CC SR 20160906 04 - Fraud Waste Abuse HotlineRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 09/06/2016
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA DESCRIPTION:
Consideration and possible action regarding the Fraud, Waste, and Abuse Hotline
RECOMMENDED COUNCIL ACTION:
1) Adopt the revised City's Fraud, Waste, and Abuse Hotline Policy that incorporate
the recommended changes discussed below.
2) Direct Staff to continue working with NAVEX to implement the changes in the
revised Policy and help potential reporters to file appropriate reports.
FISCAL IMPACT: No fiscal impact.
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Dave Aleshire, City Attorney
Gabriella Yap, Deputy City Manager.
REVIEWED BY: Gabriella Yap, Deputy City Manager.
APPROVED BY: Doug Willmore, City Manager f' -
ATTACHED SUPPORTING DOCUMENTS:
A. Revised City Council Policy No. 50, "Anonymous Fraud, Waste, and Abuse
Hotline" (page A-1)
B. City Services Request webpage (B-1)
C. City FWA Hotline webpage (C-1)
D. Navex Hotline webpage Mockup (D-1)
BACKGROUND AND DISCUSSION:
This item was continued from the August 16, 2016, Council meeting without discussion
due to the lateness of the hour.
On May 17, 2016, the City Council approved the City Attorney's recommendations to the
Fraud, Waste, and Abuse policy which included:
• Focusing the hotline on internal matters, and redirecting allegations of fraud,
waste or abuse by a Council member to the appropriate agency, such as the
District Attorney (DA) or the Fair Political Practices Commission (FPPC)
• Seeking City Attorney Assessment Before Referring Reports to an Outside
Investigator
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• Providing clearer guidance for potential reporters, including updates to the
website
Attached is the revised Fraud, Waste, and Abuse Policy No. 50 prepared by the City
Attorney's office (Attachment A). To combat the issue of reporters using the hotline
politically to make charges concerning councilmembers, the City's Policy was revised to
state that the City will no longer receive reports about members of City Council and will
direct the reporter to the District Attorney (DA) or the Fair Political Practices Commission
(FPPC).
The Policy also seeks an initial assessment from the City Attorney for politically sensitive
or highly complex allegations, rather than immediately referring the report to an outside
investigatory agency. The City Attorney, whose rate is lower and should result in cost
savings, will make a recommendation to the City as to whether an in-house or outside
investigation should be performed.
Lastly, the Council also directed Staff to incorporate the recommended changes on the
City's website and with Navex (formerly The Network). To address the issue of reporters
mistakenly using the hotline to make service complaints, Staff had already revised the
City's website to include links to show the existing City Service Request page (Attachment
B). The City's Fraud, Waste and Abuse webpage has been updated with hyperlinks to
direct reporters to the correct agency or department before a user reaches the Navex
Hotline page (Attachment C). Finally, the main page of the Navex Fraud, Waste and
Abuse webpage has been updated to point reporters to the correct reporting agencies or
departments (Attachment D).
If after these multiple notices a reporter files a report that does not meet the fraud, waste
or abuse guidelines, the report will still become a "case" within the Navex reporting
system. In a change to our current process, however, the person making the incorrect
report will be directed to the appropriate agency or department to file their case for
investigation, and the case will be marked "No Investigation" (NI) within the Navex system
and on Navex reports, and closed.
Staff has been working with Navex to institute the changes on their hotline end. Because
of the quantity of changes required, including wording on the Navex website entry page,
script changes when reporters call, changes to the reporting categories themselves, and
people and departments associated to case type investigations, Navex suggested the
City complete the implementation worksheet as though this was a new
implementation. That process is currently being implemented by Navex and should be
complete by the end of September, 2016. There will be no changes to the workflows
themselves other than cases not directly associated with fraud, waste or abuse will not
be investigated.
ALTERNATIVES:
In addition to the City Attorney and Staff recommendation, the following alternative
actions are available for the City Council's consideration:
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1) Further revise the Fraud, Waste, and Abuse Policy No. 50.
2) Direct Staff to take different actions regarding the Fraud, Waste, and Abuse
Hotline Policy that the Council deems appropriate.
