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Audit Subcommittee to No Longer Take Ethics Complaints

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By Jorge Casuso

October 28, 2019 -- Santa Monica's audit subcommittee -- created four years ago to increase financial transparency -- will no longer directly receive and respond to ethics complaints.

On Tuesday, the City Council voted to revise the subcommittee's role to instead "clearly support" the City's confidential 24-hour ethics hotline "as the primary method to report suspected illegal or improper activity."

The hotline was established as part of a Code of Ethics for all City employees in November 2015, four months after the subcommittee was created.

"The City aims to make reporting potential ethics violations as simple, clear, and straightforward as possible," staff said in its report to the Council.

"While Audit Subcommittee members may hear about concerns or complaints, it is more complicated to publicize this part of their role or direct complaints to them," according to staff.

The current system, staff said, "places a burden" on members of the Audit Subcommittee, which is composed of three Council members and two community members who are experts in governance and have auditing experience.

Under the current system, the procedure for following up on a complaint is "less clear" and "may be very difficult to standardize," staff said.

"Having one recommended method for anonymous complaints removes any confusion about the appropriate path to follow for reporting."

Complaints made on the hotline are received and logged by MYECCHO, a third-party vendor contracted by the City, staff said.

The vendor forwards each complaint "to the appropriate party in the City Attorney’s Office or Human Resources Department for handling."

The Audit subcommittee, which meets three times a year, was created by Council resolution in July 2015 to oversee audits of the City’s biennial budgets ("Santa Monica City Council Approves Subcommittee for Budget," July 30, 2015).

It was proposed after a Los Angeles County Civil Grand Jury report released in 2013 found Santa Monica’s governance and financial management practices were among the worst in the County.

The City vigorously disputed the results of the report but followed its recommendation to create an audit committee to act as a watchdog of auditors, without engaging in the auditing itself.

Among the subcommittee's duties originally approved by the council was to "provide an alternative way for employees, taxpayers, or other citizens to confidentially report suspected illegal, improper, wasteful or fraudulent activity.”

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