Denver Fire Department OF CONTENTS EXECUTIVE SUMMARY 1 Finding 1: Denver Fire Department Lacks...

Dennis J. Gallagher

Auditor

Office of the Auditor

Audit Services Division

City and County of Denver

Denver Fire Department Performance Audit

February 2011

The Auditor of the City and County of Denver is independently elected by the citizens of Denver. He is

responsible for examining and evaluating the operations of City agencies for the purpose of ensuring the

proper and efficient use of City resources and providing other audit services and information to City

Council, the Mayor and the public to improve all aspects of Denver’s government. He also chairs the

City’s Audit Committee.

The Audit Committee is chaired by the Auditor and consists of seven members. The Audit Committee

assists the Auditor in his oversight responsibilities of the integrity of the City’s finances and operations,

including the integrity of the City’s financial statements. The Audit Committee is structured in a manner

that ensures the independent oversight of City operations, thereby enhancing citizen confidence and

avoiding any appearance of a conflict of interest.

Audit Committee

Dennis Gallagher, Chair Robert Bishop

Maurice Goodgaine Robert Haddock

Jeffrey Hart Bonney Lopez

Timothy O’Brien

Audit Staff

John Carlson, Deputy Director, JD, MBA, CIA

Chris Wedor, Internal Audit Supervisor, MBA

Kelan Kelly, Lead Internal Auditor, MPA

Anna Hansen, Senior Internal Auditor, CICA

Travis Henline, Senior Internal Auditor

You can obtain free copies of this report by contacting us at:


201 W. Colfax Avenue, Dept. 705 Denver CO, 80202

(720) 913-5000 Fax (720) 913-5026

Or view an electronic copy by visiting our website at: www.denvergov.org/auditor

http://www.denvergov.org/auditor


To promote open, accountable, efficient and effective government by performing impartial reviews and other audit

services that provide objective and useful information to improve decision making by management and the people.

We will monitor and report on recommendations and progress towards their implementation.

City and County of Denver 201 West Colfax Ave., Dept. 705 Denver, Colorado 80202 720-913-5000 FAX 720-913-5247 www.denvergov.org/auditor

Dennis J. Gallagher

Auditor

February 17, 2011

Chief Joseph L. Gonzales, Division Chief, Fire Prevention & Investigation

Denver Fire Department


Dear Chief Gonzales:

Attached is the Auditor’s Office Audit Services Division’s report of their audit of the Denver Fire

Department for the period January 1, 2009 through December 31, 2009. The purpose of the audit

was to determine if fire inspection fees were structured to allow for full cost recovery for services

provided, to evaluate revenue generating procedures, and to determine whether internal

controls in place were adequate to safeguard assets.

Audit work determined the Denver Fire Department has made significant improvements in the

revenue controls and cash handling processes identified in the previous audit. However, this

audit identified opportunities to improve the completeness of the Department’s fire inspection

database, to enhance the Fire Department’s project planning process, and to develop

processes to comply with Fiscal Rule 4.2 regarding the annual physical inventory of fire

inspection tablets.

If you have any questions, please call Kip Memmott, Director of Audit Services, at 720-913-5029.

Sincerely,

Dennis J. Gallagher

Auditor

DJG/ect

cc: Honorable Bill Vidal, Mayor

Honorable Members of City Council

Members of Audit Committee

Mr. Jack Finlaw, Chief of Staff

Mr. David Fine, City Attorney

Mr. L. Michael Henry, Staff Director, Board of Ethics

Ms. Lauri Dannemiller, City Council Executive Staff Director


To promote open, accountable, efficient and effective government by performing impartial reviews and other audit

services that provide objective and useful information to improve decision making by management and the people.

We will monitor and report on recommendations and progress towards their implementation.

City and County of Denver 201 West Colfax Ave., Dept. 705 Denver, Colorado 80202 720-913-5000 FAX 720-913-5247 www.denvergov.org/auditor

Dennis J. Gallagher

Auditor

AUDITOR’S REPORT

We have completed our audit of the Denver Fire Department for the period January 1, 2009

through December 31, 2009. The purpose of the audit was to determine if fire inspection fees

were structured to allow for full cost recovery for services provided, to evaluate revenue

procedures related to fire inspections, and to determine whether sufficient internal controls were

in place to safeguard Fire Department physical assets.

