Audit oversight panel sought

By Mike Zapler
Review-Journal

      Responding to reports that city misdeeds are being concealed by senior managers, Las Vegas officials on Monday called for a new committee to oversee the audit department.
      Also, Mayor Jan Jones said she will seek a change in the city's charter that would give the City Council, rather than the city manager, authority to fire the auditor.
      Jones said she "doesn't like being kept out of the loop" and was fairly surprised by audit reports stating that officials spent hundreds of thousands of dollars without proper authority and illegally confiscated property from unlicensed businesses.
      She also defended Deputy City Manager Steve Houchens, who oversees the city's audit department. The department examines city functions for inefficiencies and possible savings.
      "I have a tremendous amount of confidence in Steve Houchens," she said. "I don't think he was trying to hide anything from me or the council."
      The proposed audit committee, which Houchens recommended in a memorandum Monday, and which all five council members said in interviews they supported, would be made up of two councilmen, the city manager and a citizen.
      The committee would oversee the audit department, review its work and recommend possible areas of investigation. The auditor, however, would still report to the city manager.
      At least 14 audits, reviews and analyses over the last 2.5 years have not been made public by the city manager's office, which has the final say over whether the studies are released. Although four of the reports were released in response to a formal records request, officials say the other 10 are not public documents and refuse to release them.
      "The documents I chose to withhold from the R-J are concerned with potential legal or personnel issues, and as such, are not considered public record," Houchens wrote in a memo to council members and staff Monday.
      He then went on to defend the city against some of the audit studies' findings reported in the Review-Journal on Sunday.
      Houchens wrote there was some doubt about whether the city should have solicited public bids before purchasing $382,520 worth of cable and fiber-optic equipment from Third Wave Corp. An October 1996 audit stamped "Draft-Confidential" said officials violated state law by not soliciting other companies' proposals before purchasing the equipment.
      Because Third Wave also was providing specialized computer services, it wasn't clear that the purchase of the cable and fiber-optic equipment should have been subject to a bid, Houchens wrote. But according to the audit, the equipment did not fall under exempted professional services and the city should have solicited other proposals.
      The city at the time had paid or committed to pay Third Wave more than $501,000, only $182,000 of which was approved by the council, according to the audit. Houchens' memo did not mention that finding, and he declined to address it in an interview. City regulations require that the council approve expenditures above $25,000.
      Houchens also criticized a report comparing Las Vegas' park maintenance costs with those of seven other cities. He called the report a limited telephone survey that included "a significant discrepancy in information, requiring further investigation and perhaps an actual audit."
      In an interview, Houchens said the audit will be conducted eventually, "but it's going to take time because there are other priorities."
      Before she was fired in February, City Auditor Susan Toohey proposed an audit committee made up of citizens that would have sole oversight over her department.
      Houchens' proposal would give the auditor less independence than Toohey sought, but Jones said the panel will help make more information publicly available. The mayor said the city manager should not have the final say over what audits are finalized and released.
      "I want to change the structure so the council is aware of findings all the way through," Jones said.
      The mayor also plans to ask the Legislature to change the city charter to require a majority vote of the council to fire the auditor.
      Part of the problem, Jones said, lies in the city government structure, which -- at least in theory -- leaves policy decisions to the part-time council and management decisions to nonelected officials. Jones said she prefers a strong mayor form of government that would narrow, if not eliminate, the separation between elected officials and bureaucrats.
      If anything is clear, it's that the council should be kept abreast of the audit department's findings as they are made, Jones said.
      "We're going to make mistakes," she said, "but let's air them and then fix them."