720-913-5000 auditor@denvergov.org

Audit Services

 

What We Do

Internal auditing focuses on identifying risks that threaten the ability of an organization to accomplish its mission. The Auditor’s Office conducts independent audits of city agencies to help mitigate identified risks in order to enhance efficiency and effectiveness, reduce costs, and improve the quality of services.

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Audit Reports

 
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Annual Documents

Audit Committee

 

The results of conducted audits are communicated through formal audit reports, which communicate findings and recommendations for improvement to the audited agency, oversight officials, and the public. Additionally, the Auditor’s Office conducts follow-up work to verify that corrective actions have been taken to address findings, and publishes follow-up reports.

Audits from 2015 – present can be found here.

Audits prior to 2015 can be found here

The Annual Audit Plan is a list of potential audits of City departments, programs, or contracts developed from an ongoing process of assessing potential risks and collecting input from a variety of sources.

View the plan.

The Audit Committee receives the reports of audits conducted by the Audit Services. Additionally, the Audit Committee commissions and oversees an annual independent external audit of the finances of the City and County of Denver.

Audit Committee

TV8 videos of Audit Committee meetings

Determining What to Audit

A high-quality and transparent annual audit plan is critical for meeting the mission of the Denver Auditor’s Office. Developing the plan is an ongoing process, conducted by assembling ideas from a variety of sources, examining a broad range of City activities, and then assessing risk factors in tandem with some additional considerations. By evaluating potential audits from a variety of perspectives, the Auditor’s Office seeks to provide widespread audit coverage both in terms of the types of audits performed and the entities assessed. This approach results in a diverse list of departments, programs, activities, and contracts that are examined to determine the extent to which they are operating efficiently, effectively, and in accordance with program or contract requirements.

In developing a list of potential audits, ideas come from a variety of sources:

  • Assessments of operations and controls derived from previous internal and external audits, including independent audits of the City’s Comprehensive Annual Financial Report (CAFR), the audit of federal compliance, and audit management letters;
  • Input from the community, elected officials, Audit Committee members, operational management, and staff;
  • Benchmarking against the audit priorities of other governmental entities;
  • Consideration of current local events, financial conditions, major capital projects, and public policy issues; and
  • Established industry risk-assessment criteria, including from the U.S. Government Accountability Office and the Institute of Internal Auditors.

A robust audit plan will assess a broad range of City activities, including:

  • Organizational units within a City agency, such as a division or a department;
  • Individual City programs and activities;
  • Transaction cycles or processes that affect more than one City function or department, such as contract procurement and purchasing, cash handling, human resources, and/or information technology;
  • Individual financial statement accounts and transactional areas, such as capital assets, leave liability, accounts payable, and payroll;
  • City functions that operate similarly to for-profit entities, such as Denver International Airport and the Golf Enterprise Fund; and
  • Contracts and agreements between the City and third parties.

Potential audits are identified and prioritized using a risk-based approach by examining a variety of factors that may expose the City to fraud, misappropriation of funds, liability, or reputational harm.

Accordingly, risk factors are assessed by reviewing:

  • Size of department, program, activity, or contract
  • Size of budget
  • Compliance and regulations
  • Pending or recent legislation
  • Complexity of transactions
  • Fiscal sustainability
  • Critical IT systems, including hardware and software
  • Management accountability
  • Quality of internal control system
  • Age of program, operation, or contract
  • Audit history
  • Public health and safety
  • Critical infrastructure
  • Short-term and long-term strategic risks
  • Related litigation
  • Relevant case law
  • Emerging risk areas

Risk factors are periodically evaluated and modified as necessary. In tandem with risk-based considerations, some additional considerations also provide practical guidance in determining which audits to pursue. First and foremost, resource constraints within the Auditor’s Office inherently limit the amount of audit work performed in one year. Furthermore, deference is given to the unique interests and responsibilities of the Auditor as an elected official and the risks the Auditor identifies as a priority to serve the interests of the City and its people. After the plan is finalized, new information may come to light; situations, initiatives, priorities, and risks within the City may change. The flexible nature of the audit plan as a living document provides the discretion to change course when it is in the best interest of the City.

