local government auditing quarterly...tina adams senior auditor charlotte, nc (704) 336-7270...

The Journal of Local Government Auditing Winter 2013

Auditing Environmental Sustainability

Local Government Auditing Quarterly

LGAQ_winter13.indd 1 1/6/2014 4:46:24 PM

The Local Government Auditing Quarterly (LGAQ) is published four times per year – in September, December, March, and June – by the Association of Local Government Auditors (ALGA). Membership information appears on the inside back cover.

Association of Local Government Auditors449 Lewis Hargett Circle, Suite 290, Lexington, KY 40503-3590(859) 276-0686algaonline.org

Board of Directors

Bill Greene, PresidentCity AuditorPhoenix, AZ(602) [email protected]

Corrie Stokes, President-ElectDeputy City AuditorAustin, TX(512) [email protected]

David Givans, TreasurerCounty Internal AuditorDeschutes County, OR(541) [email protected]

Kymber Waltmunson, SecretaryKing County AuditorKing County, WA(206) [email protected]

Drummond Kahn, Past PresidentDirector of Audit ServicesPortland, OR(503) [email protected]

Tina AdamsSenior AuditorCharlotte, NC(704) [email protected]

Craig KintonCity AuditorDallas, TX(213) [email protected]

Pamela WeipertManagerOakland County, MI(248) [email protected]

Carmelina Di MondoDirector, Forensic UnitToronto, ON(416) [email protected]

Publications Committee

Justin AndersonChairKing County, WA

Amanda LambLGAQ EditorAudits Division, OR

Emily Jacobson LGAQ Assistant EditorDenver, CO

Slemo WarigonLGAQ Assistant EditorOffi ce of the Inspector GeneralWashington, D.C.

Kristine Adams-WannbergPortland, OR

Mary Hull CaballeroMetro, OR Angela DarraghClark County, NV

Craig KintonDallas, TX

Paula WardWashoe County School District, NV

Margot WilsonAustin, TX

LGAQ Volume 27, Number 2


From the Editor……………………………............................................................................ 2Message From the President……………………………...................................................... 3Opportunities for Improvement: Seeking Sustainability...................................................... 4AudiTechie: Using CAATs to Automate the OIG Audit Process…………………………...... 6GASB Update………………………………………………………………............................... 8ALGA 2014 Annual Conference: Save the Date!………...................................................... 9Committee Report: Awards Program.....………………………............................................. 10Committee Report: Membership…………………………….................................................. 14Committee Report: Long-Term Planning………………………............................................. 16Committee Report: Education………….……………………................................................. 17Committee Report: Nominating..…………………………….................................................. 18ALGA’s On Twitter!....................…………………………….................................................. 19Member News……………………………………………........................................................ 20Audit Shop Profi le: District of Columbia OIG…..…………................................................... 21Sustainability: Environmental Sustainability: Learned Hints for Performance Audits.......... 22Sustainability: Street Sweeping as an Environmental Compliance Tool............................. 24Sustainability: Environmental Sustainability and the Local Government Audit Function…………………………………………............................................................ 27Sustainability: Calculating Avoided Greenhouse Gas Emissions….……………................. 30Sustainability: The Triple-Bottom-Line Model: Clarifying the Role of Audit Function and Its Effect on Organizational Sustainability..................................................... 32Sustainability: From Zero to 90: Auditing the City of Austin’s Efforts to Measure And Achieve Zero Waste……….......................................................................................... 37Quarterly Quizzer………..................................................................................................... 40Recently Completed Audit Abstracts………………............................................................. 41

Table of Contents

Winter 2013 1



Environmental sustainability has been a hot-button issue for many years now. From President Carter’s solar panels on the roof of the White House in 1979 to the increase in municipal recycling programs in the 1980s and 90s, then on to the regulation of greenhouse gas emissions in the 90s and then, well, President Obama’s reinstalling of the White House solar panels in 2013 (they had been removed following Presidents Carter’s departure), government institutions have been an integral force in the sustainability movement. Sometimes lauding environmental sustainability to improve quality of life for future generations, other times denouncing the cost or questioning the purpose, governments everywhere continue to take center stage in the public debate over the costs and benefits of sustainability.

While local governments grapple with training citizens to recycle, improving the fuel-efficiency of fleet vehicles, and trading vehicle lanes for bike paths, local government auditors have been stuck with the more difficult questions. What is success? How do you measure it? How is it monitored? In other words, how do you audit environmental sustainability?

The Winter 2013 issue of the Local Government Auditing Quarterly will address these questions and many more. This issue includes articles on auditing a city’s sustainability goals, evaluating the effectiveness of

environmental restoration projects and improving coordination, and even aligning sustainability goals with auditing practices.

Looking Forward to the Spring 2014 QuarterlyThe Spring 2014 issue will continue our audit topic-specific themes with Auditing Public Safety. ALGA will be partnering with the International Law Enforcement Auditors Association (ILEAA) to bring content from international law enforcement professionals, as well as ALGA members. Articles are due on February 15. Please submit your articles using the form available on the ALGA website or submit to [email protected] Future themes include:

• Summer issue due May 15: Auditing Fiscal Sustainability

• Fall issue due August 15: Identifying Fraud

• Winter issue due November 15: Auditing Human Resources

Let’s Connect!Finally, please do not forget to join ALGA’s social networking sites. Our LinkedIn group now has over 1,300 members who are there to share valuable information and engage in meaningful discussions about our profession. For even more real-time information, follow ALGA on Twitter. You’ll have a vast community of thousands of professionals, all right at your fingertips.

Cheers,

From the Editor

LGAQ 2

AMANDA LAMBEditor

Performance Auditor,Division of Audits (OR)


Greetings ALGA Friends!

The ALGA Board and the Committee Chairs had a very productive September meeting in Tampa, Florida. As always, I was blown away by the level of commitment, enthusiasm, and amount of work done by the volunteers of our great professional organization. Although many topics were discussed, there were a few in particular that I wanted to highlight:

Guidance for Non-Audit ComplianceAfter the Government Accountability Office (GAO) revised non-audit definitions and guidance in the 2011 Yellow Book, a number of ALGA members expressed concern about how best to comply with non-audit requirements. As a result, the Board appointed a subcommittee charged with developing guidance for local audit shops, as well as ALGA peer reviewers. When finalized, this information will be rolled out to our members, so stay tuned.

2014 Annual ConferenceWhile in Tampa, we had the opportunity to tour venues for our annual conference scheduled for May 5-6, 2014. We are very excited about our conference hotel, the Marriott Waterside. It’s a beautiful facility and the Conference Committee is working hard to fill the agenda with impactful presentations, great speakers, and opportunities to network. Our Monday evening function at the Florida Aquarium not only offers a chance to relax and network with peers, but spectacular scenery and an opportunity to learn more about local wildlife.

Cooperative AgreementsDid you know that ALGA has cooperative agreements with several organizations, such as the International

Law Enforcement Auditors Association (ILEAA), the Institute of Internal Auditors (IIA) and others? If not, you are not alone. These agreements were executed over a number of years and resulted in mutual benefits for ALGA and other organizations. In some cases, key personnel have changed and the agreements are in need of review and update. The Board is pursuing this process and will share the results with members when complete.

CommitteesCommittee Chair reports provided to the Board demonstrated that our volunteers continue their hard work to maintain ALGA’s position as the premier professional association for local government auditors. From new mentorship programs, extensive member advocacy efforts, and ongoing website improvements, to new member outreach and outstanding content in the Local Government Auditing Quarterly, we continue to accomplish amazing things through the dedication of our members. I encourage you to take advantage of the resources on ALGA’s website (algaonline.org) and take some time to read highlights from a few of our committees in this issue (Education, Membership, Nominating and Long Term Conference Planning). I think you will be impressed and proud as well.

The ALGA Board will hold its next meeting at the beginning of February 2014. Feel free to contact me anytime if you would like to share any suggestions on how ALGA might better serve its members or promote local government auditing ([email protected]).

Message From the President

BILL GREENEPresident, 2013-14Acting City Auditor, City of Phoenix (AZ)

Winter 2013 3


Seeking Sustainability

State law required an audit of an agency with the mission of restoring Oregon's watersheds and salmon. The Oregon Watershed Enhancement Board (OWEB) had been spending a share of lottery funds for over a decade toward its mission.

