Audit Report

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Board of Ethics and Clerk and Recorder’s Office

The audit had three objectives:

  1. To determine the degree to which select areas of the City and County of Denver’s Code of Ethics align with model ethics codes and other government ethics codes;
  2. To determine the extent to which the processes for Denver’s Board of Ethics support the city’s ethics program; and
  3. To determine whether the process for city officers’ gift disclosures adheres to city ordinance and the letter and spirit of the Code of Ethics.

Adopted in 1965, the city’s Code of Ethics defines what actions are allowed and which actions would breach the public trust.

The Board of Ethics is made up of five volunteer members and supported by one full-time employee: an executive director. The board operates under authority granted by Denver’s Code of Ethics and city charter, and it meets monthly to hear requests for advisory opinions, to screen complaints, and to issue findings for alleged violations of the ethics code.

We identified several areas where improvements to the board’s authority and processes are necessary to achieve greater impact in fostering
an ethical culture in the city. Additionally, we found a need for more oversight of city officers’ gift disclosures to ensure compliance with code requirements.

The Board of Ethics’ Insufficient Authority and Role May Impact the City’s Ethical Environment

  • Gaps in the board’s authority could impact employees’ willingness to report.
  • The board is not adequately informed of and incorporated into the city’s ethics program.

The Board of Ethics Can Increase Its Impact and Effectiveness through Addressing Operational Risks and through More Outreach

  • The board operates without sufficient policies and procedures.
  • The board should enhance training and outreach to city agencies and personnel.

The City Did Not Ensure Full Compliance with Rules for City Officials’ Semiannual Gift Disclosures

  • Some city officials failed to submit semiannual gift disclosure forms.
  • Semiannual gift disclosure forms are inadequate and not sufficiently reviewed for compliance.
  • Denver residents do not have complete, year-round access to the gift disclosures.

1.1 Allow Anonymous Reporting – The Board of Ethics and its executive director should work with the City Council to update the Code of Ethics and allow the acceptance of anonymous reports.

Response: Agree, Implementation Date – Oct. 30, 2020

1.2 Develop and Document Policies and Procedures – Once Recommendation 1.1 is implemented, the Board of Ethics and its executive director should develop and document a process to ensure they vet anonymous complaints and ensure credibility of a complaint is established before initiating an investigation.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

1.3 Collaborate to Ensure Enforcement and Information Sharing – The Board of Ethics and its executive director should work with the City Council, the Office of Human Resources, and the Civil Service Commission to discuss and create a formal process that ensures appropriate enforcement. This could be achieved through updating the Code of Ethics and the city charter to grant the board the authority to impose sanctions or through formal coordination between the board and the Office of Human Resources to develop information-sharing policies and procedures that ensure the board receives information on the outcomes of all ethics-related violations.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

1.4 Develop and Document Procedure for Board-Initiated Investigations – The Board of Ethics and its executive director should consider the minimum information needed and the recusal process necessary to initiate an investigation without receiving a complaint. They should also document this process in a procedure.

Agency Response: Disagree
Auditor’s Addendum: See page 59 under Recommendation 1.4

1.5 Assess Workload and Obtain Additional Resources If Necessary – The Board of Ethics’ executive director should work with the board and the Budget and Management Office to assess the board’s workload and determine whether additional staff resources are necessary. If necessary, the board should request additional staff resources.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

1.6 Collaborate on Data Collection and Analysis – The Board of Ethics’ executive director should coordinate with representatives from the City Council, the Office of Human Resources, the Fraud Hotline Committee, the Civil Service Commission, and the Clerk and Recorder’s Office to identify and document processes and data relevant to the city’s ethical environment.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

1.7 Develop Plan for Sharing Data – The Board of Ethics’ executive director should work with the City Council, the Office of Human Resources, the Fraud Hotline Committee, the Civil Service Commission, and the Clerk and Recorder’s Office to develop and document a plan for regular communication and data sharing with the board to ensure it can adequately monitor the city’s ethical environment.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

2.1 Develop Policies and Procedures to Address Risks – The Board of Ethics and its executive director should develop and document policies and procedures that define a time frame for periodically assessing and documenting significant risks to the board’s operations and developing or updating policies and procedures that mitigate those identified risks. This should include but not be limited to procedures that document:

  • A formal process to ensure board members and the executive director recuse themselves in the event of a conflict of interest;

  • The board’s records retention and records security process; and

  • The board’s approach to tracking and documenting proposed changes to the Code of Ethics. Agency Response: Agree, Implementation Date – Oct. 30, 2020

2.2 Develop and Document Review Process for Policies and Procedures – The Board of Ethics should develop, document, and implement a process to regularly review its rules of procedure and any other internal policies and procedures to ensure compliance with the Code of Ethics and to ensure their continued relevance.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

