Although he is a rival now, for most of his seven and a half years in office Comptroller William Thompson has not been a ferocious antagonist to Mayor Michael Bloomberg. Instead, he has mostly praised the mayor's budgets, smiled on his economic policies and hailed Bloomberg's accomplishments with the city's schools. When Thompson endorsed Bloomberg's re-election opponent Fernando Ferrer in 2005, he was asked to name three areas where the Democrat would perform better than the mayor. "You'd have to ask Freddy the question," was Thompson's response.

But while they have avoided open warfare, Thompson's office and the Bloomberg administration have engaged in hundreds of low-level skirmishes over the comptroller's audits of city agencies and programs.

Since he took office in January 2002, Thompson's office has issued some 650 audits. While some were obscure or perfunctory and generated little disagreement between the comptroller's and mayor's staffs, several audit reports lodged major criticisms of the administration's performance, called for significant changes in how the city did business and spurred strong reactions from Bloomberg appointees.

And some have concerned the city's most vulnerable populations. Over the years, his audits contended that the Department of Aging needed to do a better job checking the physical condition of its senior centers, that the Human Resources Administration was not serving HIV/AIDS clients well enough, and that HRA's fair hearing process for welfare applicants was at odds with state regulations, to cite just a few examples. Advocates for low-income New Yorkers recently convinced the comptroller to issue a statement addressing concerns with the city's Back to Work program.

Thompson has not, however, audited the mayor's office and agencies as often as did his predecessor, Alan Hevesi, under Mayor Rudolph Giuliani. The jury is still out on what impact Thompson's audits have had on city services—and whether his record as an auditor will matter in the comptroller's current run for mayor.

A painstaking process

The city charter gives the comptroller broad audit authority, specifically the “power to audit and investigate all matters relating to or affecting the finances of the city” as well as examine “city programs to determine whether funds are being expended or utilized efficiently.” Every agency has to be audited at least once every four years. To accomplish all these tasks, the comptroller has the power to take testimony under oath and to “obtain access to agency records required by law to be kept confidential."

At present, the comptroller has around 150 auditors, with skills ranging from accounting to engineering. The starting salary is $40,000 and the division has a budget of roughly $8 million. Under the direction of Deputy Comptroller for Audits, Accountancy and Contracts John Graham—a 29-year veteran of the comptroller's office—the audit bureau selects audit targets using a "risk analysis" that looks for programs with big budgets (where waste or potential savings are most likely), dealing with important issue areas (say, education), and possibly with a history of audits that detected problems. "Choosing what and who to audit is part art, part science and part risk assessment," Graham says. "Often, an audit is the result of media attention, whistleblower complaints, or our own research."

Once an audit is launched, it can involve a single auditor and last a month in the simplest case, and in the most complex instance has a team of five working for up to a year. Auditors collect documents and interview agency personnel, contact state agencies, talk with contractors and vendors and in some cases prepare alternative cost estimates of construction projects. Field work also plays a part. If the auditors are looking at concessions on city property, they eat at the restaurant, looking to see if the concessionaires take cash, give receipts—whether they handle money properly or stuff it in a cigar box.

Once the audit is largely finished, a preliminary version is sent to the target agency to see if there are disagreements on the basic facts. Then a draft audit is given to the agency, to which it makes a formal reply.

During his time in office, Thompson's auditors have audited Department of Parks and Recreation 78 times—more than any other agency—primarily, the comptroller's office says, because the agency's many concession arrangements offer the chance for the cash-strapped city to recoup extra money. The school system has been audited 33 times. Thompson's auditors have issued 31 reports on the Administration for Children's Services, 22 on the pension funds and 19 concerning the Department of Finance.

Assessing the impact

According to its annual reports, the comptroller's audit bureau has saved the city as much as $77 million during Thompson's tenure and identified another $183 million in potential savings.

So far in 2009, the comptroller has issued audits on topics like spending by the Brooklyn district attorney, retirees who double-dip by working for the city while collecting pension benefits, case management at the Civilian Complaint Review Board and the use of department credit cards by the Department of Parks and Recreation. None of those have generated much controversy. But some of Thompson's earlier audits touched on—or touched off—major debate.

When comptroller auditors in the fall of 2003 looked into the Department of Homeless Services' contracts with hotels and landlords to provide temporary shelter, they found that DHS had failed to comply with city contracting rules in awarding some $96 million in business to property owners. What's more, 30 of the 56 apartments that auditors visited had "unsafe or unsanitary conditions." Those concerns resurfaced this past spring, with the department facing questions over placing multiple homeless families in particular apartment buildings.

In September of 2003, the city announced that Snapple had won the exclusive rights to sell products in city schools, control vending machines in all other city buildings and market the city's name—a deal that was supposed to bring in more than $166 million to the city's coffers. A March, 2004 comptroller's audit found that the process through which Snapple won the school vending rights was "fundamentally flawed" because it failed to solicit a range of bids and offered the marketing agent "exorbitant compensation for its services." Thompson ended up suing the city to try to stop the citywide marketing deal. The state Court of Appeals in 2006 upheld a lower court ruling that Thompson was right to consider the city's marketing potential as city "property." But the court ruled that the comptroller's objections were not sufficient to stop the deal. The city abandoned the marketing arrangement in 2009 anyway, after it failed to generate anywhere near the anticipated revenue.