Coronavirus Relief Funding Follow-up
The Department of Finance fully implemented one recommendation made in the original audit report, but four others were not acted upon.
While the department did provide more detailed guidance on how to substantiate pandemic-related transactions with supporting documentation, several risks related to tracking interest earnings for grants remain unaddressed.
By not ensuring bank reconciliations are completed monthly, the Department of Finance risks that bank errors, erroneous transactions, or fraud against the city goes undetected. Furthermore, by also not ensuring interest is posted monthly for grants that earn interest, the city risks not following federal, state, or local requirements for the grant money it received. This puts this money at risk if it must be used by a certain date and grant managers do not know interest earnings are available for the city’s use.
Because of these continued risks, the city may forfeit valuable financial resources that can otherwise be used on services and programs benefiting Denver taxpayers.
Meanwhile, by not having a plan to rotate job functions among staff, the department is not complying with a city fiscal rule and it risks losing institutional knowledge as employees leave the city. Employee fraud against the city might go undetected or — as we saw previously — important job functions may not be completed when employees are on leave. This leaves city resources at risk of being misused.
July 7, 2022
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 “Coronavirus Relief Funding” audit report issued in July 2021, we determined the Finance Department fully implemented only one recommendation and did not implement four other recommendations it agreed to in the original audit report. Therefore, we 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 Finance Department 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
Call: (720) 913-5000
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