The San Diego City Council continued its internal struggle today over who will select City Hall’s new financial watchdog, postponing a decision on ballot language until March 3.

The ballot measure is one in a series of constitutional changes that city leaders have been working to put on the 2008 and 2010 ballots.

Amid that series of ballot initiatives, the make-up of the city’s much-maligned auditing structure has become the most contentious item to date. Today, the City Council voted down two separate proposals that both would’ve put the council, in some fashion, in charge of appointing the city’s new internal auditor.

The new position takes on a heightened importance here in San Diego, where the city was sanctioned for securities fraud by federal regulators in 2006 for downplaying its financial troubles to potential investors. The internal auditor would be tasked with ensuring that the city has the proper controls in place to deliver a reliable, accurate picture of its financial health.

Central to the position is its independence from the management structure it will inspect.

A committee convened by Mayor Jerry Sanders proposed that the mayor appoint the auditor and the City Council confirm the appointment, but City Councilwoman Donna Frye has fought that idea. She argues that in order for the position to truly be independent, it cannot be selected by the same management structure that the auditor will be asked to inspect.

Frye instead issued a proposal that would have the city’s Audit Committee appoint the auditor with the City Council’s confirmation. That motion failed 5-3.

City Councilman Jim Madaffer piggybacked that proposal, but added that the appointment would be made “in consultation” with the mayor, but that failed 4-4.

Frye opposed Madaffer’s proposal, insisting that a balance had to be struck to insure that the mayor, who would appoint three of the five audit committee members, didn’t have too much control. She said that she’d compromised enough, as she initially wanted the position to be elected.

The issue will be revisited March 3; the council was also unable to reach a decision Feb. 5.

Also today, the council postponed making a decision on putting a proposal before voters that would’ve altered how its salaries are calculated. The council currently sets its own salaries with recommendations coming from a commission. Councilman Tony Young put forth a proposal that would’ve tied the mayor’s salary to that of a Superior Court judge, and calculated council members’ salaries as 75 percent of judges’ pay.

Some council members said they should take more time and that there was no reason to rush the issue onto the June ballot.

Update: The original version of this post incorrectly stated the vote on Madaffer’s motion. I regret the error.

ANDREW DONOHUE

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