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CITY COUNCIL POLICY
NUMBER: 50
DATE ADOPTED/AMENDED: 8/16/16
SUBJECT: Anonymous Fraud, Waste, and Abuse Hotline
INTRODUCTION
The City of Rancho Palos Verdes ("City") is committed to protecting City residents, City
employees, and public assets entrusted to the City. Accordingly, it is the policy of the City to
identify and promptly investigate incidents of fraud, waste, and abuse committed by City
employees, and to pursue appropriate remedies available under the law.
The City recognizes that confidential reporting can be an important and effective way to
discover fraud, waste, and abuse. Consequently, the City has established a Fraud, Waste,
and Abuse Hotline ("Hotline"), which allows members of the public, City employees, and
elected and appointed City officials to confidentially report incidents of fraud, waste, and
abuse within the City.
WHAT SHOULD BE REPORTED ON THE HOTLINE
The Hotline is only designed to address a specific, limited set of issues. A person
considering making a report using the Hotline should first ask the following questions:
1. Who is the Report About?
The Hotline should only be used to make reports about City employees, City
volunteers, members of City commissions and committees, and City contractors. It should
not be used to make reports about members of City Council or City residents who don't
work for or with the City.
2. Is the Report about Fraud, Waste, and Abuse?
The Hotline should only be used to make reports about fraud, waste, and abuse, as
defined in this Policy. Other issues should be reported somewhere else. Government
Code § 53087.6(f)(2) defines "fraud, waste, and abuse" as:
any activity by a local agency or employee that is undertaken in the performance of
the employee's official duties, including activities deemed to be outside the scope of
his or her employment, that is
■ in violation of any local, state, or federal law or regulation relating to
corruption, malfeasance, bribery, theft of government property, fraudulent
claims, fraud, coercion, conversion, malicious prosecution, misuse of
government property, or willful omission to perform duty,
01203.0001/298509.2
A-1
■ is economically wasteful, or
■ involves gross misconduct.
Under this definition, the following actions would be appropriate subjects for a Hotline
report, although this list is not meant to be exclusive:
• Corruption
• Bribery
• Kickbacks
• Theft of Government Property
• False Claims for Payment
• Forging Financial Documents
• Misuse of Government Property
HOW TO REPORT OTHER ISSUES
• Use of Coercion, Threats, or
Position of Authority for Personal
Gain
• Willful Failure to Perform Duties
• Deceptive Accounting Practices
• Other Kinds of Misconduct
Involving Government Finances or
Assets
• Other Activities that Waste or
Mismanage Government Assets
The fact that something is not an appropriate issue for the Hotline does not mean that it
should not be reported. There are many other ways to report important issues:
1. Crimes
Criminal activity should be reported to law enforcement by dialing 9-1-1. If the crime
is committed by a City employee and involves fraud, waste, or abuse, as defined above,
then it can also be reported to the Hotline. However, the Hotline should not be used as a
substitute for calling the police.
2. Members of the City Council
The Hotline will not accept reports about members of the City Council; instead, such
reports should be directed to another appropriate public agency. This will ensure that any
investigation into the conduct of a member of City Council remains objective. Moreover,
this policy recognizes the fact that the City is very limited in its ability to discipline members
of the City Council and that, consequently, any necessary disciplinary actions would be
best left to outside agencies with express powers to take such actions.
Instead of using the Hotline, reports about fraud, waste, and abuse by members of
City Council should be directed to law enforcement and/or the Los Angeles District Attorney
(for criminal behavior) or to the California Fair Political Practices Committee, or FPPC (for
issues involving elections, conflicts of interest, and government ethics).
01203.0001/298509.2 2
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The Los Angeles District Attorney can be contacted by calling (213) 974-3512. The
FPPC can be contracted by calling (916) 322-5660, and complaints may be filed online at
http://www.fppc.ca.gov/enforcement/file-a-complaint.html.
3. Personnel Issues
Personnel issues such as discrimination, sexual harassment, substance abuse, and
workplace violence and threats are not included within the definition of fraud, waste, and
abuse, and should not be reported to the Hotline. Instead, these issues should be reported
directly to department heads, the City Manager, or the Director of Human Resources.
4. Service and "Fix -It" Requests
The City currently has a "Non -Emergency Customer Service Requests" portal on its
website, which is designed to help City residents access City services. Service requests
are routed to the City Manager or an appropriate department for further action. The
following issues can be addressed by making a service request:
• Public works assistance, including downed tree branches, flooding, and potholes;
• Public record requests; and
• Trash and graffiti reporting.
