There was a phone plugged into the wall of the City Auditor’s office when Laura Doud was elected to the position in 2006. It was meant for employees to whistleblow fraudulent behavior. It never rang.
“You know it exists,” City Auditor Laura Doud told the Post of her perception of fraud when she took office six years ago. “We weren’t going to put our heads into sand and pretend it doesn’t exist.”
The lack of fraud reporting prompted Doud and her staff to not only reinvigorate the whistleblower line but to do research on reporting as well. Two major things were discovered: employees were ultimately afraid to call because of a lack of information with how to report fraud, including a fear for the protection of their own identity; and secondly, there exists a lack of clarity in regards to fraud reporting within the ethics guide that directs City officials and employees.
This duty to report—beyond reinvigorating the hotline—has prompted Doud to take one step further in educating City officials and employees. On November 13, she will request before City Council that a direct anti-fraud policy be placed in the Ethics Guide for Long Beach City Officials and Employees.
Though fraud has been a concern of Doud and her office since her taking on the role of auditor, the recent case of a city employee embezzling a quarter-million dollars has certainly heightened awareness and garnered the desire for more tips to be brought forth. This method is—for Doud as well as the Association of Certified Fraud Examiners—by far the most efficient in catching fraud and it must be implemented by simply educating the City to not only keep this fiscal impact at null, but engage the City on a personal-responsibility level.
“Education is key and it really can’t be implemented otherwise. To be aware of it, to look for signs, and to know there is a safe place for you to call,” explained Doud. “You can trust us to keep your confidence and over time, [City officials and employees] will see that they will be protected and—simply put—they’re doing the right thing by reporting it. It hurts everyone when you don’t report it.”
On top of informing employees that their whistleblower protection will be preserved via the hotline being operated by a third party, the hope is to make employees simply feel more comfortable about the wrongdoings of those who can manipulate taxpayer dollars—particularly given that, even with “spot” audits, or unannounced examinations of cash collection points throughout the City, the Auditor’s office needs the assistance in every shape and form.
“These are taxpayer dollars—public funds—being entrusted to us,” continued Doud. “It is supposed to go back into the taxpayers’ wallets and we have to make sure that it is being used for what it was intended to: to benefit and serve the public. [This policy and campaign] does send a message to those being dishonest that we are indeed watching, that we are being as aggressive as we can. The revenue lost through fraud is significant. At all times, we have to make sure we do everything we can to prevent it.”
Doud’s anti-fraud campaign is part of her larger support of International Fraud Awareness Week (November 11 through 17), where her office has teamed with the Long Beach State School of Art and Graphic Design to help assist in creating the campaign under the slogan, “Let’s Be Clear.”
For more information about the fraud hotline and the “Let’s Be Clear” campaign, click here.
NOTE: This article originally stated that the case involving city employee embezzling was brought to light via a tip; this was a misstatement in Auditor Doud’s press release. In fact, it was the the installation of new technology overseeing the animal licensing and cashiering functions during FY 2009/2010 that allowed management, in August 2010, to identify a discrepancy in deposited revenues. Upon discovery of this discrepancy, management contacted the Office of the City Auditor for an audit.