Bureau of Audit

Annual Audit Report Fiscal Year 2011

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March 1, 2012

Mayor Bloomberg, Speaker Quinn, and Members of the City Council:

I hereby transmit the annual report on the operations of the audit bureau of the New York City Comptroller’s Office for Fiscal Year 2011. This report is mandated under Section 93 (f) of the City Charter, which stipulates that no later than March 1 of each year, the Comptroller is to provide a report to the Mayor and City Council on all major audit activities of City agencies conducted in the previous fiscal year.

As Comptroller, I am committed to make aggressive and vigorous use of the power of audit to both champion and pursue the achievement of efficient, effective City operations and services. The severe national and local recessions have resulted in lower tax collections at the State and City level. As a result, the City is facing looming budget deficits in the billions of dollars in each of the next several years. Therefore, it is critical that we root out waste, mismanagement, and inefficiencies in City government. As New York City Comptroller, my audits will be crucial in accomplishing that task and in putting government resources to work to improve the lives of all New Yorkers.

In Fiscal Year 2011, the audit bureau issued 90 audits and special reports that resulted in $4.4 million in actual revenues and savings, $36.7 million in potential revenues and savings, and called into question another $166.1 million associated with claims filed against the City.Additionally, the audit bureau offered 527 recommendations to City agencies and other related entities to improve government programs and operations. ;While Agency managers are responsible for resolving and implementing recommendations promptly and effectively, auditors are responsible for following up to see that action is taken and that intended results are realized. Follow-up of this year’s recommendations found that Agencies reported implementing or are in the process of implementing 362 recommendations (68.7%) and not implementing 165 recommendations (31.3%).

The Comptroller’s Office welcomes your interest in ensuring that those recommendations made by the audit bureau which have not been implemented are carefully considered by City agencies. The benefit from audit work is not in the recommendations made, but in their effective implementation. Corrective action taken by management is essential to improving the effectiveness and efficiency of government operations. To that end, we have provided supplementary information on the status of all our recommendations by both audit report and by agency.

Our office is using its audit power to ensure that money is recouped and saved whenever and wherever possible and that waste, fraud , and abuse are continuously rooted out. During the last two calendar years, the 186 audits and special reports issued by my audit bureau have generated a total of $256 million in actual and potential revenues and savings, and have called into question $191 million associated with claims filed against the City.

Sincerely,

John C. Liu