The Auditor’s Office extends its gratitude and appreciation to the Mayor’s Office, the City Council, the Audit Committee, members of the city’s operational management, and members of the general public for providing input on the 2017 Audit Plan and for supporting the general mission of our Office throughout the year.

The Denver Auditor’s Office provides independent oversight of how tax dollars are spent to fund the City’s many services, initiatives, and programs. The Denver City Charter, Article V, establishes this independence and provides for the Auditor’s general authority and duties. The Charter also establishes the Audit Committee, through which we report our audit findings.

History

Originally, the Auditor served as the general accountant for the City, maintaining the City’s financial records and paying City expenses, including payroll. However, in November 2006, Denver voters approved an amendment to the City Charter, changing the duties of the Auditor that had been in place since 1904. Based on this Charter revision, accounting and payroll functions moved to the Controller’s Office under the Chief Financial Officer in June 2007. This revision plus other ordinances authorized the Auditor to conduct audits of any entity using City dollars. Today, Denver’s Auditor oversees one of the most structurally independent government audit functions in the country.

Several key components serve as the cornerstone for Denver’s auditing framework. These elements provide the Auditor with the independence that results in the Office’s ability to conduct high-impact audits.

  • Elected Auditor ― The City and County of Denver has an elected Auditor who is independent from all other elected officials and operational management.
  • Audit Committee ― The City Charter establishes an independent Audit Committee, chaired by the Auditor, with six other members appointed by the Mayor, City Council, and Auditor.
  • Comprehensive Access ― City Charter and Municipal Code authorize the Auditor to have access to all officers, employees, records, and property maintained by the City and County of Denver, and to all external entities, records, and personnel related to their business interactions with the City.
  • Audit Response Requirements ― City ordinance requires that audited City and County departments formally respond to all audit findings and recommendations, establishing the Auditor’s Office’s ability to work in conjunction with these departments while maintaining its independence.
  • Adherence to Professional Audit Standards ― The Auditor’s Office conducts all audits in accordance with Generally Accepted Government Auditing Standards promulgated by the United States Comptroller General.

Please see the Archives for a full list of these documents and more.

Recent Audits

City Agencies Fail to Follow Through on Recommended Changes

DENVER – Two city agencies haven’t fully implemented recommendations made in three separate reports from Denver Auditor Timothy M. O’Brien, CPA.This month the Auditor’s Office released follow-up reports on our May 2017 Golf Enterprise Fund Management...

Denver Needs Better Oversight and Controls for User Access in Workday, the Software Application Driving Denver’s Day-to-Day Business

DENVER – After implementing a new software application in 2017 to manage and integrate important day-to-day financial and human resource functions, the city failed to put effective controls and comprehensive oversight in place to ensure its more than...

Audit Finds Denver’s Approach to Homelessness Is Fragmented and Understaffed

DENVER – A lack of a cohesive overall strategy along with unclear authority and understaffing hinders the city’s ability to comprehensively address homelessness or measure the effectiveness of its efforts, according to a new audit from Denver Auditor...

Public Works Should Improve Competitive Bid Process and Ensure Cost Controls

DENVER – The city needs to improve contract competitiveness and enforce formal policies during the bidding process when working on some on-call contracts, according to an examination commissioned by Denver Auditor Timothy M. O’Brien, CPA.“It’s in the best...

Denver Public Trustee’s Accounting and Financial Practices Need Improvement

DENVER – The city is not clearly reporting the amount of money passing through the Denver Public Trustee’s office, and the Denver Public Trustee’s accounting, check-handling and foreclosure recordkeeping were among practices that need improvement, a new...

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Ask The Auditor

Ask The Auditor is our new series of informative short videos to expand the understanding of the Auditor’s Office.

Episode 1: 
What do the Denver Auditor and his office do? They aren’t just accountants and they aren’t the IRS. Denver Auditor Timothy M. O’Brien, CPA, is here to answer your questions about the Office of the Auditor. This first episode of Ask the Auditor will explain what the Denver Auditor does and his office’s role as the watchdog for the City and County of Denver.

More episodes are available on our YouTube page.

Contact Audit Services

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