Expense Report Approval Process Follow-up

The Department of Finance fully implemented five recommendations made in the original audit report. The department has defined and documented the responsibilities for each level of approver as well as developed standardized training guides for expense reports. Training was provided to some of the employees who are engaged in this process. Training materials and financial newsletters provide clear information about the expense report process with links to related job aids and Fiscal Accountability Rules.

Remaining Risks

The two recommendations the department did not fully implement present several lingering risks. Among them:

• Finance officials acknowledge they are skipping the manager approval step when approving expense reports for employees who are listed as their own manager or do not have a manager in Workday, the city’s system of record. Although the expense reports still go through two levels of review and the Department of Finance considers this sufficient, there is a risk of expenses by some managers not being adequately scrutinized.
• The Department of Finance has created procedures to analyze the percentages of expense reports sent back for adjustments and resubmission as a portion of all expense reports by city agency, but there is no process to confirm whether the reports that are not sent back are also compliant with the required procedures.

Auditor's Letter

June 1, 2023

In keeping with generally accepted government auditing standards and Auditor’s Office policy, as authorized by city ordinance, we have 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.

After following up on the “Expense Report Approval Process” audit report issued in November 2021, we determined the Department of Finance fully implemented five of seven recommendations it agreed to. Of the remaining two recommendations, one is partially implemented and the other is not implemented.

During the original audit, we found a high percentage of approved expense reports lacked adequate documentation to support the dollar amounts and sufficient explanations of what an expense was for. The roles and responsibilities for employees tasked with approving expense reports were not adequately defined or uniformly understood, and there was no mechanism to monitor whether employees were compliant with approval procedures.

Based on our follow-up work, we determined the Department of Finance made significant progress but did not fully address all the risks associated with our initial findings. Consequently, we may revisit these risk areas in future audits to ensure the city takes appropriate corrective action.

We appreciate the leaders and team members at the Department of Finance who shared their time and knowledge with us throughout the audit and the follow-up process. Please contact me at 720-913-5000 with any questions.

Denver Auditor's Office


Timothy O'Brien, CPA

AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor

Denver Auditor´s Office

201 W. Colfax Ave. #705 Denver, CO 80202
Email: auditor@denvergov.org
Call: 720-913-5000
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