When I was first elected Auditor, the mayor made all the appointments to the city's audit committee. I was pleased that he appointed me, the Auditor, to the audit committee. Otherwise, I would not have been able to serve on the committee at that time. He also appointed two cabinet members to serve as well. At my suggestion he appointed two independent auditors. Tim O'Brien, CPA, and former Colorado State Auditor was appointed at my suggestion. I had worked with Tim for his twelve years as State Auditor during my service on the Legislative Audit Committee while serving in our State Senate. The mayor also reappointed Bonney Lopez, CPA, to the committee. But the committee still lacked independence. With the exception of Mr. O’Brien, Mr. Lopez and me, the committee was completely made up of members of the mayor’s administration; it was virtually was made up of ‘members of the company’, so to speak. Anyone here remember ENRON?
With the passage of the charter changes addressing reforms to the Denver Auditor's Office, the committee truly became an independent audit committee. The charter language did not allow the mayor to appoint members of his cabinet or other city employees to the committee. The mayor, the city council and I each appoint two members to the committee but all of those appointments must come from outside the city government. As the Auditor, I serve as Audit committee chair. Under the General Standards section of the Government Accounting Standards which guides all of our audits at the city, independence is the first quality which must rule any auditor and audit process.
I am pleased to report that we now have a very strong and independent audit committee. The audit committee members vigorously question administration staff as to how audit recommendations will be implemented. And the audit committee schedules follow-up sessions with city agencies to see how the agency is doing on implementing the benchmarks set by a particular audit. Under the leadership of our new and independent audit committee, our outside Auditor BKD, noted marked improvement to city financial practices.
The most recent external audit of the city’s financial statements, overseen by the audit committee, and the accompanying management letter prepared by BKD that notes observations with regard to the city’s internal controls related to financial reporting has once again shown improvement over the previous year. This is a direct result of the role our independent audit committee plays.
Years of planning, negotiating and hard work have paid off with high marks for accountability for tax dollars thanks to the dedication and diligence of Denver's Independent Audit Committee.