Adam McCoyAdam McCoyApril 23, 20183min495

Denver could have misplaced hundreds of assets like equipment due to poor record-keeping, a new report by the city auditor found.

Of 124 assets listed in the city’s books, Denver City Auditor Timothy O’Brien’s office couldn’t find 15 items during an audit. And based on sampling methodology used during the audit, between 670 and 1,590 city assets, which include equipment, buildings and fixtures, could be missing or improperly classified, the auditor’s office said.

“These record-keeping errors are significant and indicate a high probability of other missing or improperly recorded assets, both large and small,” O’Brien said in a statement. “These assets belong to the taxpayers and should be accurately tracked.”

For example, the audit found a car the city sold in 2003 still on the books and a garbage truck no longer in use in the city listed as still in service. The audit also found one instance where the city tallied a portion of the cost of a swimming pool at the La Alma Recreation Center twice, inflating the value of the city’s assets by $853,000.

“In another example, the audit team was unable to find any record of what happened to five of the items in their sample even after asking for help from the managing agency,” O’Brien’s office said in the statement. “In one case, a $3.5 million asset was listed only as ‘Bond C&C Bldg – Exterior,’ and officials could not explain the reason for the entry.”

The auditor also found inaccuracies related to locations, descriptions and the timeliness of asset recording and discrepancies between the recorded historical costs of the assets and the actual historical costs. In the books, the auditor found a series of outdoor sculptures recorded at the McNichols Building, though they were actually in various parks throughout Green Valley Ranch.

The audit did not survey all of the city’s possessions. The airport and construction in progress, for example, were not included.

O’Brien’s office surveyed employees during the audit and found 43 percent said they hadn’t received proper asset-management training. The auditor said formal training and coordinating with the city’s Controller’s Office to develop a process for an annual review of assets could better track assets in the future.


Adam McCoyAdam McCoyMarch 27, 20182min388

You could say the auditor has become the audited. And Denver Auditor Timothy O’Brien’s office passed with high marks.

As part of a peer review process through a Association of Local Government Auditors’ program, a team of three experienced auditors probed the quality of O’Brien’s office including conducting interviews, assessing the office’s policies, and examining sampled audits among other reviews. The office was found to be in full compliance with government auditing standards.

“I am pleased to receive the confirmation that my office is doing the best possible work on behalf of everyone in Denver,” O’Brien said in a statement. “We’re working hard to maintain high standards, so citizens know their tax dollars are spent as accurately and wisely as possible.”

The review found that all audits out of O’Brien’s office, from May 2015 to December 2017, were in line with government auditing standards. The office was also praised for the quality of the audits including their wide-ranging topics and innovative techniques used during the review process.

The peer review also touched on the experience of O’Brien’s office which includes 12 certified public accountants; four certified internal auditors; five fraud examiners three certified global management accountants; four certified information systems auditors; five certified government auditing professional; among other staff with advanced college degrees.

“It’s our duty to ensure transparency and clarity of findings and recommendations on behalf of everyone who cares about the future of our city,” O’Brien said.

The Denver Auditor’s Office serves as an independent check and balance on city government, conducting internal audits and enforcing the city’s prevailing wage.

Most recently, the auditor’s office found that Denver International Airport was operating oil and gas wells at a big loss.


Adam McCoyAdam McCoyMarch 20, 20182min653

DENVER — Instead of gushing revenue, oil and gas wells on Denver International Airport’s property are a money pit, with the airport losing more than $200,000 over a nine-month period last year, according to a new audit.

The audit coordinated by Denver Auditor Timothy O’Brien found DIA is losing money on oil and gas wells on its property through unprofitable wells and significant operating costs.

“The airport needs to take a closer look at whether it’s a good idea to continue operating wells that could be costing — instead of making — money on the airport’s land,” O’Brien said in a statement.

O’Brien’s office worked with accounting firm CliftonLarsonAllen LLP to probe operating expense reports from January 2017 to September 2017. Those reports showed DIA lost more than $220,000 on its wells over that period. Overall, it brought in $617,000.

Over the nine-month period, 26 of the 71 wells on DIA’s property were unprofitable. Six of the wells have been temporarily abandoned, which incurred minimal management/operating costs, while 20 other wells were not only operating at a loss, but expected to produce less and cost more to operate over time.