This performance audit is authorized pursuant to the City and County of Denver Charter, Article

V, Part 2, Section 1, General Powers and Duties of Auditor, and was conducted in accordance

with generally accepted government auditing standards. Those standards require that we plan

and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis

for our findings and conclusions based on our audit objectives. We believe that the evidence

obtained provides a reasonable basis for our findings and conclusions based on our audit

objectives.

The audit identified opportunities to improve the Department’s fire inspection database, to

enhance the Fire Department’s project planning process, and to develop processes to comply

with Fiscal Rule 4.2 regarding the annual physical inventory.

We extend our appreciation to the Denver Fire Department and personnel who assisted and

cooperated with us during the audit.

Audit Services Division

Kip Memmott, MA, CGAP, CICA

Director of Audit Services


TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

Finding 1: Denver Fire Department Lacks Complete Fire Inspection

Records Resulting In Lost Revenue and Increased Safety Risks 1

Finding 2: Denver Fire Department Should Develop an Implementation

Plan for Electronic Tablet Inspection Devices 2

Finding 3: Opportunities Exist for the Denver Fire Department to

Improve Physical Asset Controls 3

INTRODUCTION & BACKGROUND 4

City and County of Denver Fire Department 4

SCOPE 7

OBJECTIVE 7

METHODOLOGY 7

FINDING 1 8

Denver Fire Department Lacks Complete Fire Inspection

Records Resulting In Lost Revenue and Increased Safety Risks 8

FINDING 2 10

Denver Fire Department Should Develop an Implementation

Plan for Electronic Tablet Inspection Devices 10

FINDING 3 12

Opportunities Exist for the Denver Fire Department to

Improve Physical Asset Controls 12

RECOMMENDATIONS 13

TABLE OF CONTENTS (cont’d)

EXHIBITS 14

Exhibit A – Building Fire Safety Inspection Report 14

Exhibit B – Fire Permit and Inspection Fee Summary 15

Exhibit C – Fire Safety Permit Fee Increase Announcement 16

Exhibit D – Excerpt from Memo Regarding Identifying Potential

Revenues 17

Exhibit E – Fiscal Accountability Rule 4.2 18

AGENCY RESPONSE 20

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DFD’s incomplete FireHouse

database exposes the people

and property of the City and

County of Denver to a

potential safety risk.

EXECUTIVE SUMMARY

Finding 1: Denver Fire Department Lacks Complete Fire

Inspection Records Resulting In Lost Revenue and Increased

Safety Risks

The FireHouse Permit Inspection Database is Incomplete

In 1999 electronic fire inspection and permit

records for the City and County of Denver were

lost and irrecoverable due to the failure of the

database that housed the inspection and permit

records. As a result, the Denver Fire Department

(DFD) had to build a new database called

FireHouse® (FireHouse).1 Audit work determined

the FireHouse database does not include all

property addresses which require fire inspections.

As part of sound safety practices and as required by the Denver Fire Code, all property

addresses requiring a fire inspection should have a fire inspection completed annually.2

Audit work identified six addresses that were not in the database nor inspected resulting

in lost revenues to the City and potential safety issues. Based on the results of our testing,

the likelihood of additional uninspected properties is high. Additionally, an internal

memorandum from DFD management identifies evidence of the incomplete FireHouse

database and revenue loss. The incomplete database exposes people and property

within the City and County of Denver to potential safety risks and results in lost revenue.

The Number of Incomplete Inspections is Increasing

A fire inspection is considered complete when firefighters inspect the property and the

resident signs the Inspection Report.3 The FireHouse database indicated 274 property

addresses scheduled for inspection in 2009 were not completed. Furthermore, a review

of the past three years indicates the number of complete and incomplete inspections

has increased. The number of properties requiring inspections has increased during this

time while the total number of completed inspections, as a percentage, has decreased

from 99.40% to 98.96%; however, the number of firefighters available to complete the

inspections has not significantly changed. Incomplete inspections expose people and

property within the City and County of Denver to potential safety risks.