The restoration mission in Oregon is daunting but not impossible. The wave of immigrants over the Oregon trail just 150 years ago began significantly affecting thousands of miles of rivers and streams, sometimes willfully and sometimes without awareness. For example, they turned forests into farmland, which washed soil into rivers, raised their temperatures, and ultimately reduced the volume of animal, insect, and plant life. Many other human actions affected the ecology of the rivers, such as pollutants, chemically enhanced lawns, large dams, and irrigation diversions.

It had taken millennia for the natural systems of the Pacific Northwest to evolve and reach an equilibrium among all the species, the geography, and climate. The introduction of humans and their modern commerce broke that equilibrium, and we are trying to apply what we now know to restore it. Salmon were the most obviously affected species and their numbers declined and continue to do so, even as hatcheries unsuccessfully try to mitigate the losses. For example, we now know that our past well-intentioned efforts to clear river channels actually reduced habitat for young salmon, with fallen trees providing food and shelter.

In the west, we are not so far from that equilibrium - most of the species still exist, though not in the proportions of the past. We also know that these natural systems can rebuild themselves with just a little extra

human effort, but future vigilance is also needed to mitigate impacts.

Our audit reviewed OWEB’s efforts to build capacity and sustainability for local restoration work, develop partnerships, monitor, and apply adaptive management practices. Our audit had positive conclusions, but also some recommendations. The title was intended to convey the program's past success as well as necessary steps for the future: Continuing Sound Partnerships and Strategies for Restoration and Protection.

The program's efforts were built around a framework called the Oregon Plan, intended to enlist the support of property owners, community-based groups, and other stakeholders to physically restore stretches of rivers, and to monitor the water conditions, numbers of salmon, and other wildlife. Salmon were considered an indicator species for the overall health of the rivers and, for many Oregon rivers, became listed under the Endangered Species Act.

The lottery money paid for staff visits to communities to engage with soil and water conservation districts, local government agencies, the Army Corps of Engineers, and other organizations to align efforts. These groups were offered funding to pay for equipment rental, water testing, and other activities to restore more natural conditions in and around the rivers. Just as importantly, the groups were expected to continue their efforts over the years, and to ensure that their improvements were not undone.

OWEB built an online library of reference materials to explain the science of healthy streams, help individuals diagnose problems, provide practical instructions for restoration, and offer other technical information. This ensured that when the local

Opportunities for Improvement

GARY BLACKMERDirector,

Division of Audits (OR)

LGAQ 4


Winter 2013 5

groups applied for improvement grants from OWEB, their particular projects were scientficially sound and lasting. In addition, OWEB coordinated with agencies like the Army Corps of Engineers or the Transportation Department (for culvert upgrades), which could further leverage the group efforts.

Over the decade many groups formed, improving sections of rivers by working with the property owners on their banks in a number of ways. They worked with highway engineers to replace culverts that blocked salmon passage, upgraded irrigation systems to screen out salmon and better conserve water, removed invasive junipers, and addressed erosion and bacterial contamination that reduced water quality.

Sustainability for the long term was a fundamental requirement of the mission. The magnitude of rivers needing attention was huge and, while restoring a section of stream was a long-term investment, restoration could be undone over time. To meet these needs the wisest investment was to build a community that cared about its rivers and would continue those sound practices into the future. River masters, watershed councils, and on-going partnerships all contribute to the infrastructure that could produce lasting results.

We tested the quality of that key effort in our audit. We conducted extensive interviews of community group members, current and former board members, agencies, and stakeholders to identify any possible problems that could interfere with their efforts, but found few issues. We found committed and active individuals who worked with farmers, ranchers, and other property owners who in turn could persuade for river improvements, but also with financial support to accomplish the work. We concluded that the program was operating as intended.

While we saw that these efforts were achieving their intended purpose, the projects were often

disconnected and needed to be more systematically addressed. For example, there is little value in replacing culverts under a roadway to allow passage for returning salmon if they can't be reached due to earlier barriers downstream. OWEB had been moving toward more “river basin” approaches to restoration, but its system of awarding restoration projects was still emphasizing community-building.

We recommended that rather than just choosing among proposals made by the groups, OWEB establish statewide and regional goals and priorities that could be the basis for funding decisions. With a decade of successful capacity-building established, this next step seemed obvious and necessary, which OWEB realized and embraced.

One other important aspect of sustainability was the ability of OWEB to adopt the best practices for restoration. The Oregon Plan states that watershed restoration efforts will need to adapt, evolve, and improve based on information obtained from monitoring, independent scientific review, and knowledge of the people putting the Oregon Plan to work. Our audit found that OWEB applied adaptive management strategies including learning from experience, applying alternative approaches, and making changes to current programs. Nonetheless, we recommended additional effort in measuring their progress and results to help better inform them and the public.

The “systems view” of our report reveals another layer to consider in any audit. To be sustainable, organizations also need to adapt, acquiring information to be more efficient and effective, building stronger relationships with other agencies and stakeholders, and adjusting to changing conditions to maintain an equilibrium and successful results. This lesson about how humans and their systems interact with other systems is perhaps the most important of all.


LGAQ 6

Using CAATs to Automate the OIG Audit Process

The District of Columbia Offi ce of the Inspector General’s (DCOIG) Audit Division uses the following Computer Aided Audit Tools (CAATs) or Benefi cial Electronic Audit Support Tools (BEAST) to automate its audit process:

Electronic Working PapersDCOIG uses TeamMate R10 software to create, track, store, review, and manage its electronic working papers (EWPs). Maintaining EWPs in a centralized database allows auditors to navigate through current and historical audit records with ease and effi ciency. The database enables auditors to coordinate current audit projects and ensure that fi ndings from prior or related projects are appropriately considered during the audit planning phase. The use of EWPs also enables the auditors to more effectively standardize audit procedures and programs, thereby improving the quality and consistency of the audit documentation.

Data Analysis TechnologyDCOIG uses both Audit Command Language (ACL) and Microsoft Excel software packages to import data from any source, identify unexpected or unexplained patterns in data that may indicate fraud and abuse, perform 360-degree analytics to dig into the root cause of fraud and abuse, communicate audit results, and automate repeatable audit tasks. In addition to enabling auditors to select statistical samples for review using systematic, random, or monetary unit techniques, these tools play a key role in DCOIG’s fraud prevention, detection, and investigation program. These tools are also used to perform data business process review, data

mining, and continuous monitoring discussed below. Interactive Data Extraction and Analysis (IDEA) is a tool similar to ACL that other audit shops use.

Data Mining/Continuous MonitoringData mining is the practice of examining large databases in order to generate new information that enables organizations to make proactive, knowledgeable decisions. This practice involves automating the detection of relevant correlations, patterns, or anomalies embedded within large data sets – using specifi c tools and defi ned approaches – that can be used to predict future trends. DCOIG performs its data mining in ACL, Microsoft Excel spreadsheets, and Statistical Analysis System (SAS). These activities are conducted under the umbrella of DCOIG’s Identity Validation and Data Mining System. The identify validation is handled through LEXIS/NEXIS’ Accurint databases on a test basis. These tools enable DCOIG auditors to identify rules and irregularities in databases, as well as issue predictions based on a defensible data analysis.

Continuous monitoring is an ongoing process for acquiring, analyzing, and reporting on fi nancial data to identify and address the risks of fraud, waste, and abuse (i.e., minimize losses to the District government). DCOIG engages extensively in data mining as a part of its continuous monitoring strategy. Continuous monitoring helps DCOIG to: (1) reduce audit costs; (2) monitor internal controls centrally; (3) increase audit effectiveness and effi ciency; and (4) detect early signs of fraud. Continuous monitoring also helps the District government and its offi cials to: (1) identify undesirable events before it is too late; (2) reduce potential loss of revenue; (3) centrally monitor distributed information systems; (4)

AudiTechie

SLEMO D. WARIGONCIA, CIGA, CISA, CICA,

MBADirector of Quality

Assurance and Technical Audits,

Offi ce of the Inspector General,Washington, D.C.


Winter 2013 7

provide early notifi cation of system breaches; and, (5) increase compliance with laws and regulations.

