Prop C – Financial Officers and Responsibilities

What is Prop C?

City of San Diego Charter Amendment

Approval required: Majority

Official ballot language: Shall the voters approve amendments to the Charter to establish or modify the offices and responsibilities of a Chief Financial Officer, City Auditor, and Independent Budget Analyst; modify the City Treasurer appointment process; and create an Audit Committee to oversee the City Auditor?

What does Prop C mean?

This Proposition would put the authority of selecting the City Auditor in the hands of the mayor. This independence of the city auditor would then be compromised. He would be beholden to the mayor. The City Auditor needs to be fully independent to ensure that never again does the City of San Diego face the possibility of bankruptcy.

Those in support of Prop C say:

Proposition C would allow the mayor to appoint the city auditor, with the City Council’s approval, and allow the mayor to select the majority of members on the audit committee.

Those against Prop C say:

The mayor-appointed auditor will not lead to more transparent government or fiscal reform. The proposition, however, would create a permanent office of the independent budget analyst, one of the key recommendations of the Kroll investigation.

REASONS TO VOTE NO ON PROP C

Through this ballot measure, the City Council seeks to amend the City Charter to more clearly separate the City’s internal auditing function from supervision of the mayor by creating the new office of City Auditor, which would be supervised by a restructured Audit Committee.

These changes would remain even if the Mayor-Council form of government ends as scheduled in 2010.

The auditor would perform the City’s internal audits and investigations and would be appointed for a 10-year term by the mayor, in consultation with the Audit Committee, with the City Council’s confirmation. The Audit Committee would oversee the City’s internal auditing and control practices; direct the auditor’s work; and recommend the City’s outside auditor, monitoring its work. The Audit Committee would consists of two Councilmembers, one of whom would chair the Committee, and three public members.

FISCAL IMPACT

The approval of this ballot measure would have no fiscal impact on the City.

ARGUMENT AGAINST PROP C:

Honest government needs an independent city auditor

Public confidence in the city’s finances begins with the auditor. An independent auditor ensures trustworthy, timely and accurate financial reporting and increases taxpayer confidence in how tax dollars are spent.

San Diego lost its credit rating because of management interference

In 2004, the city auditor left in disgrace when it was found that false and misleading financial statements were issued under pressure from management. Prop C allows this behavior to continue.

Prop C protects political interests, not the taxpayers

The auditor’s job is to protect the taxpayers by being an objective and independent check on the city’s financial controls and performance. The auditor must not be a political rubber stamp.

Prop C is a smokescreen

Prop C bundles together a confusing mix of City Charter changes. Voters do not have a real choice about which items to support and which to reject.

Protect your tax dollars

National auditing standards require auditors to be independent from the entity they examine. Prop C violates those requirements by having the fox guard the henhouse.