STATUS UPDATE ON QUADRENNIAL AUDITS

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The City Council’s Committee on Taxation, Finance, and Economic Development Committee (TFED), held a hearing on the status of the Quadrennial Audits, on Nov 12. At the hearing, the Director of Department of Finance indicated that three of the five agencies in the first round were on schedule to be completed by Nov 30. As of Nov 30, below is the current status of all 13 audits (including the first round of five).

Status of the First Round of Five Audits

The first three: Baltimore City Recreation & Parks (BCRP), Department of Finance, and Department of Transportation (DOT), are all expected to be delivered at a Board of Estimates (BOE) hearing in December (BOE being the City’s spending panel). The remaining two: Baltimore Police Department (BPD) and Department of Public Works (DPW), are expected shortly after. The Department of Finance has an established policy for the implementation of the Quadrennial Audits Charter Amendment, AM-404-5. Specifically, this policy outlines seven procedural steps for each agency audit, which the final one being: “The “Principal Agency,” through the Department of Finance, will facilitate transmittal of the financial and performance audits to the Board of Estimates. Copies of the audits will be provided to the Mayor, the President of the City Council, the Comptroller, and all members of City Council.” The audited agencies are essentially required to transmit the audits to the BOE, which can require 1 – 3 weeks to get on the BOE agenda, thus the delay in transmittal of the audits. While this does not alleviate the frustration of being able to read the findings of the audits, it is the policy that was established.

Status of the Second Round of Four Audits

The Director of Finance previously committed at our Oct 01 hearing to award the four agencies slated for the second round of audits (Housing & Community Development (HCD), Baltimore Fire Department (BFD), Department of General Services (DGS), and the Mayor’s Office of Information Technology (MOIT)) by Oct 07. All four were awarded at the Oct 07 BOE Meeting (see: agenda, items #44 – #47).

Status of the Third Round of Four Audits

The third round includes: Department of Planning (Planning), Baltimore Development Corporation (BDC), Department of Law (Law), and Department of Human Resources (DHR). The Director of Finance has taken steps to help expedite the initiation of at least two of the audits referenced above, ahead of schedule.

Continued Oversight By City Council

The City Council has taken several steps to provide oversight and accountability, and will continue to do so. This has been done in an effort to ensure the Quadrennial Audits are completed by their Charter mandated deadline of December 2016. These steps include:

  • Jan 15 – Councilman Costello introduced a Resolution (14-0196R) which resulted in an Investigative Hearing – Status of Charter Required Agency Audits FOR the purpose of calling on representatives from the Finance Department, Law Department, and Department of Audits to appear before the Council to provide a comprehensive update about the City’s progress towards meeting the Charter requirement that designated City agencies be audited once every 4 years, and to discuss the City’s plan for meeting this Charter obligation in a responsible and timely manner.
  • Oct 01 – Councilman Costello introduced a Resolution (15-0260R) which resulted in an Investigative Hearing  – Reviewing Charter Required Agency Audits FOR the purpose of calling on representatives from the Finance Department, Law Department, and Department of Audits to appear before the Council to provide a comprehensive update about the City’s progress towards meeting the Charter requirement that designated City agencies be audited once every 4 years, explain why the current round of audits is behind schedule as well as what the potential consequences of this delay may be, and discuss the City’s plan for meeting this Charter obligation in a responsible and timely manner.
  • Nov 12 – Chairman Stokes held a Legislative Oversight Hearing (LO15-0136) – Brief Committee on Current Status of City Audits For the purpose of calling on representatives from the Department of Audits and the Department of Finance to brief the committee on the current status of City audits.
  • Ongoing monthly Legislative Oversight Hearings
  • Regular discussions with the Director of Finance

Other Audits Being Conducted Annually

It is important to note that, contrary to popular belief, there are several other audits conducted on an annual basis. While I am certainly disappointed with the current status of the 13 quadrennials audits, I am pleased with recent progress and hopeful they will be completed on time. Other audits conducted annually include, just to name a few:

  • the Comprehensive Annual Financial Report (CAFR)
  • 911 Emergency System Program Report
  • Water Utility Fund Statement
  • Waste Water Utility Fund Statement
  • Parking Facilities Fund Statement
  • Loan and Guarantee Fund Statement
  • A-133 Audit for all Federally funded grants

In closing, I look forward to continuing to work together with Council President Young, Councilman Stokes, other members of the Council, the Director of Finance, and the Administration. It is my sincere hope that all 13 audits will be completed on time.