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HomeMy WebLinkAboutAudit Reports - Public - Housing Management and Maintenance Internal Audit Report - 9/15/2022 FINAL REPORT City of Glendale HOUSING MANAGEMENT AND MAINTENANCE INTERNAL AUDIT REPORT September 15, 2022 Moss Adams LLP 999 Third Avenue, Suite 2800 Seattle, WA 98104 (206) 302-6500 Housing Management and Maintenance Internal Audit Report for the City of Glendale Table of Contents Executive Summary 1 A. Objectives 1 B. Conclusions 1 Detailed Report 3 A. Introduction 3 B. Background 3 C. Scope and Methodology 4 Findings and Recommendations 6 Process Improvement Opportunities 13 Appendix A: Definitions of Audit Finding Rankings 16 Appendix B: Template for Maintenance and Replacement Forecasting 17 Appendix C: Maintenance Checklist 18 Housing Management and Maintenance Internal Audit Report for the City of Glendale | 1 EXECUTIVE SUMMARY Moss Adams LLP (Moss Adams) was contracted by the City of Glendale (the City) to perform an internal audit related to the City’s Housing Management and Maintenance (HMM) function within the Community Services Department (Department). We performed a variety of procedures to test internal controls and assess the overall HMM function for compliance with policies and procedures and best practices, as well as to assess for overall efficiency and effectiveness of select processes. Our procedures included assessing preventative maintenance practices, evaluating asset replacement tracking and monitoring, testing work order intake and processing, testing the completeness and accuracy of inventory listings, and assessing the tracking and controls of capital-type items such as HVAC units and appliances. This engagement was performed in accordance with Standards for Consulting Services established by the American Institute of Certified Public Accountants. Accordingly, we provide no opinion, attestation, or other form of assurance with respect to our work or the information upon which our work is based. This engagement was also performed consistent with the guidance issued by the Institute of Internal Auditor’s (IIA’s) International Professional Practices Framework (IPPF). This report was developed based on information gained from our interviews and analyses of sample documentation. The procedures we performed do not constitute an examination in accordance with generally accepted auditing standards or attestation standards. Our objectives for this engagement were to:  Assess the overall HMM process for adequate controls and compliance with policies and procedures and best practices.  Review preventative maintenance schedules, asset replacement tracking and monitoring, and work order intake process.  Test the completeness and accuracy of inventory listings.  Assess the tracking and control of inventory and capital-type items.  Evaluate the overall efficiency and effectiveness of the City’s HMM program. The procedures and testing performed identified two areas that warrant improvement. These are highlighted below: Finding 1. Physical Inventory Counts – Medium Risk Finding Inventory on hand was not being tracked on a perpetual basis, and regular physical inventory counts, or other usage monitoring controls were not in place to ensure that inventory was not lost, stolen, or otherwise misappropriated. Recommendation Document and implement physical inventory count processes and establish other high-level monitoring controls to evaluate usage and ensure that potential issues are identified and addressed timely. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 2 Finding 2. Work Order Analysis – Medium Risk Finding Work orders were not always resolved timely, and adequate detail of the work performed or materials used was not consistently documented. Detailed work order information was not available to allow for meaningful analysis to identify potential recurring issues or opportunities for improvement. Recommendation Evaluate the current expectations for timeliness of completing work orders and update the existing policy to reflect those expectations. Require that maintenance technicians document detailed information on work orders including the services performed and materials used, implement a quality control inspection process, and perform meaningful analysis on work order details. Throughout the internal audit, we also identified process improvement opportunities related to preventative maintenance scheduling, asset replacement forecasting, and policies and procedures. These process improvement opportunities should be considered for implementation. See Section IV for details on these process improvement opportunities. Although the focus of this internal audit was to identify opportunities for improvement, it is important to note the areas that are operating well. The City should be commended for the following accomplishments:  Policies and Procedures: The policies and procedures related to work order tracking and processing and preventative maintenance and asset replacement functions provides a good baseline for the Department to utilize in drafting and updating policies and procedures.  