Auditor Files Lawsuit to Clarify Illegal City Council Amendment

Published on March 03, 2022

City and County Building

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DENVER – Denver Auditor Timothy M. O’Brien has filed a lawsuit to rectify the damage caused by the Denver City Council’s misguided ordinance amendment that improperly restricts independent audit work.

“The council’s amendment was a mistake — and now we are asking the Denver District Court to clarify the legality of the amendment,” Auditor O’Brien said. “This was our only choice because the City Council refused to agree to the necessary changes — and we cannot operate in a way that does not comply with Denver’s Charter.”

In May 2020, the Denver City Council passed a new ordinance allowing the Denver Auditor to use subpoenas to efficiently access information when auditing external parties related to city projects. This is a common tool for government auditors, including in many other cities and counties across the country.

However, at the last minute, some City Council members supported an amendment to the ordinance, which allows the city partners we audit to withhold information and restrict our staff to having only on-site access. This hinders our standard audit process and conflicts with requirements against undue influence described in the Generally Accepted Government Auditing Standards published by the U.S. Comptroller General.

“Our audit process is confidential and professional. The council overstepped its bounds by placing misguided restrictions on our audit work, and now it is doing more damage by erasing the limited progress we made,” Auditor O’Brien said.

Rather than make the necessary changes in good faith, the City Council has chosen instead to take steps to repeal the ordinance — removing a tool for transparency and accountability that benefits the public and small businesses.

Over the past year, Auditor O’Brien and members of his office have met with council leadership several times and attempted to work out a solution.

Auditor O’Brien proposed several solutions to the problematic amendment as recently as February — as seen in the attached letter — and he accepted council’s request for additional time. But instead of taking that time to consider a compromise, council leadership chose to misrepresent our actions and the issue as a whole.

Council leadership misleadingly said Auditor O’Brien did not attend the May 2021 council meeting when City Council members approved the ordinance and its problematic amendment. The council members did not invite Auditor O’Brien to attend their Zoom meeting and the Auditor was not alerted that there would be any questions, so he watched the meeting on Denver8 TV. When a council member asked for a recess to allow Auditor O’Brien to join the virtual meeting, the council president refused.

Council leadership also said our office did not respect their process, despite the fact that we reached out to meet with every member of council individually to discuss the ordinance in 2021 and we met with more than a dozen community stakeholder groups.

Subpoena power can help speed up both our audits and our wage investigations. It also would cost businesses less time and money to resolve through the court system than years of litigation. Having the subpoena power was a win for public transparency, at-risk workers, and disadvantaged businesses struggling to compete in an opaque system. But instead, the City Council has chosen to support special interests and big business.

“It is inappropriate for people who are not auditors to attempt to determine correct audit methodology,” Auditor O’Brien said. “Taking a ‘view only’ approach to assessing data impedes our ability to apply modern audit methodologies and conduct thorough, independent analysis. The amendment takes our leading-edge audit work back several decades.”

The Denver Auditor’s Office is a national leader in audit and data analytics techniques. To perform this work and fulfill document retention requirements to support our audit findings, our office must have copies of records. View-only, on-site access does not make that possible.

Audit analytics techniques use automation to examine entire sets of data, rather than relying on less detailed — and less exact — traditional sampling techniques. This innovative work improves our office’s efficiency and effectiveness, allows us to assess potential risks more accurately, and is an excellent service for the public who expect the highest standards from our work.

“There’s a big difference between being asked to assess thousands of data points manually, on-site versus being able to run the data through our audit analytics programs for a comprehensive look at risks and areas of concern,” Auditor O’Brien said. “These limitations are time consuming, expensive, prone to human error, and increase the risk that an issue is missed through the traditional sampling process.”

The Denver Charter and city ordinance authorize the Auditor to access to all officers, employees, records, and property maintained by the City and County of Denver and to access all external entities, records, and personnel related to their business interactions with the city. The Auditor’s Office has the authority to issue subpoenas to gain access to records from external agencies if documents needed for an audit are not produced voluntarily first.

“I tried cooperation and compromise with the council,” Auditor O’Brien said. “And I believe there are many council members who support me. However, council leadership has been unreasonable and has repeatedly misrepresented this problem.”

Our function as an independent agency serves as a tool for good government in the city. Our work is performed on behalf of everyone who cares about the city, including its residents, workers, and decision-makers.

You can find more information about the Auditor and recent audits at on our website.

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Denver's Auditor

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