REPORT TO COUNCIL
SUBJECT
Title
Approval of a Fraud, Waste and Abuse Policy; Authorization of a Whistleblower Hotline; Delegation of Signature Authority to City Auditor for Vendor Agreements Related to the Whistleblower Hotline
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
The Government Finance Officers Association (GFOA) recommends that every government agency establish policies and procedures to encourage and facilitate the reporting of fraud or abuse and questionable accounting or auditing practices. A fraud, waste, and abuse policy raises awareness amongst staff, and is an excellent tool for the City to communicate its ethical standards.
In addition, in 2009, California Government Code section 53087.6 enabled local government auditors to establish whistleblower hotlines and to provide whistleblower protections with the approval of their respective legislative bodies. A whistleblower hotline, combined with a whistleblower protection clause, helps the City detect and prevent fraud and questionable practices against the City because most incidents are identified through reporting by employees.
DISCUSSION
The City adopted a Code of Ethics and Values but does not currently have a Fraud, Waste, and Abuse Reporting Policy (Fraud Policy) that defines unacceptable behaviors, assigns oversight responsibility, and provides direction for reporting suspected fraud. A fraud policy raises awareness and helps the City set a tone of oversight and commitment to combating fraud and corruption. The attached City Auditor's Office Fraud Policy provides detailed policy and procedures including definitions of fraud, waste, and abuse; oversight responsibilities; reporting procedures; guidelines and steps for investigation allegations; whistleblower protection and reporting results. The policy also helps promote consistent organizational behavior and facilitates the development of controls that will aid in the detection and prevention of fraud ...
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