Eagerness for Improvements: During our interviews, feedback from Housing employees indicated an eagerness to implement improvements to the HMM functions. We would like to thank City staff and management for their time and efforts in assisting with this project. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 3 DETAILED REPORT Moss Adams was contracted by the City to perform an internal audit over the Housing Management and Maintenance (HMM) function within the Community Services Department (Department). This audit was focused on the tracking and management of inventory, capital assets, and capital-type items, work order intake and response, software asset management, and the preventative maintenance and asset replacement programs. This internal audit was performed as part of the Fiscal Year (FY) 2022 Annual Audit Plan developed by the City’s Independent Internal Audit Program (IIAP). Our internal audit was performed between February and June 2022. Please refer to Appendix A for definitions of audit finding rankings. The City’s Community Services Department is responsible for Housing functions, which includes monitoring 155 units across three different properties that were built through the 1940s, 1950s, and 1970s. The Department has been utilizing the Lindsey-MRI (Lindsey) system, a property management software and work order tracking module for over 20 years. As of FY 2021, the Housing Division managed over $3 million (net of depreciation) of capital assets and varying levels of inventory on hand (i.e., paint, appliance parts, etc.), and processed approximately 120 work orders per month. As of the time of this internal audit, work orders were entered manually into the Lindsey system by Housing personnel and assigned to maintenance technicians for processing. Housing is currently looking at different software/systems to help provide tracking and reporting needs identified by department staff. Currently, the City is in the process of implementing Lucity, a new maintenance software, within select City departments with a focus on helping departments track past and upcoming maintenance of capital assets and aid in the budget process. The Lucity software contains a work order module, similar to the Lindsey system currently utilized by the Department. Lucity may be able to assist the HMM area with other functionality and will continue to be evaluated along with other Public Housing-related software options. Our objectives for this internal audit were related to the City’s HMM function. Specifically, the internal audit focused on the following objectives:  Assessing the overall HMM process for adequate controls and compliance with policies and procedures and best practices.  Reviewing preventative maintenance schedules, asset replacement tracking and monitoring, and work order intake process.  Testing the completeness and accuracy of inventory listings.  Assessing the tracking and control of inventory and capital-type items.  Evaluating the overall efficiency and effectiveness of the City’s HMM program. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 4 In order to obtain an understanding of the specific processes and controls, and overall HMM functions, we conducted interviews with personnel of the Community Services Department. These employees have designated responsibilities related to the HMM function, including work order and maintenance processing, equipment and inventory purchases, and physical asset and inventory counts. We reviewed the City’s policies and procedures provided during the internal audit related to HMM. We performed the following detailed testing procedures:  Physical Inventory Counts: We requested all documentation related to the last physical inventory counts performed including support for the physical counts, documentation of who performed the count, and documentation of the final reconciliation and resulting adjustments. We assessed the documentation to determine whether: ○ Inventory counts were performed within the last fiscal year. ○ The inventory counts performed appeared to be complete and adequate. ○ Departments appeared to be actively involved in the counts and that someone other than the inventory custodian was involved in, or approved, the count results. ○ The results were reconciled to the Maintenance Supply Inventory Listing (MSIL), changes were properly supported (e.g., disposals, additions, etc.), and adjustments were made timely. Through interviews, we determined whether there were existing instructions used to conduct the physical inventory counts and whether inventory spot checks were conducted regularly.  Inventory Purchasing: We obtained a listing of all Housing purchases of inventory (i.e., expenses coded to inventory general ledger accounts) from June 1, 2021 through February 28, 2022, and selected a random sample of 20 inventory purchases. We assessed the supporting documentation for the following: ○ Purchase approvals are documented. ○ Transactions are correctly recorded on the general ledger. ○ Delivery/receipt of the inventory was documented. ○ Segregation of duties existed between the purchases and receiving of inventory. ○ The purchased inventory was added to the MSIL. In addition to the above, we evaluated the results to assess whether inventory purchases appear to be well controlled, inventory is being added to the MSIL upon receipt, and opportunities for improvement to controls or the overall process exist.  