Observations provided to the City’s External Auditor 7.9.26
We sent 49 pages of documentation to Clark Schaefer Hackett with our observations and supporting documents about the City’s internal control environment, governance processes and oversight mechanisms. Clark Schaefer Hackett has been retained by the City to conduct the annual audit of its financial statements.
When people hear “audit,” they naturally think of getting and reporting their numbers correctly, balancing the books, following the money, etc. But audits conducted according to Generally Accepted Government Auditing Standards (GAGAS) must also examine an auditee’s internal control environment and any risks of fraud, waste and abuse.
Our observations fall into the “control environment” and “fraud risk” categories. We are hopeful that Clark Schaefer Hackett’s audit of the City’s FY 2026 financial statements will include audit procedures to examine some of the areas that we have highlighted.
Our observations are organized into seven categories:
- Lack of Oversight of External Funding
- Railroad Money
- Council-Directed Funding and Earmarks
- Internal Audit Independence and Municipal Code Compliance
- Procurement Controls and Moral Obligations
- Governance and Conflict-of-Interest Controls
- Contract Administration and Monitoring
Attached to the memorandum are 18 exhibits supporting our observations.
All are posted at the links above.
