Joplin’s biggest criticism after audit: lack of internal audit function

One of the major criticisms of the City of Joplin’s audit upon the release was the fact that Joplin didn’t have an internal audit function.

Missouri State Auditor Scott Fitzpatrick joined the Morning Newswatch to discuss the release of Joplin’s city audit on Wednesday. 

“They’re a large enough entity that they should have an internal audit function and they basically just indicated they’re not really interested in pursuing that,” Fitzpatrick said. “Large organizations—when you’re talking about a couple hundred million dollars in expenditures or a couple hundred million dollar budget, hundreds of employees, lots of different functions—having an independent internal audit function can really improve the organization’s operations. … If they had an internal audit function that reported directly to the city council … You get a financial audit annually. In the case of the City of Joplin, you get a statewide single audit. In the event that you get $750,000 of federal funds through your city, that you have to make that a component of your financial audit. But your financial auditors are looking at the financial statements. Number one, they’re looking at the financial statements. Number two, they’re getting paid to do that. … In cases like the state auditor’s office, where we are there because the citizens petitioned us to be there, the city of Joplin cannot hire us or fire us from doing this audit. So, we’re a 100 percent objective and independent entity looking at the city. In the case of an internal audit function, you want that to be structurally independent as well, where it reports directly to the city council and not to somebody who they’re auditing directly.”

Fitzpatrick said the easiest way to be transparent is using an internal audit function, which many similar sized cities have and use. 

“If they’re auditing the actions of the mayor or of the mayor’s administration and they also report to the mayor, that’s going to have a chilling effect on that internal audit function,” Fitzpatrick said. “They’re not going to want to report potential problems that they may find because they would potentially fear retaliation. So, having an internal audit function would be one that they just said ‘we’re not really interested in that’, but they are an entity that’s large enough that they absolutely should have an internal audit function.”

For more information on or to hear the full interview, click here.