Capital Asset Monitoring: Through interviews, we obtained an understanding of the current processes related to capital asset management. We quantified and evaluated the types of Housing capital assets under Community Services Department management. We evaluated for potential control gaps to help ensure assets are effectively being monitored and accurately reported.  Work Order Response and Analysis: We obtained a listing of all work orders completed from June 1, 2021 through February 28, 2022, and selected a random sample of 40 work orders. We assessed these work orders for timely completion according to their classifications (e.g., emergency and non-emergency). Additionally, we performed a detailed analysis on approximately 1,500 work orders and attempted to quantify items such as: ○ Units with the highest repair costs. ○ Units with the greatest number of work orders. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 5 ○ Most commonly occurring problems, based on the total cost and the total number of work orders processed. ○ Issues that take the longest and shortest amount of time to complete. ○ Technicians that handle the largest amount of work orders. ○ Technicians that have the fastest work order completion time, on average. Additionally, we evaluated based on the results above if there are opportunities for improving work order intake and prioritization processes.  Preventative Maintenance and Asset Replacement Programs: We obtained an understanding of how the Department is currently tracking preventive maintenance and asset replacement schedules and researched best practices in this area. Using the best practices and the Public Housing Maintenance Policy and Procedure, we created the following: ○ A checklist of common maintenance items that can be reviewed during the completion of each work order. ○ A template for preventative maintenance scheduling and asset replacement forecasting.  Policies and Procedures: Throughout our testing, we documented policy and procedure recommendations based on our experience and research with industry best practices. We assessed the following areas: ○ Inventory Management ○ Capital Asset Management ○ Work Order Tracking and Processing ○ Preventative Maintenance and Asset Replacement Programs  Systems Assessment: For each of the areas of focus described above, we evaluated the Department’s current use of the Lindsey system, performed research to assess whether there were system capabilities that could be utilized to increase the efficiency or effectiveness of the related functions, and evaluated whether another system, such as Lucity, could add value. We specifically evaluated the system usage and capabilities as it relates to: ○ Physical inventory and capital asset tracking and monitoring. ○ Work order tracking and processing. ○ Preventative maintenance and asset replacement. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 6 FINDINGS AND RECOMMENDATIONS 1. Finding Inventory on hand was not being tracked on a perpetual basis, and regular physical inventory counts, or other usage monitoring controls were not in place to ensure that inventory was not lost, stolen, or otherwise misappropriated. Recommendation Document and implement physical inventory count processes and establish other high-level monitoring controls to evaluate usage and ensure that potential issues are identified and addressed timely. Condition: The Department maintained certain inventory items on hand, such as paint, small parts, supplies, etc., for repairs and maintenance performed on the housing units. Controls were not in place to track inventory on hand on a perpetual basis or to conduct regular physical inventory counts. A physical inventory count was completed In FY 2021; however, there was no documentation to support the count that was performed, and it was unclear if the results of the count were utilized in a meaningful way. In addition, there were no written instructions for performing the counts and there were no other mitigating controls over inventory, such as independent spot checks of amounts on hand or evaluation of inventory purchase and usage trends. Criteria: Best practices established by the Government Finance Officers Association (GFOA), as well as other reputable best practice resources, recommend either tracking inventory on a perpetual basis or instituting a formal inventory count process at set intervals throughout the year. In instances where physical inventory counts are performed, the results should be utilized to assess the reasonableness of inventory level changes. The process should be documented and applied consistently to ensure that inventory records are accurate for operational decisions and financial reporting, and to ensure that misuse or misappropriation of City inventory is identified timely. Cause: Based on interviews, the Department did not have a policy established, and had not developed or implemented a formal process for tracking inventory on hand on a perpetual basis or for performing regular inventory counts. The expectation was that the MSIL be updated annually, based on a count performed by the maintenance technicians; however, the results were not used for any form of analysis