Audit Offi ce Productivity ToolsDCOIG issues notebook computers, scanners, iPads, and smartphones to its auditors to enhance their productivity in and out of the offi ce. These tools include the latest applications for word processing (Microsoft Word), spreadsheets (Microsoft Excel), email (Microsoft Outlook), speech recognition, document storage, EWPs, and audit evidence gathering to replace cumbersome manual procedures.

These tools provide DCOIG with a structured framework for performing organized, effi cient, and reliable audits that meet or exceed professional standards, such as the Yellow Book (Generally Accepted Government Auditing Standards). They offer simple and comprehensive methodology that facilitates every aspect of the audit process, from data analysis to reporting actionable results. In short, they increase the economy, effi ciency, and effectiveness of DCOIG’s audit process by automating and simplifying its workfl ow while providing a high-level of audit assurance.


LGAQ 8

The GASB released its Comprehensive Implementation Guide for 2013-2014, which added questions and answers on a number of topics. Some of these include taxation authority and fiscal dependency, presentation of a component unit whose debt is to be repaid with resources of the primary government, government combinations, service concession arrangements, and presentation of deferred inflows and outflows of resources and changes in those balances due to certain events. It also released a Guide to Implementation of GASB Statement 67 on Financial Reporting for Pension Plans. The guide includes nearly 100 questions and answers intended to clarify and explain the statement and its application in specific situations. You can download the guides, statements, and other resources free of charge at GASB’s website, http://www.gasb.org, which has been updated to be easier to navigate.

The GASB added two projects to its current technical agenda: a project addressing fiduciary responsibilities and pre-agenda research to re-examine the financial reporting model established in statements 34, 35, 37, 41 and 46. The primary objective of the fiduciary responsibility project is to develop guidance on applying criteria regarding whether and how governments should report fiduciary activities in their general purpose external financial reports. An exposure draft is scheduled to be released in the third quarter of 2014.

At the October meeting of the Governmental Accounting Standards Advisory Council (GASAC), members also provided feedback to the GASB on the following projects under deliberation: • Hierarchy of Generally Accepted

Accounting Principles (GAAP Hierarchy)—which is considering

changes to the current hierarchy established in Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The GASB is scheduled to issue an exposure draft on the GAAP hierarchy in the first quarter of 2014. Recent deliberations dealt with proposed guidance that governments consider situations analogous to authoritative guidance before considering guidance from nonauthoritative sources when specific authoritative guidance is not available.

• Other Postemployment Benefits (OPEB)—which is reviewing the effectiveness of existing standards for reporting retiree health insurance and other forms of other postemployment benefits. The GASB is expected to issue a preliminary views document in the second quarter of 2014. Recent deliberations dealt with cost-sharing plans, special funding situations, and note disclosures. The GASB’s preliminary tentative decisions are consistent with the changes in pension accounting and reporting.

• Leases—which is re-examining issues associated with lease accounting in the government environment and considering improvements to the existing guidance. The GASB is scheduled to issue an exposure draft in the final quarter of 2014. Recent deliberations dealt with defining leases, determining the scope of the proposed guidance, and considering how to address option periods and fiscal funding clauses.

The Conceptual Framework – Recognition project is on hold pending completion of the pre-agenda research on the financial reporting model. The Economic Condition Reporting: Financial Projections project also remains on hold.

GASB Update

AMANDA NOBLEDeputy City Auditor,City of Atlanta (GA)

More detailed information about all of these projects is available at www.gasb.org.

As always, I welcome your thoughts on any of the topics. Feel free to send me an email: [email protected].


Save the Date for ALGA 2014!May 5-6 Tampa, Florida Marriott Waterside

Conference Sessions

May 5-6 (earn up to 15 CPE credits)

• Auditing in a political environment• Auditor on-boarding• Using graphics for reporting• Data analytics• Challenges in investigations• Internal controls: COSO and the GAO Green Book• Construction auditing• Auditing for sustainability• HR auditing• And more!

ALSO...

• A general session featuring GoverningMagazine’s “B & G Report” columnists

Workshops

May 4 Conducting an ALGA Peer Review (8 CPE credits)

Other skill-enhancing pre- and post-conference workshops (on May 4 and May 7) will be announced soon!

Fees

• Conference - Member: $450• Conference - Non-Member: $550• Conference - Guest: $120

(Sun. reception, Mon. dinner)• Workshop - 8 CPE: $270• Workshop - 4 CPE: $135

Watch for more details and registration information at algaonline.org!

Unlocking Audit Tools and Treasures

Winter 2013 9


2013 Knighton Awards, Lifetime Achievement Award, and Outstanding Contribution to the Quarterly Award Programs

ALGA’s members give so much to our organization—ALGA wants to give back to YOU by recognizing the work you do every day to move our profession forward! ALGA’s three awards programs provide member shops with opportunities to recognize others and be recognized for their own outstanding work. The 2014 awards cycle kicks off in January and it’s easy to participate. You can submit your shop’s work, nominate a veteran auditor for his or her contributions, or even serve as a judge.

We encourage all organizational members to participate! Organizational members are audit shops from local governments, school districts, boards and authorities that conduct audits as a primary duty. Organizational members must hold an ALGA membership for all auditors (including the Chief Audit Executive) in the audit shop.

What are the three awards? The Knighton Awards recognize the best performance audit reports of the preceding calendar year. The Lifetime Achievement Award is presented by the Board of Directors for long-standing service to both ALGA and the local government auditing community. And our newest award, the Outstanding Contribution to the Quarterly Award, recognizes an author who contributed an exceptional article to the Local Government Auditing Quarterly in 2013. Winners will be honored at the ALGA Annual Conference, to be held in Tampa, Florida on May 5 – 6, 2014.

New this year: The entire 2013 awards process will be administered electronically, using ALGA’s website. Knighton and Lifetime Achievement Award submission packets will be uploaded in unprotected PDF format to the Awards page on the ALGA website. The deadline for uploading submission packets is January 27, 2014. Submissions received after the deadline will not be accepted. When submissions are uploaded, there is an option for sending an email to yourself to verify your submission. Please check this option. This email will serve as the official confirmation that your online submission was received. The submitting office is solely responsible for ensuring that all submission documents are uploaded to the website. If you have questions about the uploading process, please contact Ben Thompson at [email protected].

Volunteer Judges Needed!The Awards Program Committee is looking for seasoned audit professionals to volunteer as Knighton judges. Volunteer judges must be willing to contribute time between January 27 and mid-March, 2014 to read and evaluate performance audit reports against the established award criteria and to deliberate with fellow award panelists to choose the winners. The actual time required will vary depending on the number of audit submissions in each judge’s assigned shop size category. Please consider volunteering to be a judge. Evaluating the work of your audit colleagues is a great way to pick up some tips for enhancing your own audit work and reports!

Volunteers are not allowed to judge within their own shop size category or within any category where there could be a conflict of interest either in fact or appearance. For example, volunteers are not allowed to judge in a category in which there is a submission from a

Committee Report: Awards Program

LGAQ 10


shop to which the judge belongs or belonged during the last three years.

If you are interested in volunteering, please submit an application, which can be accessed from the Knighton Awards page on ALGA’s website (http://algaonline.org). You can submit from the website or send your application to Nancy Howe at [email protected]. Volunteers who served as a judge last year do not need to complete the application again; just email Nancy Howe that you would like to serve as a judge for the 2013 awards cycle. You can also contact Nancy with any questions related to serving as a Knighton judge. The deadline for applying to be a judge is January 17, 2014.

Judges are also needed for the Outstanding Contribution to the Quarterly Award. You can find information about this award on the website’s Awards page. If you want to serve on the judging panel for this award, please apply on the Outstanding Contribution Award page or contact LGAQ Editor Amanda Lamb at [email protected].

2013 Knighton Award Program DescriptionDid you publish an outstanding performance audit report in 2013? We encourage you to participate in the Knighton Awards program, which recognizes the best performance audit reports of the calendar year.

Audit shops compete against other shops of the same size. Award categories are:

• Small Shop = 1 to 5 auditors• Medium Shop = 6 to 15 auditors• Large Shop = over 15 auditors

Note: Shop sizes include the Chief Audit Executive (e.g., City Auditor) and staffed auditor positions, but not administrative support personnel. Consultants working as full time employees should also be included in the shop size.

