sidewalks.

Other potential audit topics identified during the selection process include:

· Cable television franchise audit

· Capital planning and budgeting

· Cash control testing

· Condition of public buildings

· Downtown parking

· Vehicle and equipment conditions

· Financial policies

· Flow of traffic (high priority in 2011 citizen survey)

· Golf course finances

· Implementing full cost accounting for solid waste

· Municipal Court workload

· Outside agencies

· Overtime controls

· Park and Recreation fee waivers and scholarship fund

· Parking enterprise fund financial performance

· Pavement markings

· Payment card industry data security standards

· Process for reviewing and approving incentives such as TIF, TDD, tax abatements and industrial revenue bonds

· Public-private partnership practices

· Purchase card transaction reviews

· Record retention

· Reliability of population forecasts and estimates

· Risk assessment survey of department and program managers

· Safety and workers compensation

· Solid waste rate structure

· Span of control analysis

· Vehicle and equipment replacement

· Water conservation