Sacramento's whistle-blower hotline ’woefully inadequate'

Concerned city of Sacramento staffers may be swallowing their whistles, because a hotline set up for tipsters hasn’t even addressed the small number of fraud and corruption complaints already made.

At least this is the fear Councilwoman Angelique Ashby articulated during a December 11 committee meeting last week on the city’s year-old whistle-blower program.

The Office of the City Auditor currently operates the hotline, which city council ordered into existence this past February. Since then, the hotline has only received 19 calls, nine of which haven’t been investigated.

“That’s not going to work,” Ashby said last week. “If we can’t handle 19 calls in a year, that’s woefully inadequate, right?”

Of the 10 complaints city auditor Jorge Oseguera’s office investigated, two were substantiated, three were referred to other departments and three were unsubstantiated. Two others were information-only items.

Both the substantiated complaints were deemed high priority: The city’s IT department tried to enter into a contract without putting its project out to bid first, which is required. The other substantiated claim involved managers who hadn’t completed mandated sexual-harassment training.

The complaints that have yet to be investigated include allegations of bribery, kickbacks, theft and abuses of authority, according to the auditor’s report.

“We can’t get to all of them at this time,” Oseguera told the committee. This didn’t fly with Ashby.

“I don’t want people to find the courage to make that phone call, send that letter or come to you face to face,” she began, “and then not have their concerns researched, addressed, handled in a timely manner. …

“I don’t think it’s a system that’s working right now, and these numbers indicate it’s not working.”

There are also indications the hotline’s call log should be much higher.

Before the hotline was set up, the auditor’s office conducted a survey of city staff. Of the 580 employees who participated, 56 percent indicated they’ve witnessed at least one instance of fraud or waste at City Hall but didn’t come forward because they feared retaliation or didn’t know where to report concerns. If those numbers were to be extrapolated, half of the people working for the city should be ringing up the hotline.

Ashby also wondered whether the hotline was receiving the number of complaints it should.

“I mean, 19 calls in a year is either to say we’re really stellar or people have no idea that there’s a whistle-blower hotline, or they’re not comfortable with the process we put in place, and I’m going to guess it’s probably a bit of each,” Ashby said.

While the auditor’s office runs the hotline right now, an effort is underway to shift that responsibility over to a third party. The Office of the City Auditor would still investigate the complaints that come into the toll-free hotline.

Meanwhile, the city doesn’t know how much money it’s losing. National estimates say a typical organization can lose 5 percent of its annual revenues to fraud. If that figure held true in Sacramento, the city would be sacrificing about $30 million a year.

The state of California, meanwhile, has identified roughly $31.2 million in governmental waste since establishing its own whistle-blower hotline in 1993. The state’s hotline received more than 7,200 calls or inquiries this past year. The California State Auditor reported both these figures the same day the city’s audit committee gathered to discuss its own slow-moving hotline.

The Office of the City Auditor will file its next activity report six months from now, along with some recommendations on how to better administer the fledgling hotline.