Denver Public Library J. Gallagher Auditor Office of the Auditor Audit Services Division City and County of Denver Denver Public Library Follow‐up Report

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  • DennisJ.GallagherAuditor

    OfficeoftheAuditorAuditServicesDivision

    CityandCountyofDenver

    DenverPublicLibraryFollowupReport

    March2015

  • TheAuditoroftheCityandCountyofDenver is independentlyelectedbythecitizensofDenver.He isresponsibleforexaminingandevaluatingtheoperationsofCityagenciesforthepurposeofensuringtheproperandefficientuseofCity resourcesandprovidingotheraudit services and information toCityCouncil, theMayorand thepublic to improveallaspectsofDenversgovernment.Healsochairs theCitysAuditCommittee.

    TheAuditCommittee ischairedbytheAuditorandconsistsofsevenmembers.TheAuditCommitteeassiststheAuditorinhisoversightresponsibilitiesoftheintegrityoftheCitysfinancesandoperations,includingtheintegrityoftheCitysfinancialstatements.TheAuditCommitteeisstructuredinamannerthatensures the independentoversightofCityoperations, therebyenhancing citizen confidenceandavoidinganyappearanceofaconflictofinterest.

    AuditCommittee ______

    DennisGallagher,Chair RobertBishop

    MauriceGoodgaine JeffreyHart

    LeslieMitchell TimothyOBrien,ViceChair

    RudolfoPayan

    AuditManagement

    KipMemmott,Director,MA,CGAP,CRMA

    JohnCarlson,DeputyDirector,JD,MBA,CIA,CGAP,CRMA

    AudreyDonovan,DeputyDirector,CIA,CGAP,CRMA

    AuditStaff _____________

    DawnWiseman,AuditSupervisor,CRMA

    EmilyOwens,LeadAuditor,MPA

    Youcanobtaincopiesofthisreportbycontactingusat:

    OfficeoftheAuditor201WestColfaxAvenue,Department705DenverCO,80202

    (720)9135000Fax(720)9135247

    Ordownloadandviewanelectroniccopybyvisitingourwebsiteat:www.denvergov.org/auditorReportNumberA2013004

  • To promote open, accountable, efficient and effective government by performing impartial reviews and other audit services that provide objective and useful information to improve decision making by management and the people.

    We will monitor and report on recommendations and progress towards their implementation.

    City and County of Denver 201 West Colfax Avenue, Department 705 Denver, Colorado 80202 720-913-5000 FAX 720-913-5247 www.denvergov.org/auditor

    Dennis J. Gallagher Auditor

    March26,2015Ms.MichelleJeske,CityLibrarianDenverPublicLibraryCityandCountyofDenverRe:AuditFollowUpReportDearMs.Jeske:InkeepingwithprofessionalauditingstandardsandtheAuditServicesDivisionspolicy,asauthorizedbyD.R.M.C.20276,ourDivisionhasaresponsibilitytomonitorandfollowuponauditrecommendationstoensureauditfindingsarebeingaddressedandtoaidusinplanningfutureaudits.

    Thisreport isto informyouthatwehavecompletedourfollowupeffortfortheDenverPublicLibrary(DPL)auditissuedNovember21,2013.OurreviewdeterminedthatDPLhasimplementedallbutoneofthefifteenrecommendationsmadeintheauditreport.DespiteDPLsefforts,auditorsdeterminedthattheriskassociatedwithoneoftheauditteamsinitialfindingshasnotbeenfullymitigated.Asaresult,theDivisionmayrevisitthisriskareainfutureauditstoensureappropriatecorrectiveactionistaken.

    For your reference, this report includes a Highlights page that provides background and summaryinformationontheoriginalauditandthecompletedfollowupeffort.FollowingtheHighlightspageisadetailedimplementationstatusupdateforeachrecommendation.

    Thisconcludesauditfollowupworkrelatedtothisaudit.IwouldliketoexpressoursincereappreciationtoyouandtoDPLpersonnelwhoassistedusthroughouttheauditand followupprocess. Ifyouhaveany questions, please feel free to contact me at 7209135029 or Dawn Wiseman, Internal AuditSupervisor,at7209135069.

    Sincerely,

    KipMemmott,MA,CGAP,CRMA

    DirectorofAuditServicesKRM/leo

    cc:HonorableMichaelHancock,Mayor HonorableMembersofCityCouncil MembersofAuditCommittee Ms.CaryKennedy,DeputyMayor,ChiefFinancialOfficer

  • To promote open, accountable, efficient and effective government by performing impartial reviews and other audit services that provide objective and useful information to improve decision making by management and the people.

    We will monitor and report on recommendations and progress towards their implementation.

    Ms.JaniceSinden,ChiefofStaff Mr.DavidP.Edinger,ChiefPerformanceOfficer Ms.BethMachann,Controller Mr.ScottMartinez,CityAttorney Ms.JannaYoung,CityCouncilExecutiveStaffDirector Mr.L.MichaelHenry,StaffDirector,BoardofEthics Mr.RonMiller,DirectorofFinance,DenverPublicLibrary

  • BackgroundTheDenverPublicLibrarys(DPLs)missionistoconnectpeoplewithinformation,ideasandexperiencestoprovideenjoyment,enrichlivesandstrengthenthecommunity.ThroughitsCentralLibraryandtwentyfourbranchlibraries,DPLprovidescitizensintheDenverareawithavarietyofservicesincludingpublicaccesscomputers,skillstraining,afterschoolandsummerreadingprograms,literacycourses,andcirculatingcollectionsofbooks,movies,andmusic.Inaddition,twolibrariestheCentralLibraryandBlairCaldwellbranchlibrarymaintainspecialcollectionsthatdocumentColoradosplaceinthehistoryoftheAmericanWestamongotherareas.Bothlibrariesreceiveadditionalfundingassistancefromtwononprofitorganizationsthathelpsupportoperationsandthespecialcollections.