PROCEDURES: REPORT. INVESTIGATION. OUTCOME
The City has retained an independent Service Provider to receive Hotline reports. Reports
can be made either by calling the Service Provider or by filing a written report through a
portal on the City's website. Both options are available twenty-four hours a day, seven
days a week. Reporters are not required to give their name, and even if they do give their
name, the City is required to maintain the reporter's confidentiality to the extent required by
law, as described below.
Once a report is made, the Service Provider will immediately forward the report to the Case
Manager and the City Manager. The Case Manager will then determine whether the report
is appropriate for the Hotline: specifically, whether the report is about a City employee, and
whether the report is about fraud, waste, or abuse, as defined in this Policy. If the report is
not appropriate for the Hotline, the Case Manager will close the case and either determine
that (a) the City should take no action at all on the report, (b) the report should be
forwarded to another public agency, or (c) the report should be forwarded to a specific City
department for further action.
If the report is appropriate for the Hotline, the Case Manager will forward the report to the
City Attorney. The City Attorney will then determine the proper method for investigating the
report, which may either involve an in-house investigation, conducted by the City Attorney
and/or the City Manager, or an investigation conducted by a third -party, such as a law firm,
financial auditor, or private investigator. The method of investigation should be selected
based on considerations of efficiency, cost-effectiveness, the ability of the investigator(s) to
01203.0001/298509.2 3
A-3
maintain objectivity, and the fit between the expertise of the investigator(s) and the subject
matter of the Hotline report.
If an investigated report is found to lack merit, it will be closed, and no further action will be
taken on the matter except that, if possible, the reporter will be informed of the outcome of
the investigation, and, in the discretion of the City Council, the public may be informed that
the report was found to lack merit.
If the report is confirmed, the City Council will be informed immediately and the City will
take appropriate punitive and remedial actions.
CASE MANAGER
The Case Manager will be the Human Resources Manager unless the Human Resources
Manager is the subject of the report, in which case the Deputy City Manager will be the
Case Manager.
AUDIT COMMITTEE
The City Council has established an Audit Committee in accordance with City Council
Policy Number 44. The Audit Committee is responsible for ensuring this Policy is properly
implemented and that procedures exist and are being followed for the receipt, retention,
investigation, and appropriate resolution of Hotline reports. The Audit Committee shall meet
at least annually to monitor the use of the Hotline and the resolution of Hotline reports, but
may meet more frequently if desired. The City Manager, or his or her designee, shall keep
the Audit Committee informed about the Hotline by providing Committee members with a
Case Report following the resolution of each Hotline report and a Quarterly Report updating
the Committee on all Hotline activities.
Each Case Report shall include the subject matter of the Hotline report; whether or not the
Hotline report was investigated and, if so, how; the cost of the investigation, if any; and the
results of the investigation, if any. The Quarterly Report shall include a brief summary of
each Hotline report and its resolution, the total cost of all investigations during the past
quarter, and an analysis of any issues or concerns that have arisen during the past quarter
as well as suggested resolutions to those issues and concerns.
CONFIDENTIALITY
Information received in Hotline reports must be kept confidential to the extent required by
Section 53087.6 of the California Government Code. The following policies are intended to
help the City comply with these confidentiality requirements:
1. Only the Case Manager and the City Manager shall receive the report from
the Service Provider. If the Case Manager or City Manager is the subject of the report, he
or she shall be barred from making any decisions concerning the investigation or resolution
of the report and shall hold the content of the report in strict confidence, except that he or
she may discuss the report with appropriate legal counsel. If the City Manager is the
01203.0001/298509.2 4
subject of the Hotline report, the Assistant City Manager will assume the City Manager's
role in the investigation and resolution of the report.
2. The Case Manager, City Manager, and City Attorney shall not discuss the
content of the Hotline report with, or transmit the content of the report to, anyone else,
including members of City Council, until they have decided whether and how the report will
be investigated. "Content" includes the identity of the person who made the report, and the
parties identified in the report.
3. If the Hotline report concerns activities that took place in a jurisdiction other
than the City, the Case Manager or City Manager shall forward the report to the appropriate
person(s) in that jurisdiction, and shall take reasonable steps to ensure that the report
remains confidential.
