RPVCCA_CC_SR_2014_10_21_03_Anonymous_Fraud_Waste_and_Abuse_HotlineCrTYOF RANCHO PALOS VERDES
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE MAYOR & CITY COUNCIL MEMBERS
DENNIS McLEAN, DIRECTOR OF FINANCE
OCTOBER 21, 2014
UPDATE -ANONYMOUS FRAUD, WASTE AND.ABUSE
HOTLINE
CAROLYNN PETRU, ACTING CITY MANAGER@
RECOMMENDATION
1) Receive and file an update regarding the Anonymous Fraud, Waste and Abuse Hotline
project; and, 2) Direct the Audit Subcommittee to work with Staff to finalize the draft Hotline
Policy in order to present the policy at the November 4, 2014 Council meeting, along with a
recommended vendor to support the Anonymous Fraud, Waste, and Abuse Hotline.
DISCUSSION
On June 3, 2014, the City Council made several policy decisions regarding the
establishment of an Anonymous Fraud, Waste and Abuse Hotline ("Hotline") based on
a memorandum prepared by Mark Meyerhoff at Liebert Cassidy Whitmore, the City's
legal advisor for the proposed Hotline.
On June 27, 2014, the Anonymous Fraud, Waste, and Abuse Hotline Request for
Proposals (RFP) was released to nine (9) Hotline industry leaders Staff identified as
potentially capable of providing the service standards required to meet the City's needs.
After reviewing the four (4) submitted proposals, Staff narrowed its selection to two (2)
finalists, NAVEX Global and The Network, Inc. The proposals from both firms and a draft
policy, developed by Mr. Meyerhoff and Staff based upon in<;Justry best practices and the
recommendations provided to the City in 2013 by the Los Angeles Civil Grand Jury, were
distributed to the Audit Subcommittee on September 30, 2014.
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Update -Anonymous Fraud, Waste and Abuse Hotline
October 21, 2014
Page 2of2
On October 2, 2014 Mr. Meyerhoff and Staff met with Audit Subcommittee member
Councilmember Misetich to review the draft policy. Councilmember Misetich provided
several suggestions for the modification of the policy, which were incorporated into the
draft document.
On October 15, 2014, both NAVEX Global and The Network, Inc. provided demonstrations
of their Hotline platforms' features and functionality to Staff. Councilmember Campbell
participated in one of the web-based demonstrations. At that time, Councilmember
Campbell made inquiries regarding the preservation of anonymity and how confidentiality
could be assured by the complainant. Based on these concerns, Staff has reached out to
both providers to determine how they maintain absolute confidentiality in terms ·of retention
of complainant telephone numbers and/or IP addresses in the company's voice or
computer database logs, and is presently awaiting a response from the two Hotline
companies.
On October 16, 2014, Councilmember Campbell expressed concerns to Staff about the
proposed Hotline Policy, specifically in terms of the proposed case management workflow
and in how reports are disseminated and investigated. Additionally, he expressed an
interest in including incident complaint categories in the policy that go beyond the financial
fraud, waste, and abuse and personnel/ Human Resources matters as defined in the
California Government Code.
CONCLUSION
Since the full City Council last considered this item in June 2014, an RFP has been issued,
two qualified firms have been identified to potentially host the Hotline for the City, and a
draft Hotline Policy has been prepared and distributed to the Audit Subcommittee. In order
to allow ~dequate time for the Audit Subcommittee to fully vet the draft Hotline Policy and
address the other questions that have been raised, Staff recommends that this item be
continued to the November 4, 2014 City Council meeting and that the Audit Subcommittee
set a date to meet with Mr. Meyerhoff and Staff to work through the remaining issues. Staff
recommends selecting the firm to host the Hotline after the Policy is adopted, as any
significant changes to the desired services level could potentially affect the scope of
proposals, as well as pricing.
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