1 FIREHOUSE Software is designed to make records entry and records management as easy as possible for fire departments and

EMS agencies of all sizes. http://www.firehousesoftware.com/aboutFH.php retrieved on September 27, 2010. 2 2008 Denver Amendments to the 2006 International Fire Code, Section 101.2(1), page 1: Inspection of permanent and

temporary building, processes, equipment, systems, and other fire, and safety-related situations, at intervals established by the fire code official but not to exceed once every 12 months. 3 See Exhibit A for an example of a Building Fire Safety Inspection Report.

http://www.firehousesoftware.com/aboutFH.php

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DFD spent over $343,000

on electronic tablets that

are not currently used to

complete fire inspections.

Finding 2: Denver Fire Department Should Develop an

Implementation Plan for Electronic Tablet Inspection Devices

Audit work noted DFD lacks a thorough and comprehensive implementation plan for

electronic tablets purchased for fire inspection activities.

By 2008, the Fire Safety Inspections program had been using Personal Digital Assistants

(PDAs) for inspection activities for six years, exceeding their projected life span.

Firefighters using PDAs for inspections lost confidence in them as a result of equipment

failures and limitations, such as short battery life, small screens, and loss of data before

download into the FireHouse database.

Due to the system limitations with the PDAs, DFD conducted a pilot program to

determine the viability of using electronic tablets to perform inspections.4 The pilot

program resulted in the purchase of 114 electronic tablets for $343,000 plus $2,500 for an

extended battery warranty.

Audit work determined there was no planning for electronic tablet implementation,

training, maintenance, or required infrastructure.

Additionally, based on Auditors’ observations, fire

inspectors did not use the electronic tablets

because they did not realize the expected

efficiency benefits. DFD is still not utilizing the

electronic tablets for fire inspections. Furthermore,

lack of proper project planning resulted in $2,500

spent unnecessarily on additional battery

warranties as the original warranties had lapsed.

In addition, auditors observed that, Firefighters continue to utilize paper-based

documentation for fire inspections. This is a result of poor project planning, training and

electronic tablet deployment.5

DFD should develop an implementation plan to fully realize the value of these electronic

tablets. The plan should include the following elements:

- The individual(s) responsible for completing the objective;

- The timelines for objectives and projects;

- Resources (monetary or manpower) needed for project completion;

- Input from other affiliated agencies;

- Performance measures that will help determine the success or failure of an

objective or project; and

- A review process to ensure objectives are met and projects are completed

timely.

4 Auditors requested documentation on the pilot program; however, DFD was unable to locate and provide auditors with any

documentation regarding the effectiveness or results of the pilot program for electronic tablets. 5 See Exhibit A – Building Fire Safety Inspection Report

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Finding 3: Opportunities Exist for the Denver Fire Department to

Improve Physical Asset Controls

DFD’s fixed asset tracking and monitoring process does not comply with the City and

County of Denver’s Fiscal Accountability Rule (FAR) 4.2-8. This rule provides that an

annual physical inventory of all fixed assets must be performed, the inventory process

documented, and the results submitted to the Controller's Office.

Fixed assets are real or personal property that is tangible in nature and has an expected

useful life longer than one year. FAR 4.2 and its associated Fixed Assets Procedure

establish written criteria requiring City agencies to inventory, account for, and safeguard

each fixed asset under their control. City agencies and the Controller’s Office share

responsibility for maintaining an accurate inventory of the City’s fixed assets.

Audit work determined DFD did not conduct an annual physical inventory in 2009 to

account for PDAs. Auditors determined DFD’s inventory custodian does not physically

verify each asset assigned to DFD. The inventory custodian stated this was due to lack of

available time. Instead, the inventory custodian relies on information provided by

personnel at each fire station. DFD’s asset inventory procedures were not documented

at the time of our fieldwork. Furthermore, DFD did not have their 2009 inventory results.

The non-verification of assets could lead to theft, loss, or misuse of assets.

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INTRODUCTION & BACKGROUND

City and County of Denver Fire Department

The Denver Fire Department (DFD) protects the Denver community

and its citizens by providing emergency medical and fire services.

DFD also conducts a variety of prevention efforts and public

education programs to promote fire safety and emergency

preparedness throughout the City. The Department is organized

into two sections: Fire Administration and Fire Operations; and six

divisions: Administration, Fire Prevention and Investigation, Technical

Services, Safety and Training, Suppression (Operations), and Airport

Fire and Rescue.

