OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Denver Auditor's Office Reports on Cybersecurity, Contract Oversight, Wage Enforcement, and More - April 24, 2024

City CouncilWednesday, April 24, 2024
BodyDenver, Colorado
SessionCity Council
DateWednesday, April 24, 2024
StatusFILED
Video Record

STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE

Transcript — Verbatim
0:45

My name is Hunter Hayes, and I know my buzz warning signs.

0:48

Buzz driving is drunk driving.

0:51

Buzz driving is drunk driving.

0:53

Buzz driving is drunk driving.

0:55

Buzz driving is drunk driving.

0:57

Okay.

0:58

Buzz driving.

0:59

I just I feel like I'm not being real.

1:00

I think if you just do it the way we're, you know, we're asking.

1:04

Why don't I do the interview?

1:05

You can sit here and just can you say it?

1:08

Buzz driving is drunk driving.

1:10

Buzz driving is drunk driving.

1:12

Yeah, it's loosen up.

1:52

The bad guys only have to be right once.

1:54

Our cybersecurity has to be right every single time, every day.

2:11

We tested thousands of employees to see how well they responded to a common cybercrime tactic.

2:17

This is an example of our extensive cybersecurity audit work.

2:21

My office regularly does audits of various city agencies cybersecurity.

2:26

One recent audit examined how the city's thousands of employees respond to one of the most common cybersecurity threats, phish.

2:42

Their goal is to lure an unsuspecting person into sharing sensitive information or downloading malicious software such as ransomware.

2:51

The information or software can then be used to access systems or important accounts, which can result in identity theft, data loss, and financial loss.

3:02

Common signs of a phishing email include misspellings and grammar errors, domain spoofs, logo imitation, or outdated branding, creating a sense of urgency and too good to be true offers or unexpected attachments.

3:15

These kinds of attacks are not unique to government agencies, and every person and every organization should be on the lookout for these fishing warning signs.

3:25

During the audit, my team created two simulated phishing emails and sent them out to about 6,500 randomly selected employees.

3:34

Half got an easy-to-spot phishing email, the second half got a more difficult polished looking phishing email.

3:41

We compared how city employees handled the fake emails to their job types, length of time with the city, management level, VIP status, and number of recent completed cybersecurity trainings.

3:53

Based on the results of our testing, we found a positive but limited impact of the city's cybersecurity trainings.

4:01

Employees who had more recent training that included information about fishing were more likely to correctly report a fish.

4:09

But the number of employees who responded correctly to the phishing emails still needs to be much higher.

4:30

Like many technology audits, we found technology services would benefit from a comprehensive strategy in preparation for any worst case scenario.

4:41

An example of what can happen if a hacker or cyber criminal gain access to government systems and other infrastructure include the 2018 case of the city of Atlanta where employees were locked out of files for five days while people using malware held the city for ransom.

5:00

I am confident in the steps technology services takes to keep the city's data secure in response to our work.

5:07

We have done many cybersecurity audits since I took office, and I am confident that as a result, the city is in a much more secure place when it comes to protecting data and important city systems.

5:21

Well, that's it for this episode of Ask the Auditor.

5:24

If you have a question, submit it to Auditor at DenverGov.org, and maybe your question will be the next question we answer on the next episode of Ask the Auditor.

5:42

Oversight and transparency are key tools to serving the people of Denver well.

5:47

Some city agencies need to step up their efforts.

6:08

That wasn't the first time our audit teams found a lack of oversight.

6:11

Auditor O'Brien decided to do a series of construction and contract audits because we keep seeing it over and over.

6:17

Inadequate contractor oversight and concerns about how the city is managing its vendors.

6:23

An area of high risk for the city is how managers are ensuring taxpayer dollars are used by third-party contractors and vendors to the best benefit of the people we serve.

6:35

Contract managers should have specific policies and procedures that allow them to track public money, verify invoices are accurate, and ensure the city actually got what it paid for through a fair and transparent process.

6:49

Based on what we've seen after doing several audits of the management of the city's contracts and construction projects, that's easier said than done.

6:59

Our most recent audit looked at the Department of Transportation and Infrastructure's management of a construction project to build a new fire station.

7:07

We found city managers weren't keeping a close enough eye on the contractor to ensure the city wasn't overcharged and that the process for hiring subcontractors was as transparent and fair as possible.

7:20

City staff relied too much on the contractor to take care of everything.

7:24

Without performing due diligence to check up on the costs and subcontracting processes, it's a lot more difficult for the city to reassure the people their tax dollars are used wisely.

7:34

Inadequately managing city construction projects means the city and county of Denver potentially waste taxpayer money.

7:41

The city might not receive all contractually required services and deliverables it is paying for, and it risked paying too much for the services it does receive.

