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HomeMy WebLinkAboutAudit Reports - Public - Audit Report - City of Glendale's Fire Prevention Office - 11/12/2019November 13, 2019 Mayor Weiers and Members of Glendale City Council: Independent Internal Audit Program (IIAP) is pleased to present the audit report of the City of Glendale’s Fire Prevention Office. This audit began in October 2018 and concluded in April 2019. The report includes Management’s verbatim responses concurring with all the recommendations. Due to the Council-adopted changes to the IIAP, the report was not finalized until the new IIAP structure was in place. The report was reviewed and accepted by the Council-appointed Audit Committee at its November 7, 2019 meeting. We would like to thank the management and staff of the Fire Prevention Office for their corporation and support during the audit. Should you have any questions regarding this report, please don’t hesitate to contact me at 930-2103 or via email at eogutu@glendaleaz.com Respectfully Submitted, Emmanuel Ogutu, CIA, CFE Internal Audit Program Manager Distribution: Kevin Phelps, City Manager Michael Bailey, City Attorney Rick St. John, Interim Deputy City Manager Vicki Rios, Assistant City Manager Terry Garrison, Fire Chief Jean Moreno, Director, Organizational Performance Lisette Camacho, Interim Director, Budget and Finance Irene Avalos, Audit Committee Member Rusty Simmons, Audit Committee Member Independent Internal Audit Program Audit of the Fire Prevention Office Report Date: October 21, 2019 Emmanuel Ogutu, CIA, CFE Internal Audit Program Manager ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 1 Fire Prevention Office Table of Contents Executive Summary .......................................................................................................... 2 Introduction ........................................................................................................................ 3 Purpose and Objectives .................................................................................................. 4 Scope and Methodology ................................................................................................ 4 Observations, Recommendations, and Management Responses........................... 4 ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 2 Fire Prevention Office Executive Summary Internal Audit completed an audit of Fire Prevention Office (FPO) in October 2018, for the period July 2017 to August 2018. The audit was performed to evaluate operations and internal controls relating to fire prevention services and fees. Existing processes and controls in place were assessed against the International Fire Code as well as general industry standards in order to determine the level of compliance and identify areas of improvement. The audit noted several areas where improvements are needed. Specifically, the audit highlighted 12 observations. 1. (High) Testing identified FPO permit, plan review, and after-hours inspection fees that were waived without written authority or reference to a valid agreement, or not charged at all. 2. FPO fees have not been updated in over 10 years and fire plan review fees are not recovered if a project is not permitted 3. Only 53% of City occupancies that were charged an annual fire inspection fee in FY18 received an inspection. Additionally, 44% of the required re-inspections were completed. 4. Usage of multiple systems to track and bill for FPO activity was noted with multiple issues in each of the system and no interface among the systems. 5. Cellular data is not utilized to enhance customer service and safety while out in the field. 6. Only half of fire inspectors are assigned to perform new construction inspections. 7. Opportunities to increase efficient use of FPO vehicles exist. 8. Approximately $60,000 is owed to the City in past due fire inspection fees with little effort to recover the amount owed. 9. Inspection reports were not always submitted on a timely basis for billing. 10. Some of FPO related procurement cards were not approved timely. 11. FPO had not established performance goals to effectively manage its performance. 12. Many of the FPO policies that were accidentally deleted due to server crash have not been re-drafted. These issues are discussed in more detail beginning on page 2 of this report. Emmanuel Ogutu, CIA, CFE Internal Audit Program Manager Responsible Management Team: Terry Garrison, Fire Chief Charles Jenkins, Fire Marshall Carlos Elzy, Deputy Fire Marshall L. Scott Miller, Deputy Fire Marshall Vivian Soza, Tax, License & Revenue Recovery Manager Emmanuel Ogutu ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 3 Fire Prevention Office Introduction As part of the FY19 audit plan, the City Auditor’s Office1 conducted an internal audit of the City of Glendale’s (City) Fire Prevention Office (FPO) in October 2018. The purpose of the audit was to evaluate operations and internal controls relating to fire prevention services and fees. The FPO follows the 2018 International Fire Code, which was adopted by City Council in December 2018. The FPO is located within the Fire Department and is responsible for performing a variety of fire inspection services including: new and existing construction; care facilities; arson investigation; and special events. The FY18 annual operating budget of the FPO was approximately $1.042 million, of which salaries and benefits comprised 94%. There are 10 