Change will eliminate secret audits

Tuesday, July 28, 1998 | 8:25 a.m.

The change will allow auditors to report directly to the Las Vegas City Council.

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.

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.