7:51

We've gotten a lot of questions from members of the public on this issue on social media, via email, and at community meetings.

7:58

The answer is it's not just one agency or contract.

8:01

The city needs strong safeguards on all of its projects to check up on how tax dollars are used.

8:07

Another recent audit of Denver's airport parking shuttle found similar lack of oversight.

8:12

Airport managers weren't watching how often shuttles were late entering airport parking lots to pick up passengers.

8:19

Our team found they failed to meet on-time requirements in the contract every single day for three years straight.

8:26

And all that time, the airport only assessed a penalty once after hundreds of complaints by customers.

8:33

The airport could have proactively assessed millions of dollars in penalties.

8:37

Instead, management relied on the contractor to stay on time on its own, which it did not do.

8:43

The airport also did not ensure a fair and competitive contracting process when choosing a vendor.

Discussion Breakdown — Share of Meeting
Homelessness██████████████14%
Worker Protections███████████11%
Contracts And Procurement█████████9%
Revenue/Taxation█████████9%
Cybersecurity████████8%
Public Engagement████████8%
Education████████8%
Electric Vehicles█████5%
Auditing████4%
Summary of Proceedings

Denver Auditor's Office Reports on Cybersecurity, Contract Oversight, Wage Enforcement, and More - April 24, 2024

On April 24, 2024, the Denver Auditor's Office presented a series of audit findings and updates covering cybersecurity, construction contract management, wage enforcement, public notice, homelessness services, and other city initiatives. The presentation also included segments on Denver Public Schools' electric bus program, food waste prevention, and workforce training for electric vehicle repair. The following summary captures the key points from the various segments.

Cybersecurity Audit

  • Auditor O'Brien's team conducted a simulated phishing exercise targeting approximately 6,500 randomly selected employees. Half received an easy-to-spot phishing email, and half received a more polished version.
  • The audit found a positive but limited impact from cybersecurity training. Employees with more recent training were more likely to correctly report phishing, but overall response rates need improvement.
  • The auditor recommended a comprehensive strategy for worst-case scenarios, citing the 2018 ransomware attack on the city of Atlanta as an example.

Construction Contract Oversight

  • An audit of the Department of Transportation and Infrastructure's management of a new fire station construction project found inadequate oversight. City managers relied too heavily on the contractor without verifying costs or subcontractor hiring processes.
  • Similar issues were identified in audits of Denver's airport parking shuttle contract, where shuttle on-time requirements were missed every day for three years, yet the airport only assessed a penalty once after hundreds of complaints.
  • Other audits of a jail building and the airport's West End contract showed similar contracting concerns.

Wage Enforcement and Minimum Wage

  • The Denver Labor team reported recovering thousands of dollars for workers in 2024, with a record number of complaints due to the minimum wage increase and greater awareness.
  • Examples include recovering over $11,000 for a custodian at the Denver Zoo and thousands for bus drivers at the Weston Hotel construction site.
  • Denver's minimum wage is $15.87 per hour (as of January 1, 2024). The office is now using data to proactively reach out to high-risk employers and industries, including restaurants, home care, parking, salons, and marijuana.
  • In 2021, the team recovered nearly $150,000 in restitution under the citywide minimum wage.

Public Notice and Engagement Audit

  • The audit found that the city's public notice and engagement efforts are decentralized and vary by agency. Some agencies exceed requirements, while others fall short.
  • Public notices are legally required but often insufficient to meaningfully engage the public. For example, neighbors were notified about road work for bike lane projects but not about the bike lanes themselves.
  • The audit recommended raising the bar for comprehensive and inclusive public notice and engagement.

Homeless Services Follow-Up Audit

  • The auditor followed up on a 2019 audit of homeless services. The city has taken important steps, including creating a new agency and a strategic plan, but has not completed a staffing analysis.
  • Budgets for homeless services grew from $37 million in 2018 to $51 million in 2019, and over $190 million was budgeted in 2022 for affordable housing and homelessness resolution.
  • The city implemented two of four recommendations from the 2019 audit, partially implemented one, and failed to implement two.
  • Future audits planned include encampment responses, shelter programs, mental health services in jails, and affordable housing.

Denver Public Schools Electric Buses

  • Superintendent Dr. Alex Morero, joined by student Kate from East High School's Sustainability Club, celebrated the unveiling of the district's third electric school bus.
  • Over $24 million in funding is heading to 13 Colorado school districts for new electric buses. DPS aims to have 13 electric buses by next year and 23 within two years.
  • The switch to electric buses reduces diesel fumes, improves air quality, and frees up fuel costs for classrooms.

Food Waste Prevention Week

  • The city partnered with a bakery and a brewery to brew beer using surplus bread, highlighting food waste reduction. 40% of food in the U.S. is wasted annually.
  • The event aimed to inspire similar partnerships and reduce methane emissions from landfills.