DFD is dedicated to providing quality, timely, and professional emergency services to

those who live in, work in, and visit the City and County of Denver; respecting each other

through trust, pride, diversity, integrity, and training; and working together to achieve the

highest levels of preparedness, prevention, and community involvement with a

dedication to purpose.6

In addition to core services offered on fire rescue, firefighters attend required training

sessions, instruct and educate citizens, and perform fire inspections. The Fire Prevention

unit manages DFD’s Fire Safety Inspection program, assists with annual safety inspections

involving approximately 26,000 properties, and issues permits. While not all properties

require permits, these 26,000 properties require an annual fire inspection. Permits are

required for a variety of business activities including those with hazardous materials or

flammable and combustible materials on-site. Finally, the Fire Prevention unit schedules

and maintains all records, invoicing, and collections related to the program.

The Fire Prevention and Investigation Division is authorized to inspect land, buildings,

structures, utilities, installation, equipment, devices, illegal processes, and material for fire,

explosion, and other emergency hazards and to investigate and ascertain the causes of

fires, explosions, releases of hazardous material, false alarms, any unsafe conditions that

relate to the protection of the public and/or property and other emergencies.7 The

Manager of Safety is authorized to adopt an inspection fee schedule necessary to cover

administrative costs of inspections and record keeping under this code.8

Fire inspections are conducted on an annual basis by Denver firefighters assigned to

individual fire stations, and by fire prevention personnel, stationed at the Fire Bureau

headquarters in downtown Denver. An annual inspection is conducted to ensure that (1)

all life-safety factors at a given property are in compliance with Denver’s Fire Code,

6 City and County of Denver 2009 Budget Book, page 293.

7 2008 Denver Amendments to the 2006 International Fire Code, Section 104.1, page 3.

8 2008 Denver Amendments to the 2006 International Fire Code, Section 106.5, page 19.

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including such components as exits, structural condition of the building, fire apparatus

access, fire safety systems, and many more; (2) any hazardous processes or operations

have appropriate, up-to-date permits in place; and (3) the local firehouse crew is aware

of any fire hazards in case of an emergency at the property.9

Loss of Fire Inspection Data

In 1999, the Fire Safety Inspections database, at that time maintained by the Office of

Safety Information (OSI), failed. As a result, thousands of electronic property records

related to fire inspections and permits throughout the City were permanently lost.

Coincidentally, this loss of information occurred at the same time there was a national

trend by municipalities to collect fees for fire safety inspections. DFD subsequently

determined to collect inspection fees to help defray increasing administrative costs. DFD

decided to:

- Re-collect all property data and rebuild the database manually, and

- Charge fees for Fire Safety Inspections.

DFD utilized FireHouse software to rebuild the database. FireHouse enables DFD to

schedule, track, and bill for inspections, permits, and other revenue generating activities.

Currently, DFD is notified of new and changed property uses through pre-construction

coordination meetings and periodic comparisons with the Assessor’s Office property

database.

Increase of Fire Permit and Inspections Fees

In 2008, the City’s Budget Management Office (BMO) completed a cost recovery

analysis at the request of DFD.10 The purpose of the analysis was to determine the

necessary fee structure that would allow DFD to

recover operating costs related to fire permits and

inspections. Most of DFD’s permit fees had not been

raised since their creation in the 1960s. Inspection fees

had remained the same since they were initially levied

in 2002.11 As a result of the analysis, DFD announced

both fees would be increased in 2009. The fee

increase allows DFD to recover approximately 94% of

direct and indirect costs.

Technology Used to Complete Inspections

By 2008, the Fire Safety Inspections program had been using Personal Digital Assistants

(PDAs) for inspection activities for six years, exceeding their projected life span.

Furthermore, firefighters using PDAs for inspections had lost confidence in them as a result

of equipment failures and limitations, such as short battery life, small screens, and loss of

9 Excerpt from the 2008 Denver Fire Department 2008 Annual report, retrieved from

http://www.denvergov.org/Portals/286/documents/Annual_Reports/2008%20Annual%20Report.pdf. 10

See Exhibit B for the fee analysis summary completed by the Budget Management Office. 11

See Exhibit C for the memo announcing the increase to fire safety permit fees.