Denver contracts with PetroPro Engineering, Inc for operation and maintenance of the wells — a $3.6 million contract spanning November 2016 to October 2021 — but the audit found DIA was paying other contractors for work as well. In one example, DIA paid an outside firm $204,971 in September for work on one well while the average monthly cost to PetroPro, and outside companies, is $115,575.

The auditor’s office is recommending a well-by-well review at DIA.

“The airport should determine whether it should continue to produce oil and gas from these wells or shut them down to save money on maintenance and operations,” O’Brien’s office wrote in a statement.


Adam McCoyAdam McCoyFebruary 22, 20183min525

In the era of Russian meddling in U.S. elections, checks on the accuracy of election results are fundamental. Denver’s Elections Division recently took steps required by state law to ensure that its vote counts are indeed accurate, but it also wanted to double-check it was dotting its i’s and crossing its t’s. An audit has now concluded Denver is in compliance.

Denver election officials requested a review from Denver Auditor Timothy O’Brien’s office  to see if its procedures conformed to a 2009 state law that makes county elections officials use a risk-limiting auditing procedure. The procedure, first used in Colorado during the November 2017 election, provides checks on election results after the votes are tallied.

“The process is meant to help improve efficiency of election validation by allocating more resources to races with smaller margins of victory,”O’Brien’s office noted in a statement.

This is how it works: The Colorado Secretary of State chooses a statewide and countywide contest to audit, considering narrowness of victory and other factors when selecting a race. Election officials then manually compare selected batches of ballots from contests with recorded votes for the ballot scanning machine.

With Denver in compliance with the state risk-limiting procedure, O’Brien’s office pointed to some changes to improve efficiency.

First, the auditor’s office argues Denver’s division should stop using Excel spreadsheets in the process to track ballots, as there is room for human error in data entry. Instead, switching to an automated system would reduce the risk of typos or other errors.

The audit also found problems with the state’s ballot sampling method, considering Denver’s two-page ballots. When randomly pulling ballots, there is no way to ensure the one pulled would have the contest being audited on it.

O’Brien’s office also advised Denver create performance metrics for the auditing process to track the success of the project from year-to-year.

“Ensuring the integrity of our elections is integral to upholding the pillars of our democracy,” O’Brien said. “I’m proud to see Denver leading the way nationally to make sure every vote counts the way the voters intended.”


Adam McCoyAdam McCoyDecember 26, 20174min424

Denver’s missing the mark when it comes to enforcement of rules governing Airbnb-style rentals and is doing a poor job of analyzing data to assess their impact on neighborhoods.

That’s the gist of a new city audit, which sought to gauge how Denver is doing in enforcing its ordinance regulating short-term rentals — roughly one year after it went into effect.

The audit conducted by City Auditor Timothy O’Brien’s office found a discrepancy between how regulations are enforced and the law — which he said puts the city at risk for litigation.

“These discrepancies between the law and enforcement could lead to public confusion on how to stay in compliance, as well as the risk of perceived inequity,” O’Brien said in a statement.  “This could put Denver at risk of legal action.”

Furthermore, O’Brien’s office found inconsistent application of the lodger tax, leading to some being granted licenses that shouldn’t have. The city also hasn’t been using data effectively to assess the impact of short-term rentals on neighborhoods and affordable housing.   

Last year, the city passed new regulations for short-term rentals “to create a fair operating environment, ensure minimum safety requirements” and assess their impact. In the first eight months of the new rules, Denver’s Department of Excise and Licenses issued 2,000 licenses, translating to 68 percent of rentals listed online, according to O’Brien’s office.

The city’s Excise and Licenses Department disagreed with recommendations to shore up inconsistencies in enforcement of regulations, according to the auditor’s office.

The audit found issues with lodger tax license numbers. In some cases, multiple people were sharing the same number, multiple licenses were issued to one applicant or more than one address were attached to one license.

“For example, we identified 45 instances out of 1,642 applicants who received more than one short-term rental license, 20 of them had a license registered to more than one address,” O’Brien’s office said in a press statement.

The rules were designed to keep landlords from renting out multiple properties on a short-term basis, in effect reducing the affordable long-term housing stock.

“The agency disagreed with our recommendation to develop and implement a data collection approach because officials say they are focused on licensing, not affordable housing analysis,” the city auditor’s office said in a statement.

“If the Department of Excise and Licenses does not track and analyze the data, officials should work with City Council to determine who is responsible,” O’Brien said. “A central goal in the ordinance is to determine the impact on neighborhoods and affordable housing, and some agency needs to be working on it throughout the process.”