    PurposeThepurposeoftheauditwastoassesstheenvironmentalandsecuritycontrolsforDPLsspecialcollectionsandtoevaluatetheefficiencyandeffectivenessofDPLscurrentfundraisingactivities.

    City and County of Denver Office of the Auditor Audit Services Division

    REPORTHIGHLIGHTS

    FindingsatFollowup

    DPLdevelopedseveralpoliciestorespondtotheauditrecommendations,includinganenvironmentalmonitoringprogramandasecurityplantoimprovethepreservationandsecurityofspecialcollectionsitems.DPLalsostrengtheneditsinternalcontrolsoverdonatedassets;however,DPLdidnotsecuredocumented

    agreementswithallfundraisingpartners.

    DenverPublicLibraryPerformanceAuditFollowupReport:March2015TheDenverPublicLibraryhasimplementedallbutoneoftherecommendationsmadeintheNovember2013auditreport.

    Highlights fromOriginalAuditEnvironmentalconditionsandcontrolsatboththeCentralLibraryandtheBlairCaldwellAfricanAmericanResearchLibrary(BlairCaldwell)werenotadequate.TestingofthetemperatureandrelativehumiditylevelsofsomespecialcollectionsareasfoundsignificantdeficienciesinthetemperatureandrelativehumidityconditionsmaintainedbyDPL.Furthermore,temperatureandhumiditylevelsatBlairCaldwellwerenotstableduringthethreemonthsweanalyzed.Inappropriateandfluctuatingenvironmentalconditionscanleadtothedeteriorationoftheseuniquespecialcollections.Otherriskstothespecialcollectionsincludedthepotentialforwaterdamageandthelackofaninternalpolicyforthemaintenanceandprotectionofthesecollections.

    Severalsecurityrelateddeficienciesleftcertainspecialcollectionsvulnerable.DPLdidnotfullycontrolormonitorpublicandstaffaccesstocertainspecialcollectionsanditdidnotadheretoavarietyofbestpracticesthathelpensurespecialcollectionsareprotected,includingregularinventorychecks.

    ThroughtheFriendsFoundation,DPLhadheavilyreliedontwotypesoffundraisingeventsthatcouldbemorecosteffective.OtherfindingsincludedimproperinternalcontrolsfordonatedassetstoDPLandthelackofformalwrittenagreementsbetweenDPLanditsFriendsorganizations.ThesedeficienciesreducedDPLsabilitytooptimizeitsfundraisingpotentialandtomaintainaccountableandtransparentprocessesfordonationrevenue.

    Foracompletecopyofthisreport,visitwww.denvergov.org/auditorAuditContactPerson:DawnWiseman|720.913.5069|Dawn.Wiseman@denvergov.org

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    Office of the Auditor OOffffiicceeoofftthheeAAuuddiittoorr

    Recommendations:StatusofImplementation Recommendation AuditeeAction Status

    Finding1:DenverPublicLibrarysSpecialCollectionsAreNotMaintainedunderAdequateEnvironmentalConditionsandControls

    1.1 TheManageroftheWesternHistory/GenealogyDepartmentshouldarrangeforaninternalassessmenttoupdateDenverPublicLibrarysunderstandingofthecurrentenvironmentrelatedriskstothespecialcollectionsareasatCentralLibraryandBlairCaldwellbranchlibrary.

    DPLconductedaninternalassessmentoftheenvironmentrelatedriskstothespecialcollections.Theassessmentanalyzedenvironmentaldatarecordedoveronemonth.Thisinformationwasthenusedtoinformariskassessmentthatidentifiedriskstothecollectionsfromwater,lighting,andtemperature,amongotherfactors.

    Implemented

    1.2 TheCityLibrarian,togetherwiththeWesternHistory/GenealogyDepartmentManagerandFacilitiesSuperintendent,shouldcompleteacostanalysistodeterminethepotentialcostassociatedwithimprovingDenverPublicLibrarysabilitytoprovideappropriateenvironmentalconditionsforspecialcollectionsareas.

    DPLcompletedacostanalysistodeterminethepotentialcostofimprovingtheenvironmentalconditionsforspecialcollectionsareasatCentralLibraryandBlairCaldwell.Theanalysisincludedtheinstallationofwaterandmoisturesensors,andtemperatureandhumiditymonitors,amongotheractions.Additionalcostswereincludedinthereport,includingthoseassociatedwithaddedstoragecapacityaswellaspersonnel.

    Implemented

    1.3 TheCityLibrarian,withinputfromtheWesternHistory/GenealogyDepartmentManager,shoulddevelopastrategicplanforDenverPublicLibrarysspecialcollectionsthatoutlinesitsapproachformanagingthegrowthofitsspecialcollections.

    DPLcreatedastrategicplantoguidethegrowthandmanagementofitsspecialcollections.TheplanoutlinesthecurrentstoragecapacityatCentralLibraryandBlairCaldwell,thegrowthofDPLscollectionsoverrecentyears,andthreestrategiestomanagethegrowthofitscollections.Accordingtotheplan,specialcollectionsseniorstaffwillreviewtheplanannuallytomakeanynecessaryupdates.

    Implemented

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    City and County of Denver

    Recommendations:StatusofImplementation Recommendation AuditeeAction Status

    1.4 TheWesternHistory/GenealogyDepartmentManager,withinputfromtheFacilitiesSuperintendent,shoulddevelopapolicythatdescribesDenverPublicLibrarysenvironmentalmonitoringprogramandincludeskeyinformationsuchaslocationandmaintenanceofenvironmentmonitoringequipment,environmentsetpoints,andfrequencywithwhichenviron