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City auditor will depart, leaving office empty

Posted by: Eric Roper Updated: January 8, 2014 - 4:12 PM

The office of the city's chief watchdog, its internal auditor, will become empty next week when its only employee departs City Hall for another job.

Magdy Mossaad, who joined the city as part of an auditing overhaul, announced that he has accepted a job as vice president of Jackson Health System in Florida. His departure leaves the city's auditing function in limbo, with at least one audit committee member proposing that the task be entirely outsourced in the future.

In 2009, outside reviewers concluded that the city should employ at least three internal auditors. Hennepin County, by comparison, employs 13 people in its internal audit department. St. Paul does not have dedicated auditors, however.

Mossaad's office performs reviews like ensuring major city contracts are in compliance and that there are appropriate controls on city finances. The state auditor also reviews the city's financial statements annually.

Their audit plan for 2014 includes an examination of city purchasing cards, reviewing the city's garbage contract with Minneapolis Refuse, Inc., and ensuring that the water treatment plant keeps adequate controls over its inventory.

The city briefly paid for three full-time audit staffers, in 2011, but eliminated one of the positions after an auditor transferred elsewhere in city government. Another auditor left earlier this year for a job at U.S. Bank. College interns still aid Mossaad with the work.

The department's budget did get a boost in the latest budget, however. The mayor recommended increasing it by 28 percent, or $109,350 to hire an additional auditor and increase the number of projects. That provides for three FTEs, rather than two. It does not appear the council changed that recommendation, though the final budget is not yet online.

Mossaad's department is overseen by an audit committee comprised of council members and several citizen appointees. One of the appointees, software executive and former mayoral candidate Stephanie Woodruff, believes it may be wiser to outsource the work to firms like KPMG and PricewaterhouseCoopers in 2014 -- and possibly 2015.

Woodruff said not only does it take months to hire a new qualified person, but "you get a much better product, I believe, when you can pull in one of the big four firms." The benefit, she said, is that it is more efficient to just pay for projects rather than an entirely new city staff person.

The new chair of the audit committee, new council member Linea Palmisano, said in a message that she is still examining the issue. "I'm trying to look at this strategically," Palmisano said. " I'm trying to look at this as an opportunity to really create a new and productive function in a way that we can really help out our city from an auditing perspective."

The first audit committee meeting of the year will take place on January 22.

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