What criteria are used to judge the reports?Judges will use the following file criteria to evaluate reports for the Knighton Award. Each is equally weighted in the judging process.

1. An audit scope that has the potential for significant impact, and is responsive to the needs and concerns of decision-makers and/or the public;

2. Audit conclusions that are persuasive, logical, and firmly supported by the evidence (which was gathered using appropriate research methods and tools);

3. Audit recommendations that are feasible, and will make government programs more effective and efficient;

4. Audit results that are communicated in a clear, concise way;

5. Audits that have an innovative scope, methodology, recommendations, or report format.

How are the best performance audit reports determined?The ALGA Awards Program Committee, its Chairperson, and the ALGA President coordinate and manage the judging of the submissions.

Teams of judges, comprised of audit professionals, review the report submissions against the established criteria and determine which performance audit reports receive awards in each size category. Gold, Silver, and Bronze awards, as well as Honorable Mention recognition, may be presented to the audit shops issuing the best performance audit reports. The decision of the judges and the Awards Program Committee are final. Once the winners are determined, the Awards Program Committee Chairperson will announce the winners in each shop size category.

What reports are eligible for the award?Each audit organization can submit only one performance audit report annually. For a report to be eligible to receive the Knighton Award, the following minimum eligibility requirements must be met:

• The submitting office must be a current organizational member of ALGA. Organizational members are local governments, school districts, boards, and authorities that conduct audits as a primary duty. Organizational members must hold current ALGA memberships for all auditors in the audit shop, including the Chief Audit Executive.

• The submitting office must have issued the audit report during the 2013 calendar year.

• The submitting office must take “majority responsibility” for the conduct of the performance audit. This criterion is intended to ensure that ALGA's members are given equal opportunity for recognition based upon an audit shop's professional growth and achievement rather than its budget.

• The performance audit report submitted for a Knighton Award must have been conducted in accordance with either Yellow Book or Red Book standards, and must contain a standards compliance or modified standards compliance statement.

• The submitting office must grant permission for the report to be posted on ALGA’s website in the event it wins a Knighton award.

What should the Knighton Award submission include?Each Knighton Award submission must include a PDF copy of the performance audit report being

Winter 2013 11


submitted for a Knighton Award, with a completed 2013 Knighton Award Submission Form. The form contains five sections:

1. Section A captures general and contact information about the submitting audit shop and the audit shop size. The Awards Program Committee uses this information after the judging process is completed, so please enter all information as you would like it to appear throughout the awards process for official correspondence.

2. Section B affirms that the audit organization has met the minimum eligibility requirements, and gives ALGA permission to share award winning reports with its members by placing them on its website.

3. Section C seeks additional information on how your report submission meets or exceeds three of the five Knighton Award criteria. Please provide a short description or background information for the judges that address how your:• Audit scope has the potential for significant

impact, and is responsive to the needs and concerns of decision-makers and/or the public,

• Workable audit recommendations will make government programs more effective and efficient, and

• Audit scope, methodology, recommendations, or report format is innovative.

• Note: Supplemental information (such as newspaper clippings, news reports, etc.) submitted in conjunction with the report to illustrate audit impact, is no longer allowed, and will not be considered by the judges.

4. Section D, which is optional, asks for your participation in the awards program transparency efforts. ALGA members have indicated they are interested in reading the reports submitted for an award. Please indicate if you give ALGA permission to share your report submission on its website if you do not win an award. Your decision to participate (or not participate) will have no impact on your submission or the judging process.

5. Section E captures the Chief Audit Executive’s approval of the Knighton Award Submission Form and affirms the accuracy of the information provided.

How should the submission package be transmitted?To be considered for an award, all documents must be uploaded to the ALGA website in PDF format. PDF documents must not be protected in any manner that would prevent printing or require a password to access the documents. Protected documents will be disqualified.

When submissions are uploaded, there is an option for sending an email to yourself to verify your submission.

Please check this option - this email will serve as the official confirmation that your online submission was received.

To be considered for an award, your unprotected PDF documents must be uploaded to the ALGA website no later than January 27, 2014.

The Awards Program Committee will send a confirmation email to shops that have uploaded submission documents to the website. If you have not received confirmation within three days, please contact the Awards Program Committee Vice-Chair, Ben Thompson at [email protected]. The submitting office is solely responsible for ensuring that their complete submission packet is uploaded to the website.

What do the Knighton Award winners receive? Each award winning audit organization will receive:

• An award plaque presented during the ALGA Annual Conference;

• A congratulatory letter, co-signed by the ALGA President and Awards Program Committee Chairperson, addressed to the Chief Audit Executive and one additional official requested by the award winner; and

• A press release announcing the award and its significance.

The Gold award recipients from each shop size category are provided the opportunity to share their report with ALGA members during a concurrent session at the Annual Conference. If the audit shop agrees to present their winning audit report at the 2014 ALGA Annual Conference, they will receive:

1. Travel costs to the Annual Conference• Airfare at the 21-day advance coach fare.• Three (3) nights of hotel accommodations. An

additional night of hotel accommodations (total number of nights of hotel accommodations not to exceed four (4) nights) may be paid if it is more cost effective for ALGA.

• Airfare and hotel expenses not to exceed $1,000.

2. One Conference registration

Please note that the ALGA Conference Chair (the President-Elect) has the discretion to modify or limit the airfare and hotel accommodations when in the best interest of ALGA.

We encourage all eligible member organizations to submit their best report of the 2013 calendar year for a Knighton Award. Remember, you can’t win if you don’t enter!

LGAQ 12


2013 Lifetime Achievement Award Program DescriptionHas one of your colleagues gone above and beyond the norm in service to our association? Have they worked to establish or improve auditing standards and the environment in which we work? Have their volunteer efforts been trail-blazing? Have they implemented new ways of doing our jobs? Have they established new relationships with other organizations?

If so, consider nominating that outstanding colleague for ALGA’s Lifetime Achievement Award. The Lifetime Achievement Award recognizes and honors auditors who have made lasting and worthwhile contributions to local government auditing through their extraordinary service to ALGA.

What are the eligibility requirements of the Lifetime Achievement Award?Nominees for the award should meet the following criteria. Nominees should have:

1. Maintained an active membership in ALGA for at least 10 years.

2. Served ALGA as an Officer, Board Member, or Committee Chair.

3. Contributed to ALGA in ways that were significant and introduced, improved, or sustained ALGA’s initiatives, programs, or mission.

4. Retired from the local government auditing profession.

Specific requirements, including the requirement to be retired from the profession, may be waived at the discretion of the Board.

How are Lifetime Achievement Award recipients decided?Award recipients are determined by a majority vote of ALGA’s Board of Directors. Each year, the Awards Program Committee accepts nominations for the Lifetime Achievement Award. The committee reviews applications to determine whether nominees meet the established criteria, and makes a recommendation to ALGA’s Board based on the nominee’s merits.

How is the Lifetime Achievement Award winner recognized?Winners are announced and appropriate honors are bestowed at ALGA’s Annual Conference. Winners are also recognized in the Local Government Auditing Quarterly, and via a press release distributed to the award winner’s hometown newspaper.

In addition, Lifetime Achievement Award winners receive a complimentary individual membership to ALGA and a complimentary registration for the Annual Conference.

How is someone nominated for the Lifetime Achievement Award?Active ALGA members may make a submission by completing a nomination package. The nomination package should include the following:

• A completed Lifetime Achievement Award Nomination Form. An electronic version of the form is available on ALGA’s website (http://algaonline.org).

• A Nomination Letter providing a brief explanation of why the nominee should be considered for the award, and specific examples of the nominee’s contributions to ALGA. If a waiver to any of the award’s criteria is sought, the Nomination Letter should include an explanation of why the nominator believes the criteria should be waived.

• Letters of support from two ALGA members not affiliated with the nominee's local government agency.

The Nomination Letter and letters of support may be submitted separately or as a single PDF document. For each submission, up to three separate documents can be uploaded to the website.

NOTE: No individual may submit more than one nomination for the Lifetime Achievement Award in each awards cycle.

Your nominating package must be uploaded in unprotected PDF format to the ALGA website no later than January 27, 2014. Submissions received after the deadline, and documents that cannot be opened or printed, will not be accepted.