DFD permit and

inspection revenues

cover 94% of permit

and inspection expenses

http://www.denvergov.org/Portals/286/documents/Annual_Reports/2008%20Annual%20Report.pdf

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data before successful download into the FireHouse database. Also, the PDAs did not

have an electronic signature (e-signature) feature.

An updated FireHouse version offered many features, such as e-signature, hazardous

material module, and pre-fire planning modules. Those features, however, were not

compatible with the PDAs. Therefore, DFD decided to retire the obsolete PDAs and

purchase fourteen electronic tablets. DFD conducted a pilot program by assigning these

initial tablets to the fire station staffed with the most computer-savvy inspectors. The

purpose of the pilot program was to determine the viability of using electronic tablets.

The pilot program resulted in the purchase of 100 additional tablets totaling $343,000 plus

$2,500 for an extended battery warranty.

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SCOPE

The DFD audit was originally initiated as part of the City Fees audit to determine if

selected City fees are properly structured to allow for full cost recovery for services

related to fire inspections. During fieldwork, auditors identified areas of concern in the fire

inspection process. Auditors expanded the scope to include reviewing internal cash

control processes, verifying the completeness of the FireHouse database, assessing

inventory controls, and evaluating fire inspection fees for the period January 1, 2009

through December 31, 2009.

OBJECTIVE

The audit objective was to determine if fire inspection fees were structured to allow for

full cost recovery for services provided, assess revenue generating procedures, and

evaluate the effectiveness of the Fire Department’s fire inspection and inventory

management processes.

METHODOLOGY

Auditors utilized several methodologies to achieve the audit objective. Evidence

gathering techniques included, but were not limited to:

Reviewing the 2008 Amendments to the 2006 International Fire Code

Examining the 2009 International Fire Code

Analyzing the City Charter, the Denver Revised Municipal Code (D.R.M.C.),

and legal requirements

Reviewing applicable Denver Fire Department policies and procedures

Reviewing prior audits completed on the Denver Fire Department

Evaluating internal controls related to revenue collection, recording, and

reporting

Evaluating the Budget Management Office’s analysis of fee structure and

cost recovery

Observing the fire inspection process

Interviewing Fire Chiefs, firefighters, and Fire Department finance personnel

Analyzing cash handling procedures and reconciliations

Reviewing the accuracy of property data contained within FireHouse

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FINDING 1

Denver Fire Department Lacks Complete Fire Inspection Records

Resulting In Lost Revenue and Increased Safety Risks

The FireHouse Database is Incomplete

Electronic fire inspection and permit records for the City and County of Denver were

destroyed in 1999 due to a catastrophic failure of the fire inspection database. As a

result, the Denver Fire Department (DFD) had to manually recreate a new database

which is now backed up on a daily basis, by Technology Services, to limit potential future

data loss. Audit work determined the new FireHouse database did not include all

property addresses requiring a fire inspection. As part of sound safety practices and as

required by the Denver Fire Code, all property addresses requiring a fire inspection

should have a fire inspection completed annually.12

Table 1 – Selected Test Streets

From the 2009 scheduled

inspection lists for Fire

Stations #8 and #23,

auditors randomly selected

sections of seven streets

(Table 1) and counted every

property along these

sections to verify the

completeness of the lists.

Audit work identified a total

of 208 properties, both

commercial and residential,

along these street sections.

Of this total, auditors

identified 29 properties that

were not on the 2009

inspection lists. Twenty-three

properties had legitimate

reasons for exclusion from the lists. For example, the property had been converted to a

private residence.

However, six of the twenty-nine property addresses identified should have had an

inspection in 2009, but did not. Lost revenues to the City for these missed inspections

totaled $1,813. Auditors reviewed a very small sample of the City’s property addresses.

Based on the number of properties city-wide, the likelihood of additional uninspected

properties is high. To further corroborate auditors’ assertion that the FireHouse database is

12 2008 Denver Amendments to the 2006 International Fire Code, supra note 2, at 1.