or oversight of inventory usage and balances. Effect: Inventory may be lost, stolen, or otherwise misappropriated, and it would not be identified in the absence of physical inventory counts or other mitigating controls. While the overall inventory balance was immaterial to the City, a lack of controls over inventory can lead to inaccurate information for operational decisions and potential public relations risks if inventory was to be stolen or otherwise misappropriated and it was not identified and addressed timely. Recommendation: The Department should establish and document policies and procedures around the HMM physical inventory process. These are essential to ensuring an effective and reliable count is performed and demonstrating management’s commitment to control and accountability over inventory. In defining the inventory count process, the Department should consider what inventory should be counted, in what frequency, who should perform the counts, the specific purpose of the counts performed, and a method for ensuring that inaccuracies or changes reported during counts Housing Management and Maintenance Internal Audit Report for the City of Glendale | 7 are processed and recorded timely. The results of the physical counts should be used to perform meaningful analysis and monitoring, such as:  Performing a high-level reconciliation of the beginning balance, plus purchases of inventory, less usage, compared to the ending balances.  Comparing trends of inventory purchases to total usage inputs such as number of work orders processed. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 8 MANAGEMENT RESPONSE Management Agreement Partially Concur Owner Jean Moreno, Community Services Director Target Completion Date October 28, 2022 Housing Management and Maintenance Internal Audit Report for the City of Glendale | 9 Action Plan The estimated dollar value of all materials and parts on hand in inventory is valued at $15,441. Housing uses/tracks over 250 different types of parts and materials from cable ties to wall lamps varying from $0.05 up to $196 in value individually. There are approximately 1,822 parts on hand in 173 categories as follows with 84% of the parts on hand valued at less than $10.00 per unit: $0-$9.99 – 1,529 units (84%) $10.00-$24.99 – 155 units (9%) $25.00-$49.99 – 78 units (4%) $50.00 and up – 60 units (3%) Additionally, this inventory ($15,441) accounts for 0.42% of total capital assets net depreciation as of June 30, 2021 ($3,666,406), and less than 4% of annual capital asset expenditures ($392,949). The inventory on hand represents about 19% of annual expenditures indicating that the inventory turns over five times in a year. In examining the inventory in the greater context of all capital assets and operations, management’s position is that the materiality of this inventory and the associated risk of loss is de minimis. It is not reasonable that every part with nominal value per unit used for a work order will be documented, therefore attempting to track and reconcile inventory is not feasible nor warranted. There are compensating controls in place as it relates to these purchases which address the appropriate level of internal controls in accordance with city policy. All parts are kept in a locked room and picked up each day for work orders as they are needed. All inventory on-hand is purchased by maintenance staff utilizing procurement cards which are subject to city review policies that incorporate segregation of duties for purchases and approvals. The Account Specialist who is not involved in the purchases and does not have a procurement card is responsible for reviewing all purchases to ensure compliance with city policy and uploading all required documentation into MUNIS which is ultimately reviewed once more by the appropriate supervisors. Finally, most large purchases of a significant nature are on done on an as-needed basis and are not kept in inventory. Housing will establish an Inventory Policy and Procedure that establishes the following as the housing division’s policy: A list of maintenance supplies will be maintained and updated as needed. A count of maintenance supplies on hand will be conducted at least annually and the list shall be updated. Purchases will be monitored to ensure a minimal amount of inventory is on hand to meet demand of any given item throughout the year. The value of inventory on hand will be less than $25,000. Acquisition and disposal of capital assets valued at $5,000 or more will be conducted in accordance with city policy. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 10 Acquisition and disposal of household appliances or parts valued at $500 or more will be conducted using a similar framework to that of capital assets and will be documented in the policy. The policy will include how often the inventory will be conducted, segregation of duties, and who is responsible. Housing will explore the use of the Lindsey System for tracking capital assets and household appliance acquisition and disposal. 