The Awards Program Committee will send a confirmation email when nominating documents are uploaded to the website. If you have not received confirmation within three days, please contact the Awards Program Committee Chair, Nancy Howe at [email protected], or the Vice-Chair, Ben Thompson at [email protected]. The submitting office is solely responsible for ensuring that their complete submission packet is uploaded to the website.

2013 Award for Outstanding Contribution to the Quarterly DescriptionFirst awarded for the 2012 Quarterly publication year, this new award recognizes an article published in the Local Government Auditing Quarterly (LGAQ) that makes a noteworthy contribution to the field of auditing. It recognizes articles that educate fellow auditors on new and innovative audit practices and techniques, share experiences and lessons learned,

(article continued, page 15)

Winter 2013 13


LGAQ 14

Mission of Committee

The primary objective of the Membership Committee is to increase the number of member organizations. This objective is achieved by developing and implementing strategies to retain and attract new members.

Current UpdateFor the past several months, the committee has been engaged in follow-up activities with members who have not renewed their memberships from the prior year. The primary intent of this follow-up work is to promote renewals. As a secondary goal, committee members are soliciting feedback on primary causes for why former members are not renewing their memberships. This data will be used in addition to other research to perform a root cause analysis. The results of this analysis will facilitate the implementation of possible changes to better enable ALGA to attract and maintain members.

Next StepsSince the last Membership Committee report, the committee has completed a re-assessment of its two-tiered strategic plan. The intent is to strengthen the plan through the enhancement and refinement of plan objectives and, through the development and implementation of performance metrics, to measure progress made on plan objectives. The committee’s first strategic objective is to conduct activities for retaining current members and for recruiting former members who have not renewed their memberships. The committee’s second strategic objective entails initiating activities intended to increase membership by identifying and contacting prospective members. One subcommittee reviewed and developed proposals for the first objective related to membership

retention, and another subcommittee reviewed and developed proposals for the strategic objective related to expanding membership.

One subcommittee worked with Member Services to determine the ideal timing for conducting follow-up for non-renewing members. While the committee has experienced good success performing this strategic work activity over the years, there have been some historical issues related to timing of follow-up work, i.e., there were instances when an organization had submitted its renewal payment, but for various reasons, the payment information had not been communicated to the committee prior to conducting outreach. While the impact from these situations has been minimal, addressing the timing has better maximized committee member time for other activities and has helped to ensure that organizations do not have any negative perceptions of ALGA related to the renewal process. The committee is using an enhanced tracking tool for non-renewal follow-up analysis. This tool includes a data field to help facilitate root cause analysis related to non-renewals. The information will ultimately be used by the committee for outreach strategy purposes and to better collaborate with other ALGA committees, most specifically the Advocacy Committee.

As part of the committee’s re-assessment of the strategic plan, a second subcommittee reviewed the committee’s outreach activities to prospective members. The subcommittee decided to conduct outreach to prospective members on an incremental basis using a regional approach. The purpose of the regional approach is to ensure the committee workload is manageable and eliminate contacting the same individuals on an annual basis. As time passes, personnel, governing bodies,

Committee Report: Membership

KIP MEMMOTTChair, Membership

Committee and Director of Audit Services,

City and County of Denver (CO)


Winter 2013 15

environments, and budgets change, which may alter the responses received during outreach. By implementing a regional approach, the committee is taking into account those changes and minimizing the potential negative perception created by repeated inquiries to the same individuals. The committee intends to focus on Canadian local government audit organizations as an initial region for outreach. The ALGA Board had expressed interest in such outreach, and Canada is a new region for the committee to perform this type of work activity. The committee continues to work on identifying Canadian organizations for outreach activities.

Additionally, the Committee provided the OnLine Resources Committee with requisite web content data related to the Membership Committee, specifically, and ALGA membership, generally. The following highlights committee work activities related to this directive:

• The Chair regularly liaises with the ALGA OnLine Resources Committee Chair to ensure the committee is properly managing its presence on the ALGA website. The Chair wants to acknowledge and thank the OnLine Resources Chair, Alexandra Fercak, for all of her help in this capacity.

• The Chair has uploaded historical committee documents on the website and is utilizing the agenda page to help facilitate and manage monthly committee meetings.

• The Chair updates committee pages based on committee membership retention and growth strategies and continues to serve as the committee’s records manager.

Committee Recognitions The committee Chair would like to recognize ongoing members and thank them for their service:

• Magdalena Brady – Plano, Texas• Ty Elliot – College Station, Texas• Roger Strout – West Palm Beach, Florida• Theresa Weatherman – Fairfax, Virginia

Finally, the committee Chair would like to recognize Board Liaison Pam Weipert, Board President Bill Greene, and ALGA Membership Services personnel and thank them for their tremendous support of the committee.

Awards Committee Report (continued from page 13)

and provide insight into the field of auditing with clarity and eloquence.

Who is Eligible to Receive an Award for Outstanding Contribution?All ALGA members who submitted an article for publication in the Local Government Auditing Quarterly (LGAQ), excluding the LGAQ Editor and Publications Committee Chair, are eligible to receive the Award for Outstanding Contribution. As an author, you do not need to submit your article for consideration. So long as it was published in a 2013 Quarterly, you will be considered for the upcoming awards cycle.

How are Nominees Evaluated?Articles are scored based on four categories:

1. Significance of the article's contribution to the field. (Content)

2. Substantive importance and methodological rigor; significance of the topic and elegance and thoroughness of the methods presented. (Effectiveness)

3. Substantive and/or methodological innovativeness; the degree to which the article breaks new ground. (Uniqueness)

4. Style of communication and clarity of conveying information. (Organization and Prose)

How is the Winner Recognized?The winner for the Award for Outstanding Contribution will receive a plaque and formal letter recognizing the author’s achievement, be featured in an announcement to ALGA members, and congratulated in an article in the Quarterly itself. Honorable Mentions may be awarded as well.

Don‘t be shy! Share your greatness with us today.


LGAQ 16

You made our job easy this year…a little too easy! The mission of the Long Term Conference Planning Committee is to ensure the availability of desired conference facilities and dates by identifying locations for the annual conference on a three-year horizon.We select a conference site based on a fair, competitive process that ensures a world-class conference and considers member needs for affordability and access. In past years, audit shops that wanted to apply to host the conference in three years sent in pounds of materials to demonstrate their city’s attractions. To try to make the process simpler, and save a few trees, we worked with Kymber Waltmunson and Donna Maloy to make a paperless, electronic application to host the conference. That way applicants could simply include links to their local attractions, or images of venues or menus. Easy, right? Well, the good news is we selected a great venue for 2016: Austin, Texas. The not-so-good news is that Austin was the only applicant. Where were you Dallas and Houston? Milwaukee

and Chicago? C leveland and Columbus? Winnipeg? Waukesha? We think perhaps the word didn’t get out to all the Central region ALGA members who might have bid to host the conference in 2016.

So we’ve put together a mailing list, and next year we will send a personal invite to all the East region members to consider bidding to host the conference. That way we will fulfill our responsibility to hold a competitive process. When you get that notice, make our job harder: apply to host the conference. In other news, our committee had some membership changes this year. We said farewell and thanks to Tina Adams, our board Liaison, and Jim Henthorn and Jacob Claeys who moved to private sector jobs. Jerry Shaubel, our past-president member, left us after four terms. We welcomed our new board Liaison Carmelina Di Mondo, former Board Chair Mike Taylor, and Jorge Oseguera. Thanks to our former members for their service, and to our new and returning members for their willingness to serve. Kathie Harrison will be taking over as chair of the Long Term Conference Planning Committee in 2014.

