-Reports show DSNY issuing payments without proper authorization and tossing user input to the wayside in improving violations system-

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View Directive #7 compliance audit

New York City Comptroller William C. Thompson, Jr. today released two audits on the New York City Department of Sanitation (DSNY) that found the Department is in violation of a Comptroller Directive and problems with the system charged with recording Notice of Violations currently exist.  Thompson made a number of recommendations to rectify the issues.

The audits, which are available at www.comptroller.nyc.gov, covered Fiscal Year 2007; and August 2007 – February 2008, respectively.

“My auditors have found some troubling practices within the Sanitation Department and it is my hope that they immediately implement my recommendations to ensure more efficient operations,” Thompson said.

The first audit examined the Sanitation Department’s Engineering Audit Office (EAO), which is responsible for performing individual audits of capital payments for a number of construction-related expenses, and its compliance with Comptroller Directive #7, which sets guidelines for pre-auditing payment requests for a variety of construction and related consultant contracts.

The audit determined that the Department’s EAO has not fully complied with the Comptroller’s Directive #7 regarding change order work and had authorized payment for:

• $1,678,491 in vouchers associated with change-orders not registered with the Comptroller’s Office;
• $48,913 in vouchers despite the lack of substantiating timesheets and material invoices;
• $321,553 in vouchers although the amounts exceeded the costs estimated by the EAO;
• $1,017,616 in vouchers although the associated change orders lacked required engineering audit certification of cost reasonableness.

“It is troubling that the office charged with the responsibility of ensuring that the City is receiving appropriate contract value, would authorize payments without proper substantiating documentation” Thompson said. “I expect the EAO to fully implement my recommendations and establish further controls on the payment to contractors.”

In contrast to the problems uncovered, the EAO was generally found to have complied with other major requirements of Directive #7 that relate to auditing and authorizing payments concerning work originally specified under construction and consultant contracts.

The Comptroller made ten recommendations to DSNY to ensure better operating practices in the future, of which they generally agreed with most.

Thompson’s second audit evaluated the development and implementation of the Notice of Violation Administrative System (NOVAS) by DSNY, which allows DSNY Enforcement Agents and Police Officers to use a handheld device to issue summonses.  The system has been in place since 2006, replacing manual paper summonses and helping to streamline the summons and management process.

Auditors found that NOVAS met the overall goals as stated in the original system justification and the design allowed for possible future upgrades. In addition, NOVAS complies with Electronic Signature and Records Act Federal guidelines, and the handheld devices are physically secure when not in use.  The Comptroller’s Office surveyed system users and based on responses found that the users have issues that DSNY must address to improve the system’s functionality and productivity.  Also, data integrity tests indicate that DSNY must address specific issues to improve the reliability of the system.

The Comptroller made a number of recommendations to address specific issues and improve reliability of the system, of which the Sanitation Department disagreed with the majority.

Some recommendations included:

• Improving screens on the handheld devices, adding additional menu items and providing additional training to users;
• Correct data fields and create input controls or validation checks to ensure no data entry errors are allowed;
• Enforce requirement that users change their passwords every 45 days and program a warning to remind users to do so;
• Establish policies to terminate inactive user ID’s and terminate access of users no longer employed by agency;
• Develop and periodically test a formal, comprehensive disaster-recovery plan for NOVAS.

 “User comments are vital parts of developing a properly working system.  By ignoring the concerns of those who use the system on a daily basis, the Sanitation Department is being negligent in its duty,” Thompson concluded.

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