DENVER – The city’s Board of Ethics is unable to ensure ethical behavior across agencies, and the city’s gift reporting process lacks transparency, according to a new audit of city ethics rules and enforcement from Denver Auditor Timothy M. O’Brien, CPA.
“The only way to discourage inappropriate behavior is to make it clear that someone is watching and that there will be consequences for violations,” Auditor O’Brien said. “I hope every city employee chooses to behave ethically, but I also think we can do more to encourage an ethical and transparent culture.”
First, the audit examines the authority of the Board of Ethics and its ability to encourage and enforce ethical behavior for all city employees. The five-member, volunteer board is supported by one paid employee — the executive director. We added this ethics audit to our schedule after the outgoing executive director in 2019 requested we take a closer look at the agency and ethics citywide.
The board’s purpose is to issue advisory opinions and waivers on ethical issues, to hear inquiries or complaints and to issue findings and recommendations regarding alleged violations of the city’s ethics code.
We found the Board of Ethics has no enforcement authority, and it is not the only avenue for reporting ethics complaints. Managers of individual city agencies are responsible for enforcing action on ethics violations. These deficiencies could hurt the city’s ethical environment.
As a result, agencies may take action — or not — in response to ethics complaints, and agencies have no obligation to report what happens to the board. Agencies may also take action — or not — after a recommendation from the Board of Ethics, and there is no obligation to let the board know if the agency followed the recommendations. The previous executive director of the board noted that in the past, some agencies have ignored recommendations from the board after an investigation of an ethics complaint.
“The board can’t take action on ethics violations, and it may not be told how often its recommendations are followed,” Auditor O’Brien said. “The Board of Ethics can review complaints, but there’s no mechanism to allow them to actively ensure there are consequences for bad behavior.”
While anyone can file an ethics complaint with the Board of Ethics, the complaint can’t be anonymous. All complainants must provide their signature, home address, email address and telephone number, or an investigation can’t begin. In addition, the board has to give all the complainant’s personally identifying information to the subject of the complaint within five days.
We surveyed all 14,712 city employees with a valid email address and had a response rate of about 25%. One question on the survey indicated that many employees would not file an ethics complaint if they could not do so anonymously.
Similarly, we asked employees if they had ever observed unethical behavior and reported it. Of those surveyed who said they had observed unethical behavior, 41% said they did not report it. Of those who said they had observed this behavior but did not report it, the top two reasons why were “fear of retaliation” and that they “did not expect any action.”
In a previous audit in 2010, our office recommended a more comprehensive whistleblower program, including anonymous complaints. Most of our recommendations were never implemented.
Denver has a fraud hotline that can accept anonymous complaints. However, it can only be used by city employees, and it only accepts complaints related to financial fraud, waste and abuse.
One concern expressed by some board members was that anonymity could encourage baseless complaints. However, we looked at what some other cities in Colorado, counties, and states across the country do, and most agree the best practice is to allow anonymous reporting.
Our audit found that although the concern about anonymous complaints potentially causing an increase in bad faith or baseless accusations may be valid, the board does not open investigations without determining the credibility of complaints.
“We are recommending that Denver accept anonymous reports but that the board also develop a documented process to ensure they vet those complaints,” Auditor O’Brien said. “We don’t want to open the door for someone with a grudge to anonymously harm the reputation of an innocent person, but we also do not want to discourage legitimate complaints due to fear of retaliation.”
The Code of Ethics not only describes the Board of Ethics and its function but also defines what gifts can be accepted by elected officers, appointees and employees. In our review, we found the city did not ensure full compliance with rules for gift disclosures.
Not all elected officers and their appointees submitted the required disclosures for the period included in this audit. We also found that after officials submit their disclosure forms, the level of review is insufficient to catch unallowable gifts or remedy noncompliance.
City ordinance does not require a review of the forms once they are submitted. Even if the city ordinance did require a thorough review of forms, the gift disclosure forms do not capture all the information necessary to determine compliance.
“Insufficient detail on these forms could make allowable gifts look suspect or could obscure unallowable gifts,” Auditor O’Brien said. “Reporting possible conflicts of interest without subsequent review is a risk to the city’s reputation.”
Once disclosure forms are submitted, they are published on the Clerk and Recorder’s website for public review. This is essential to transparency and accountability; however, 30 days before the reporting deadlines in January and July, the gift disclosure records have not been available on the website. This is because the Mayor’s Office and City Attorney’s Office reviewed mayoral appointees’ forms before making them public by the deadline.
“The public should be able to find disclosure forms at all times,” Auditor O’Brien said. “If they’re not available online for any reason, there should be clear instructions in the interim for how people can obtain the records. We owe the people of Denver transparency every day of the year.”
Our audit also identified a need for better, role-specific formal training for city employees to ensure everyone can identify potential ethical concerns. The Board of Ethics also needs to update its procedural rules and track more data to identify areas of concern.