positions assigned to the FPO including the Fire Marshal, one Assistant Fire Marshal, three Senior Fire Inspectors, three Fire Inspectors, one Fire Plans Examiner, and one Senior Plans Examiner. One administrative support employee that reports to Fire Administration also assists with some FPO duties. The FPO primarily generates revenue through fire plan review and permit fees, as well as fire inspections. Table 1 summarizes FPO actual revenue and expenditures, as reported in the City’s financial records over the last two years. Table 1 – Summary of FPO Revenue and Expenditures Description Fund Account FY17 FY18 Inspector Overtime (after hours inspections) 1000 1000 407800 $10,889 $7,726 Fire Inspection Program Fees 1000 1000 492690 $238,857 $238,528 Construction Fire Permit Fees 1000 1000 408800 $381,519 $339,259 Special Event Fire Permit Fees 1000 1000 408805 $48,287 $48,953 Care Facilities Inspection Fees 1000 1000 408610 $15,625 $13,814 Operational Fire Permit Fees 1000 1000 408820 $25,589 $18,757 Total FPO Revenue $720,766 $667,037 Expenditures 1000 331 12441 $919,273 $967,046 A summary of FPO activity, as provided by the FPO is displayed in Table 2. Table 2 – Summary of FPO Activity Description FY17 FY18 Fire Prevention Inspections 3,043 3,074 New Construction Inspections 939 669 Existing Building Inspections 2,097 2,383 New Construction Plan Review 875 902 Care Facilities Inspections 215 193 Special Events Inspections 265 287 Fire Investigations 97 93 Total 7,531 7,601 1 This audit was conducted by the former City Auditor’s Office. The final report is being issued after the changes made to the City Auditor Office. The newly formed Internal Audit Program is issuing this report. ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 4 Fire Prevention Office Purpose and Objectives The purpose of the audit was to evaluate operations and internal controls relating to fire prevention services and fees. Scope and Methodology The scope of the audit was July 1, 2017 to August 31, 2018. To gain an understanding of the FPO, we interviewed staff from Fire and various City departments. We also sampled invoices and reviewed various documents including: • Budgets and financial reports • Community Development (CD) fee schedules • Firehouse, Hansen, and Tax Mantra data • Inspection forms and reports • Invoices and supporting documentation • Laws, regulations, policies, and procedures Observations, Recommendations, and Management Responses Our testing identified the following observations: 1. Testing identified FPO permit, plan review, and after-hours inspection fees that were waived without written authority or reference to a valid agreement, or not charged at all. In accordance with City Code Ordinance 3001, the CD Fee Schedule shall be reviewed and approved by City Council annually. Any of the CD fees may be waived or rebated by City Council if it’s in the best interests of the City. City Council delegated its authority to the City Manager to waive or rebate, in writing, CD fees up to $50,000, as an economic development incentive that is in the best interests of the City. City Council also delegated its authority to the City Manager, or designee, to waive or rebate, in writing, CD fees up to $25,000 as an incentive to attract privately-produced events in the City Council adopted redevelopment area in the best interests of the City. In FY18, Building Safety reported that approximately $89,926 in Fire Department CD fees were waived in Hansen. While some of these waivers related to valid development agreements, testing identified instances where FPO fees were waived and the auditors could not locate any policies, written authority, or agreements approving CD FPO fees waivers as follows: • $43,968 in FPO fees were waived for Gila River Arena. Building Safety was under the impression that the City’s expired Safety and Security Agreement between the City and IceArizona Arena Manager was still valid and waived all CD Fire plan review and permit fees at the Arena. The City’s 2016 management agreement with AEG does not include any discussion regarding the payment or waiver of CD FPO permit, plan review, and after-hours inspection fees. Staff also reported that controls are not ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 5 Fire Prevention Office in place to ensure Building Safety receives copies of City agreements that impact CD fees. • $6,249 in CD FPO permit, plan review, and after-hours inspection fees were waived for City projects funded by the general and enterprise funds. Examples included alarm installations at the Arrowhead West Area Reclamation Facility and sprinkler modifications at the Media Center. • $6,810 in CD FPO permit, plan review, and after-hours inspection fees were waived for events at the Civic Center. Prior to FY17, $2,500 was transferred from the Civic Center’s budget to the FPO special events revenue account to cover FPO fees. No transfers were made after FY16. • $9,926 in FPO after-hours inspection fees were not charged for NFL games at the Stadium. A time and labor code was setup to enter and track FPO overtime at the stadium in FY18. However, the auditors were unable to locate any evidence that the City charged for FPO after-hours inspection fees for the NFL season. Additionally, $1,354 in FPO pyrotechnic standby fees were not charged for the NFL season. • $1,418 in CD FPO plan review and permit fees were waived for K to 12 graduations and dances. The auditors also noted that FPO staff do not request