Street Name Properties Observed

East 10th Avenue 59

North Pearl Street 25

West Florida Avenue 77

West Maple Avenue 15

South Navajo Street 16

Tejon Street 6

West Alameda Avenue 10

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incomplete, an internal memorandum from DFD management to the BMO indicated

inspections of properties not currently in the system could increase revenues between

$95,000 and $130,000 annually.13

An incomplete database results in an unsafe environment for the individuals who live

and work at these property addresses and lost revenues for the City and County of

Denver.

The Number of Incomplete Inspections is Increasing

A fire inspection is considered complete when firefighters inspect the property and the

resident signs the Inspection Report. Fire safety inspections are assigned each year based

on district location. The FireHouse database indicated 274 property addresses scheduled

for inspection in 2009 were not completed. Furthermore, a review of the past three years

indicates the number of complete and incomplete inspections has increased. Table 2

provides a detailed summary of the years 2007 through 2009.14

Table 2 – Number of Inspections by Year

Year Number of

Fire Fighters

Inspections

Completed

Inspections

Not

Completed

Total

Inspections

% of

Inspections

Completed

2007 914 24,203 145 24,348 99.40%

2008 916 25,268 163 25,431 99.36%

2009 916 26,044 274 26,318 98.96%

Source: FireHouse Database and 2009 and 2010 City and County of Denver Budget Book

Furthermore, the number of firefighters available to complete the inspections has not

increased significantly.15 The 2009 City and County of Denver Budget Book revealed a

fire inspection completion goal of 95%. This goal appears to be contrary to the Denver

Fire Code, which states permanent and temporary buildings, processes, equipment,

systems, and other fire and safety related situations, should receive inspections at

intervals established by the fire code official but not to exceed once every 12 months.16

While DFD is exceeding its stated goal for fire inspection completion, incomplete fire

inspections result in increased safety risk for the individuals who work, live, and visit those

uninspected properties within the City and County of Denver. Furthermore, the non-

completion of these required fire inspections results in lost revenue for the City.

13 See Exhibit D identifying areas of potential revenue increases.

14 Total inspections represented in Table 2 do not accurately represent the potential number of properties requiring inspection

due to the incomplete FireHouse database. 15

See Table 2 – Number of Inspections by Year 16

2008 Denver Amendments to the 2006 International Fire Code, supra note 2, at 1.

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FINDING 2

Denver Fire Department Should Develop an Implementation Plan

for Electronic Tablet Inspection Devices

Audit work noted DFD lacks a thorough and comprehensive implementation plan for

electronic tablets purchased for fire inspection activities.

The lack of an implementation project plan for these devices resulted in:

- DFD’s inability to adapt and plan for the electronic tablets;

- Lack of oversight and ownership for the roll out of the electronic tablets;

- People and property exposed to unnecessary safety risks within the City and

County of Denver;

- DFD’s inability to accomplish their goals and objectives;

- A lack of periodic permit and inspection fee adjustments; and

- Frustration of firefighters as they were unable to utilize electronic tablets and

experience their anticipated efficiencies.

Prior to investing in new electronic tablets, DFD conducted a pilot program to test the

usefulness and functionality of the devices. Based on the results of this program, DFD

made the decision to purchase the electronic tablets.17 After the tablets were received,

it was determined not all fire stations had the necessary IT infrastructure in place to utilize

the tablets.18 Technology Services (TS) provided DFD with options to resolve this issue. DFD

evaluated these options and decided to equip each fire station with wireless

capabilities. DFD paid $343,000 for the electronic tablets in addition to $2,500 for

extended battery warranties. However, DFD is currently not using these devices for

inspections.

Audit work determined there was no planning for electronic tablet implementation,

training, maintenance, or required infrastructure.

In addition, audit work determined the tablets distributed to various fire stations were not

used for fire inspections because inspectors:

- Could not logon to the devices;

- Did not receive adequate training to properly operate the devices;

- Did not experience the expected efficiency benefits; and

- Found them more difficult to operate compared to handwritten inspection forms.

17 Pilot Program, supra note 4, at 2.

18 IT infrastructure did not allow the new electronic tablets to sync data to the FireHouse database via data cables or wireless.

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The implementation of the electronic tablets would have been more effective had a

comprehensive implementation plan been utilized.