Committee Report: Long-Term Planning

MARY DENZELCommittee Chair, Long-

Term Conference Planning Committee and

Assistant City Auditor, Seattle (WA)


Winter 2013 17

The Education Committee has been working hard in 2013 to meet our core mission of providing high-quality, low-cost training, as well as expanding our ability to provide support for ALGA membership through new initiatives such as the ALGA mentorship program. Regional trainings and webinars are the Education Committee’s main business. In 2013, the Committee provided two regional trainings, in Vancouver, British Columbia and in Tampa, Florida. These sessions provided training to approximately 35 auditors on topics including performance auditing, IT auditing, capital improvement projects, and preparing for a peer review. This year has also been a very successful year for webinars. The Education Committee helped to bring eight webinars to the ALGA membership, partnering with Professional Issues Committee and the Awards Committee along the way. These webinars served the training needs of hundreds of local government auditors. Planning for 2014 regional training and webinars is already under way. The first regional training will be held February 6 and 7 in Dallas, Texas. The first webinar will be held on January 14 and will focus on developing effective staffing models. We are also excited to be expanding our partnership with the Professional Issues Committee to hold two webinars in 2014 that will cover topics of broad interest to local government auditors. In addition to providing regional trainings and webinars, the Education Committee has developed and implemented the ALGA mentorship program. We are pleased that the program is up and running on the ALGA website, and there are already

some mentoring relationships that have begun as a result. It is our hope that the ALGA mentorship program can play a significant role in supporting the development needs of the ALGA membership, especially by connecting people in different geographic locations. Please take some time to acquaint yourself with the mentorship program and the resources that we offer (http://algaonline.org/index.aspx?nid=291). Even if you are already in a mentorship relationship, we have some helpful mentorship resources that we help you get the most out of your efforts. Finally, the Education Committee will soon be adding another resource to help audit organizations meet their training needs. In early 2014, we will add an online training database that is easily searchable, allowing ALGA members to identify refresher training for their office or subject matter experts among their ALGA colleagues. Once this tool is available we will send out an announcement, so stay tuned! As the chair of the Education Committee, it is my privilege to work with numerous talented individuals who graciously volunteer their time to support numerous training and development initiatives. The individuals who have served on the Education Committee in 2013 include: Carmelina Di Mondo (Board Liaison); Sharron Walker (Vice-Chair); Irella Blackwood; Germaine Brewington; Brian Estes; Suzanne Flynn; Deborah Jenkins; Keith Jeter; Heather Kneale; Claudia Orsi; Natalya Penton; Martha Rogers; Rachel Snell; Lise Valentine; and Ross Visscher. If you know or work with these individuals, please take time to thank them for their service.

Committee Report: Education

CHRIS HORTONChair,

Education Committee,Internal Audit Supervisor,

City and County of Denver (CO)


ALGA Nominating Committee Now Accepting Nominations for the Board

The Nominating Committee will be accepting nominations for the positions of President-Elect, Secretary, and two At-Large Board Members on the ALGA Board of Directors through December 16, 2013. The Board meets four times per year: fall, winter, and twice at the annual conference (once before and once after).

The ProcessThe Nominating Committee accepts and reviews nominations and recommends a slate of officers to be voted on by the members at the annual conference.

Minimum Qualifications

• Must be full member of ALGA for the past three years; dues must be current,

• Must certify that no felony conviction has occurred in the past ten years, and

• Must commit to perform the responsibilities of the position.

Criteria for ConsiderationInclude but are not limited to:

• Degrees, certifications, and auditing experience,

• Contributions to ALGA (including, but not limited to: holding office, committee involvement, conference presentations, publications, and participation in the peer review program),

• Participation in and contributions to other professional organizations,

• Leadership skills, ability to work well with others, etc., and

• Diversity (e.g., size and location of audit organization).

To Nominate a PeerIf you would like to submit a name for consideration, please complete the ALGA Board Nomination Form, which is available from the Nominating Committee page of the ALGA website. To Submit or Confirm Your Name for ConsiderationTo be considered for a formal nomination, the nominee must also complete and sign the ALGA Officer and Board Personal Data Form, which is available from the Nominating Committee page of the ALGA website.

Committee Report: Nominating

CORRIE STOKESChair, Nominating

Committee, Deputy City Auditor, City of Austin (TX)

LGAQ 18


Get timely ALGA news through Twitter!

Winter 2013 19

Start following today @ALGA_Gov


LGAQ 20

Jones Reappointed in SeattleOn September 30, 2014, David G. Jones was reappointed to a four-year term as Seattle City Auditor by a unanimous vote (9-0) of the Seattle City Council.

Tampa Appoints New Internal Audit DirectorChristine Glover is the new Director of Internal Audit for the City of Tampa. She has over 15 years of internal audit experience in banking, insurance, and government; and previously served as the Director of Internal Audit for the South Carolina Department of Revenue and South Carolina State University. Prior to her appointment at the City of Tampa, Christine headed up the Governor's Office of Executive Policy and Programs for South Carolina Governor Nikki Haley. Christine's education includes a Bachelor's Degree in Accounting from South Carolina State University, a Master of Business Administration Degree from Webster University, and a Master of Science Degree in Strategic Studies from the Army War College. She holds the following professional designations: Certified Internal Auditor, Certified Government Audit Professional, and Certified Fraud Examiner. Christine is retired from the South Carolina Army National Guard where she served 29 ½ years and held the rank of Colonel.

Denver Auditor’s Office Co-Hosts Mountain & Plains Intergovernmental Audit ForumIn August 2013, the Denver Auditor’s Office and the U.S. Government Accountability Office co-hosted the Mountain & Plains Intergovernmental Audit Forum. The two-day conference focused on working together for better government, highlighting successful examples of collaboration between government audit functions and other stakeholders. More than 130 governmental audit professionals attended, the largest number of attendees since the Denver Auditor’s Office and the GAO Denver Field Office sought to reinvigorate the Forum in 2010. The Forum was created to provide an organizational means of fostering coordination and communication within the governmental audit community.

ISACA Willamette Valley Chapter Elects New President

Janice Richards, CPA, CISA, a Senior Management Auditor for the City of Portland, was elected to serve a 2-year term as the local chapter President of the Information Systems Audit and Control Association (ISACA).

Member News


Winter 2013 21

Audit Shop Profile: District of Columbia OIG

District of Columbia Offi ce of the Inspector Generalhttp://oig.dc.gov/

City Auditor Charles J. Willoughby, Inspector GeneralRon King, CPA, CIA, CICA, CFE, CGMA, Assistant Inspector General for AuditsLaDonia Wilkins, CIGA, CPM, Deputy Assistant Inspector General for Audits

Reporting Structure The Inspector General is appointed by the District of Columbia Council and serves for six years. The Inspector General must possess adequate certifi cation such as Certifi ed Public Accountant.

Offi ce Mission The mission of the OIG is to promote economy, effi ciency, and effectiveness in the programs and operations of the District of Columbia government

Offi ce Budget $15.95 millionOrganization Operating Budget

$10.1 billion, including $3 billion in federal funds

Offi ce Size 112 FTEs (with 32 FTEs in the Audit Division)Staff Backgrounds The OIG audit staff has corporate, higher education, federal, state, and local

government auditing experience. Staff Certifi cations CFE, CIA, CICA, CIGA, CISA, CPA, CPM, CGMAStandards Followed Government Auditing Standards (Yellow Book)Types of Projects Performance, fi nancial, attestation, and IT audits as well as management of the

contract for the City’s annual fi nancial audit.Projects Per Year 35Years as an ALGA Member 14Awards Received 2007 Knighton Award Honorable Mention, Knighton Award for Best Audit 2003Favorite Audit to Date Audit of the District’s Condominium Conversion Fees, OIG No. 08-1-

18CR, issued on February 17, 2012, with $37 million in potential revenue enhancements.

Other Items of Interest The OIG Audit Division has implemented an Identity Validation and Data Mining System to help in the fi ght against fraud, waste, and abuse of public resources.

Front row (L-R): Jim Segar, Slemo Warigon, LaDonia Wilkins, Ron King, Dinell Arnold, Roy Simmons, Paul Hicks

2nd Row (L-R): Solomon Fon, Lenore Peters, Michael Onojeta, Robin Bass-White, Jemal Cheatham, Katrice Howell

3rd Row (L-R): Cynthia Williams, Imani Richardson, Hoberlina Latupeirissa, Mano Govindaraj, Wanda Scales, Tara Garner

4th Row (L-R): Roger Williams, Fekede Gindaba, Jada Akins, Alonzo Munyeneh, Quazi Haque, Octavian Reeves, Anthony Jones, Kenneth Bates


Environmental Sustainability: Learned Hints for Performance Audits

What is sustainability? According to the EPA: “Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations.