or review revenue reports or fees charged for the services they perform to ensure accuracy and compliance with the CD Fee Schedule. Potential Risk: High – Lack of communication and written policy increases the risk of inconsistencies or errors. City costs may not be recovered in accordance with approved fees schedules. Errors may not be detected in a timely manner, or at all, if revenue is not reviewed and reconciled to department activity Recommendation 1.1 Fire work with City Management to ensure FPO CD fees are charged or formally waived, as appropriate, in accordance with City Code. 1.2 Development Services develop a policy to ensure agreements involving CD fees are provided to Building Safety when executed. The policy should ensure that CD FPO fees are not waived unless a valid development agreement, or other appropriate supporting documentation, is provided in advance. 1.3 Fire develop controls to ensure FPO revenues are reconciled to services performed. Management Response 1.1 Concur. Estimated Completion Date (ECD) January 2020.Gila River Arena: Staff will review the current agreement and work with City Management to clarify if the intent is to waive fire prevention fees. Civic Center: Staff will meet with the Civic Center manager to discuss fire prevention fees. If the intent is to waive fees, an agreement through the City Manager’s Office will be developed. City ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 6 Fire Prevention Office Projects: Staff will meet with the applicable departments to discuss fire prevention fees. If fees are intended to be waived, an agreement through the City Manager’s Office will be developed. 1.2 Concur. Development Services shall develop a written policy that ensures that CD FPO fees, and any development fees, shall not be waived unless a valid development agreement or a written fee waiver from the City Manager’s Office (for waivers less than $ 50,000) is on file in the Development Services Center. This stipulation shall be noted in the fee waiver reason in our permitting system. This policy shall be distributed to the Development Services staff, the Fire Prevention Office, and to the Economic Development Department. The new written fee waiver policy shall be completed no later than March 31, 2019. 1.3 Concur. Fire Administration Staff will work with Finance personnel to develop procedures for reconciling revenues with paid invoices through the new Simplicity program. ECD November 2019. 2. FPO fees have not been updated in over 10 years except for inflationary adjustments, and Fire plan review fees are not recovered if a project is not permitted. City rates and fees should be analyzed and updated periodically, to ensure they are supported and reflect the goals of the City. Management should develop strategies to ensure the expectations of the Council are accomplished. In 2002, Council adopted Ordinance 2260, the CD Fee Schedule, allowing an annual adjustment of the fees in accordance with the inflationary index (CPIU). In addition, Council passed a resolution stating that adjusting the development related permit and service fees on a periodic basis is consistent with the City’s business plan approach. Furthermore, City Council provided direction that the City should recover costs of development business, keep up with the consumer price index, and raise fees to be consistent with other Valley cities. In accordance with this direction, staff developed a fee schedule to recover 100 percent of the cost of doing business. However, other than inflationary increases, the City last updated the CD fees in 2007 A fee study was performed by the FPO in FY13, but the proposed fees were not taken to City Council by City Management and no changes were made to the fees. A review of the current FPO fees indicated that they have no basis and although the FPO fees are reviewed as part of the annual CD fee study to determine if CPI increases are needed, the City could not provide any justification for the current fees, including how the fees were developed or if cost recovery is achieved. The FPO budget includes two plans examiners responsible for reviewing plans for tenant improvements, new construction, special events, and fire protection systems. The City currently charges a fire plan review application fee of $45.81 upon submittal to start the review process. However, the City does not track time or collect Fire plan review fees for tenant improvements, new construction, special events, and fire protection systems prior to receipt of an approved permit. If a permit is not approved or is abandoned, Fire ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 7 Fire Prevention Office plan review fees are not collected at all. The City’s FY13 fee study included a fire plan review fee of $97.50, but, as stated earlier, the study was never taken to Council for consideration. In FY18, the FPO performed 1,099 fire plan reviews. Since time is not accurately tracked in Hansen for fire plan reviews that were not approved or abandoned, the auditors were unable to estimate the amount of lost revenue to the City. Additionally, the CD Fee Schedule includes over 125 separate Fire fees. Some of these fees are duplicative or no longer used. Potential Risk: High – Without an analysis of FPO fees, the City is unable to justify the amount of the fees charged to citizens. Fees may not reflect actual costs and may result in customers being over or under charged. Recommendation 2.1 Fire work with City Management