OCA Audit Reports

Issued: July 2009

This report presents the results of our follow-up work on the Small and Minority Business Resources Department (SMBR) audit issued in February 2007. The purpose of this follow-up was to assess the progress that the department has made toward addressing the original audit findings and implementing the recommendations set forth in the original audit report.

We found that SMBR management accurately reported the status of all recommendations; SMBR has implemented six recommendations from the 2007 audit and implementation of the remaining seven recommendations is underway.

Overall, we found that SMBR staff has made considerable progress toward certifying minority and women-owned vendors since the 2007 audit. The certification function was transferred back to SMBR in January 2007. SMBR documented roles, responsibilities, and expectations of staff; and roles and responsibilities for updating and maintaining the City vendor database are well-defined. However, SMBR staff does not use the City vendor database to the full extent possible. Additionally, to address issues found in the 2007 audit report, SMBR staff reviewed certification records and the status of certified vendors in the City’s database. SMBR staff has implemented a risk-based approach to perform site visits on certified vendors to verify certification eligibility. However, during our review, we found a few instances where SMBR staff did not conduct a site visit as intended.

To ensure proper contract monitoring and enforcement, SMBR management assigned monitoring of professional services contracts to the Post-Award Team. Staff in the City’s Contract and Land Management Department (CLMD) and SMBR also collaborated to strengthen monitoring of rotation list contracts. Furthermore, SMBR worked with CLMD, Public Works, and the Law Department to clarify and improve the contract close-out process.

As for enforcement of the SMBR program rules, SMBR management updated the MBE/WBE program rules to incorporate progressive sanctions and developed a letter to the vendors outlining the rules. Violations of program rules are currently compiled manually and SMBR is in the process of obtaining software to improve reporting of enforcement decisions.

While SMBR management has made significant revisions to its performance measures and has improved its ability to get routine reports since the 2007 audit, most reports still require some manual steps and customized reporting is still a challenge. Additionally, SMBR management has implemented multiple records management controls and created a records management team; however, team members and other staff are unclear about their roles and responsibilities related to records management.

Download the entire text of our Follow-up Audit of Small and Minority Business Resources Department in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files. Or request a hard copy of this audit report, No. AU09114, by submitting this audit report request form.

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