2. Finding Work orders were not always resolved timely, and adequate detail of the work performed or materials used was not consistently documented. Detailed work order information was not available to allow for meaningful analysis to identify potential recurring issues or opportunities for improvement. Recommendation Evaluate the current expectations for timeliness of completing work orders and update the existing policy to reflect those expectations. Require that maintenance technicians document detailed information on work orders including the services performed and materials used, implement a quality control inspection process, and perform meaningful analysis on work order details. Condition: Work orders, which were used by the Department to record and track repairs and maintenance performed on the various housing units, did not always include adequate detail of the work performed and materials used, preventing the Department from achieving meaningful analysis and ongoing monitoring. Work orders were not consistently resolved within the timelines defined by management. During our review of 40 work orders, we identified the following:  Fourteen instances (35%) where non-emergency (regular) work orders were not completed within 72 hours, (with days to complete ranging from four to 39) and documentation was not consistent to support the extended timelines.  Two instances (5%) where a work order did not provide the “labor end date/time;” therefore, the time to complete the work order could not be determined.  In most cases, work orders lacked adequate detail identifying the inventory/materials used and any associated cost. Whenever materials were used, they were recorded as “NONSTOCK” with no price assigned to them. In addition, the Public Housing Maintenance Policy and Procedure appears outdated as it was last revised in 2010. Criteria: The Public Housing Maintenance Policy and Procedure reflected the following requirements:  Work orders should be completed in order of priority, keeping in mind work order completion standards and any instructions provided by the manager. If the assigned maintenance worker Housing Management and Maintenance Internal Audit Report for the City of Glendale | 11 cannot complete any portion of a particular work order, the worker will immediately notify the Housing Services Administrator or designated staff of the problem.  When the work is completed, the assigned worker will fill in the appropriate information (time completed, materials used, time taken to complete, tenant charges, if any, etc.), and return the work order to the designated staff before the end of the day. Based on discussions with management, the Department strives to complete emergency work orders within 24 hours and non-emergency work orders within 72 hours; however, these timelines were not reflected in a policy. Cause: The Public Housing Maintenance Policy and Procedure was outdated and did not reflect current practices or expectations for timelines of work order completion and prioritization. Employees historically were not held accountable for recording detailed information of the services performed and materials used on each work order. Meaningful work order analyses have never been performed given the lack of information captured. Effect: Work orders were not always resolved timely, which could lead to tenant complaints and ultimately higher repair costs if problems worsened between the time a work order was reported and when it was resolved. Without capturing adequate work order details, including services performed and materials used, the Department is unable to perform meaningful trend or performance analyses. Therefore, staff could not evaluate potential high-cost units or capital-like items and identify cost- saving solutions or opportunities for improving the efficiency and effectiveness of HMM operations. In addition, not tracking inventory/materials utilized increases the risk that inventory issues are not identified timely (refer to Finding #1 above). Recommendation: Evaluate the current expectations for timelines of completing non-emergency work orders to determine if 72 hours is reasonable. Update the existing policy to reflect the established timelines and consider adding documentation required to justify situations where a work order is not completed within the required time. Maintenance technicians should be trained on the work order documentation requirements, which includes time completed, materials used, time taken to complete, and tenant charges, if any. To ensure that these procedures are taking place, the Housing Administrator should perform quality control inspections on a minimum of 5% of the work orders completed each month, as described in Section 3.4 of the Public Housing Maintenance Policy and Procedure. The Department should utilize work order data from the Lindsey system (or future programs/systems) to evaluate for trends and opportunities to improve efficiency and effectiveness such as:  Determining the specific units with the highest number of work orders and potentially highest cost of repairs.  Identifying specific capital-like items (appliances, HVAC, etc.) that are requiring more repairs and determining if specific brands are resulting in higher costs versus other brands that may be resulting in lower costs.  Identifying recurring issues or multiple repairs performed on the same unit or for the same issue that could warrant a different approach or an asset replacement.  