Ernst& Young conducted the study that cost $580,000 and was unanimously approved by council members last year.
On Wednesday, Mayor Whitmire's chiefs of staff presented the findings at the City Council Meeting.
The city's employee structure was called into question with the finding that 40% of managers in the city have three or fewer employees under them.
"If you have too many leaders, we are a top-heavy organization," Cynthia Wilson, the mayor's special advisor for organizational culture and education, said. "If you have too many leaders who are giving direct reports a message, the message becomes choppy."
Wilson explained that the ideal number of layers from city executives down is five, yet the City of Houston has 11. The ideal number of people reporting to one person is eight, yet the audit determined it should be 25.
The audit also highlighted issues with employee retention, which Wilson referred to as an "inefficiency we cannot be proud of," and internal salary equity.
"One of the challenges in terms of addressing efficiencies is using a scalpel rather than a hammer and focusing on the areas that need real reform, but not simply going into an institution and say shutting it down or firing half of its staff without really doing a thorough review," Mark Jones, a professor of political science at Rice University, said.
The city's spending was referred to as being "uncoordinated," by Whitmire's Chief of Staff Chris Newport. He said with the information from the audit, there are "big opportunities" for savings.
Already, the mayor's team said they combined the Houston Public Works water bill call center with 311, because they were doing nearly the same function and were located in the same building. That saved the city at least $4.5 million.
"You can contrast what the mayor is doing to what the county is doing," Jones said. "The county, when it had a chance to use the (Hurricane) Beryl loophole to jack up property taxes, ran through that loophole as quickly as they could. The mayor said, 'I could run through that loophole, but I'm not going to do so.'"
In an effort to reduce theft amongst city employees, a platform was created to catch transactions that seem suspicious or patterns of unusual behavior. Once the system flags something, members of the city's finance department will review it and if it is found to be problematic, the Office of Inspector General will look into it further.
Since the system went live, Whitmire's Deputy Chief of Staff, Steven David, said two instances were flagged. Neither was determined to be criminal, but one was found to be a policy violation.
"This is the first time the City of Houston has been able to be proactive about the illicit financial behavior of its employees," David said. "Every other time and instance we have either waited to be told or we have had to wait for the news to report on it."
City leaders announced that all open positions, except fire and police, will be closed.
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