On Thursday evening, Aug. 23, 2007, the mayor’s City Charter Review Committee held a meeting, but hardly anyone noticed. There was only one member of the press there, and a few members of the public, which was too bad, because important issues were being discussed. One significant item was a proposed action to approve language forwarded by the Financial Reform Subcommittee regarding the city auditor.
Specifically, the action was to allow the mayor to nominate the city auditor in consultation with the audit committee, confirmation by the City Council, and termination by the audit committee with appeal rights to the full council. Think of this as a hybrid compared with what we had and what we currently have.
Under the council-manager form of governance, the city auditor was elected by the City Council for an indefinite term. That didn’t work out so well.
Under the current strong mayor trial form of governance, the mayor appoints and can fire the city auditor, with appeal rights to the City Council. That didn’t work out so well either. (If you recall, it was shortly after then-auditor, John Torell, was asked by management to change some key text in the conclusions section of the 2007 Annual Report on Internal Controls to make things appear better than they actually were, that he resigned.)
In fact, we still don’t have a city auditor (although sometimes Jay Goldstone is the acting city auditor, but only when he isn’t the chief financial officer or the acting chief operating officer).
Given that both options have been tried, with less than stellar results, it makes sense that the next city auditor should be elected by the people. But that’s not what the subcommittee majority was recommending. I wondered why not, and after sitting and listening to the mayor’s Charter Review Committee’s comments, I think I heard the answer: The mayor needs to work with the auditor so he should get to choose someone he likes. Interesting, but not very compelling.
Before the meeting, I decided to see what the experts had to say about city auditors, and whether or not “best practices” supported management appointing the city auditor. I asked the Association of Local Government Auditors (ALGA) and as it turns out, they have a lot of good information including Model Legislation Guidelines for Local Government Auditors, Third Edition 2007.
This model includes two options for choosing a city auditor; by election of the people or by appointment of the legislative body. It does not include a recommendation to have the mayor (management) appoint the city auditor.
The reason for this is pretty simple: auditor independence. According to Jay Poole, who is the Advocacy Committee Chair for ALGA:
The most significant threat to auditor independence and public accountability… is the question of who hires and who fires the city auditor.
Generally Accepted Government Audit Standards define “independence as independence from management, in this case the city manager/mayor,” says Poole.
That makes sense, since it is management’s numbers and financial internal controls that will be audited. So what do you think? Would the public interest best be served by a city auditor who is:
Elected by the people?
Appointed by the city council?
Appointed by the mayor with city council confirmation?
— DONNA FRYE