Assessing the number of work orders completed, by maintenance technician, to identify opportunities for recognition or potential training needs. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 12 MANAGEMENT RESPONSE Management Agreement Concur Owner Karen Mofford, Interim Housing Administrator Mike Demlong, Facilities Supervisor – Community Services Target Completion Date Complete Action Plan The newly hired Service Worker Lead has been given the assignment of checking the close out dates on work orders. An emergency work order must be finalized and closed out within a 24-hour period. Normal work orders are given a 72-hour turnaround time. The closing date must be within the hours allotted of the assignment date to the service worker and if it is normal or emergency. The Service Worker Lead will notify the Facilities Supervisor if the expected turn- around times are not being met. The policy and procedure manual will include work order turnaround times and expectations. The Lindsey work order system will automatically enter the closing date when opening the work order file. If the user hits enter the date remains, whereas the date should have been updated to the correct close out date. The current service workers have been alerted to this issue and are made aware they need to verify the close out date. The Lead will also be monitoring the close out dates closely for error. If an error exists, the work order corrected before the end of the current month. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 13 PROCESS IMPROVEMENT OPPORTUNITIES Moss Adams identified opportunities for process improvements as a result of this internal audit. The table below summarizes these recommendations. CATEGORY PROCESS IMPROVEMENT RECOMMENDATIONS 1 Preventative Maintenance Scheduling and Asset Replacement Forecasting The Department is not currently tracking preventive maintenance schedules on all assets and does not have a formalized asset replacement forecasting process established. As a first step, the Department should perform a full inventory of Housing assets and capital-type items to identify and confirm information including: ● Asset type, including capital-type items (appliances, HVAC, etc.) ● Quantity ● Age of asset ● Location (including the specific unit) ● Condition (good, fair, poor; alternatively, a numeric scale) ● Remaining useful life and value (this is already being tracked in the Lindsey system) ● Replacement cost (estimate) ● Replacement date (target date based upon the purchase date and the useful life) ● Warranty information, where applicable Upon collecting and/or verifying the information above and implementing a more comprehensive work order documentation process (see Recommendation #2 above), the Department would have the information available to effectively begin tracking preventive maintenance needs and developing a realistic asset replacement forecast. The Department should consider other software/system options that will meet all the tracking and reporting needs identified by department staff; however, a temporary solution should be established until that occurs. We have created a template for maintenance and forecasting (See Appendix B), which can be tailored and utilized, if elected. We have also provided a sample checklist (See Appendix C) that can be tailored and utilized by maintenance technicians during each visit to help document the current condition of each unit. HMM should considerer updating the checklist on the technician’s tablet while the technician is at a specific unit. A checklist of this kind may be useful in assessing the overall condition of a unit, evaluating the remaining useful life of assets, and forecasting and budgeting maintenance and replacement costs. Housing Management and Maintenance Internal Audit Report for the City of Glendale | 14 CATEGORY PROCESS IMPROVEMENT RECOMMENDATIONS 2 Policies and Procedures The Department has fairly comprehensive Public Housing Maintenance Policies and Procedures. However, it is outdated, as it was last revised in 2010, does not appear to reflect current practices, and has gaps in coverage. The Department should perform a full review and update of these policies and procedures to ensure that the document reflects current practices and expectations, covers all key areas of HMM operations, and provides adequate details to support employees’ compliance. Specifically, the Department should consider those policy and process documentation recommendations included in this report (refer to recommendations 1–2 above). In addition, the Department should document preventive maintenance scheduling and asset replacement forecast requirements and related roles and responsibilities (see Process Improvement Opportunity #1 above). Housing Management and Maintenance Internal Audit Report for the City of Glendale | 15 CATEGORY PROCESS IMPROVEMENT RECOMMENDATIONS 3 Inventory Purchasing Based on the testing performed, and discussions with Department employees, we identified the following areas of process improvements:  Documentation of receipt (i.e., packing slips, receiving reports, etc.) was not being consistently maintained to support purchases of inventory/supplies. Therefore, receiving documentation was not reconciled to related vendor invoices to ensure that the City is billed only for goods actually received.  