Dan NjegomirDan NjegomirOctober 27, 20173min490

If only the IRS were so considerate: Denver Auditor Timothy O’Brien gave fair warning this week as to what areas of Denver government he will train his sights on next. His office has released his 2018 Audit Plan, which provides an extensive overview of the different agencies, services and activities O’Brien and his staff will scrutinize in the coming year.

Included in the lineup, according to a press release from the auditor’s office : “Use-of-force policies in public safety, airport financial management practices, homeless policies, property tax processes and Denver’s cybersecurity.”

Here’s more detail on some of the areas of inquiry:

Included in the plan is a second look at the oversight and use of mill levy funds by Rocky Mountain Human Services, Denver’s community centered board designed by the state to help individuals with intellectual and developmental disabilities. The 2018 Audit Plan includes a possibility of reviewing Denver Human Services’ oversight and monitoring of public funds, as well as the impact of state regulations that will change the way all community centered boards operate.

The Auditor also plans to take a close look at Denver’s airport operations. Audit plans include airport security and coordination practices, financial and administration management and revenue-sharing with the Westin Denver International Airport Hotel. Many community members have expressed concern and Auditor O’Brien plans to exercise his ability to audit the airport to make sure the organization is using tax dollars effectively.

Additionally, Auditor O’Brien plans to look into homeless services in Denver. The audit might include an analysis of the effects of certain social policies and might also assess the resources dedicated to addressing homelessness and the collaboration among agencies citywide.

How does O’Brien decide who goes under the microscope? The press announcement says he “considered input about the city’s risks from a wide range of sources and people.”

Get all the details by browsing the audit plan; here’s the link again.


Adam McCoyAdam McCoySeptember 25, 20172min722

Denver recently made a complex conversion to a new payroll system, and while it was largely successful, a lack of controls resulted in some errors, according to an audit.

In one instance, an employee’s annual salary was set at the biweekly rate, and an incorrect payment was made, Auditor Timothy O’Brien’s office said in a press statement. The error was remedied after the employee reported it.

Other mistakes found during the system change included incorrect vacation accruals, a terminated employee receiving paychecks for months after leaving and over and underpayments.

The number of errors is not out of the ordinary for such a large-scale change, O’Brien’s office said, but they cropped up due to a lack of controls.

In the audit report, O’Brien’s office recommends the city’s Controller’s Office, the department responsible for accounting and payroll, develop procedures and training for finding errors and solving them.

Some city departments have had recurring issues with supervisor timesheet approvals, the auditor’s office said. There are no procedures for missing timesheet approvals, with 11 percent of employee timesheets going unapproved while checks were still being issued by payroll.

“This creates a risk of someone being paid for no work,” O’Brien’s office said. “There was no direct evidence of payroll fraud identified in this audit report.”

Denver also does not appear to have a reliable timecard approval report for all public safety employees, since January 2017, according to O’Brien’s office.

“This could mean overtime, vacation time or other exceptions to regular hours worked could go unreported and unreviewed,” the statement said.

The Controller’s Office has agreed to implement the audit report’s 19 recommendations before or by December 2017.


Mike McKibbinMike McKibbinApril 14, 20177min370

A year after a Denver auditor's report found a nonprofit provider of services to the mentally and developmentally disabled residents of the City and County of Denver had mismanaged city funds, the picture is much better, City Council members were recently told. Rocky Mountain Human Services, formerly called Denver Options, serves over 6,000 Colorado residents through case management and direct service programs.


Mike McKibbinMike McKibbinDecember 16, 20166min502

Private personal information such as full legal names, drivers license and Social Security numbers of thousands of citizens, current and former City and County of Denver employees were accessible to as many as 10,000 city workers, an audit by the city auditor found. No evidence of unintended, improper or illegal viewing or access was found, but the audit report warned it pointed out the risk and liability if such personally identifiable information had led to fraud or identity theft.


Mike McKibbinMike McKibbinNovember 18, 201610min382

Denver International Airport is not ensuring prompt payments from airlines, promptly collecting delinquent airline payments and associated interest penalties or managing airline space changes, an audit report found. Denver City Auditor Timothy O'Brien's staff presented those and other findings and recommendations about DIA's airline agreement management practices and lack of controls to the independent audit committee Thursday, Nov. 17.