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Audit Facts and Frequently Asked Questions


Services/responsibilities of the City Auditor

The City Auditor performs an independent, objective assurance and service within the City of Clearwater government to examine and evaluate its activities as a service to our City. We primarily conduct program and revenue audits and serve as consultants to all departments and residents on a variety of areas and topics ranging from payroll processes, sales tax requirements, and proper controls to reduce the possibility of fraud, abuse, or waste.

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What is an audit?

An audit is a detailed examination or evaluation for accuracy of an entire City department, a division within a department, contract, lease, agreement, item, function or activity to provide reasonable assurance that objectives and goals will be met efficiently and economically.

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Types of Audits

The City Auditor performs program (operational, performance), compliance, and revenue audits to independently determine that:

  • Activities and programs being implemented have been properly authorized.
  • Activities and programs are being conducted in a manner contemplated to accomplish the objectives intended by the Council and/or City Manager.
  • Activities or programs are performed in an efficient and effective manner.
  • Tasks and functions are performed in compliance with applicable laws, policies, and procedures.
  • Revenues are being properly collected, deposited, and accounted for.
  • Resources, including funds, property, and personnel are adequately safeguarded, controlled, and used in a faithful, effective, and efficient manner.
  • Any suspicious or questionable indications of fraud, abuse, or illegl acts that may have taken place during the process of an audit.
  • Operating and administrative procedures and practices, systems, or accounting internal control systems and administrative controls have been established by management, and are being utilized adequately.
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Revenue audits

The City of Clearwater, like most Florida cities, funds the majority of its operations from revenue obtained through numerous sources, namely the various types of taxes (property, communications, etc.,), user fees (payment for municipal services such as recreation, parking meters, utility services, etc.), fines, and licenses. Based on the importance of revenue to the City of Clearwater, the City Auditor conducts examinations of other government agencies and companies required to collect and remit revenues to ensure that the City is receiving all revenue lawfully entitled.

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Independence and Objectivity

Pursuant to standards proclaimed by the Institute of Internal Auditors (IIA), the City Auditor Department is independent when it can carry out its work freely and objectively. Independence permits auditors to render the impartial and unbiased judgments essential to the proper conduct of audits. It is achieved through organizational status and objectivity. Objectivity is an independent mental attitude that auditors must maintain in performing audits. Auditors are not to subordinate their judgment on audit matters to that of others. Objectivity requires auditors to perform in such a manner that they have an honest belief in their work product and that no significant quality compromises are made.

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Internal Controls

Per the Institute of Internal Auditor (IIA) standards, an internal control is a process within an organization designed to provide reasonable assurance regarding the achievement of the following primary objectives:

  • The reliability and integrity of information
  • Compliance with policies, plan, procedures, laws, and regulations
  • The safeguarding of assets
  • The economical and efficient use of resources
  • The accomplishment of established objectives and goals for operations or programs

Controls may be preventive (to deter undesirable events from occurring), detective (to detect and correct undesirable events that have occurred), or directive (to cause or encourage a desirable event to occur).

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How do we determine what to audit?

The following methodology is used to select items, functions, or programs to audit:

  • Potential risk associated with fraud, internal controls, departmental management, employees, outside governmental agencies (HUD, EPA, DEP, etc.)
  • Largest revenue sources with a high probability that the City is not receiving its fair share of revenue
  • Departments with the largest expenditures/appropriations, and/or where the City Council, City Manager, and the Public have indicated are important programs and/or services (outlined in "Vision"). Items, functions, programs, etc., selected for audit are compiled into an audit calendar submitted every September to the City Manager
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Audit calendar

The audit calendar is an audit work plan for the entire fiscal year (October 1 to September 30) that lists the audits scheduled, tentative start and completion dates, and estimated budget hours for each audit. Any calendar amendments are made on a quarterly basis.

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To whom are audit results reported?

All audit work completed is summarized into a written report with an introduction, scope, background, observations, recommendations, and a conclusion. The written report is forwarded to the management and director of the City department audited, the management of the applicable (non-city) company audited, and the City Manager's Office.

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Professional standards and conduct governing the auditing profession

The City Auditor adheres to generally accepted governmental auditing standards (GAGAS) where appropriate and maintains independence and objectivity in the performance of all audit work. Moreover, the Department complies with the standards for the Professional Practice of Internal Auditing as promulgated by the Institute of Internal Auditors (IIA) as well as standards issued by other professional organizations (AICPA, FICPA, GFOA).

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What is the difference between City/Municipal auditing and external auditing performed by outside auditing and/or accounting firms?

An external auditing firm performs primarily a financial audit of the City's general purpose financial statements. They render an opinion as to whether or not the City's Comprehensive Annual Financial Report fairly presents the financial position of the City at the end of a fiscal year, and also whether or not the results of City operations and the cash flows of the City's proprietary and similar trust fund types for the year then ended are in conformity with generally accepted accounting principles (GAAP). Their audit work is done in accordance with generally accepted auditing standards (GAAS) and Governmental Auditing Standards issued by the Comptroller General of the United States. The City Auditor performs a continuous program of independent audits during the year of items, functions, and departments on a flexible schedule, thus enabling prompt attention to and correction of any problem areas. The City's external auditing firm uses some of the work and reports completed by the City Auditor. The City Auditor can effect needed changes through its reports and conferences with management and is available to examine specific areas about which management wishes objective reports.

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