Audit

Sioux Falls City Council Agenda, Tuesday Oct 11

l3wis October 11, 2022 4Comments

MEETING CALENDAR

Informational Meeting • 4 PM

• Downtown Parking Ramp Update by Erica Beck, Chief of Staff

• Parks and Recreation – Ice Plex/Tennis Center Updates by Don Kearney, Director of Parks and Recreation

Regular Meeting • 6 PM

Item #6, Approval of Contracts, Sub-Item #16, Professional Services Agreement for Site Selection, Study for Sioux Area Metro Consultant will complete a site selection analysis of a maximum of five sites, including the existing site and planning-level cost estimate for a new transit office and garage facility for Sioux Area Metro. TSP, Inc., $94,600. (while the city may want to tell you that they are just considering moving the Bus Barn, it is pretty obvious that they plan to move it for a developer that wants the current location. There is absolutely nothing wrong with this site, it just needs to be remodeled and upgraded. I also find it a bit odd with the hundreds of city employees that work in engineering and public works that we can’t study a proposal internally.)

Item #12, 1st reading, Background & Objective: Ordinance supplements the Sales Tax Fund by an additional $2M for arterial street improvements resulting from platting fee projected revenues in excess of budget expectations and $70K for Police to purchase a vehicle using federal grant dollars; and supplements the General Fund by $100K for Fire due to high fuel costs; $500K for Parks and Recreation primarily due to high fuel costs and spring storm damage repairs; and $400K for the Planning Department based on higher than anticipated lodging at ESF BID tax revenues that are subsequently transmitted to Experience Sioux Falls. (The $500K for parks cleanup is kind of surprising since we are told all the time that the city keeps track of storm cleanup so they can get Federal reimbursement).

Item #13, 1st Reading, Background & Objective: This is the development agreement between the City and Nielson Development for TIF #26. This agreement is for up to $2,140,000, plus financing costs of eligible expenses to assist in funding the development activities required to create an accessible housing subdivision, which includes the site improvements infrastructure, utilities and professional services to develop the site. The end result will include 65 single-family housing units that will be priced below the South Dakota Housing First Time Homebuyer pricing. (this is a TIF that will NOT be passed on to the new homeowners. It is simply keeping the costs down for the developer and the banks that are funding the development. It has also been stated in the media that this will do nothing to provide affordable housing.)

Items #14-15, Resolutions, Background & Objective: Resolution to approve a new five-year facilities management agreement for the Events Center Complex with ASM Global Arena Management, LLC for the period of January 1, 2023 through December 31, 2027. ASM Global Arena Management, LLC is the current facility manager for the Events Center Complex.

Background & Objective: Resolution to approve a new five-year food and beverage services agreement with Ovations Food Services for the period of January 1, 2023 through December 31, 2027. Ovations Food Services is the current food and beverage service provider for the Events Center Complex.

(Notice in the audit meeting on Thursday below that they have audits of these facilities ready but are NOT releasing the information before the 1st reading tonight. I have also implored the council to pass a bond ticket fee of at least $5 per ticket to help pay down the bonds. Councilors and management have complained that promoters would not come here if that attached ticket fee applied. Hogwash. The fee doesn’t take profits away from the management company, the promoters or the artists, it is an additional fee paid for by the very people who use the facility. If you can afford a $150 dollar ticket fee and $9 Bud Lights, you can afford the extra $5 to help pay down the bonds.)

Audit Committee Meeting • Thursday, October 13, 2022 at 4:00 PM

I find it interesting that the Audit Committee is reviewing audits of the Denty 2 days AFTER the 1st Reading for Contract renewals for the Denty at the city council meeting. There is also NO attached documents in the meeting link letting the public know what is in those audits (I’m sure they will magically appear on Wednesday). Makes you wonder what is in the audits that they cannot show they to us before the meeting tonight.

UPDATE II: This is why the Sioux Falls City Council internal audit division is important

l3wis September 30, 2022 4Comments

UPDATE II: It is interesting that someone can be PUBLICLY appointed but when they depart from their job it is all of a sudden a personnel issue;

Sioux Falls’ former internal audit manager, whose appointment drew controversy and conflict of interest claims from city councilors three years ago, has been serving in a different position since August, according to city officials.

But the reason for the move isn’t clear.

Asked whether she had applied for the position or been moved to it, and whether the move had anything to do with her spouse’s position in the city, O’Toole said that the city could not release confidential personnel information.

The city council publicly appointed her and they have a duty to tell the public why she decided to leave council to work for the mayor. It could be as simple as a press release.

But three years after her appointment divided the council, Nelson is now serving as a housing compliance manager for the city, according to Human Resources Director Bill O’Toole

The topic was raised in an informational meeting of the council on Tuesday, as the city’s internal audit program presented findings from several recent audits.

Starr asked about the lack of a statement from Nelson in a damage recovery billing audit, saying it needed to be more clear that she had not been involved in the audit.

During the discussion, Starr said, “the public doesn’t know she’s gone, so we can’t use that as an excuse.”

The hatefest towards transparency continues in city government.

You have to wonder why the mayor would hire Nelson while she was serving as the Internal Audit Manager? Did the council approve of this? It would be one thing if she quit to run her pet store or she was terminated, but if she quit on her own fruition why would the mayor promote her and take a council employee? Weird stuff.

UPDATE: During the informational meeting today, Councilor Starr did mention that the internal audit manager was no longer working for the city council. During public input I asked how long the council was going to wait before they told the public.

Even though it seems the department is without management (still waiting for the city council to tell us if a very publicly appointed ‘Rockstar’ internal audit manager has left us) the two internal auditors still working for the city council seem to be accomplishing the important work. They did two audits, one on using Lewis Drug for Falls Community Health pharmacy needs;

Finding 1: Lewis doesn’t implement any inventory optimization processes, such as product
minimum/maximum levels, which makes it hard to ensure sufficient inventory levels.
Finding 2: Lewis does not utilize a ‘tracking system’ to retrospectively review dispensing
reports and verify patient eligibility, which is a requirement of the agreement.
Finding 3: 20% of prescriptions tested did not have a designation that the patient was
eligible for 340B drugs. It is a requirement of the agreement that Lewis only dispenses
340B drugs when the prescription form designates the patient as 340B-eligible.
Finding 4: Lewis is not currently providing all of the required quarterly reports listed in the
agreement.

The other audit was on how the city invoices damage repair to city property;

Finding 1: Materials invoiced with an overhead charge in one City department
Finding 2: Estimated labor rates utilized for invoicing in one City Department
Finding 3: Billing for damages to City property claims procedures not formally
documented

Once you read the details of the audits (that reveal NO fraud) you can assess there are many operational issues that needed to be addressed. Besides the city pulling damage repair estimates from their butts you kind of wonder how Lewis manages their private clientele if they do this poor of a job with Falls Community Health?

Just looking at these two audits shows us why internal audits are important, with or without management.