In an abandoned corner of City Hall that formerly housed the planning department, four auditors are digging for information about the city’s rules and finances.

Jorge Oseguera, the new city auditor, has narrowed down the top four areas of municipal government he will investigate first: the city’s health benefits, citywide policies, revenue collections and the vehicle fleet.

In addition to those audits, he has four more in the hopper. The next set of audits will cover the city’s 311 information center, purchase cards, fire inspection fees and the city’s sidewalk repair process.

The City Council gave Oseguera permission to move ahead with the audits in June.

Oseguera said his goal is to complete the eight audits by June 30, 2011, the end of the fiscal year.

“If we don’t finish all eight, at the very least, we’ll initiate all eight,” he said in an interview Thursday.

In the revenue collections audit, Oseguera said he wants to learn if cuts to staff have affected the way the city collects cash. He will examine the Finance Department, among other departments.

Leyne Milstein, city finance director and head of the Finance Department, spoke positively about the revenue collections audit. “They’ll provide a second set of eyes,” she said.

On the issue of health benefits, Oseguera noted in a Jan. 22 report to the City Council that $34 million of the city’s funds go toward medical insurance for employees and retirees. The city may be able to find other ways to pay for health benefits, he wrote.

Meanwhile, the city’s fleet of vehicles should be audited with a focus on its management, he wrote in the report.

He pointed out in the report that the city’s fleet, which is overseen by the General Services Department, had a proposed 2011 fiscal year budget of $34 million.

“It’s a lot of money that we’re spending on fleet,” he said.

The auditors will delve into why the fleet division’s budget for this fiscal year was about $7 million less than its budget in 2007/08, according to the report.

Hiring outside the city for some areas of fleet work is another idea they will study. San Jose saved money and enhanced its operations as a result of an audit on its vehicle fleet, Oseguera noted in his report.

In a fourth audit, Oseguera and staff will look at rules used throughout the city government, he said.

The city “seems to lack several important formal policies,” Oseguera said in his report. He’s also looking into whether city procedures contradict each other, or if they haven’t been updated.

The scope of each audit is not limited to one city department, Oseguera said, noting that the audits on the city’s polices, revenue collections and vehicle fleet will involve numerous departments.

Oseguera and his staff will focus on the Finance Department in the revenue collections audit. But they will examine several other city departments because many of them collect money, he said.

The General Services Department, which oversees the vehicle fleet, will be scrutinized in the fleet audit. But again, Oseguera pointed out that numerous departments will be involved. Many departments use vehicles, he said.

The same principle applies to the citywide policies audit. While the city manager’s office will play a key role in the audit, citywide policies affect multiple departments, he noted.

The results of the audit will produce a report that includes recommendations. The City Council is in charge of making any decisions in response to the audit.

Oseguera said his audit reports will be made public.

He explained that the audit process includes data gathering, risk assessment, interviews and analysis. The risk assessment process plays an important role in the audit. For that step, the auditors investigate possible areas where the city might be vulnerable, he said.

“Through the risk assessment, what we do is we try to brainstorm about all the things that could possibly go wrong, all the threats that are involved,” he said.

Oseguera said the public can participate in the audit process. “(I’m) willing to talk to whoever is interested in talking to me about potential concerns that they may have regarding the city, regarding operations,” he said.

Read more information about all eight planned audits here.

Kathleen Haley is a staff reporter for The Sacramento Press.