Inventory purchases were not being added to the MSIL and mitigating controls, such as regular monitoring of inventory purchasing and usage trends, were not established.  At times, duties may not be adequately segregated within the inventory management function. Maintenance technicians and the facilities supervisor are responsible for the following: ○ Handling inventory on hand daily (stocking, organizing, monitoring balances, etc.). ○ Initiating purchases. ○ Physically receiving inventory purchased. ○ Conducting inventory counts  We identified five (of 20, or 25%) instances where transactions were incorrectly recorded as inventory and supplies expenses. After identifying these errors, corrected journal entries were processed to reclassify the expenses. We recommend to develop and document a formal inventory receiving process that includes verifying inventory upon receipt, documenting the receipt on the corresponding packing slip or receiving support, and comparing the receipt records to vendor invoices, prior to submitting invoices for payment processing. Due to the Department staffing levels and available resources, it may not be feasible to segregate duties. Given the low dollar value of inventory on hand, it also may not be feasible to track inventory on a perpetual basis. However, to reduce overall risk mitigating controls such as the following should be implemented:  Require that a second individual, independent of the purchasing/ordering function review the inventory received, including verifying that the physical items received agree to the receiving report/packing slip, and document said review.  Implement controls for documenting inventory usage while completing work orders and other tasks such as maintaining a log of inventory uses (e.g., one ceiling fan was installed in unit #1). This log could be utilized for high-level inventory usage monitoring (refer to Recommendation #1 above). Housing Management and Maintenance Internal Audit Report for the City of Glendale | 16 APPENDIX A: DEFINITIONS OF AUDIT FINDING RANKINGS We utilized the City IIAP’s risk rankings, presented below, and assigned rankings based on our professional judgment. A qualitative assessment of high, medium, or low helps to prioritize implementation of corrective action as shown in the following table. HIGH Critical control deficiencies that expose the City to a high degree of combined risks. Recommendations from high risk findings should be implemented immediately (preferably within three months) to address areas with the most significant impact or highest likelihood of loss, misappropriation, or damage related to the City assets. MEDIUM Represents less than critical deficiencies that expose the City to a moderate degree of combined risks. Recommendations arising from moderate risk findings should be implemented in a timely manner (preferably within six months), to address moderate risks and strengthen or enhance efficiency in internal controls on areas with moderate impact and likelihood of exposure. LOW Represents low risk or control deficiencies and the exposure is not likely to expose the City and its assets to significant losses. However, they should be addressed in order to improve efficiency and effectiveness of operations. Recommendations arising from low risk findings should be implemented within 12 months. Housing Management and Maintenance Internal Audit Report for the City of Glendale| 17 APPENDIX B: TEMPLATE FOR MAINTENANCE AND REPLACEMENT FORECASTING (EXAMPLE) MAINTENANCE CATEGORY DESCRIPTION PROCEDURES FREQUENCY ASSIGNED TO LAST MAINTENANCE DATE MAINTENANCE FREQUENCY (IN DAYS) NEXT MAINTENANCE DATE NOTES Landscape & Grounds Cholla Vista sprinkler system Weekly Technician 1 1/1/2022 7 1/8/2022 Landscape & Grounds Grounds maintenance Weekly Technician 1 1/1/2022 7 1/8/2022 Landscape & Grounds Clean ashtrays Bi-Weekly Admin 1/1/2022 14 1/15/2022 Landscape & Grounds Check security lights Bi-Weekly Technician 1 1/1/2022 14 1/15/2022 Landscape & Grounds Weed-eat all grounds Bi-Weekly Technician 1 1/1/2022 14 1/15/2022 Landscape & Grounds Clean shops Monthly Technician 1 1/1/2022 30 1/31/2022 Landscape & Grounds Trimmings - all grounds Monthly Technician 1 1/1/2022 30 1/31/2022 Landscape & Grounds Edging - all grounds Monthly Technician 1 1/1/2022 30 1/31/2022 Landscape & Grounds Admin and GH sprinkler systems Monthly Technician 1 1/1/2022 30 1/31/2022 Landscape & Grounds Dumpsters - all projects Quarterly Technician 1 1/1/2022 90 4/1/2022 Landscape & Grounds Fill dirt and sod - all projects Quarterly Technician 1 1/1/2022 90 4/1/2022 Landscape & Grounds Service Tractor Mowers Quarterly Technician 1 1/1/2022 90 4/1/2022 Landscape & Grounds Herbicide - all grounds Quarterly Technician 1 1/1/2022 90 4/1/2022 Landscape & Grounds Dumpsters - all projects Annually Technician 1 1/1/2022 365 1/1/2023 Landscape & Grounds Building Exteriors - all projects Annually Technician 1 1/1/2022 365 1/1/2023 Landscape & Grounds Key machine Annually Admin 1/1/2022 365 1/1/2023 Landscape & Grounds Fire extinguishers Annually Admin 1/1/2022 365 1/1/2023 Landscape & Grounds Winter Grass - all grounds Annually Technician 1 1/1/2022 365 1/1/2023 Landscape & Grounds Service all Furnaces - all projects Utilize the Furnace Service Checklist within the Low Rent Maintenance Policy and Procedures Annually Technician 1 1/1/2022 365 1/1/2023 Housing Management and Maintenance Internal Audit Report for the City of Glendale| 18 APPENDIX C: MAINTENANCE CHECKLIST Checked and functions as expected         Item may need future attention         Item requires immediate attention   EXTERIOR             The unit number is legible and secure.       