The San Diego City Council is tussling with Mayor Jerry Sanders over who the city auditor should report to, with the council siding with the financial watchdog’s plea for more independence from the city bureaucracy. The mayor, meanwhile, claims he must have oversight of the position.

On Wednesday, the council will begin discussing the auditor’s place in the city hierarchy, though it’s possible voters will eventually decide in November whether the position is removed from the mayor’s control.

The auditor debate focuses on a particularly sore area for the city, as the office is crucial to a city trying to shake the stench of the investigations by federal regulators, prosecutors and outside consultants into its financial dealings and the veracity of its disclosures to potential investors.

The Auditor’s Office, which serves a key role as independent arbiter of financial information, was placed under the purview of the mayor’s chief financial officer after the city switched to a strong-mayor form of governance in January. As a result, if

Auditor John Torell encounters a flawed financial process or an over-budget department, he’s placed in the precarious position of having to call out his supervisors.

“There is a policing function of the auditor that this council needs and I think the city needs,” Council President Scott Peters said at a recent budget hearing. “It’s not going to work to have the auditor reporting to the mayor.”

As with the rest of the city’s at-will employees, the mayor can hire and fire the auditor, although the auditor can appeal his termination to the council.

On Wednesday, Independent Budget Analyst Andrea Tevlin is slated to tell a council panel that the situation needs to be remedied, providing an additional voice to a growing chorus of critics who believe the Torell’s job is compromised by being so closely tied to the mayor.

“In order for the [Auditor’s Office] to be effective, he or she needs to have an objective opinion, which in turn requires a certain degree of independence,” Tevlin said in a report released Tuesday. “Concerns have been raised regarding the degree to which independence can be secured under the current form of government, which places [the office] beneath the chief executive.”

Tevlin recommended that the council allow the current reporting structure for the duration of the strong-mayor structure, which expires in 2010 without a voter-approved extension.

Before the strong mayor system, the auditor was hired and fired by a majority of the City Council. The Mayor’s Office argues that the financial problems that have landed the city in hot water – overstating the city’s assets by $462 million, releasing financial statements and bond disclosures that did not include the true amount of the city’s pension deficit – happened on the watch of a council-appointed auditor.

The IBA includes several alternatives to the current reporting structure. The options include allowing the voters to elect the position, appointing an “audit committee” comprised of financial experts to oversee the office, and allowing the council or mayor to hire the auditor for a multiyear, fixed term.

Chief Financial Officer Jay Goldstone said it was “premature” to look at changes less than two years after the voters approved the strong-mayor structure. He said his office will wait at least a year before proposing any specific changes.

Torell, who has been vocal about his office’s independence in the past – particularly in a report on internal controls he released in January – said he was more dispassionate of the council’s decision.

“They have my thoughts on the subject so I’m going to let them do what they want to do,” Torell said.

Any ballot initiative would have to be accepted by the county registrar in August.

< i>Please contact Evan McLaughlin directly at evan.mclaughlin@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or write a letter to the editor.

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