BY SARA TABIN
Daily Post Staff Writer
Palo Alto City Council could decide tonight (Jan. 21) whether they want to have the city auditor report to the city manager, a possibility that has been denounced by auditing advocates and might violate the city charter.
Kevin Harper, of Kevin Harper CPA & Associates of Castro Valley, was contracted by the city to review the auditing office. Harper said in his report that the city auditor should report to the city manager.
“Often the independent auditors are auditing the work of (city) management,” Institute of Internal Auditors CEO Richard Chambers told the Post. “To have the independent auditor reporting to management … presents a really serious conflict.”
Chambers sent the council a letter denouncing the report earlier this month. The city charter, a document similar to a constitution, says in Section 20 that “the offices of city manager and auditor may not be combined.”
The charter says, “The city auditor shall conduct internal audits in accordance with a schedule approved by the city council and may conduct unscheduled audits from time to time.”
Harper suggested that a “dual-reporting” relationship, in which the auditor reports to both the city manager and the council, could increase teamwork in the city.
Harper said in a letter to council last week that decisions about auditing should not be made by the city manager, but advocated for having the auditor report to the city manager in an administrative manner. Harper did not give examples of what that would look like.
Sharon Erickson, who served as the city’s auditor from 2001-2008, spoke out against the report at a council committee meeting in December. She said the auditor should only report to the council to ensure that the auditor is independent from the rest of the city.
The city contracted Harper to suggest possible changes to the auditor’s office as part of a review of the position. Palo Alto has not had a full-time auditor since Harriet Richardson left in February.
Outsourcing of audits urged
Harper conducted a survey, which was sent to 12 Bay Area cities and counties, and found that Palo Alto’s $508,426 internal audit budget is the second highest of comparable cities. He said outsourcing some audits might save the city money.