to perform a study of CD FPO fees and present their findings to City Council for review. Consideration should be given to streamlining the over 125 separate Fire fees. Management Response 2.1 Concur. Staff will meet with City Management to discuss fire prevention fees and determine the best course of action to review and establish fees that meet City Council direction for cost recovery. ECD July 2020 3. Only 53% of City occupancies that were charged an annual fire inspection fee in FY18 received an inspection, and only 44% of the required re-inspections were completed. City resources should be allocated in an efficient and effective manner, ensuring the highest level of customer service. Customers should be billed based on the services received. Follow-up fire inspections should be conducted when violations are identified to ensure they have been corrected. The Fire Inspection Fee (FIF) program was established in 2012 as a revenue enhancement program to charge for the City’s inspection of existing buildings. The program generated $238,528 in FY18. The FIF is pre-billed annually by the Tax & License Division in Budget and Finance through the Tax Mantra system and is included with Glendale business license fees. New businesses are also charged a fire inspection fee of $50 that staff reported was a one-time setup fee. The 2018 CD Fee Schedule includes a FIF for annual ($320.89, high hazard), 2-year ($160.45, medium hazard), and 4-year ($53.47, low hazard) inspections of commercial occupancies. A review of the FIF program data provided by the FPO identified the following issues: ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 8 Fire Prevention Office • Out of the 503 occupancies billed an annual inspection fee in FY18, only 266 (53%) were inspected by the FPO. • Out of the 1,042 re-inspections needed in 2018, only 456 (44%) were completed. • Although the CD FPO Fee Schedule includes 4-year inspections, the FPO only conducts 1, 2 and 3-year inspections. The 3-year inspection fees are prorated over four years for billing purposes, instead of three. • The $50 one-time fire application fee is not included in the Council approved CD Fee Schedule, has no basis, and has remained at the same amount since the program was developed. • FIF data is included in both Firehouse and Tax Mantra. Although Fire reconciles occupancies subject to a FIF in Firehouse with Tax Mantra, staff reported that there are some occupancies that are not in the system and may never get billed. • The FIF program, along with procedures to input, review, waive, and reconcile data, are not formalized and are managed by two Fire employees who have not been professionally trained in Firehouse or Tax Mantra. Potential Risk: High – Businesses may be charged for services that are not delivered by the City in a timely manner, or at all. Reported violations may not be corrected in a timely manner, if at all, increasing the risk of loss and damage to property. Inadequate controls over systems and data may lead to errors and business interruption. Recommendation 3.1 Fire, in conjunction with City Management, review the FIF program and develop any necessary policies and procedures to ensure City occupancies are billed for services performed. 3.2 Fire review existing resources to ensure FIF re-inspections are performed timely, as appropriate, to address any reported violations. Management Response 3.1 Concur. Staff will meet with City Management to discuss alternative billing methods for this program. ECD July 2020 3.2 Concur. The Assistant Fire Marshal reviews all fire inspection reports and discusses serious violations with the inspector. Minor violations may or may not warrant a follow-up inspection, and are routinely addressed via phone or email confirmation, or verification at the next regularly scheduled inspection. The decision not to re-inspect a business is based on inspector knowledge, nature of the issue, and fiscal responsibility. When an inspector determines that a violation is so minor that a follow-up is not warranted [i.e. fan plugged into an extension cord], they are still required to document the violation so that verification of the correction can be made at the next regular scheduled inspection. This type of decision is acceptable from a fiscal and business relationship development perspective; both of which are key to risk reduction efforts. Fire will develop an SOP that outlines this process. ECD April 2020 ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 9 Fire Prevention Office 4. Multiple systems managed by different departments are used to track and bill for FPO activity. Information systems should be efficient and cost effective to ensure seamless business operations. Controls should be established over fee waivers. The FPO utilizes three different information systems and software to conduct business operations and manage inspections. Firehouse stores information on occupancies and inspection dates. Tax Mantra contains taxpayer information on business licenses and FIF billings. Hansen is managed by CD and contains permit and fee information. A review of these systems identified the following issues: Firehouse (managed by Fire) • Contains corrupt and duplicate data • Information on new businesses must be manually entered • Audit logs are not generated for periodic review of changes to data • Inspectors use a separate application, Form Connect, for new construction. The information from Form Connect must be separately entered