Department of Streets And Sanitation Bureau of Forestry Tree Guarantee Audit – 2010

Executive Summary

The purpose of the audit was to review, test, and evaluate activities performed to determine whether tree plantings were properly tracked, guarantees enforced, and whether trees were surveyed prior to the expiration of the guarantee period. A copy of the audit report is attached. It contains our findings and recommendations, and incorporates BOF responses and IGO responses where appropriate.

The audit found that the BOF’s inconsistent application of internal controls and lack of sufficient documentation was not adequate to provide reasonable assurance that the two-year tree replacement guarantee provision of the supplier agreements was effectively utilized.

We found the following deficiencies in internal controls and resulting negative consequences:

• BOF and suppliers reported substantially fewer than expected tree guarantee replacements during the audit period. 19,885 trees subject to guarantee during the audit period were purchased at a total cost of $10,797,555. 107 trees, approximately .5% of the total trees planted, were reported and verified as replaced under the guarantee provision of the supplier agreements. Based on interviews with BOF personnel and suppliers, we estimated a conservative expected tree replacement rate during the guarantee period to be 5% of tree plantings. As such, the IGO estimates a potential loss of guarantee tree replacements of $481,641.
• BOF and suppliers reported different numbers of trees planted during the audit period. In our review of records maintained by the BOF compared to actual invoices billed by suppliers and paid by the City of Chicago, we found that during 2008 the BOF recorded 54 more trees planted than suppliers indicated they planted. For 2009, the BOF recorded 620 more trees than suppliers said they planted. For 2010, suppliers reported 11 more trees than the BOF said were planted. This discrepancy indicates that the BOF’s ability to track and monitor tree guarantees was compromised.
• The BOF failed to properly track tree planting and tree replacements for over three years. The BOF failed to ensure its mapping and tree tracking software systems properly interfaced, leading to an inability to properly track tree plantings and tree replacements. Further, according to the Department of Innovation and Technology (“DolT”), BOF failed to utilize existing software that could have provided the tree guarantee tracking information. DolT indicated that software integration was delayed in part due to the City’s internal adjustments of information technology priorities, as well as other issues including a twelve-month contract gap with Motorola. Thus, BOF failed to properly track tree guarantees during this period. 309 potential tree guarantee replacements were subsequently identified in December 2009; this one-month figure is almost three times the total number of tree replacements identified by BOF under practices in place during the audit review period.