December 13, 2005
SUBJECT: Transmittal of Facilities Management Program Results Audit FY 2003/2004
REPORT IN BRIEF
This report presents the results of the performance audit of the Facilities Management Program for FY 2003/2004. Facilities Management, located in the Parks and Recreation Department, is responsible for all City-owned buildings. Primary activities performed by the Facilities Management Program include: routine and scheduled janitorial services; preventative maintenance; answering requests for repairs of structural, electrical and mechanical systems; and the provision of facility furnishings and equipment related services. In FY 2003/2004, the Facilities Management Program had a budget of $3,310,242 and 29,011 work hours for achievement of its goals.
Auditors noted some overarching issues present in this Program that have been encountered in other City programs through the audit process. The four bullets below summarize these issues:
- In many cases, programs are still recording and tracking measure results manually which is time consuming and inherent with human error;
- Measures tend to be transient, which could be an indication of development or implementation flaws; for example, measures using a three-year average are often changed or deleted before a three-year average is established;
- Some measures rely on complex evaluation and scoring systems that were not set up properly primarily because they require specialized measurement expertise; and
- Calculation and filing systems are often inadequate for auditors to reproduce reported results.
These issues are present in the Facilities Management Program and affected the results of this audit. Data was available for 51% of the measures and auditors could reproduce reported results for 23% of the measures and activities. However, an additional eleven measures were reported accurately from an index that did not correctly translate a rating scale into a percentage score. Had the index measures been correctly calculated, the total number of accurate measures would have been 40%.
Auditors could not verify results for 49% of the measures because support documentation was missing or nonexistent, could not be cross-referenced to result numbers, or data did not reconcile with the results reported. Auditors also found that 67% of the measures had Standard Operating Procedures requiring minor to major revisions in order to provide correct and adequate instruction to record and calculate performance results.
BACKGROUND
Fieldwork for the performance audit of the Facilities Management Program for FY 2003/2004 commenced in FY 2004/2005 and was completed in September 2005. Audit staff completed a draft report, which the Facilities Management Program reviewed for factual accuracy. The final report was released on November 21, 2005 for Departmental review and formal response. The Departmental response to the audit was issued on November 23, 2005 and is included in Appendix 1 of the report. It should be noted that Facilities Management had already identified many of the issues outlined in the findings and had started addressing these issues either in the new FY 2006/2007 budget restructure or with development of an automated work-order system.
The timeline for completion of this audit was adversely impacted by a significant staffing shortage in the Internal Audit area during most of FY 2004/2005. These problems have now been corrected and the Internal Audit Program was fully staffed as of September 2005.
Following Council’s receipt of the audit report, the Parks and Recreation Department will have 60 days to prepare a plan for implementation of the recommendations. Audit staff will monitor the department’s implementation progress on a quarterly basis during FY 2005/2006.
EXISTING POLICY
This report is issued to the Council and the public in accordance with the City of Sunnyvale Audit Charter and the FY 2004/2005 Performance Audit Work Plan, as adopted in May 2004.
DISCUSSION
The purpose of the audit was to review the program results as reported by the Facilities Management Program staff for FY 2003/2004.
The audit examined 57 unique, active measures and activities. To verify accuracy of the reported results, auditors need to see the source documentation that is used to build the product numbers. Due to data management issues, this audit was unable to verify the reported results for 28 measures (49% of the 57 measures). Ten of the 28 measures (18% of the 57 measures) could not be verified because they were either work hours or products such as square footage that do not require/generate source documentation other than Journal Vouchers or Time Cards. Eighteen measures (32% of the 57 measures) could not be verified because support documentation was not cross-referenced on the calculation sheets and/or support documentation could not be found (portions of supporting documents could not be found for 4 measures, no supporting documents could be found for one measure).
Data was available for 29 measures (51% of the 57 measures). Of the 29 measures reviewed, auditors found 13 measures (46% of the 29 measures) were accurate. Two measures (7% of the 29 measures) were calculated and reported inaccurately. Three measures (10% of the 29 measures) were reported inaccurately due to posting errors. Eleven measures (38% of the 29 measures) were reported accurately from an index but the index did not correctly translate a rating scale into a percentage score. Had the index measures been correctly calculated, then the total number of accurate measures would have been 23 (40% of the 57 measures).
A more detailed discussion of these findings is found in the Specific Findings section of the Audit Report, pages 10 – 11.
FISCAL IMPACT
Costs associated with preparation of the audit report were included in the operating budget.
Conclusion
The audit report provides a broad scope of recommendations, primarily related to improved documentation and reporting procedures, implementation of new internal review processes and structures, and measure clarification and simplification to ensure the accuracy of future results. The Department has already implemented some of the recommendations in the audit plan and will be restructuring the Program as part of the City’s move to a new and enhanced Performance Based Budgeting system in FY 2005/2006. As stated above, audit staff will follow-up on the Program’s implementation plan on a quarterly basis.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, publication of the Council agenda in the San Jose Mercury News, and the availability of the report in the Library and the City Clerk’s Office.
ALTERNATIVES
1. Receive the audit report and concur with management’s acceptance of recommendations.
2. Receive the audit report and direct staff to hold a study session to discuss the audit findings and recommendations.
3. Receive the audit report and give alternative direction regarding specific recommendations.
RECOMMENDATION
Staff recommends alternative #1.
Prepared by:
Kate Murdock
Internal Auditor
Reviewed by:
Mary J. Bradley
Director of Finance
Reviewed by:
David Lewis
Director of Parks and Recreation
Approved by:
Amy Chan
City Manager
Attachments
1. Facilities Management Program Results Audit FY 2003/2004 (.pdf format - 6.03MB)
2. Appendix 1 - Facilities Management Program Results Audit FY 2003/2004 (.pdf format - 2.5MB)