City Real Estate Portfolio Practices Follow-up
The Real Estate Division fully implemented only one recommendation it agreed to in the original audit report. Nine other recommendations have yet to be fully implemented or acted upon.
The division is now documenting transaction details and justification in project files, which increases transparency and the ability to pass on institutional knowledge. The division took steps to standardize its naming conventions for recent property files, which will help current and future staff locate files — but it did not rename files from before February 2020. Real Estate also developed a strategic plan, but we found it could use more detail.
While we found the division took steps to help mitigate some of the risks identified in the original audit — including those of the three recommendations the division disagreed to at the time, the recommendations the division did not fully implement present several lingering risks.
For example, the department is still not properly overseeing the city’s real estate portfolio. The spreadsheet that serves as the documented portfolio is incomplete and Real Estate does not share it with partner agencies, such as the Department of General Services. An accompanying interactive map on the division’s website also does not include all relevant details.
If Real Estate included all recommended information in both its portfolio and the interactive map, it would be better equipped to meet its mission to be consistent, transparent, and an accountable partner with “internal and external customers in the management, acquisition, and disposition of the city’s real estate assets.” The information could also help partner agencies meet the city’s future real estate needs as efficiently and economically as possible.
November 4, 2021
In keeping with generally accepted government auditing standards and Auditor’s Office policy, as authorized by city ordinance, the Audit Services Division has a responsibility to monitor and follow up on audit recommendations to ensure city agencies address audit findings through appropriate corrective action and to aid us in planning future audits.
In our follow-up effort for the “City Real Estate Portfolio Practices” audit report issued in May 2020, we determined the Finance Department’s Real Estate Division did not implement six of the 10 recommendations it agreed to in the original audit report. Real Estate implemented only one recommendation and partially implemented three. Although Real Estate personnel disagreed with three other recommendations, we learned they took at least some action to address those concerns.
However, auditors determined the risks associated with the audit team’s initial findings have not been fully mitigated. As a result, the Audit Services Division may revisit these risk areas in future audits to ensure the city takes appropriate corrective action.
The Highlights page in this report provides background and summary information about the original audit and the completed follow-up effort. Following the Highlights page is a detailed implementation status update for each recommendation.
I would like to express our sincere appreciation to the personnel in the Real Estate Division who assisted us throughout the audit and the follow-up process. For any questions, please feel free to contact me at 720-913-5000.
Timothy O'Brien, CPA
AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor´s Office
201 W. Colfax Ave. #705 Denver, CO 80202
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