Welcome to business session for September 28, 2023.

Our first item is approval of minutes for business session.

Is there a motion?

So moved.

Second.

Been moved and second.

All in favor of uh approving the motion, the business session minutes say aye.

Aye.

Aye.

All opposed.

Motion passes.

We'll go on to the first presentation, audit presentation for FY 2023, fourth quarter.

Police spending from the community policing and prevention fund from the city auditor.

There we go.

Good afternoon, Mayor Lucas, members of the city council, city manager Platt, Doug Jones, City Auditor.

I'm here to present our audit of police department spending from the community policing and prevention fund for the fourth quarter of fiscal year 2023.

That also wraps up our quarterly series of audits on this topic.

I will discuss the audit objective, provide some background, and summarize our findings.

You should have received an email yesterday with links to the audit report as well as a copy of the presentation.

In front of you is a copy of the highlights page.

And if somebody would like a physical copy of the report, I have a few of those I could hand out.

The team for the audit was Jonathan LeCure and Clinton Pullham.

And we also presented this audit to the Board of Police Commissioners this last Tuesday.

On March 22nd, on March 2022, the City Council passed ordinance 220-216, creating the community policing and prevention fund.

The ordinance also directed the city auditor to conduct quarterly audits of the Board of Police Commissioners' efforts to meet the city's expectations as outlined in the ordinance and report to the council as soon as practical after the end of each fiscal quarter.

Our audit focuses on whether the department spent the fund as expected by the council during the quarter.

To answer the objective, we assess the method the police department developed for reporting the CPAPF fund spending and summarized all reporting categories.

For the fourth quarter, we verified officers and staff were correctly reported in the categories of crisis intervention team and enhanced publicly available data reporting.

We also verified the accuracy of reported changes in the number of recruits in academy classes and reviewed the demographic profile of the new and lateral recruits the department hired from February 2022 through April 2023.

We conducted the audit in accordance with government auditing standards.

Ordinance 220216 establishes the city's expectations regarding the police department's expenditures of 33.36 million dollars in the 12 categories shown this slide during fiscal year 2023.

The department report allocating the final 9.6 million dollars in funds appropriated to the fund in the fourth quarter, and these were to eligible spending categories.

A summary of the spending allocated each category is shown in exhibit two on page four of the report or on the back of the highlights page that you have.

While the police department expended all the CPP fund within the categories approved by the city council, they did not expend all categories in the amounts originally approved.

The department expanded $5 million from seven spending categories to cover expenses in four other categories within the fund.

The Board of Police Commissioners approved the police department's request to transfer those funds between budget line items within the CPP.

The police department reported it was unable to spend the fund balances within the original categories due to hiring challenges and attrition.

The department also reported that they did not charge eligible salary expenses such as health and life insurance costs within some spending categories because of time constraints.

Because Academy Class 178's 24 cadets began the final week of the fiscal year.

Their class was not charged to the fund in the fourth quarter.

About 1.5 million from the $4 million allocated to this category was used in other CPP fund categories.

Between February 2022 and April 2023, the police department hired 103 officers, including lateral recruits, officers graduated from the academy, and now on assignment, and officers currently in the academy.

Lateral recruits are officers who worked for a law enforcement agency other than Kansas City prior to joining the department.

These officers do not need to attend a full academy session.

For the 103 officers who were hired or began the academy between February 22 and April 23, the department reported that 82% were male, 18% were female.

Additionally, the department reported 65% were white, 14% were black, 11% were of mixed heritage, 8% were Hispanic, and 3% were Asian.

As part of our work on this audit, we reviewed the police department's budgeting practices and found the department adopted the adopted budgets, did not plan for appropriations from the city that were less than the department requested.

The government finance officers association or GFOA recommended practices, state that local government entities should evaluate revenue and expenditure options together prior to making final budget discussion decisions, ensure expenditures, identify service level assumptions and key issues that may affect actual expenditures, and describe expenditure assumptions in relation to those revenue assumptions.

In fiscal years 23 and 24, the city increased appropriations year to year, but the appropriate amounts were less than requested by the police department.

In both years, the department's adopted budget included a placeholder for the known shortfall.

In fiscal 23, the adopted budget shows most of this lower appropriation as salary savings assessment.

In fiscal 24, the adopted budget shows most of the lower appropriations as efficiency cuts to contractual services.

Police department staff state they are required to adopt the line item budget the city of council appropriates to them even if it leaves a large unplanned item.

It is city staff's practice to account for most of that difference in a single line item in areas other than personnel.

However, city staff state they anticipate the department would evaluate and adjust specific line items based on how the police department and police board wish to manage the department's resources.

A budget that plans for lower than expected revenues should identify what specific line items the department plans to reduce to account for the lower revenue, not as a single or ongoing line items that require future decisions.

Well, the city council has certain requirements under state law for appropriating money to the police department.

The Board of Police Commissioners is responsible for determining how to itemize the funds appropriated by the city to operate the police department.

GFOA recommended practices would expect the police department should present the police board a comprehensive budget for the board's consideration, which includes any known revenue shortfalls that will impact planned expenditures.

The department has the time to present a comprehensive budget that considers revenue and expenditure options together during the normal budgeting process.