R112121
City Council Meeting: October 22, 2019 Santa Monica, California
RESOLUTION NUMBER 11212 (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA REVISING AUDIT COMMITTEE
RESPONSIBILITIES TO INCLUDE MONITORING THE CITY’S ADMINISTRATION OF
A CONFIDENTIAL ETHICS HOTLINE
WHEREAS, the City Council of the City of Santa Monica (the “City Council”)
recognizes the importance of transparency and accountability in the administration of
public resources, and the City Council is ultimately responsible for ensuring that the City
of Santa Monica (the “City”) is meeting its internal controls and financial reporting
responsibilities; and
WHEREAS, on July 14, 2015, the City Council adopted Resolution No. 10897
(CCS) (“Resolution 10897”), which established an Audit Subcommittee of the City Council
(the “Audit Committee”) to ensure regular and direct communication between the City’s
independent auditors and the City Council and further the City Council’s goals of
transparency and accountability in the administration of public resources; and
WHEREAS, on July 28, 2015, the City Council adopted Resolution No. 10901
(CCS) (“Resolution 10901”), which reflected the City Council’s intent that the Audit
Committee consist of three Council members and two City residents with relevant
expertise to be selected through a public process; and
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WHEREAS, Resolution 10901 also defined the duties and responsibilities of the
Audit Committee; and
WHEREAS, on April 20, 2017, the Audit Committee recommended that the City
Council adopt Rules of Conduct for the Audit Committee in order for the Commit tee to
efficiently conduct its meetings in compliance with applicable State and local laws; and
WHEREAS, on May 9, 2017, the City Council adopted Resolution Number 11042
(CCS) (“Resolution 11042”) adopting Rules of Conduct for the Audit Committee; and
WHEREAS, on June 27, 2017, the City Council adopted Resolution Number 11046
(CCS) (“Resolution 11046”) revising the Rules of Conduct for the Audit Committee in
order to recognize scheduling challenges resulting from restrictive attendance
requirements and ensure that Audit Committee business moves forward in a timely
manner; and
WHEREAS, on March 27, 2018, the City Council adopted Resolution Number
11103 (CCS) (“Resolution 11103”) revising the Rules of Conduct for the Audit Committee
to provide additional flexibility in the management of the Audit Committee; and
WHEREAS, Section 6(f) of Resolution 10901 provides that the Audit Committee
shall “[p]rovide an alternative way for employees, taxpayers, or other citizens to
confidentially report suspected illegal, improper, wasteful or fraudulent activity”; and
WHEREAS, on November 24, 2015, the City Council adopted a values-based
Code of Ethics for all City Staff (the “Code of Ethics”); and
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WHEREAS, pursuant to Section 6(f) of Resolution 10901 and the Code of Ethics,
City Staff established an anonymous 24-hour multilingual hotline to receive confidential
reports of ethics violations (the “Ethics Hotline”); and
WHEREAS, establishing the Ethics Hotline to confidentially report ethics violations
has been recognized as a best practice tool for approaching ethics complaints; and
WHEREAS, the City Council aims to make reporting of potential ethics violations
as simple, clear, and straightforward as possible; and
WHEREAS, the City Council desires to clarify that the Audit Committee will
continue its role in oversight and proactive prevention of illegal activity while designating
the Ethics Hotline as the clear central point for confidential complaints ; and
WHEREAS, the City Council desires to clarify the purpose, composition, and rules
of conduct of the Audit Committee as previously set forth and revised by the City Council.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Council of the City of Santa Monica has established and
hereby sets forth the composition, rules of conduct, and duties and responsibilities of an
Audit Committee, which shall assist the City Council in fulfilling its oversight
responsibilities for the financial reporting process, the framework for internal control, and
the audit process.
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SECTION 2. Composition. The Audit Committee shall consist of three members
of the City Council and two City residents who shall be appointe d by the City Council
through a public process and shall be qualified to serve by virtue of their experience and
expertise with governmental accounting and internal financial controls. The five members
of the Audit Committee shall be appointed by the City Council to staggered four-year
terms. To establish staggered terms, the initial members of the Audit Committee shall be
appointed so that two Council members and one public member serve four -year terms
and one Council member and one public member serve t wo-year terms. Thereafter all
members shall be appointed to serve four-year terms.
SECTION 3. Open Meeting Laws. Audit Committee meetings shall be held in
compliance with the State’s Open Meeting Laws. Notice of meetings, including
adjournment, shall also be given in accordance with the provisions of the Ralph M. Brown
Act, California Government Code section 54950 et seq. (the “Brown Act”). In the event
of a conflict between the provisions of the Brown Act or any other law and any provision
of these Rules of Conduct, the Brown Act, or other law, sha ll prevail. The noticing
provisions shall further be subject to any amendments of the Brown Act.
