Jan 31 2017

Second Phase of St. Louis County Government Forensic Audit Completed


The second phase of a top-to-bottom forensic audit of St. Louis County government is now complete. The audit results are being used to improve operations, cut waste and strengthen fiscal safeguards. The first phase of the audit began shortly after County Executive Stenger took office in 2015 and concluded in December of the same year.

“This audit dug deeply into every department of St. Louis County government,” said County Executive Steve Stenger, who commissioned the audit. “Brown Smith Wallace, one of the most respected audit firms in our region, provided us with an excellent blueprint for best practices in financial management that department heads are in the process of implementing or have already adopted.”

“In addition to tightening controls to protect taxpayer dollars, the audit directed us to look at ways County government could improve service and run more efficiently,” County Executive Stenger said.

The forensic audit has directly led to millions of dollars in taxpayer savings. For instance, the audit identified that the County could purchase printing services from outside sources at less expense than operating its own County print shop. The County print shop was closed, resulting in an annual savings of $300,000.

The audit caused County leadership to look at the efficiency of operations in a new light. This led to a review of the provision of services to youth at the County’s Lakeside Residential Treatment Center. This year the County is contracting with a top-rated private program to provide those services.

“With regard to Lakeside, our goal is to provide the best possible services while being good stewards of taxpayer dollars,” Stenger said. “We closed an aging facility in need of costly repairs and transferred our students to Marygrove--a facility with an excellent reputation.”

The Lakeside transfer is saving St. Louis County taxpayers $1.4 million a year.

“We will continue to review all operations of County government within a framework of efficiency and stewardship,” Stenger said. “We will challenge anything that does not fit within that framework.”

That thinking has also led to the current proposal to contract for the provision of dining services at the St. Louis County Jail. The County Council is reviewing the proposal.

“Contracting for these food services is common practice in corrections,” Stenger said. “It would enable us to provide the same service at a savings of $620,000 per year.”

Among the audit’s objectives was closing loopholes that had existed for many years. One of the purposes of the audit was to identify ways to eliminate risk in county government practices.

The audit assessed each department’s risks related to revenues, expenditures and assets. County Counselor Peter Krane approved the contract for the second phase of the audit to investigate areas of significant potential risk identified in the first phase.

“It is remarkable that the second phase of the audit was completed in 8 months because of the 155,000 exceptions in 32 categories identified during the first phase,” County Executive Stenger said. Exceptions are transactions or events that occur outside of normal parameters that auditors deem necessary to investigate. In addition to holding a law degree, Stenger is a Certified Public Accountant.

As a result of the findings of the second phase, a number of improvements in policies and practices have been made or are in the process of being made in several areas of St. Louis County Government. Among these:
 The County is developing a policy to ensure all employee records are complete,
maintained, and regularly reviewed.
 Additional controls are being put in place for the procurement to payment process to
reduce the risk of duplicate payments.
 A stronger process is in place for vendor vetting and payment.

The comprehensive forensic audit is the first of its kind in St. Louis County government.
“We are taking steps to address the risks identified in the audit,” County Executive Stenger said. “This action has proven very valuable. Aside from the millions of dollars saved, we have a comprehensive guide to best practices in fiscal management and a strong framework to focus on efficiency and stewardship. This forensic audit will ensure that our government is responsive and
responsible for years to come.”

See the audit report here:
Special Countywide Audit Follow-up Audit Report-FINAL.pdf






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