Internal Audit of City Finances

The city's Internal Audit Department serves a vital function: ongoing oversight and audit of programs and funds that flow through the city budget. The Greensboro budget will be in the $400 million range for the coming budget year - no small amount. To audit the entire city financial operation, the city engages an outside audit firm to go over the books and financial records each year. The internal audit department is a branch of city government, and it's job is to dig into the details of individual programs and departments to ensure that money is used for intended purposes and to make suggestions for improvement. The internal audit department is supposed to go about its business without outside interference, and issue a report of its findings upward to the city manager and presumably the City Council.

Over a period of years Project Homestead received a substantial sum of money from the city; all of it eligible for audit under a variety of federal, state and city grant guidelines. Following detailed discussions with several former city employees, and reading a number of documents, it appears the internal audit process was interrupted or influenced during parts of the Project Homestead audits. The fact that this happened suggests the need for additional safeguards to protect the integrity of the internal audit process, which in turn will provide assurances to the citizens that taxpayer money is being used prudently and as it was supposed to be. Several things can be done to improve these processes.

First, the City Council can appoint an audit subcommittee of two or three council members to receive copies of all reports prepared by the internal audit department. The primary recipient of internal audit reports should be the city manager, not a subordinate.

Second, the internal audit department should publish a summary of its reporting activities, including a brief description of any deficiencies noted, on the city website department page.

Third, all members of the internal audit department staff should take annual training courses through the Institute of Internal Auditors.

Finally, the city's management policies or city charter should be amended or updated to require the internal audit process to occur without interruption or interference by anyone outside the department. Its work must be independent of other city functions.

If these, or similar policies, can be integrated into the city's way of doing business, it is likely we will never again experience another Project Homestead stlye financial mess.