into Firehouse and Hansen since the systems do not interface. • FPO inspection fees are not embedded into FPO forms for inspections outside of business hours, requiring inspectors to calculate them manually. Hansen (managed by CD) • Clients schedule inspections through Hansen, which are reported to inspectors the following morning. Clients do not receive a window of time as to when their inspection will be conducted during the day. Additionally, contact names for inspections are not always provided in Hansen, making it more difficult for FPO staff to contact customers. • The FPO does not receive or generate Hansen reports regarding FPO activity Tax Mantra (managed by Budget and Finance) • One Fire employee can cancel FIFs with no additional supervisory review or approval • Data in Firehouse may be different than Tax Mantra and requires periodic review and reconciliation Additionally, inspector passwords used to access the FPO iPads are not changed in accordance with City IT Policy. Potential Risk: Medium – Inefficient or ineffective systems results in increased costs and reduced levels of customer service. Shared passwords reduce accountability and may compromise the security of data. Recommendation ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 10 Fire Prevention Office 4.1 Fire work with City departments to enhance security controls and streamline information systems used to manage FPO data and billings. Management Response 4.1 Concur. City staff is currently working with a new system provider “SmartGov” that may address this concern. The program, if approved by City Council, will replace Hansen, Tax Mantra and possibly Firehouse. The Building Department is the lead for this program and will be driving the RFP and City Council submittal timeline. ECD December 2020. NOTE this is a multi-department project that is currently underway; the completion date will remain flexible and is subject to Council approval and funding. 5. Cellular data is not utilized to enhance customer service and safety while out in the field. Technology should be utilized in the most efficient and cost-effective manner, maximizing customer service. Employees should be provided with equipment that will enhance their safety in dangerous or emergency situations. Fire inspectors are currently equipped with an iPad and flip phone to take out in the field when they perform fire inspections or investigations. However, they do not have cellular data, which would allow them to provide electronic inspection reports to customers on-the-spot, and the ability to communicate with developers regarding scheduled or same day inspection requests. Instead, they drive back to the office and email inspection reports out at the end of the day. The flip phones are not hands-free, have limited texting capabilities, and no cellular data or hot spot, which would assist inspectors with finding addresses and allow them to access to their email. Staff reported that they usually use their personal phones to avoid further business disruptions. Furthermore, the location of an inspector cannot be obtained in emergency situations. Inspectors also reported that they frequently lose connections on their iPads with large inspections and information from Firehouse is only synced every hour, causing time delays in receiving data. Staff estimates that the cost of upgrading to smart phones would cost $600, plus an additional $1,800 for service. Potential Risk: Medium - Outdated technology reduces customer service and employee safety. Recommendation 5.1 Fire consider providing cellular data to FPO devices to enhance safety, employee productivity, and customer service. Management Response ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 11 Fire Prevention Office 5.1 Concur. City staff is currently working with a new system provider “SmartGov” that may address this concern. In addition to the new software, and if City Council approves moving forward, the RFP includes new laptops or iPad with Wi- Fi/cellular service capability. It is our understanding that each department will be responsible for the monthly cellular cost; however, the program and overall plan is for all field inspectors [Fire, Building Safety, Code Compliance, etc.] to utilize the mobile or cloud-based applications to complete inspections and provide customer reports in real-time. The Building Department is the lead for this program and will be driving the RFP and City Council submittal timeline. ECD December 2020. NOTE this is a multi-department project that is currently underway; the completion date will remain flexible and is subject to Council approval and funding. 6. Only half of the FPO fire inspectors are assigned to perform new construction inspections. Government resources should be organized to achieve the highest level of efficiency and effectiveness. A review of current practices and processes in the FPO identified the following opportunities for increased efficiency: • Out of the six fire inspectors, only three are assigned to perform new construction inspections, which are often a high priority for the City. Two others are assigned to only perform existing building inspections, and one employee cannot go out on inspections on their own until they have passed the required testing. • The plans examiner is physically located in a different building from Development Services where plans are received and is required to carry plans to and from City Hall daily. • Inspectors do not inquire as to whether a business has a valid business license while conducting routine fire inspections. Potential Risk: Moderate – Inefficiencies may result in increased costs and business interruption. The security of building plans may be compromised if they are transported to different facilities. Recommendation 6.1 Fire consult with Human Resources regarding the development of an internal promotional program. 