4. During the investigation of a Hotline report, neither the Case Manager, the
City Manager, nor the City Attorney may disclose the identity of the person who made the
report, if known, to anyone else without the written consent of the person who made the
report, unless the disclosure is to a law enforcement agency that is conducting a criminal
investigation.
5. Information about ongoing investigations shall be kept confidential. During an
ongoing investigation, individuals other than the Case Manager, City Manager, and City
Attorney may be informed about the content of the report only to the extent required to
carry out an effective investigation. Any individual who is informed about the content of a
Hotline report for these purposes shall be informed that the information they receive is to be
kept strictly confidential.
6. When an investigation is completed, the City may issue an investigation
report if (a) the allegations are substantiated or (b) some or all of the findings of the
investigation are deemed necessary to serve the interests of the public. However, the
investigation report shall not include the identity of the person who made the Hotline report
(unless he or she has given written permission) and shall not include the identity of the City
employees who were accused of engaging in misconduct.
7. Notwithstanding the above, the Case Manager and/or City Manager may
provide a copy of the investigation report, including the names of the employees who were
found to have engaged in misconduct, to a department head or other authority for
disciplinary purposes. However, this version of the investigation report shall not be
released to the public.
RESPONSIBILITIES OF CITY EMPLOYEES AND ELECTED OFFICIALS
City employees and elected officials shall:
Be alert to any activities by City employees that may constitute fraud, waste,
or abuse.
01203.0001/298509.2
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A-5
2. Report incidents of fraud, waste, and abuse either through the Hotline or
through other appropriate channels.
3. Fully cooperate in any investigation of fraud, waste, and abuse, including
providing unrestricted access to records when necessary.
4. Fully comply with all confidentiality requirements included in the Policy.
ACCESS TO THE HOTLINE
The phone number for the Hotline and the website URL address for the Hotline shall be
prominently displayed on the City's website.
MEDIA
Hotline reports, or investigations thereof, shall not be discussed with the media or any
member of the public other than through the Mayor or City Manager in consultation with the
City Attorney.
ACTION
This Policy is effective on the date approved by the City Council.
01203.0001/298509.2
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"City Service Request" webpage
City Services
Public Works Assistance
Request assistance with things like tree branches in the street, flooding, or potholes.
Public Records Request
Would you like to request any City records? Click here for more information.
Trash or Graffiti Reporting
This City is dedicated to quick removal of blight, click hereto eget someone aut to take care of it
Fraud, Waste and Abuse Hotline
Reporting of fraud. waste or abuse concerning City employees.
Other City Requests
Use this link to make any requests to all other City departments.
City Fraud, Waste and Abuse Hotline webpage
Amrqmicus Fraud, Waste and Abuse Hotline RLhportl"g
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Navex Main Webpage Mockup
CIT\/OFL RANCHOIDAtOSVERIDES
ANONYMOUS FRAUD, WASTE & ABUSE REPORTING
Thank you for contacting the City's Anonymous Fraud, Waste, & Abuse Hotline. For
emergencies or other life threatening situations, please call 9-1-1 or the Lomita Sheriffs
Station at (310) 539-1661.
City employees, volunteers, contractors and committee members (not City Council members)
fraud, waste and abuse - press "Report". Intended for actions such as:
• Financial, accounting or purchasing irregularities
• Kickbacks, bribes or corruption
• Malfeasance, economic waste, or false reporting of expenses
• Misuse or theft of equipment, supplies or time
City Council ethics or criminal issues— refer to the following numbers:
• Election fraud, Brown Act violations or ethical issues contact the California Fair
Political Practices Committee at 916-322-5660.
• Theft, bribes or criminal issues contact the Los Angeles County District Attorney at
213-9743512.
Employee safety or employee relations - contact the HR Manager at 31D-544-5331, or the
City Manager at 31D-544-5202
• Threats of violence in the workplace
• Sexual harassment or discrimination
• Customer relations and safe working concerns
Maintenance issues - contact Public Works at 310-5445252 for issues such as:
• Overflowing trash, graffiti, or unsanitary park conditions
• Cracked sidewalks or potholes
• Branches down or standing storm water
IN
ASSISTANCE INSTRUCTIONS
City Website I Contact Infornwation I Report Maintenance Issues
CONFIDENTIALITY EMERGENCIES
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