City of Floma Audit Report

City of Floma Council Members

Salutation	First Name	Last Name
Mrs.	Jennifer	Doyle
Mr.	David	Dawson
Mr.	Robert	Mosley
Dr.	Jeremy	Roy

Word Test Out Material/w00_cumexam_data.docx

City of Floma

Fiscal Year 2018 Audit Report

Executive Summary

Introduction

This audit report was prepared to satisfy the City of Floma Charter’s requirement to have an external, independent, and qualified auditor annually examine its operations. The stated goal of the audit is to provide the citizens of the city with assurance that the city’s resources are being managed in accordance with local, state, and federal regulations.

The information presented in this audit report was compiled from data found in public records, transaction and management databases used by municipal software applications, and personal interviews of city employees. The data was reviewed for consistency and compliance with Generally Accepted Accounting Principles for state and local governments. Analysis of the data was then conducted to determine where opportunities for improved efficiencies exist.

The result of the audit can be found below. It includes specific findings by city department, supporting tables, and general recommendations.

City Departments

Public Safety (Police and Fire)

The analysis of the personnel expenditures of both public safety agencies found that overall costs can be reduced by hiring additional police officers and firefighters. Calculations to support this conclusion can be found in Table 1 below. The current spending on overtime warrants the net addition of two police officers and one firefighter in fiscal year 2019.

The population growth of the city is noted, and as such, additional hires should be anticipated in each of the following two years. The hires required to maintain proper personnel levels in the police force and fire department will be financially covered by the expected increase in city tax revenue commensurate with the population growth.

Utilities

The acquisition of smart electricity meters has continued at a steady pace throughout 2018. We observed delays in the installation and proper configuration of the smart meters, which causes unnecessary inconvenience for citizens. The city personnel tasked with the implementation of the smart meters has not received sufficient training to complete the project within the allotted time frame.

The utility department should organize additional training sessions for the two supervisors so that they may in turn train their employees. This training is to focus on efficient installation of the meters and connection of the meters to the central utility computer system. Until such training is completed, it is not advisable to continue installation of the new meters to avoid disruptions and costly rework.

Waste Management

The Waste Management Department has not made any plans to address the city’s landfill capacity. The landfill is expected to reach its designed capacity in Q2, 2020. Several alternative approaches to waste management are possible. In order to enact them in a manner that will not cause disruption or violation of EPA regulations, planning must commence in the next few months.

A significant opportunity for addressing the landfill capacity challenge can be found in the expansion of the recycling program. Recycling facilities for municipalities the size of the City of Floma can generally be managed in a cost-neutral manner; thus expansion will not require an increase in the department’s budget.

Parks and Recreation

The Parks and Recreation (P&R) Department has finished fiscal year 2018 with a deficit, which is entirely attributable to the costs associated with the repairs of baseball and soccer fields after unusually heavy summer storms.

Future years are expected to continue to bring inclement weather at rates higher than those seen in the past. Therefore, the department’s risk management strategy must be reviewed and updated to reflect updated forecasts of severe weather patterns.

Administration (Finance, Human Resources, Information Technology, and Mayor)

The various city departments responsible for administration were evaluated as a whole. This has highlighted the lack of smooth coordination between some departments. This breakdown is the result of employees having taken on tasks that are not directly related to their job duties. Employees who are performing such tasks may lack the necessary qualifications and often do not give priority to those tasks.

Supporting Tables

Department	Average Fulltime Employee Count	Average Hours Worked Per Week	Average Overtime per Week	Recommended New Hires
Fire Department	55	2,242	42	1
Police Department	52	2,175	95	2

General Recommendations

While our audit has not revealed any indications of fraud or abuse, some instances of wasteful spending have been uncovered. This wasteful spending can be reduced by implementing a few low-impact changes. Those changes are detailed in the following paragraphs.

First, the orientation of new city employees and ongoing dissemination of policies that relate to spending should be improved to reduce instances of accidental waste.

Second, the appointment of a city manager position will allow for monitoring of the implementation of the recommendations provided for each agency. A city manager would also absorb duties currently carried out by personnel in administrative departments, which would allow them to focus on their core tasks.

Lastly, the experiences of the P&R Department should serve as a warning to other departments as well. As incidents of natural disasters increase, so will the funds needed to respond to them.