2.3 Document Plan to Strengthen Formal Ethics Training and Outreach – The Board of Ethics should assess the frequency and content of the city’s formal ethics training and develop and document a plan for strengthening formal ethics training that includes the optimal frequency and content of ethics training needed for different management levels. The plan should also document informal training opportunities the board and its executive director can pursue independently, such as in-person meetings with agency officials and staff or regular newsletters containing frequently asked questions and advisory opinions.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

2.4 Update Formal Ethics Training – After implementation of Recommendation 2.3, the Board of Ethics’ executive director should work with the Office of Human Resources to update the city’s formal ethics training in accordance with the board’s plan.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

2.5 Review Website Content – The Board of Ethics and its executive director should review the Board of Ethics’ website content to identify additional information or resources that should be incorporated to guide visitors to the appropriate resources, such as the board’s executive director, the fraud hotline, and the Office of Human Resources. The board’s executive director should subsequently document a procedure that defines how often and by whom the website should be reviewed and updated, as well as the process for updating the website with support from the city’s Technology Services agency.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

3.1 Identify Responsible Parties – The Clerk and Recorder’s Office should work with the Board of Ethics and the City Attorney’s Office to identify the responsible party for ensuring all disclosure forms are submitted as required. The Clerk and Recorder’s Office should also develop a procedure to document who is responsible for ensuring compliance and the office’s methods for doing so.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

3.2 Ensure Accurate Reporting – After establishing the party responsible for ensuring compliance as detailed in Recommendation 3.1, that responsible party should develop and implement a process to ensure a complete and up-to-date list is maintained of all officials who are required to submit semiannual gift and city-item disclosures.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

3.3 Identify Key Information for Disclosures – The Clerk and Recorder’s Office should work with the Board of Ethics to identify what information should be required to be reported about gifts and then update gift disclosure forms to clearly collect and report this information.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

3.4 Identify Responsible Party and Process for Review – The Clerk and Recorder’s Office should work with the Board of Ethics to identify who should be responsible for reviewing the semiannual gift and city-item disclosure forms for compliance with gift rules and document a process that describes the elements that should be reviewed, the time frame for review, and an escalation procedure to enforce compliance.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

3.5 Review City Ordinance – The Clerk and Recorder’s Office and the Board of Ethics should work with the City Council to determine whether the process for reviewing disclosure forms should be documented in city ordinance. If so, the office and the board should work with the City Council to update Denver Revised Municipal Code sections 2-72 and 2-74 to require that the gift and city-item disclosure forms be reviewed, the time frame for review, and to identify who is responsible for conducting this review.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

3.6 Address Gaps in Public Access – The Clerk and Recorder’s Office should assess and select one or more methods to ensure the public has timely access to the gift and city-item disclosures in compliance with city ordinance. This could include ceasing its practice of disabling the website for two months out of the year or including instructions on the Clerk and Recorder’s Office website for how to access the disclosures while the Seamless records retention system is disabled. The method should be formalized in documented policy or procedure.

Agency Response: Agree, Implementation Date – Oct. 30, 2020

The objectives of our audit were to determine whether the City and County of Denver’s Code of Ethics aligns with model ethics codes and those of select other governments and to determine the degree to which the processes for Denver’s Board of Ethics support the city’s overall ethics program. We also sought to determine whether the process for city officers’ gift disclosures adheres to the letter and spirit of Denver’s ordinances and regulations. I am pleased to present the results of this audit.

Denver’s Code of Ethics says city employees should “adhere to high levels of ethical conduct, honesty, integrity, and accountability” so that city residents will have confidence these employees act “for the benefit of the public.” However, our audit revealed gaps in the Board of Ethics’ authority and role in the city, which may limit its effectiveness and ability to foster a strong ethical culture. We also found a lack of important policies and procedures could be impacting the ethics board’s effectiveness. Additionally, the city’s formal ethics training and ethics website are not consistent with leading practices in several areas. Finally, we found the city’s process for documenting compliance with the ethics code’s gift requirements is insufficient; several officers did not submit required gift disclosure forms, and these gift disclosures were not readily available online for two months last year.

Through taking steps to ensure appropriate enforcement, stronger documented procedures, training, and collaboration with other city agencies, the Board of Ethics will be better equipped to measure and monitor the city’s ethical environment, including by identifying areas of improvement to address existing and emerging risks. Our report lists several related recommendations.

This performance audit is authorized pursuant to the City and County of Denver Charter, Article V, Part 2, Section 1, “General Powers and Duties of Auditor,” and was conducted in accordance with generally accepted government auditing standards. Those standards require we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

We extend our appreciation to personnel at the Board of Ethics and in the Clerk and Recorder’s Office who assisted and cooperated with us during the audit. For any questions, please feel free to contact me at 720- 913-5000.

Follow-up report

A follow-up report is forthcoming. 

Audit Team: Dawn Wiseman, Emily Owens Gerber, Vilma Balnyte, Alex Dickerson, Kristin McCormack, Tyson Faussone