Further review indicated an additional area for improvement. DFD management has not

indicated a need for additional fire personnel staff to accommodate the increase in fire

inspections. Audit work revealed the number of completed fire inspections increased by

1,841 from 2007 to 2009. However, only two additional full-time equivalents have been

added to DFD for the same time period.

DFD should develop an implementation plan to fully realize the value of these electronic

tablets. The plan should include the following elements:

- The individual(s) responsible for completing the objective;

- The timelines for objectives and projects;

- Resources (monetary or manpower) needed for project completion;

- Input from other affiliated agencies;

- Performance measures that will help determine the success or failure of an

objective or project; and

- A review process to ensure objectives are met and projects are completed

timely.

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FINDING 3

Opportunities Exist for the Denver Fire Department to Improve

Physical Asset Controls

DFD’s fixed asset tracking and monitoring process does not comply with City Fiscal

Accountability Rule 4.2. City Fiscal Accountability Rule 4.2 states an annual physical

inventory of all fixed assets shall be performed, the inventory

process shall be documented, and the results submitted to the

Controller's Office.19

Auditors determined DFD’s inventory custodian does not physically

verify each asset assigned to DFD. The inventory custodian stated

this was due to lack of available time. Instead, the inventory

custodian relies on information provided by personnel at each fire

station. DFD’s asset inventory procedures were not documented

at the time of our fieldwork. Furthermore, DFD did not have their 2009 inventory results.

Auditors attempted to test the accuracy of DFD’s personal digital assistant’s (PDAs) asset

listing. Auditors obtained an asset list from Technology Services (TS) and a second asset

list from DFD. Technology Services’ list contained 150 PDAs compared to 175 on DFD’s list.

Auditors were unable to determine which list was correct since DFD was unable to

provide the reconciliation between the master purchase order and the asset list.

DFD personnel indicated all PDAs were returned to TS. However, when performing ride-a-

longs, auditors discovered five PDAs were still at Fire Station #23. The inability to

effectively track and monitor fixed assets results in increased risks of asset

misappropriation and theft.

19 See Exhibit E for Fiscal Accountability Rule 4.2.

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RECOMMENDATIONS

1.1 Fire Inspectors should physically identify all property addresses requiring a fire

inspection and ensure the property address is located within the FireHouse

database.

1.2 The Denver Fire Department, working with the City Attorney, should seek the

necessary Charter amendment to require property owners to notify the Fire

Department when changes are made to the configuration of properties.

2.0 The Denver Fire Department should prospectively develop an implementation

plan for electronic tablet inspection devices. The project plan should be specific

and include:

2.1 The individual(s) responsible for completing the objective

2.2 The timelines for objectives and projects

2.3 Resources (monetary or manpower) needed for project completion

2.4 Input from other affiliated agencies

2.5 Performance measures that will help determine the success or failure of

an objective or project

2.6 A review process to ensure objectives are met and projects are

completed timely

3.1 The Denver Fire Department should ensure all assets are physically inventoried in

accordance with Fiscal Accountability Rule 4.2. This should include maintaining

an accurate inventory list.

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EXHIBITS

Exhibit A – Building Fire Safety Inspection Report

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Exhibit B – Fire Permit and Inspection Fee Summary

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Exhibit C – Fire Safety Permit Fee Increase Announcement

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Exhibit D – Excerpt from Memo Regarding Identifying Potential

Revenues

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Exhibit E – Fiscal Accountability Rule 4.2

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Exhibit E – Continued

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AGENCY RESPONSE

CITY AND COUNTY OF DENVER

Department of Safety Fire Department

Fire Prevention Division

P.O. Box 40385 Denver, CO 80204

p: 720.913.3474 f: 720.913.3587

January 19, 2011

Mr. Kip R. Memmott, MA, CGAP, CICA

Director of Audit Services



201 West Colfax Avenue, Dept. 705

Denver, Colorado 80202

Dear Mr. Memmott:

The Office of the Auditor has conducted a performance audit of Denver Fire Department for

the audit period beginning January 1, 2009 through December 31, 2009.

This memorandum provides a written response for each reportable condition noted in the

Auditor’s Report final draft that was sent to us at 1545 hours on January 5, 2011. This response

complies with Section 20-276 (b) of the Denver Revised Municipal Code (DRMC).

