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FINAL REPORT OF THE CITIZEN CHARTER REviEw COMMITTEE <br />overhead costs such as fringe benefits, but contractors charge a lot and may not always get to the <br />root of problems if funds are limited. It is difficult to select a good contractor and once selected, <br />it is difficult to ensure that the same people will work on all of the projects. <br />A comprehensive picture and depth of knowledge of the organization is important to the success <br />of the audit position. There can be a mix of in-house and outsourcing based on efficiency, of <br />course. However, opponents of outsourcing maintain that because management is paying for <br />services rendered, independence from political pressure on the out source auditor is severely <br />compromised. If the auditor is involved in the day-to-day operations of the government, they <br />can plan the best places to audit. Being a part of the government organization also says to the <br />public that the City government is on alert for savings and improvements. The auditor, managers <br />and staff will be working in a cooperative effort, sharing a common goal, to solve problems that <br />improve service and save tax dollars that can further service the community. Refer to Appendix <br />L for a report on bench marking and best practices. <br />In further looking at the issue of in-house versus contracted out, the committee sought additional <br />information from the GAO. The concern raised by the GAO was the audience of the audit <br />reports. In sum, if the audits are to be distributed to the legislative body, the press, and the public <br />and those directed to management, steps need to be taken to ensure that the government audit <br />organization is established in such a way to be considered free from organizational impairments <br />to independence to report externally. The GAO representative's e-mail on this topic is in <br />Appendix M. Refer to Appendix N for e-mail messages regarding auditors. <br />This led the committee to determine that the audit position should be appointed by the City <br />Council, not the City Manager, in order to retain "external auditor" characteristics. <br />In discussions on a City performance auditor, an auditor hired by the City Council and how this <br />would be implemented in the City of Eugene, there concern regarding the form of government <br />and if this would represent duplication of management effort. The performance auditor position, <br />as recommended, does not change the government structure. The position is more focused on the <br />operation of a particular government service. The auditor advises the organization, but does not <br />set policy or manage. The auditor provides information to assist the council in budgeting and <br />effective oversight. Audits usually resolve operational issues with management before the audit <br />report reaches the council via the audit committee. Audits are "bad new/good news": the bad <br />news is that there was a problem, the good news is that it is being fixed. If a City Manager could <br />get fired for a problem he or she might wish to hide from the City Council, the auditor can help a <br />City Manager identify and resolve problems before they result in a firing, saving the City <br />organization from the expense of hiring a new manager in the process. <br />FINAL REPORT OF THE CrrIZEN CHARTER REVIEW Comm TTEE - JANUARY 14, 2002 Page 21 <br />