All lights function properly.       There is no visible damage to the exterior walls of the unit.       The deadbolt locks securely.       The front door viewer shows a clear image of the exterior. LIVING ROOM             All lights function properly.       The ceiling fan functions properly and is secure.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       Any visible switch covers and outlet covers are not broken.       The smoke and/or carbon monoxide detectors test properly. 1/2 BATHROOM             There are no visible leaks under the sink.       There are no visible leaks around the base of the toilet.       There are no dripping faucets.       The toilet flushes properly.       The exhaust fan functions properly.       The sink delivers hot water.       The pop-up stopper retains water.       The towel bar and toilet paper holder are secure. Housing Management and Maintenance Internal Audit Report for the City of Glendale| 19 Checked and functions as expected         Item may need future attention         Item requires immediate attention         The GFCI outlet functions. (“Test” mode prevents electrical flow to the outlet.)       Any visible switch covers and outlet covers are not broken.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling. KITCHEN             The stove ignites (gas) or turns on (electric) properly.       There is no smell of gas.       The refrigerator is cold (internal temperature around 36 degrees Fahrenheit).       The freezer is cold (internal temperature around 0 degrees Fahrenheit).       The dishwasher functions properly (tenant verbal confirmation).       The sink/garbage disposal is not leaking.       The garbage disposal turns on and operates properly.       The sink delivers hot water.       The GFCI outlet functions. (“Test” mode prevents electrical flow to the outlet.)       Any visible switch covers and outlet covers are not broken.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       The smoke and/or carbon monoxide detectors test properly. HALLWAY             All lights function properly.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       Any visible switch covers and outlet covers are not broken. Housing Management and Maintenance Internal Audit Report for the City of Glendale| 20 Checked and functions as expected         Item may need future attention         Item requires immediate attention         The smoke and/or carbon monoxide detectors test properly. MASTER BEDROOM             All lights function properly.       The ceiling fan functions properly and is secure.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       Any visible switch covers and outlet covers are not broken.       The smoke and/or carbon monoxide detectors test properly. BEDROOM #2             All lights function properly.       The ceiling fan functions properly and is secure.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       Any visible switch covers and outlet covers are not broken.       The smoke and/or carbon monoxide detectors test properly. BEDROOM #3             All lights function properly.       The ceiling fan functions properly and is secure.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       Any visible switch covers and outlet covers are not broken.       The smoke and/or carbon monoxide detectors test properly. BEDROOM #4        Housing Management and Maintenance Internal Audit Report for the City of Glendale| 21 Checked and functions as expected         Item may need future attention         Item requires immediate attention         All lights function properly.       The ceiling fan functions properly and is secure.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling.       Any visible switch covers and outlet covers are not broken.       The smoke and/or carbon monoxide detectors test properly. FULL BATHROOM             There are no visible leaks under the sink.       There are no visible leaks around the base of the toilet.       There are no dripping faucets (sink and tub).       The toilet flushes properly.       The exhaust fan functions properly.       The sink and tub deliver hot water.       The pop‐up stopper retains water.       The towel bar and toilet paper holder are secure.       The GFCI outlet functions. (“Test” mode prevents electrical flow to the outlet.)       Any visible switch covers and outlet covers are not broken.       There is no visible damage to the walls, ceiling, or windows.       There is no bulging or discoloration on the ceiling. MISCELLANEOUS ITEMS             The washer and dryer functions properly (tenant verbal confirmation).       The HVAC system provides both cold and hot air.       There is no foul odor or smell.       All doors open and close properly and locks function appropriately.