Green Workforce Mini Grant for EV Repair

  • Herol Auto Care and Drive Clean Colorado celebrated a Green Workforce Mini Grant that funded training for auto mechanics to become safety-certified for electric vehicle maintenance.
  • The grant allowed four technicians to attend a four-day curriculum in California, covering battery diagnostics, insulation testing, and safety procedures.
  • The program aims to address workforce shortages in the green economy and build scalable career pathways for underserved communities.

Homelessness Housing Progress

  • Mayor Mike Johnston declared a state of emergency in July 2023 with a goal to house 1,000 people by the end of 2023.
  • In six months, Denver established 10 temporary shelters and moved 1,123 individuals out of camps. In December 2023, no person experiencing homelessness died on the streets.
  • Wraparound services are provided to support long-term success in permanent housing.

Meeting Transcript

My name is Hunter Hayes, and I know my buzz warning signs. Buzz driving is drunk driving. Buzz driving is drunk driving. Buzz driving is drunk driving. Buzz driving is drunk driving. Okay. Buzz driving. I just I feel like I'm not being real. I think if you just do it the way we're, you know, we're asking. Why don't I do the interview? You can sit here and just can you say it? Buzz driving is drunk driving. Buzz driving is drunk driving. Yeah, it's loosen up. The bad guys only have to be right once. Our cybersecurity has to be right every single time, every day. We tested thousands of employees to see how well they responded to a common cybercrime tactic. This is an example of our extensive cybersecurity audit work. My office regularly does audits of various city agencies cybersecurity. One recent audit examined how the city's thousands of employees respond to one of the most common cybersecurity threats, phish. Their goal is to lure an unsuspecting person into sharing sensitive information or downloading malicious software such as ransomware. The information or software can then be used to access systems or important accounts, which can result in identity theft, data loss, and financial loss. Common signs of a phishing email include misspellings and grammar errors, domain spoofs, logo imitation, or outdated branding, creating a sense of urgency and too good to be true offers or unexpected attachments. These kinds of attacks are not unique to government agencies, and every person and every organization should be on the lookout for these fishing warning signs. During the audit, my team created two simulated phishing emails and sent them out to about 6,500 randomly selected employees. Half got an easy-to-spot phishing email, the second half got a more difficult polished looking phishing email. We compared how city employees handled the fake emails to their job types, length of time with the city, management level, VIP status, and number of recent completed cybersecurity trainings. Based on the results of our testing, we found a positive but limited impact of the city's cybersecurity trainings. Employees who had more recent training that included information about fishing were more likely to correctly report a fish. But the number of employees who responded correctly to the phishing emails still needs to be much higher. Like many technology audits, we found technology services would benefit from a comprehensive strategy in preparation for any worst case scenario. An example of what can happen if a hacker or cyber criminal gain access to government systems and other infrastructure include the 2018 case of the city of Atlanta where employees were locked out of files for five days while people using malware held the city for ransom. I am confident in the steps technology services takes to keep the city's data secure in response to our work. We have done many cybersecurity audits since I took office, and I am confident that as a result, the city is in a much more secure place when it comes to protecting data and important city systems. Well, that's it for this episode of Ask the Auditor. If you have a question, submit it to Auditor at DenverGov.org, and maybe your question will be the next question we answer on the next episode of Ask the Auditor. Oversight and transparency are key tools to serving the people of Denver well. Some city agencies need to step up their efforts. That wasn't the first time our audit teams found a lack of oversight. Auditor O'Brien decided to do a series of construction and contract audits because we keep seeing it over and over. Inadequate contractor oversight and concerns about how the city is managing its vendors. An area of high risk for the city is how managers are ensuring taxpayer dollars are used by third-party contractors and vendors to the best benefit of the people we serve. Contract managers should have specific policies and procedures that allow them to track public money, verify invoices are accurate, and ensure the city actually got what it paid for through a fair and transparent process. Based on what we've seen after doing several audits of the management of the city's contracts and construction projects, that's easier said than done. Our most recent audit looked at the Department of Transportation and Infrastructure's management of a construction project to build a new fire station. We found city managers weren't keeping a close enough eye on the contractor to ensure the city wasn't overcharged and that the process for hiring subcontractors was as transparent and fair as possible. City staff relied too much on the contractor to take care of everything. Without performing due diligence to check up on the costs and subcontracting processes, it's a lot more difficult for the city to reassure the people their tax dollars are used wisely. Inadequately managing city construction projects means the city and county of Denver potentially waste taxpayer money. The city might not receive all contractually required services and deliverables it is paying for, and it risked paying too much for the services it does receive.

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