Library Financial Processes Follow-up

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While the Denver Public Library implemented three recommendations made in the “Library Financial Processes” audit report, seven other recommendations have yet to be fully implemented or acted upon.
  • The lack of progress toward implementing these seven recommendations presents many lingering risks.
  • While the library did update its procedures, many are insufficient — which could lead to inadequate oversight of key financial processes in the future.
  • Inadequate procedures related to the receipt and deposit of overages and shortages — as well as the lack of a resolution plan for overages and shortages — can lead to ineffective monitoring of cash reporting, inadequate detection of anomalies, and overlooking potential misuses of library funds.
  • Staff duties are not separated, so a single staff member may still have all knowledge and control over a particular process or fiscal activity — which can increase the risk of fraud or abuse.
  • Without procedures for contract monitoring, library staff cannot adequately oversee library contracts.
  • The library’s failure to create a formal succession plan opens it to the risk of future disruptions of financial operations, and it risks not retaining employees.
  • The library’s failure to enforce timely approvals of time sheets exposes the city to potentially inaccurate payroll reporting and possible fraud.
  • While the library closed most of its store credit cards, we could not verify one outstanding card was closed. Using store credit cards increases the risk of fraud and misconduct — such as through unauthorized purchases, misuse, or opportunities for abuse. 

 Library Financial Process Follow-up - Number of implemented recommendations.

 

Auditor's Letter

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 “Library Financial Processes” audit report issued in June 2020, we determined the Denver Public Library fully implemented three recommendations and partially implemented one other it agreed to in the original audit report. However, six other recommendations to improve financial controls in alignment with the city’s Fiscal Accountability Rules were not implemented, and 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 at the Denver Public Library who assisted us throughout the audit and the follow-up process. For any questions, please feel free to contact me at 720-913-5000.

Denver Auditor,

Auditor's Signature
Timothy O'Brien, CPA

 

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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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