Audit Reports: 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993

2008 Reports

• Seattle Public Utilities Revenue Cycle - Commercial Solid Waste Internal Controls Review
• Improving City Oversight of the Seattle Indian Services Commission
• Seattle Public Utilities Revenue Cycle - Transfer Stations Internal Controls Review
• Seattle City Light Travel
• Seattle's Special Events Permitting Process: Successes and Opportunities
• External Funding of Capital Projects
• Seattle Office of City Auditor 2007 Annual Report

Seattle Public Utilities (SPU) Revenue Cycle Audit - Commercial Solid Waste – Internal Controls Review
April 9, 2008

Focus:

To evaluate the policies, procedures, and operations related to charging and collecting SPU commercial solid waste service fees.

Results:

In 2007, SPU received over $42 million from its 9,000 commercial solid waste customers in service fees. Overall, we found internal controls were adequate for the policies, procedures, and practices involved in charging and collecting commercial solid waste fees. However, we identified some control weaknesses and worked with SPU to establish an action plan to address these issues, including:

• SPU will work with the solid waste contractors and the City’s Treasury division to improve collections procedures, which should increase revenue recoveries;
• SPU will obtain monthly reporting on delinquent accounts, including the age of these accounts; it will also analyze contractor reports and delinquent rates, and evaluate the current commercial solid waste policies and procedures concerning delinquent accounts and take necessary actions to minimize delinquencies;
• At SPU’s request, the yard-waste processing vendor changed their scale house procedure for recording truck weights to address a control weakness with their process.
• SPU will strengthen invoice review procedures for transfer services, yard-waste processing services, and recycling processing services. This will include instituting procedures for periodic checks of truck weight scale tickets to verify tonnage figures and monthly queries of scale data for yard-waste invoices;
• SPU will require all critical scales (vendor and SPU transfer station scales) to be licensed with and tested by the State of Washington Weights and Measures division and that all parties adhere to applicable scale licensing requirements in the future;
• SPU will require detailed monthly complaint logs from both of its solid waste contractors, and this reporting will be expanded to include complaints other than missed garbage pickups. SPU will monitor contractor complaint reporting for any issues of service non-compliance with contract terms and assess applicable penalty fees.
  

Improving City Oversight of the Seattle Indian Services Commission
February 25, 2008

Focus:

To determine whether the Seattle Indian Services Commission’s operations were consistent with City policies and procedures.

Results:

We determined that the Seattle Indian Services Commission’s management practices complied with more than 90 percent of its City Charter mandates. However, the Commission did not fully comply with the terms of the City’s Cooperation Agreements for its Series 2002 and Series 2004 Special Obligation Bonds. Other inconsistencies were also identified with the Commission’s system of management/internal controls, payments made to employees that were not consistent with State law; contracting practices that did not adhere to Washington State public works laws; and contracting practices that may have been inconsistent with the Seattle Municipal Code provisions for public corporations.

Seattle Public Utilities Revenue Cycle - Transfer Stations Internal Controls Review
February 14, 2008

Focus:

To evaluate policies, procedures, and operations related to charging and collecting SPU Transfer Station fees.

Results:

In 2006, SPU received about $11.3 million in Transfer Station fee revenues. Overall, we found internal controls were adequate for the policies, procedures, and practices involved in charging and collecting Transfer Station fees. However, we identified some significant issues and worked with SPU to establish an action plan to address these issues, including:

• SPU management will review Transfer Station transaction policies and procedures, implement stronger transaction controls, and monitor compliance to control procedures;
  
  
• SPU and the City’s Treasury division will work together to improve collections procedures to increase revenue recoveries; and
  
  
• SPU management will strengthen control procedures relating to check payments accepted at the Transfer Stations, transactions for customers who “skip-out” (exit without paying), and handling of delinquent accounts, with the objective of minimizing these occurrences.

Report Highlights

Seattle City Light Travel
February 1, 2008

• Letter from Susan Cohen to Herb Hogue, CFO City Light February 1, 2008
• Letter to Susan Cohen from Herb Hogue in response to audit January 29, 2008

Focus:

To review controls over travel at Seattle City Light.

Results:

Overall, City Light is doing a good job of managing and controlling travel by its employees. City Light exercises strong internal controls over travel through the use of a single travel agent and by accounting staff review and verification of all travel documents and receipts. While City Light's management controls over travel are generally sound and appropriate, we found controls could be strengthened in the areas of approving travel requests and allowing exceptions to the City's travel policy.

Seattle’s Special Events Permitting Process: Successes and Opportunities
January 31, 2008

Focus:

This review focuses on the effectiveness of the special events permitting process and ways to improve the City's current Special Event Permitting process.

Results:

We found that overall, the City's Special Event permitting process successfully meets its mission of assisting public and private organizers and City departments in planning and scheduling events, as well as coordinating City services and resources, so events can occur safely and smoothly. We did, however, identify a number of potential areas for improvement to the Special Event Permitting program, including the need for readily available and easily located information about the program to the public through a dedicated City website for the Special Events Office.

Special Events Report Highlights

Additional Document I: Special Events Web Survey
Additional Document II: Sample Fee Analysis
Additional Document III: Compliance Profile of 59 Sample Applications
Additional Document IV: Sample Selection Methodology and List of Sample Projects in Analysis

External Funding of Capital Projects
January 17, 2008

Focus:

How the City can improve and strengthen its practices when reviewing capital projects relying on external funding.

Results:

Our analysis identified three City patterns for handling projects with external funding: 1) Consistent with best practices, when full funding is not in place, CIP departments wait to proceed with a project by delaying, phasing, or reducing the scope of the project. 2) The City may add funding to fill a funding gap in response to lobbying by the external partner. This is generally consistent with best practices wince full funding is achieved before proceeding with the project, but may distort the City's prioritization of projects. 3) Not consistent with best practices, the City may proceed with a project even though full funding is not in place, choosing to assume the risk that emergency, interim, or permanent funding beyond what was originally planned may be required.

We recommended the following to better address the risks associated with Pattern 3.

1. Modify the current fiscal note for projects with external funding to better reflect external funding risks;
2. Assure City Council has sufficient information to make informed decisions;
3. Strengthen internal controls related to the development, review, and execution of assurances (contracts) for capital projects with external funding;
4. Do not proceed with a project without either obtaining secure financial commitments to meet cash flow requirements or endorse a contingency plan for meeting project cash flow and funding requirement;
5. Update the City's financial policies related to capital projects with external funding, and direct a designated party to complete the analysis for capital projects relying on external funding.

Seattle Office of City Auditor 2007 Annual Report
January 16, 2008