Sustainability is important to making sure that we have and will continue to have, the water, materials, and resources to protect human health and our environment.”(http://www.epa.gov/sustainability/basicinfo.htm#sustainability)

There are several Venn diagrams like the one below that show the aspect of sustainability as being the common overlay of the concentric circles. The model requires each factor to be fixed in its magnitude. The economic viability of a city based on mining silver back in 1875 was disproportionate to

the effects on existing environment and the people demanded mining probably more than complying with any law or treaty. Models of a local government in 2005, 2010, or 2015 will each have different stressors that change the accepted area of sustainability. Fortunately, performance audits look at the snapshot of “what is” during an audit and the relationship with efficiency, effectiveness, and compliance. The model becomes a constant.

Restating the obvious is that local government audit shops typically follow the “Yellow Book” and conduct performance audits that cover the economy, efficiency, effectiveness, and compliance of the subject. Finding sustainability metrics or even compliance of the jurisdiction of a local government does not readily present itself during discovery for the scope or planning.

How do you plan and conduct tests during a performance audit of the local government’s position concerning environmental sustainability? The scope is everything within the local government’s political boundaries and the local government’s control and influence within those borders.

A minor or accepted risk may turn into a reputation disaster. One group of citizens may demand certain services which are opposed by another group. A new president or Congress or


KEITH JETERPerformance Auditor,

Audit Services, City of Chesapeak (VA)

compliance

reputation

economicviability

existingenvironment

constituentdemand

LGAQ 22


governor may set the policies that negatively or positively affect your municipality’s major employer. The existing environment may change with a drought, fire, or even a 100-year storm. Of course, there are no means to control what affects environmental sustainability. The only consistent method of trying is the observance of existing data with the preparation of a report to the decision makers and a follow-up of the impact of implementation of the recommendations.

Presented are some learned and observed lessons for environmental sustainability observation points:

• Does your municipality have ordinances or policies that direct environmental sustainability for present and future generations? The ordinances and policies will exist either implicitly or as idiosyncratic variations of federal and state regulations and laws.

• Does your municipality have consent agreements with federal and/or state agencies that affect the behavior of the locality with respect to environmental quality or actions? What is the compliance and what has been the effect of compliance?

• Does your municipality have a certified Leadership in Energy and Environmental Design (LEED) team or person to ensure buildings are being built (including contract negotiations) and maintained in accordance with the LEED program? Although LEED is not a government program, it is a measurement guide and resource and is the industry standard. The Office of Energy Efficiency and Renewable Energy provides several resources for determining metrics for energy consumption by the government. (http://energy.gov/eere/efficiency/government-energy-management)

• Does your municipality have the active participation of its public sector employees to minimize energy usage through an employee reward system or such? Small items, such as employee suggestions, can and do save millions. As with all things, significance matters, but a culture of conservation helps create public policy. Are the power-assisted doors easy to open without the power assist? Are screen savers removed from computers? What is the verification for ensuring that when municipal buildings have their air-conditioning and heating systems installed/renovated that the defined temperature and humidity content is balanced in all floors and rooms? A properly balanced system would reduce the many fans and space heaters. Do rooms that are not occupied have automatic shutoff switches on the lights when no longer occupied?

• Do your municipal buildings and properties utilize solar panels, wind turbines, or other forms of alternative energy?

• Has your municipality’s fleet converted to cleaner burning fuels such as natural gas?

• Every municipality’s fleet fueling stations should have Spill Prevention, Control and Countermeasure Plans (SPCC) and records of training, but is there training for employees fueling the vehicles and are the fuel nozzles checked to ensure the automatic shutoff device stops the pumping when the vehicle is full?

• Does your municipality have any navigable waters or any streams or creeks that flow into a navigable waterway?

• Does your municipality have storm water drains flowing directly to navigable waters?

• If you have a municipal-owned marina or boat fueling station that sells fuel to citizens, who actually fuels the boat, the employee or the boat operator? Who do you think is responsible for any fuel spillage to the water?

• How often are non-petroleum or hazardous material bulk storage tanks inspected? Does that inspection evaluate the impact of a catastrophic failure that may happen?

• Does your municipality have a planning goal for development? How many future and past decades is the model plan? How many variations exist to the model and what are the typical reasons for those changes?

• Do your municipality’s building codes require sufficient insulation for new construction of homes?

• Does your municipality require developers to install alternative energy sources such as a wind turbine for a new neighborhood or office building?

• Do your zoning codes require a balance between existing trees and open spaces, compared to development?

• How often are road and highway studies conducted to compare development to traffic level?

• Does your municipality comply with all storm water drainage requirements? What metric is used?

• Does your municipality have a recycling program for your citizens? What are the metrics to determine the effectiveness and participation level? Is it curbside pickup?

The lessons learned and observed are many. There also is no one way to conduct a performance audit of environmental sustainability. A gulf coast city would have different environmental issues than a county on the Canadian border. Nome, Alaska would have different environmental issues than Arcadia, Florida. Los Angeles would have different issues than New York City.

These lessons described above will help you in crafting your performance audit on this timely topic. Environmental sustainability is important to ensure we have, and will continue to have, the water, materials, and resources to protect human health and our environment.

Winter 2013 23


Street Sweeping as an Environmental Compliance ToolStreet Sweeping and Sustainability

The federal Environmental Protection Agency (EPA) understands sustainability to be, “the continued protection of human health and the environment while fostering economic prosperity and societal wellbeing.”1 This article describes how municipal street sweeping can help to support public health by reducing air and water pollutants. Reducing atmospheric levels of air pollution and protecting water resources are important goals in working towards a sustainable environment.

Street Sweeping and Air PollutionThe Audit Services Division of the City and County of Denver conducted an audit of Street Maintenance, which is a Division of the city’s Public Works Department. Part of the audit required research on street sweeping activities. During the research, it became apparent that street sweeping is an important city service, not only for maintaining a clean and appealing business and residential environment but also for protecting public health. Municipalities rely on street sweeping to reduce air and water pollution in their communities.

At the federal level, the Clean Air Act requires the EPA to set National Ambient Air Quality Standards (NAAQS) for air pollutants that are considered especially harmful for public health. The EPA has promulgated standards for six pollutants, one of which is Particulate Matter, PM10. PM10 is 10 microns in diameter or smaller and includes both solid particles and droplets found in the air.2 Emissions of PM10 tend to remain in close proximity to their release point. Accordingly, there are

several reasons why it is in a city’s best interest to minimize PM10 pollution. First, it can cause heart and lung disease. Children, the elderly, exercising adults, and those suffering from asthma or bronchitis are especially vulnerable to the adverse effects of PM10. Second, a fine per day is assessed for violations of PM10 regulations by the regulating state agency. Lastly, for Denver, PM10 attainment is directly linked to transportation funding that the city receives from the federal government, which is funneled through the Denver Regional Council of Governments.3

In 1987, the Denver metro area violated the federally mandated standards for PM10 and was therefore labeled a “Group I” non-attainment area. In 2002, the area achieved attainment status and has since not violated the PM10 standards. Cities have been using street sweeping increasingly since the 1990s to help reduce air pollution. The City and County of Denver uses sweeping as a measure to stay in compliance with federally mandated requirements for PM10.

Municipalities use sanding materials and salts to make streets passable for vehicles and pedestrians. When the sand and salts are crushed by vehicles as they drive, particulate matter is eventually released into the air. Studies have found traction control abrasives such as sands and salts to be a major contributor to ambient PM10 loadings following wintertime storms. Therefore, reducing the impact of sands and salts after a snow event is part of a state implementation strategy for the Denver metro area. Regulation 16 of the Air Quality Control Commission, a state entity, mandates that streets have to be swept within four days after a snow event to prevent the particles from being released into the atmosphere. Denver’s Street Maintenance Division works to achieve removal of 100% of sanding materials and salts within a


LGAQ 24

KATJA E.V. FREEMANLead Performance Auditor, City and County of Denver

(CO)


Winter 2013 25

specific central area and has exceeded results in the other areas mentioned in the regulation. The Division was able to supply records documenting information necessary to determine compliance such as lane miles typically sanded during a snow event, the percentage of sanded roadways swept within four days of a sanding event, and the type of sweeping equipment used.

