Colorado Politics

Colorado Springs City Council changes city auditor requirements over objection of former staff

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Colorado Springs City Council approved an ordinance Tuesday that removed one of the only requirements for the city auditor position after hiring an auditor in March who did not meet that rule.

The council named Natalie Lovell auditor on the condition that she obtain a certificate in public accounting within the next two years.

Lovell and the city’s Human Resources Department later determined that a CPA was not necessary to perform the duties of the job and asked the council to remove the requirement. Staff said other major cities usually did not explicitly require a CPA and that the role involved more than just financial oversight.

The council voted 8-1 to remove the requirement, with Dave Donelson being the only opposing vote. Donelson questioned the fairness of the change to other candidates who applied for the position earlier this year, and he unsuccessfully asked to have the vote delayed until the city’s Audit Committee could weigh in.

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Councilmembers on Tuesday did not allow public comment on the change before casting their votes because it was an HR decision and not a public hearing, Council President Lynette Crow-Iverson said.

When former city employees spoke on the issue during the public comment period after the vote took place, Councilmember Tom Bailey said concerns about how the change would impact future audits disrespected city employees.

“It’s really irrelevant whether (city staff) think those questions are relevant or the questioner, the auditor, is qualified to ask them,” Bailey said.

In recent weeks, City Council received emails opposing the requirement change from Mike Hall, who served as city auditor from 1999 to 2004, and Denny Nester, who held the role from 2004 until 2020.

Hall said obtaining a CPA meant more than just passing a challenging test. The State Board of Accountancy grants the licenses and also has the authority to remove a license if the license holder does not receive continuing education or meet ethical standards. Hall said he was worried that the change could lead to conflict between the auditor and employees who were trying to keep their certification.

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“It strikes me as odd that she isn’t interested and the City Council isn’t interested in knowing that the Auditor’s Office is meeting those high standards,” Hall said.

Nester told the council in an email that Lovell should not oversee audits for Colorado Springs Utilities in the short term because she had been the accounting controller before becoming auditor. Nester also said the way the council approved the change went against the office’s priorities of integrity and trustworthiness.

Since Lovell became auditor in March, two of the city’s three audit managers have retired, according to city records.

One person in the Auditor’s Office has a CPA. A report Nester provided to the council in 2020 identified six employees who had a CPA.

On Tuesday, Carl Nehls, the city’s chief information officer from 2014 to 2021, told the council that the auditor needed to have the full respect of other department heads to perform her oversight duties and that a CPA gave the auditor more credibility.

“Knowing that they know their business and have the experience and expertise to properly evaluate your department is very important. That determines my openness to performing that audit,” Nehls said.

As a counterpoint, Councilmember Nancy Henjum cited an email the council received from the Association of Local Government Auditors. The email outlined some of the group’s recommendations for what makes a qualified auditor, and the group reportedly told Henjum in a later conversation that it had no concerns about the change.

“When we interviewed Natalie, we were looking for a leader to help support our audit department and that is what we’ve hired,” Henjum said. “Spending her time working on a CPA is not particularly a beneficial use of her time.”

ALGA Advocacy Chair Thandee Maung said Wednesday that many cities require some level of certification for the role. The expertise can be a CPA or other achievements such as being a certified fraud examiner or a certified internal auditor.

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