SECTION 4. Quorum. A majority of Audit Committee members shall constitute a
quorum for the transaction of business, except to adj ourn. One City Council member who
is a member of the Audit Committee must be present for an Audit Committee meeting to
occur. The Finance Director, or designee, and the City Attorney, or designee, shall attend
all Audit Committee meetings. The Finance Director, or designee, or the City Attorney,
or designee, shall implement Audit Committee directives as appropriate and report back
on recommendations made in audit reports as directed by the Audit Committee.
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SECTION 5. Officers Powers and Duties. Each year at its first meeting, the voting
members of the Audit Committee shall elect a Chair and a Vice-Chair. Until new officers
are elected, the outgoing officers shall continue to serve, when a quorum is needed and
no officers are available. The Chair shall be the Presiding Officer at all meetings. In the
absence of the Chair, the Vice Chair shall preside. In the absence of both the Chair and
Vice Chair, the City Clerk or designee shall call the Audit Committee members present to
serve until the arrival of the Chair or Vice Chair or until adjournment. Meeting agendas
shall be prepared by the Chair in consultation with the Finance Director. Meeting agendas
shall be prepared by the Chair in consultation with the Finance Director.
SECTION 6. Conduct of Meetings. Except as otherwise provided, the Audit
Committee shall follow the City Council Rules of Order and Procedures, Resolution
Number 11106 (CCS) (“Resolution 11106”), as applicable, and as may be amended from
time to time, in the conduct of its meetings. A co py of Resolution 11106 is attached hereto
as Exhibit A and incorporated herein by this reference.
SECTION 7. Regular Meetings. Regular meetings of the Audit Committee shall
be held at least quarterly on such dates, at such locations, and at such times as may be
fixed by the Audit Committee.
SECTION 8. Ad Hoc Committees. The City Council may approve the creation of
an ad hoc committee to take part in Audit Committee discussions. Any such ad hoc
committee shall serve for a limited time and scope of work, as approved by th e City
Council. Any ad hoc committee formed shall be subject to the Open Meeting Laws and
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shall only convene during public meetings of the Audit Committee. Any ad hoc committee
formed may not:
(a) take any final action on matters which also require Audit Committee
members’ approval;
(b) fill vacancies on the Audit Committee; or
(c) make any appointments to the ad hoc committee.
Members of any ad hoc committee formed may not meet except as allowed in accordance
in the Brown Act.
SECTION 9. Duties and Responsibilities. The duties and responsibilities of the
Audit Committee include but are not limited to:
(a) Reviewing, upon completion, all City audit reports, analyzing all findings in
audit reports, and consulting with external and internal audi tors regarding
any irregularities and deficiencies disclosed in their reports;
(b) Determining what corrective action, if any, should be recommended to the
City Council;
(c) Reporting to the City Council on the outcome of all audits, on any audit
findings, and on any other pertinent communications, and mak ing
appropriate recommendations;
(d) Ensuring that timely and appropriate action has been taken in response to
City Council directions arising from audit reports;
(e) Considering the effectiveness of the framework fo r internal control,
reviewing the effectiveness of the systems for monitoring compliance with
laws and regulations, and review ing the processes for communicating the
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City’s compliance policies to City personnel and monitoring compliance
therewith;
(f) Monitoring the City’s implementation and ongoing management of a
confidential ethics hotline as a method through which employees,
taxpayers, or other concerned stakeholders may confidentially report
suspected illegal, improper, wasteful or fraudulent activity; and
(g) Providing oversight of the periodic review and selection of external and
internal auditors including, but not limited to, reviewing proposals and
making recommendations.
SECTION 10. Resolutions 10897, 10901, 11042, 11046, and 11103 are hereby
repealed in their entirety.
SECTION 11. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
_________________________
LANE DILG
City Attorney
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Adopted and approved this 22nd day of October 2019.
__________________________
G l e a m D a v i s , M a y o r
I, Denise Anderson-Warren, City Clerk of the City of Santa
Monica, do hereby certify that Resolution No. 11212 (CCS) was duly
adopted at a meeting of the Santa Monica City Council held on the 22nd
day of October 2019, by the following vote:
AYES: Councilmembers Himmelrich, Morena, McKeown, Jara, Winterer
Mayor Davis, Mayor Pro Tem O’Day
NOES: None
ABSENT: None
A T T E S T :
_____________________________________
Denise Anderson-Warren, City Clerk
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Exhibit A
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