Ethics Commission hears audit backlog update, seeks outside help while staff ramps up in-house work

The Ethics Commission heard an update Feb. 10 from audit and compliance review manager Linda Fong on the commission’s audit backlog and the audit division’s capacity and plans.

Fong said the audit division is responsible for campaign finance audits, annual lobbyist audits and a planned Form 700 (statements of economic interest) post-filing compliance review. The unit returned to full capacity in late 2021 and has since developed standardized procedures and a lobbying-audit program; it completed six lobbying audits covering activity in the most recent review period. The backlog includes mandatory audits from 2019 and 2020 and additional audits created by the 2022 election cycle.

Because the division has been working to build a sustainable audit function consistent with outside recommendations, Fong said staff initially focused on process improvements before reinitiating audits. The division has engaged the Office of Contract Administration to secure external auditing services to help work through the remaining backlog; contract efforts began in mid-2021 and have advanced recently, Fong said. While a contract is negotiated, staff have started several mandatory audits in-house and expect to initiate up to six 2020 mandatory audits internally, time permitting.

Commissioners pressed for clarity on sample sizes and audit scope. Fong said the six lobbying audits were randomly selected from roughly 253 lobbyists on file for the period reviewed; findings were primarily bookkeeping and late-disclosure issues, with one lobbyist found noncompliant. Commissioners discussed desired audit-sample targets (one commissioner said the statutory minimum of one lobbyist audit is insufficient; Fong said resources permitting she would aim for at least six for a representative sample next cycle).

In related budget business, staff presented the commission’s FY24–25 budget request. Staff reported a FY24 baseline of $6.9 million and requested $7.4 million for FY24 and $7.5 million for FY25 to support positions whose funding will expire and to maintain enforcement, disclosure, and training programs. Commissioners and public commenters urged clearer timelines and outcomes for audits and stronger resourcing; after discussion the commission voted to authorize submission of the budget proposal to the mayor.

No formal policy changes were adopted; staff will continue efforts to secure an external audit contract, proceed with in-house audits where feasible, and provide future program updates including data on audit universe and coverage.