Memorandum

City of Lawrence

City Auditor

 

TO:

Members of the City Commission

 

FROM:

Michael Eglinski, City Auditor

 

CC:

David L. Corliss, City Manager

Frank S. Reeb, Director of Administrative Services

Date:

June 19, 2008

 

RE:

Ethics Questions for Employee Survey

 

 

 

Results in Brief

 

The Director of Administrative Services should incorporate questions about the organizationís ethical environment in the upcoming employee survey.

 

Surveying employees helps the City Commission and City Manager monitor managementís efforts to promote ethical conduct and sets a baseline for future surveys.† Survey questions can examine employee awareness of ethics policies, expectations for behavior, and management attitudes.† Results of the survey help identify opportunities to strengthen the ethical environment.

 

The Director of Administrative Services agrees with the recommendation.

 

Surveying employees helps monitor ethical environment

 

The ethical environment reflects the tone of the organization and influences the effectiveness of the internal controls within the organization.† Surveying employees helps the City Commission and City Manager monitor the ethical environment and managementís efforts to create a culture encouraging ethical behavior.† A survey asks employees to provide their assessment of the environment they work in.† Strong ethical environments correlate with positive outcomes.

 

A strong ethical environment Ė measured through an employee survey Ė correlates with a number of positive outcomes, including:[1]

 

 

The ethical environment reflects the tone of the organization and influences the effectiveness of the internal controls within the organization.† A standard framework for internal control defines the control environment with reference to ethical values and managementís approach:[2]

 

The control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control, providing discipline and structure. Control environment factors include the integrity, ethical values and competence of the entity's people; management's philosophy and operating style; the way management assigns authority and responsibility, and organizes and develops its people; and the attention and direction provided by the board of directors.

 

 

Questions address awareness and attitudes towards ethical expectations

 

Surveying employees provides information on awareness of ethical expectations and managementís attitudes towards those expectations.† Awareness is about whether employees know about the cityís rules, such as the City Ethics Policy.† Attitudes are about the expectations management establishes that those rules are adhered to.† The exhibit identifies questions based on surveys from other jurisdictions that address awareness and attitudes.† Typically, surveys include statements and respondents are asked to indicate a level of agreement or disagreement.

 

Awareness questions from other jurisdictions:

 

 

Attitude questions from other jurisdictions:

 

 

Survey results help identify opportunities to strengthen the ethical environment.††† Survey results provide the most information when they can be compared against previous results or benchmarks.† Depending on the results of a survey, management might take specific actions to improve awareness or attitudes.

 

Ethics area

Possible steps for improvement

Awareness

Increasing the frequency of communications regarding policies and procedures.

 

Revising existing procedures for greater clarity.

 

Requiring acknowledgements from employees that policies have been read and understood.

Attitudes

Changes in management behavior.

 

Interactive communications between management and employees in which frank and open discussion is encouraged.

 

Source:† Internal Control Guidebook, National Association of State Auditors, Comptrollers and Treasurers.

 

Ethics questions could be included in planned employee survey

 

The Director of Administrative Services plans to survey city employees later this year.† ETC Institute will administer the survey under contract.† City employees will probably complete surveys in August.† The City Commission will probably have results in the fall.† ETC Institute surveyed employees in 2005.

 

Questions about awareness and attitudes fit within broad categories used in the 2005 survey.† In that survey, employees were asked about equipment and resources; safety; working environment; compensation and benefits; customer service and community relations; leadership and managerial effectiveness; employee recognition; communication; professional development; policies and procedures; and the City Commission.† Questions about ethics awareness and attitudes could fit with questions about policies and procedures, the working environment, or leadership.

 

While the 2005 survey didnít explicitly address ethics awareness and attitudes, it included two relevant questions.

 

2005 employee survey question

Respondents that agree and strongly agree

Respondents that donít know

I believe that co-workers who treat others unfairly are disciplined as they should be disciplined

50.0 %

6.6 %

I would feel comfortable talking to my immediate supervisor about something that is bothering me at work

71.2 %

0.8 %

Source:† City of Lawrence 2005 Employee Survey, ETC Institute, December 2005.

 

 

Recommendation

 

  1. The Director of Administrative Services should incorporate questions about the ethical environment in the employee survey.

 

Scope, objectives, method

 

This performance audit was designed to identify several questions that could be included in the upcoming employee survey to address the cityís ethical environment.† The work involved reviewing ethics related surveys and materials from other jurisdictions and compiling potential questions.† The Director of Administrative Services and the City Manager received drafts of the report on June 6, 2008, and prepared a written response.

 

The City Auditor conducted this performance audit in accordance with generally accepted government auditing standards.† Those standards require planning and performing the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for the findings and conclusions based on the audit objectives.† The City Auditor believes that the evidence obtained provides a reasonable basis for the findings and conclusions based on the audit objectives.

 

Management response

 

Memorandum

City of Lawrence

City Managerís Office

 

TO:

Michael Eglinski, City Auditor

 

FROM:

David L. Corliss, City Manager

Frank S. Reeb, Director of Administrative Services

 

Date:

June 12, 2008

 

RE:

Response to Audit Report on Ethics Questions for Employee Survey

 

 

 

 

We have received a copy of the June 6th draft audit report containing the recommendation to incorporate questions about the ethical environment in the 2008 Employee Survey.† This memo responds to that recommendation

 

The June 6th draft Audit Report contained only one recommendation.† ďThe Director of Administrative Services should incorporate questions about the ethical environment in the employee survey.Ē

 

We agree with that recommendation.† In preparation for the 2008 Employee Survey, a seven person employee survey committee was previously formed to work with Chris Tatham, ETC Institute in developing the survey instrument.† While it is expected that the 2008 survey instrument will be very similar to the 2005 survey in terms of length and content, one of the early tasks of the survey committee will be to review the 2005 survey to determine whether to delete or add questions for the 2008 survey instrument.† Incorporating questions to help monitor the ethical environment and to better understand the awareness and attitudes toward ethical expectations will be part of that process.† We believe that ETC Institute should review the audit and use their professional judgment in the final wording of questions.† It is important to note that the audit recommendation to add these questions is based on the need to continue to promote ethical conduct and set a baseline for future surveys and is not based on a concern, neither real nor perceived, to improve the ethical environment.†

 

Since the 2005 survey was administered, the Employee Handbook was revised to add a provision on reporting fraud, theft and abuse of city assets.† In addition, the Handbook continues to contain a Code of Ethics and an attachment containing the City Ethics Policy.† A better understanding of employee awareness of these ethics related policies and procedures is an important objective.

 

We also agree with the general timeline referenced on page 4 of the draft audit report.† That is, it is expected that the 2008 survey will be administered in August and a report to the City Commission can be expected in early fall.† Lastly, we appreciate the professional quality and communication of this audit process and look forward following this precedent in future audits.† ††

 

 



[1] Citywide Ethics Audit, City of Austin, City Auditorís Office, November 2002 at: http://www.ci.austin.tx.us/auditor/downloads/au02302.pdf

 

[2] Internal Control Ė Integrated Framework Executive Summary, Committee on Sponsoring Organizations of the Treadway Commission, at: http://www.coso.org/publications/executive_summary_integrated_framework.htm