Further audit research indicated, though, that the Division was unaware of exact compliance levels with PM10 particulate matter. While the Division acted as a key player to reduce PM10 emission for non-source pollution for the city, it could not assess the cause and effect of its sweeping operations and air pollutant reduction. As a result, the Division did not know if it could reduce the frequency of its sweeping operations and still stay in compliance with air pollution standards for PM10. The only knowledge the Division had was that their activities were sufficient to stay in compliance, since they had not been informed otherwise. We recommended that the Division should assess how a possible redistribution of its resources could help to provide needed services in new areas and still be in compliance. Moreover, with budget shortages and increasing growth of the city, a reassessment of current sweeping practices and a better understanding of how its activities affect the reduction of the air pollutant PM10 could benefit the Division’s future operations. This is especially important when considering that the Division uses air pollution reduction as a main argument to justify the frequency of its sweeping operations.

Street Sweeping and Water PollutionStreet sweeping is also used as a tool to reduce stormwater pollution. Municipalities consider regular street sweeping as one of the most cost-effective best practices available to reduce the amount of sediment, petroleum products, trash, metals, bacteria, and vegetation that accumulate in the streets from reaching water bodies. Keeping storm drains clear not only helps mitigate water pollution but also reduces the likelihood of flooding during heavy rains.

Compliance with water standards such as the federal Clean Water Act is achieved through the MS4/NPDES stormwater permit. The regulating state agency (Colorado Department of Public Health and Environment) issues the MS4 permit.4 Newly developed areas of Denver have to comply with new regulations that mandate the installation of stormwater treatment facilities for larger areas. Denver’s more established neighborhoods, however, do not have to treat run-off prior to entry into water bodies. The EPA mandates that discharges from small municipal separate storm sewer systems (MS4) must be addressed under the National Pollution Elimination System (NPDES).

Denver’s Public Works Department uses several best management practices to reduce the number of pollutants reaching storm drains. One of those best management practices is sweeping. It is a municipal maintenance practice according to the residential/commercial management program of the Denver Water Quality Management Plan.5 Denver’s Wastewater Management Division employs seven different programs to reduce the amount of water pollutants. Therefore, it is challenging to determine how Denver’s street sweeping activities exactly contribute to better water quality. Another concern is that street sweeping activities reach a point of diminishing returns, whereby additional sweeping does not necessarily reduce additional pollutants from stormwater run-off. The effectiveness of reducing water pollutants through sweeping levels off at some point and is dependent on other factors as well such as slope and surface of the road or sweeping equipment used. An alternative to sweeping would be to install stormwater treatment plants. While those plants would be more effective, the construction and maintenance is very expensive and requires a large amount of land, which is not generally available in established neighborhoods. New developments in the City and County of Denver are required to build treatment plants if the development is larger than about 100 acres.

As noted with air pollution, we found that Denver’s Street Maintenance Division does not analyze how current sweeping routes and frequency are keeping the city in compliance with water pollution standards. We recommended that Street Maintenance should collaborate with the city’s Wastewater Division to better understand the effects of its street sweeping activities on water pollution reduction, which will in turn allow a more efficient and effective distribution of resources.

One challenge in conducting this audit was the fact that monitoring and evaluation of collected data is done through state entities, which enforce federally mandated requirements. Although municipalities contribute to enforcement through sweeping, as in our example, the local agency is somewhat removed from the compliance process and does not know how the extent of its sweeping activities affect compliance levels. Denver’s Street Maintenance Division knew that the city was in compliance. What they did not know was how changes to sweeping routes and frequencies as a result of a rapidly growing city would impact compliance levels with existing resources in the future. Therefore, we recommended that the Division should research the correlation between the amount and location of removed debris and air and water pollution reduction, accounting for mitigating or aggravating factors to create a more efficient and effective sweeping schedule.


NOTES1 “A Framework for Sustainability Indicators at EPA,” Environmental Protection Agency, accessed on November 13, 2013, http://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P100FZZ7.PDF.

2 “Particulate Matter (PM-10),” Environmental Protection Agency, accessed on November 14, 2013, http://www.epa.gov/airtrends/aqtrnd95/pm10.html.

3 The Denver Regional Council of Governments (DRCOG) facilitates regional cooperation among county and municipal governments in the Denver metropolitan area.

4 5 C.C.R. §1002-61 (2007).

5 “Denver Wastewater Quality Management Plan,” City and County of Denver, Wastewater Management Division, accessed on November 14, 2013, http://www.denvergov.org/Portals/711/documents/Water%20Quality%20Management%20Plan.pdf.

LGAQ 26


Winter 2013 27

Environmental Sustainability and the Local Government Audit Function

Climate change is a real threat to our cities! Promoting environmental sustainability initiatives may give local governments the tools to reduce climate change impact. Sustainable development is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come.1

A sustainability audit process contains three dimensions of sustainability: social, environmental, and economic. For the purpose of this article, I will focus on environmental sustainability and integrating environmental sustainability in your audit program, and I will start with a brief history of environmental sustainability initiatives.

Initiatives related to climate change and environmental sustainability are not new. In 1987, the United Nations released the Brundlant Report which included the most widely recognized definition of sustainable development mentioned above. In 1992, the United Nations Conference on Environment and Development (UNCED) met in Rio de Janeiro to reconcile the economic and environmental goals of the global community. In 1997, the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) was adopted and went into effect in 2005. As part of the Kyoto Protocol, many developed countries have agreed to legally binding limitations/reductions in their emissions of greenhouse gases. The United States signed, but did not ratify, the Protocol and Canada withdrew from it in 2011. This has created the image around the world that the USA

and Canada are not among the top countries when it comes to strong environmental sustainability policies.

Yale’s 2012 Environmental Performance Index (EPI) ranks countries on performance indicators tracked across policy categories that cover both environmental, public, health and ecosystem vitality. These indicators provide a gauge, at a national government scale, of how countries are to establish environmental policy goals.2 The ranking goes from strongest performers to weakest performers in a five-step scale. Canada is ranked 37 as a strong performer and USA is ranked 49 as a modest performer, reaffirming that Canada and USA are not top performers when it comes to environmental performance. However, something amazing is happening lately - cities and local governments in the USA and Canada are taking matters into their own hands and going through a subtle green revolution.

Policies, activities, and strategies are being developed at the local government level to make cities “greener” and environmentally sustainable. This is the product of understanding that living in sustainable cities/communities is not a fad, but a necessity. Issues like climate change, natural resource depletion, pollution, increase in waste, cost of energy, water and transport, environmental disasters, and the global financial crisis have awakened people’s sense of social responsibility and led them to urge their governments to take action. Many cities have created strategic plans including environmental sustainability as part of their long-term objectives. So, which cities are embracing the Green Revolution?

Green CitiesIn 2011, the Economist Intelligence Unit conducted a research project assessing the environmental


JOSÉ F. GARCÍA-COLÓN

Offi ce of the City Auditor, City of Austin (TX)


performance of 27 major US and Canadian cities. The following cities were included in the project:

Atlanta New York City Boston OrlandoCalgary Ottawa Charlotte PhiladelphiaChicago PhoenixCleveland PittsburghDallas SacramentoDenver San FranciscoDetroit SeattleHouston St. Louis Los Angeles TorontoMiami VancouverMinneapolis Washington, DCMontreal

Source: US and Canada Green City Index

The 27 cities selected for the US and Canada Green City Index were chosen with a view to representing a number of the most populous metropolitan areas in the United States and Canada. The Index scores cities across nine categories: CO2, energy, land use, buildings, transport, water, waste, air quality, and environmental governance. While Austin was not assessed in this project, the city has developed a plan for the future based on sustainability.

Imagine AustinLike many other cities today, Austin has strong environmental focus; Imagine Austin proves this. Imagine Austin is a 30-year strategic plan for the city. The Austin City Council established “sustainability” as the central policy direction of the Imagine Austin Comprehensive Plan which focuses on creating a sustainable city. The concept of sustainability is defined in the Imagine Austin Plan as:

… considering not only the needs of today, but also whether these needs are being met in ways that conserve resources for future generations. Sustainability means finding a balance among three sets of goals: 1) prosperity and jobs, 2) conservation and the environment, and 3) community health, equity, and cultural vitality. It means taking positive, proactive steps to prote

local government auditing quarterly...tina adams senior auditor charlotte, nc (704) 336-7270...

Documents