AUDIT FINDING 1:

Department Lacks Complete Fire Inspection Records Resulting In Lost Revenue and

Increased Safety Risks

RECOMMENDATION 1.1:

Fire Inspectors should physically identify all property addresses requiring a fire inspection

and ensure the property address is located within the FireHouse database.

RESPONSE/ACTION PLAN:

The Department agrees with this recommendation and will take efforts to ensure that all

properties are in the database and inspected.

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State your agreement or

reason for disagreement

with Recommendation

Target date to complete

implementation activities

(Generally expected within

60 to 90 days)

Name and phone number of

primary individual responsible

for implementation

Agree. During 2011 Fire

Prevention will attempt to

identify and inspect (or

schedule for Operations

Division inspection of) all

properties.

Assess the problem and

develop a plan: 90 days.

Implement plan: by last

quarter 2011.

Joseph L. Gonzales, Division

Chief of Fire Prevention, 720-

913-3462

RECOMMENDATION 1.2:

The Denver Fire Department, working with the City Attorney, should seek the necessary

Charter amendment to require property owners to notify the Fire Department when

changes are made to the configuration of properties.


The Department agrees with this recommendation and will pursue discussions/seek counsel with

staff in the City Attorney’s Office.



with Recommendation




60 to 90 days)



for implementation

Agreed. We will look at the

approved legal mechanism to

require property owners to

notify the Fire Department

when changes are made to

property configurations.

Will discuss with City

Attorney within 30 days.

Implementation plan within

a year.

Joseph L. Gonzales, Division

Chief of Fire Prevention, 720-

913-3462

AUDIT FINDING 2:

Department Should Develop an Implementation Plan for Electronic Tablet Inspection

Devices

RECOMMENDATION 2.0:

The Denver Fire Department should prospectively develop an implementation plan for

electronic tablet inspection devices. The project plan should be specific and include:

2.1 The individual(s) responsible for completing the objective

2.2 The timelines for objectives and projects

2.3 Resources (monetary or manpower) needed for project completion

2.4 Input from other affiliated agencies

2.5 Performance measures that will help determine the success or failure of an

objective or project

P a g e 22


2.6 A review process to ensure objectives are met and projects are completed

timely




with Recommendation




60 to 90 days)



for implementation

The Department agrees with

this recommendation and will

work with City TS to ensure

that the distribution of all

tablets, the installation of all

network infrastructure in fire

stations, and training of all

Operations Division

personnel will be completed

within 30 days and a plan for

performance measures will

be developed and

implemented within 90 days.

Tablet distribution,

completion of network

infrastructure in fire stations,

and training of all Operations

Division personnel will be

complete in 30 days.

Plan for performance

measures to be developed and

implemented within 90 days.

Joseph L. Gonzales, Division Chief

of Fire Prevention, 720-913-3462

AUDIT FINDING 3:

Opportunities Exist for the Department to Improve Physical Asset Controls

RECOMMENDATION 2.0:

The Denver Fire Department should ensure all assets are physically inventoried in

accordance with Fiscal Accountability Rule 4.2. This should include maintaining an

accurate inventory list.




with Recommendation




60 to 90 days)



for implementation

We agree that all assets must

be accounted for. We will

work with City TS to ensure

Fire Department assets are

accounted for.

(Responsibility for the tablet

computers was transferred to

City Technical Services in

2008.) We will also discuss

90 days Steve Garrod, Division Chief of

Fire Technical Services, 720-

913-3474

P a g e 23


with City TS the need for

more careful accounting of

tablets that are sent out for

replacement or sent back to

the shop and make sure

responsibility for tracking is

clear.

The Auditor’s Office staff members who conducted the performance audit dated January 2011,

Anna Hansen, Marcus Richardson and Travis Henline, were very professional, direct and

thorough. Please extend our sincere appreciation to them for their efforts to learn about and

understand our operations and to make the audit process as smooth for us as they did.

Please contact me at 720-913-3462 with any questions.

Sincerely,

Joseph L. Gonzales, Division Chief

Denver Fire Department – Fire Prevention

JLG:ms (Audit Response–Final 1-19-11)

cc: Mel Thompson, Deputy Manager, Department of Safety

Beth Machann, Controller, Office of the Controller

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