Inspector General’s 2018 Statement to Chicago City Council Budget Committee

OPENING STATEMENT FOR THE OFFICE OF INSPECTOR GENERAL, 2019 BUDGET HEARINGS

To the Chair and Members of the City Council:

Thank you for the opportunity to appear before the City Council Committee on Budget & Government Operations and to submit the following opening statement. I look forward to answering your questions and discussing the Office of Inspector General’s (OIG) 2019 Budget Proposal.

2019 will be a year of significant transition for the City. While the public turns its attention to an election that will result in a change of administration, City officials and employees will continue to engage in transformative work important to residents and taxpayers. The City’s work on police reform should be expected to reach two important milestones critical to its long-term success. First, the federal court will enter the consent decree and appoint the consent decree monitor. Second, the City will implement the next phase of structural reform for the police oversight structure with the creation and integration of a community advisory board that will provide an institutional platform for full community voice, perspective, and insight in the reform effort, which, if history is a guide, may be a years-long undertaking. Additionally, the City will begin work on the biggest infrastructure project of this generation: the years-long, multibillion-dollar O’Hare expansion project. Even as OIG executes its core functions by conducting performance audits and program reviews of City programs and operations to identify opportunities for improvements and investigating allegations of administrative and criminal misconduct, it will also be working to support the ongoing success of these long-term initiatives.

Police and Police Accountability
In the area of police and police accountability reform, OIG’s dedicated Public Safety Section, which recently issued a report on the Chicago Police Department’s (CPD) management of School Resource Officers, plans to issue reviews and evaluations of:

  • COPA/CPD Compliance with the City of Chicago’s Video Release Policy
  • CPD Officer Wellness Programs
  • CPD Gang-Related Designations and Tracking
  • CPD Strategic Subject List (SSL)
  • Litigation Data Project (pattern and practice assessment of settlements & judgments)
  • CPD Bureau of Internal Affairs’ Professional Development Practices
  • CPD Compliance with Body-Worn Camera Internal Review Procedures
  • CPD Crisis Intervention Team Implementation
  • CPD Grievance Process
  • CPD Management and Production of Records
  • CPD Compliance with Post-Firearm Discharge Training Requirements
  • CPD Secondary Employment Policy Practices
  • CPD Handling of U Visa Certifications
  • CPD Hiring Process (landscape review of application and testing processes)

Work in this arena is increasingly informed by OIG’s community outreach and engagement efforts. Public forums hosted by community organizations have directly informed OIG’s identification and prioritization of several of the above-listed topics, and expert roundtables have deepened OIG’s understanding of issues and challenges the community experiences in engaging various City programs, enabling us to better focus performance audits and reviews for maximum public value.

OIG’s Audit and Program Review Section, whose past work has included reports on CPD’s administration of overtime as well as opportunities for civilianization within CPD, will complement Public Safety’s efforts through, among other things, a performance audit on CPD’s Juvenile Intervention Support Center, expected to be reported out in early 2019.

Audit and Program Review
In the coming months, OIG’s Audit and Program Review (APR) Section will be issuing Yellow Book performance audits currently in process on the following topics:

  • Chicago Department of Health Environmental Permitting
  • Low-Income Housing Trust Fund Inspections
  • Fleet and Facility Management CPD Vehicle Repair
  • Department of Innovation and Technology IT Investment Strategy
  • Department of Water Management Overtime
  • Chicago Board of Election Operations
  • Chicago Department of Transportation Driveway Billing

Audits tentatively on deck for near-term initiation include examination and assessment of:

  • Affordable Housing Requirements Ordinance Administration Follow-Up
  • Administration and Adjudication of Sanitation Citations
  • Chicago Fire Department Administration and Disposition of Discrimination and Sexual Harassment Matters
  • Department of Planning and Development Zoning Review and Approval Process
  • TIF Progress Report on Implementation and Compliance with TIF Task Force Recommendations, the Surplus Executive Order, and the Sunshine Ordinance

As it does annually, in September OIG published its APR Draft Audit Plan for 2019 with the objective of soliciting comments from stakeholders, including the members of the City Council. Indeed, a number of the ongoing or soon to be initiated projects noted above were prompted by suggestions from Aldermen. I strongly encourage feedback from you and your staff on the Draft Audit Plan (which can be found at: https://igchicago.org/wp-content/uploads/2018/09/APR-Draft-2019-Annual-Plan.pdf) to assure that our work in 2019 better meets the interests, concerns, needs, and priorities of the members of this body and the constituents we all serve.

Investigations
As specified by its enabling ordinance, OIG cannot disclose matters under investigation. However, 2018 has brought to final disposition both criminal and administrative investigations of significance, including:

  • Racist and offensive emails in the Department of Water Management;
  • Sexual harassment and sexual assault cases involving personnel of Buildings, Water Management, Cultural Affairs, and Aviation Departments, among others;
  • FMLA and personal disability leave fraud schemes by employees of the Department of Transportation and the Office of Emergency Management & Communications;
  • Tax fraud conviction (and restitution) for a former administrative staffer of the Public Building Commission, arising from a payroll fraud scheme;
  • Forgery and misappropriation and conversion of funds of a Special Service Area (SSA);
  • Felony theft of government property conviction and order of restitution to the City for a former security guard of a contractor to the Department of Revenue;
  • MBE fraud by a pass-through resulting in three criminal convictions and orders of restitution to the City in excess of $100,000; and
  • Electric vehicle charging station mail fraud scheme resulting in a criminal conviction and order of restitution to the City of nearly $500,000.

