Understanding the New York City Comptroller Audit Process

Lesley Brovner & Mark Peters
January 7, 2025

The New York City Comptroller’s Office has very broad audit authority, which includes the authority to audit both City Agencies and entities doing business with the City.  The audit findings can have serious consequences for both nonprofit and for-profit private entities.  Indeed, significant wrongdoing can lead to debarment from future contracts.  As such, these audits need to be taken seriously.

What Is the Role of the New York City Comptroller

The City Comptroller is a City-wide official charged with:

  • Conducting performance and financial audits of all City agencies;
  • Serving as a fiduciary to the City’s five public pension funds;
  • Providing comprehensive oversight of the City’s budget and fiscal condition;
  • Reviewing City contracts for integrity, accountability and fiscal compliance;
  • Resolving claims both on behalf of and against the City;
  • Ensuring transparency and accountability in setting prevailing wage and vigorously enforcing prevailing wage and living wage laws; and
  • Conducting audits of entities that do business with the City to make sure that City funds are properly spent.

Purpose of the City Comptroller’s Auditing Process

The purpose of audits conducted by the NYC Comptroller is to safeguard the City’s fiscal health, root out waste, fraud and abuse in local government, and ensure that municipal agencies are effectively and efficiently using the City’s resources to meet the needs of all New Yorkers.  

Types of Audits Conducted by the Comptroller’s Office

The City Comptroller conducts two basic types of audits: Performance Audits (which evaluate the effectiveness, efficiency and waste in the subject program or organization) and Financial Audits (which evaluate the fiscal health and fund use in the subject program or organization).  The audits are often conducted under strict government auditing standards known as Generally Accepted Government Auditing Standards or “GAGAS”.  

The Audit Process Step-by-Step

There are multiple steps, listed below, to the audit process:

  1. Planning & Selection: The first step is to select an entity – whether a City agency or a City vendor – that it wishes to audit.  This is done based on the Comptroller’s assessment of various risks and areas of concern.
  2. Notification & Entrance Conference: The next step is for the Comptroller to notify the subject of the audit and to introduce its team of auditors.
  3. Preliminary Survey/Fieldwork: Auditors initially gather data and review documents.  Based on this, the auditors next begin interviews with staff who can explain or further expand upon what the auditors have found in the data.  This is the most time-consuming part of the audit.
  4. Preliminary Findings: The auditors provide the subject with preliminary findings and invite comments and corrections.
  5. Draft Report & Subject Response: The auditors prepare a draft report and invite the subject of the audit to provide a more formal written response to the findings.  
  6. Closing Conference: After considering the subject’s responses, auditors provide the Comptroller’s final findings and recommendations.
  7. Final Report: The final report, incorporating the subject’s response, is issued and distributed, highlighting areas for improvement or cost savings

Common Issues Identified in City Audits

Common issues identified in City audits include: 

  • Weak internal controls (including lack of proper segregation of accounting duties, failure to independently review processes including dual check signing requirements, failure to follow established procedures).
  • Inadequate documentation and record-keeping (including missing invoices, receipts, and contracts, and/or failure to maintain evidence to support financial transactions). 
  • Insufficient oversight of finances, assets, and third-party contracts.
  • Noncompliance with accounting standards.

Contact Peters Brovner Today!

The attorneys at the law offices of Peters Brovner LLP have decades of experience with the investigation and auditing process.  Before founding Peters Brovner LLP, Lesley Brovner and Mark Peters served as First Deputy Commissioner and Commissioner of New York City’s Department of Investigation (“DOI”), one of the oldest law enforcement agencies in the country. At DOI, they oversaw the Inspectors General for all New York City agencies and supervised hundreds of investigations that resulted in criminal prosecutions and major agency reforms.

Prior to DOI, Lesley was a prosecutor for many years at the New York State Attorney General’s Office where she focused on complex, white collar investigations and Mark was chief of the public corruption unit at the Attorney General’s Office.

If you or someone you know has been contacting regarding a NYC Comptroller audit, please reach out to the lawyers at Peters Brovner LLP for a consultation.