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Tuesday, July 28, 1998
Council votes to revamp way city audits work
A change in the charter is sought to allow auditors to report to independent panels rather than those they watch.
By Mike Zapler
Review-Journal
Responding to recent problems with the Audit Department, the Las Vegas City Council voted Monday to seek a change in the city charter that would revamp how the audit function works.
At least 14 city audit reports over the past three years were stamped "draft" or "confidential" and not made public, a problem critics attribute to a faulty management structure.
The auditor now reports to the city manager. That manager, or a deputy city manager, signs off on audit work before it is made public, thus giving senior administrators final say over reports that may reflect poorly on them.
The Audit Department examines city financial functions for inefficiencies.
Council members voted Monday to ask the state Legislature to change the charter so the auditor would report to the council, or a committee established by the council, rather than the city manager. The change would bring the city in line with what local government auditing experts recommend.
"This is a good thing," said Mark Funkhouser, Kansas City's auditor and editor of the Local Government Auditing Quarterly. "The auditor ought to report to the City Council because the council is the conduit to the public and can hold management accountable for the stewardship of public resources."
In April, Funkhouser called the city's failure to release audit documents "a classic illustration of what goes wrong when the audit function is not done correctly. The management has shown they can't be trusted, and what they're doing contributes to the cynicism and contempt people have for government."
The audit reports showed, among other things, that hundreds of thousands of dollars were spent upgrading the city's computer system without a public bid, as required by state law. Another study showed that city business license officers illegally confiscated property from unlicensed businesses.
The reports were not released but were obtained and reported on by the Review-Journal.
The proposed change coincides with the arrival of City Manager Virginia Valentine, who said she supports a more independent audit function. Valentine replaced City Manager Larry Barton, who left in June after resigning last year.
"The City Council is probably looking to have more control over the audit function. There's a heightened awareness of the position right now," Valentine said.
Mayor Jan Jones agreed, saying she wants the auditor to report to a recently-created five-member audit committee made up of two City Council members and two private sector business people. The fifth slot on the panel, which is scheduled to meet for the first time Aug. 25, hasn't been filled.
"We want to set up a system that insulates the auditor and the (audit) committee from any pressure from staff," Jones said. "We think it's healthy that the city auditor feel absolutely no compulsion to hide or modify or paint a rosy picture of department functions or the use of city funds."
The bill, to be introduced during next year's legislative session, is one of seven proposals for which the city will seek state approval.
Also on the city legislative wish list is a bill to expand its authority to levy impact fees to build parks and fire stations. The measure, according to Valentine, would allow the city to charge newly developed areas more for parks and fire suppression, rather than spreading the costs among all city homeowners.
Jones said the measure also would give the city more flexibility in how it spends existing park impact fees, which average about $600 for each new home. Currently the fees -- which under state law could be increased to $1,000 per home -- have to be spent in the area from which they are collected.
The bill proposal, she said, would change that so the city could pool park impact fees and spend the money where need dictates.
The bill drafts were approved by the council 4-0. Jones was present during most of the meeting but missed the vote.
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