Hiring Oversight (Shakman 2.0)
OIG has a responsibility to cast an analytical lens on itself, which we do in cyclical fashion through both external mechanisms such as a regulatorily self-imposed triennial peer review (with the latest review to begin in FY 2019) and internal mechanisms such as a triennial strategic planning process. We also re-assess and re-calibrate priorities based on evolving City operations. In 2014, the City was released from federal court oversight of its hiring and promotion systems in the 45-year Shakman litigation that revealed systems historically tainted with patronage-based political considerations. This signal achievement of the outgoing administration was predicated on court and public confidence in effective OIG oversight. While OIG monitoring continues to pre-emptively catch procedural anomalies and improper practices, improvement and reform Citywide require the Hiring Oversight Section to evaluate which of the original procedural mechanisms needed to prevent improper political considerations in hiring have outlived their usefulness. In 2019, therefore, OIG’s Hiring Oversight Section will begin a process, in dialogue with both outgoing and incoming leadership of the City’s Law Department and the Department of Human Resources, to revise the City’s Hiring Plans and re-orient our compliance monitoring and auditing activities to more extensively focus on departments where the vestiges of improper practices may remain or, equally important, are perceived to remain. The bandwidth for this anticipated initiative will be made available through the data tracking and visualization tools developed for OIG’s Information Portal.

OIG Information Portal
OIG’s community and outreach engagement efforts have revealed how best-intentioned efforts, positive results notwithstanding, can fall short of meeting communities’ needs, penetrating community consciousness, or obtaining community legitimacy because they were executed without community input. The result is that the good work of public officials does little to surmount the prevailing public mistrust of government. One lesson from these observations is that how we identify and institute reforms may often turn out to be as important as the reforms themselves. An important measure of the community’s assessment of any reform is how public and transparent the reform process is and the ready availability of performance metrics by which we measure its implementation. In the absence of more public and transparent engagement, the very best reforms will still be deemed suspect, and the patience and trust needed for their successful implementation will be lacking. We must acknowledge (and respect) that for the foreseeable future the public’s perception of progress will not be assessed from a trust-but-verify framework, but rather, a verify and (only then) trust paradigm.

To lay part of the foundation for greater public transparency to combat this mistrust, OIG recently flipped the switch on the Information Portal, which provides the public, legislators and staff in this body, and City administrators with user-friendly data visualizations of important aspects of City operations. The OIG Information Portal, found at https://informationportal.igchicago.org, is based on data that is scrubbed, verified, and refreshed daily. The data is fed into an interactive platform that allows public stakeholders to easily change filters to create visualizations crafted to more closely meet their individual and local interests. The community response and, indeed, the response of some of you here today and the staff that support you can be summarized in a single word – “More.” OIG’s 2019 budget proposal seeks to meet that call through recalibrated staffing of its Center for Information Technology and Analytics (CITA), the OIG unit that built the Portal and does the data work needed to support its further development and expansion.

O’Hare Integrity Monitoring
As the City moves from the architectural design phase (currently in the bid evaluation stage) to the construction bid and initiation stages of the projected $8.7 billion, multi-year O’Hare expansion project, OIG will be working in collaboration with the Commissioner of Aviation and the City’s Chief Procurement Officer to institute an integrity monitoring program to provide real-time project monitoring of work that will include broader and deeper contract and program (including M/WBE) compliance. As projected, this will be managed through a combination of external integrity monitoring services drawing from an expansion of the roster of qualified professional service entities currently certified from a 2015 RFQ initiated jointly by OIG and the Department of Procurement Services (DPS). They will report and receive direction from a working group that will include dedicated OIG personnel collocated at O’Hare and representatives from the Aviation Commissioner’s project management team. Among other things, the integrity monitoring team will be expected to:

  • Conduct forensic audits;
  • Review the Construction Manager’s business activities;
  • Verify disclosure forms, payment requests, change orders, invoices, certified payrolls, manifests, insurance and bonding forms;
  • Assist with investigations and inquiries, including interviews, site visits, field activities, records reviews, and background checks; and
  • Prepare periodic reports documenting detailed results of any audits and reviews, and other activities as directed.

O’Hare project monitoring will draw on and create precedents in Chicago for the implementation of best-in-nation practices originally developed by the NYC Department of Investigation and the Port Authority of NY and NJ’s OIG who, working with leadership of the departments and agencies they oversee, have accomplished significant proactive, pre-emptive fraud prevention and quality assurance in the context of massive public works projects such as the ongoing rebuilding of the Lower Manhattan World Trade Center complex.

This front-end monitoring can fairly be seen as an important oversight innovation spawned by the continuing collaborative work of OIG and DPS stemming from the Mayor’s 2015 Procurement Reform Task Force (PRTF). The Chief Procurement Officers Committee, which was endorsed by City Council legislation in response to PRTF recommendations, will in the coming year move to final phase development and implementation of a unified City sister agency procurement, contract management, and contractor compliance administration and reporting platform. Efforts in this arena have, to date, brought the City significant attention and acclaim from the national government procurement community.

Conclusion
Operational continuity amidst a period of change management is needed for an orderly transition critical to the early success of an incoming administration. OIG looks forward to building on its record of service to the City Council, and the public it represents and serves, through the provision of professional performance audits, reviews, investigations, and compliance monitoring, all in the pursuit of its mission to promote economy, effectiveness, efficiency, and integrity in City programs and operations.