6.2 Fire consider working with City departments to relocate the FPO plan examiners to Development Services at City Hall. 6.3 Fire work with City departments to develop a process to report businesses operating without a valid business license to Budget and Finance. ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 12 Fire Prevention Office Management Response 6.1 Concur. Staff began working on an internal promotional program several years ago; however, due to the recession and other priority projects, program development was placed on hold. Staff will meet with HR to receive guidance on program development. ECD July 2021 6.2 Concur. Staff is currently working with Facilities to identify a location in City Hall to house two fire plans examiners. ECD December 2019. NOTE Facilities is currently evaluating office space for several departments, to include Fire Prevention. The completion date will remain flexible as the relocation impacts multiple departments and is subject to Council approval. 6.3 Concur. Fire will work with Tax and License to determine if a process can be developed where fire inspectors verify business license status. City staff is currently working with a new system provider “SmartGov” that may provide a built-in solution. ECD December 2020. NOTE this is a multi-department project that is currently underway; the completion date will remain flexible and is subject to Council approval and funding. 7. Opportunities to increase the efficient utilization of FPO vehicles exist. City assets should be utilized in an efficient and cost-effective manner. There are eight vehicles assigned to the FPO. Two sedans are used by the Fire Marshal and Deputy Fire Marshal to visit construction sites, attend meetings, perform inspections, and respond to emergencies. Six pickup trucks are assigned to the fire inspectors for inspection and investigation purposes. A review of the type and usage of the vehicles was performed, and the following was noted: • One vehicle assigned to a fire inspector had low usage, driving 2,900 miles in FY18. • Three vehicles are assigned to three fire investigators, each outfitted with tools, protective gear, self-contained breathing apparatus, and miscellaneous equipment. However, only one fire investigator is on call at any one time. Potential Risk: Moderate – The City may be incurring higher costs and reduced efficiencies by utilizing vehicles that exceed the business needs of a department. Recommendation 7.1 Fire review current vehicle needs, in conjunction with Equipment Management, to ensure they efficiently and effectively meet the business needs of the FPO. Management Response 7.1 Concur. Staff will meet with Fleet Management and GFD Resources to determine if efficiencies can be made. ECD December 2019. ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 13 Fire Prevention Office 8. The City is owed approximately $60,192 in past due fire inspection fees (FIF). According to Budget and Finance’s Revenue Recovery (RR) Division, City invoices are due upon receipt. Budget and Finance will request departmental approval to send invoices that are 90 days past due to RR. If approved, RR will send a final demand letter, and if not paid in 10 days, the account will be sent to the City’s third-party collection agency. According to aged receivable records provided to the auditors, the City is owed approximately $60,192 for past due FIF from 2011 to 2018. Potential Risk: Moderate – The City is not recovering costs associated with services provided. Recommendation 8.1 Budget and Finance continue to work with the City’s third-party collections agencies to recover past due FPO fees. Management Response 8.1 Concur. Budget and Finance will continue to work with the City’s third-party collections agencies to recover past due FPO fees. 9. Testing identified that inspection reports are not always submitted timely for billing In accordance with the City’s approved CD Fee Schedule, fire inspection fees (FIF) are charged for: • Inspections performed after normal duty hours • Hospitals and group homes • Child and adult day care facilities • Existing building inspections after two follow up inspections Auditors reviewed eight FPO inspections billed through Fire Administration and noted the following: • The number of days to pay FPO invoices ranged from 15 to 371 days, with an average of 101 days. • The number of days between the date a fire inspection was performed and the date an invoice was generated ranged from 9 to 35 days, with an average of 19 days. • One payment of $150.40 was recorded in the wrong revenue account. A journal entry to correct the payment was prepared in March 2018; however, it was not prepared accurately, and the revenue did not post to the correct account. An adjusting entry was processed by Accounting during the audit to correct the error. • The process used to prepare and approve billings in Fire is manual and paper laden. ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 14 Fire Prevention Office Additionally, FPO staff does not monitor financial records to ensure revenue is accurate and deposited into the correct account. Potential Risk: Moderate – Revenue may not be accurately recorded or received timely if controls are not in place to monitor revenue accounts and customer payments. Inefficient processes lead to increased costs and take time away from performing other job duties. Recommendation 9.1 Fire review financial reports to ensure FIF billed through Fire Administration are accurate and correctly recorded. 9.2 Fire streamline the internal billing and approval process, including forms, for FIF billed through Fire Administration. Written performance measures should be developed regarding the number of days it should take from completion of a fire inspection to submission to Budget and Finance for billing. Management Response 9.1 Concur. Fire Administration staff will work with Finance personnel to develop procedures for reconciling revenues with paid invoices. ECD November 2019. 9.2 Concur. Fire Administration staff and the Fire Marshal will work together to develop and approve an SOP to ensure we have timelines set in place to process all FIF in a timely manner. ECD April 2020. 10. FY18 procurement card statements were not approved timely. The City’s FY18 Procurement (P-Card) Policy requires that supervisors approve and sign the Procurement Card Statement Checklist within three working days of its completion and by the end of the month. The administrative support specialist that reports to the Fire Resource Division uses their P-Card to pay for FPO transactions. None of the employees in the FPO have a P-Card. Auditors reviewed 10 FPO P-Card purchases made during the period July 1, 2017 to August 31, 2018 totaling $5,675. For 8 of the 10 purchases, the Procurement Card Statement Checklist was approved late, after the end of the month. Potential Risk: Moderate – Untimely review of P-Card charges increases the risk that errors or misuse are not detected in a timely manner. Recommendation 10.1 Fire enhance controls to ensure P-Card statements are approved in accordance with policy. Management Response: ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 15 Fire Prevention Office 10.1 Concur. Since the implementation of the new Simplicity program, P-Card statements are being approved within 48 hours. 100 percent of the P-Card statements in FY19 have been approved prior to the end of the month. 11. Performance goals and measures have not been established to assess Fire’s ability to efficiently and effectively manage the FPO. Performance measures should be established and monitored to ensure City programs and operations are managed efficiently and effectively. A review of the FPO’s goals and measures indicate that the City has not clearly established performance objectives and measures to assess the City’s ability to efficiently and effectively manage the FPO. Furthermore, FPO goals are not formally documented and monitored for progress. Additionally, updates and progress reports on the achievement of stated goals and measure are not communicated to management and governance on a periodic basis. Potential Risk: Moderate – Without established performance measures and communication of results, management is not able to determine the effectiveness and results of the FPO and whether it assists the City in meeting its strategic goals and objectives. Additionally, City resources may not be expended in an efficient and effective manner. Recommendation 11.1 Fire develop formal goals, objectives, and performance measures for the FPO and report on the accomplishment of these activities to City Management and the public. Management Response 11.1 Concur. FPO performance goals and measures were lost when a server crash accidently deleted all fire prevention policies and procedures. Staff will meet with the department head for direction and begin drafting new performance goals and measures. ECD April 2020. 12. Many FPO policies and procedures were accidently deleted and have not been redrafted. Policies and procedures should be current and formalized to ensure tasks are performed consistently, in accordance with management’s expectations. Auditors requested the FPO policies and procedures and noted that many of their standard operating procedures (SOPS) were in draft format, not completed, or out of date including the following areas: ______________________________________________________________________________ _____________________________________________________________________________________ Internal Audit Program 16 Fire Prevention Office • Fire inspection QA program • Plan review process, procedures, and timelines • Prioritizing annual inspections and periodic updates of the plan • Reporting and analysis • Training and education Staff reported that the FPO SOPS were accidentally deleted when a server crashed, and IT could not successfully restore the files. FPO staff have been working to redraft the SOPS. Potential Risk: Moderate – Services and tasks may not be provided consistently, in accordance with management’s expectations, and there is an increased risk that staff turnover would have a negative impact on business continuity. Recommendation 12.1 Fire ensure FPO policies and procedures are complete and train staff. Management Response 12.1 Concur. FPO performance goals and measures were lost when a server crash accidently deleted all fire prevention policies and procedures. Staff will meet with the department head for direction and begin drafting new performance goals and measures. ECD April 2020.