AgdaPkt 2002-04-08 - Laserfiche WebLink

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REPORT To the Honorable Mayor and City Council From the City Manager April 8, 2002 Subject Performance Auditor Recommendation It is recommended that the Council direct staff to discontinue efforts to engage a Pe~0rmance auditor. Background At the request of Council Member Ruskin, the Finance Director met with the Council Finance Committee to explore the advantages and disadvantages of engaging an external performance auditor, on a rotating basis, to examine how efficiently a given City department is operating. It was understood that the objective of this audit would be for the City Council to learn directly how well City departments are using their resources, and if there are any opportunities for financial savings or improved delivery of services. The focus of this audit was contemplated to be different than the financial audit that is currently performed annually as the financial audit is focused primarily in the areas of compliance with generally accepted accounting principles, internal control, and the presentation of the City's annual financial statements. A part of Council Member Ruskin's concern is based upon the fact that until the City Charter was amended in 1986 the Finance Director was appointed by the City Council and served at the Council's discretion. Now the Finance Director serves at the discretion of the City Manager. Council Member Ruskin expressed a concern that this change has eroded the City Council's control and influence over the City's financial affairs and that a performance auditor, that reports directly to the City Council, is an appropriate way of mitigating this. From discussions with various sources, staff was able to develop an estimate of at least $50,000 per year for the cost of engaging a consultant to audit one City department annually. The exact cost of the audit would vary depending upon the scope of examination involved. After considerable thought and discussion, it is the recommendation of the undersigned that the suggestion of an annual performance audit be abandoned and that Council and staff focus their efforts on continuing the City's participation in the International City Management Association's (ICMA) performance measurement program. It is our opinion that over the long run, the ICMA performance measurement program will yield similar if not better results at a lower cost and in a manner that is the less disruptive to the organization. This program allows the City to compare its specific performance in all departments and divisions from year to year and to "benchmark" against other cities.