In The News › Changes suggested for plan to establish inspector general

Oct 17, 2006

Source: Baton Rouge Advocate

Changes suggested for plan to establish inspector general

Changes suggested for plan to establish inspector general
By JOE GYAN JR.
Advocate New Orleans bureau
Published: Oct 17, 2006

NEW ORLEANS — The Bureau of Governmental Research is applauding the New Orleans City Council for
proposing the creation of an Inspector General’s Office to ferret out waste, fraud and inefficiency at City Hall.
But the independent research group says the office should be given broader powers and more teeth.

Council members say the ordinance introduced Sept. 21 is needed to reassure the nation that the city’s post-Katrina
government is honest and competent.

New Orleans-based BGR agrees, but one of its recommendations to the council is that the inspector general’s probes
not be restricted to future events.

“That suggestion, which would have the effect of providing amnesty for prior wrongdoings, should be firmly
rejected,’’ BGR president and chief executive officer Janet Howard wrote in an Oct. 12 letter to the council.
The council plans to discuss and vote on the proposed ordinance at its meeting Thursday.

Howard said the office must have a clear mandate and the necessary powers to implement it.

“The ordinance is unclear and, in some respects, too limited in scope,’’ she wrote. “It should clearly state that the
OIG’s authority to audit, evaluate and investigate extends to all city departments and agencies, to attached and
unattached boards and commissions, enterprise funds, trust funds, public benefit corporations, and all other entities
through which the city conducts business.

“It should also extend to any entity where a majority of the governing members are city elected officials and/or
appointed by city elected officials,’’ she added.

Howard said one section of the current draft of the ordinance says the inspector general has the power to “audit,
evaluate, investigate and inspect the activities, records and individuals with contracts, procurements, grants,
agreements and other programmatic and financial arrangements undertaken by the City.’’

It should be made clear, she said, that the OIG’s powers are not limited to the contract signatory; that the OIG’s
authority extends “beyond prime contracts and contractors to subcontracts and subcontractors’’; and that the OIG’s
authority should extend to the review of contracts and arrangements “of all related entities, not just those of the city.’’
Under the ordinance, Howard said, some critical powers are missing when it comes to the inspector general’s ability
to require entities and individuals to produce documents and information and to respond to questioning.

“The powers should be expanded to include the power of subpoena for persons and documents in regard to any matter
within the jurisdiction of the Inspector General,’’ she wrote. “The Inspector General should have the power to impose
fines and to institute legal proceedings if a party does not respond appropriately to a subpoena within a reasonable
time.’’

As it stands now, the yet-to-be-appointed city Ethics Review Board would select and appoint the inspector general. If
the board fails to act within 30 days from the date the ordinance is passed, the City Council becomes the appointing
authority.

While there is an advantage to having the inspector general appointed by a group not part of city government, Howard
said, the proposal presents several problems.

“Not the least of these is the fact that the Ethics Review Board has not been appointed and is highly unlikely to be
able to act within the appointed time frame. The likely result is that the search will be conducted by, and the Inspector
General selected by, the City Council — one of the bodies subject to the Inspector General’s oversight,’’ she said.
BGR recommends the creation of a selection committee consisting of high-ranking individuals in law enforcement
and ethics. The committee would recommend its candidate of choice to the Ethics Review Board or City Council for
appointment, Howard said. The board or council would have the right to reject the nominee by a two-thirds vote, after
a public hearing, she said. If the board or council failed to approve the selection, the committee would submit another
nominee for consideration.

BGR also suggests that the funding sources for the inspector general’s office be amended. The ordinance calls for
funding from a 0.25 percent fee on contracts of $10,000 or more.

“The dedicated fee is designed to enhance the independence of the office by providing it with a source of funding
independent of the general fund and the city’s appropriation process. While the goal is admirable, there are some
offsetting negative considerations,’’ Howard said. “First and foremost, it creates a conflict of interest by making the
OIG’s funding dependent on contracts over which the office has oversight. This may provide an inducement to
overlook problems in an area that is rife with problems.’’

Howard also said the amount of money generated by the fee would fluctuate, making it difficult to plan work and hire
qualified personnel. BGR recommends replacing the fee with “a clear commitment’’ to set aside a percentage of the
general fund annually.

A 1995 revision of the City Charter mandated creation of the ethics board and authorized the inspector general’s
office, but neither has ever been implemented.

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Oct 17, 2006

Source: Baton Rouge Advocate

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