Los Angeles Unified School District
Ethics Program Assessment and Implementation (Review of Ethics Office Operations)
Presented to the Business, Finance, Audit and Technology Committee August 2002 Page 1
Why Should We Have an Ethics Program? ⇒ Ethical conduct is not only the right thing to do, it is good for the District ⇒ A good ethical reputation is a tangible asset of any organization ⇒ Enhances District’s reputation in the community ⇒ Enables employees to make good ethical decisions ⇒ Fosters adherence to sound ethical business practices ⇒ Creates healthier working environment for employees ⇒ Improves quality of new hires and retention of current employees ⇒ Increases respect for fellow employees and for District property ⇒ Builds trust and mutual respect ⇒ Will have a positive impact in the classroom ⇒ Reduces financial risks ⇒ Reduces litigation expenses
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Goals of the Ethics Program WHAT DO WE WANT TO ACCOMPLISH IN A DISTRICT-WIDE INITIATIVE? 1. Let employees know what is expected of them under the Code of Ethics. (Rules and Laws)
(Compliance-based)
2. Enhance employee awareness and commitment to broader ethics responsibilities. 3. Assist employees in making ethical decisions. 4. Develop a culture that develops trust and commitment and improves District performance.
(Values-based)
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AREAS OF INTEREST EXPRESSED DURING INTERVIEWS: ⇒ Conflict of Interest ⇒ Lobbyist Registration ⇒ Code of Ethics for Employees ⇒ Code of Ethics for Contractors and Consultants ⇒ Revolving Door ⇒ Debarment Policy ⇒ Whistleblower Policy ⇒ Honoraria Policy ⇒ Affirmative Action ⇒ Sexual Harassment ⇒ Hiring Policy ⇒ Nepotism ⇒ Employee Discipline ⇒ Teaching Ethics in the Classroom ⇒ Gifts and Gratuities
⇒ Role Modeling ⇒ Leadership ⇒ Build Trust ⇒ Promote Teamwork ⇒ Provide Ethics Advice ⇒ Ethics Training ⇒ Competitive Bidding ⇒ Kickbacks ⇒ Retaliation ⇒ Equal Opportunity ⇒ Confidentiality ⇒ Personal Investments ⇒ Outside Employment ⇒ Contracting Process ⇒ Enforcement ⇒ Risk Assessment
⇒ Travel Policy ⇒ Acceptance of Favors ⇒ Misuse of District Funds ⇒ Misuse of District Time ⇒ Procurement Integrity ⇒ Ethics Policy Development ⇒ Privacy ⇒ Accountability ⇒ District Values ⇒ Political Contributions ⇒ Appearance of Impropriety ⇒ Fraud and Waste ⇒ Misuse of Office ⇒ Student Cheating ⇒ Vendor Relations
HOW CAN WE GET IT DONE?
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Purpose of Review • Office of Inspector General Review (June 3, 2002) o Review of Ethics Office, at the request of the Ethics Officer, to include options for improving and implementing the District’s Code of Ethics, as well as Conflict of Interest and Lobbyist Registration Programs
• Board of Education Directive (July 9, 2002) o Resolution – Provide BFAT Committee with a comprehensive package to implement the District’s Code of Ethics and a Lobbyist Registration System
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Scope of Review • Mission of Ethics Office • Role and responsibilities of the Ethics Officer • Adequacy of ethics program strategic plans, budget allocation, performance priorities/objectives, reporting responsibilities • Status of implementation of Code of Ethics • Effectiveness of employee training and awareness programs • Use of hotline to seek advice or report concerns • Effectiveness of enforcement process • Status of Conflict of Interest and Lobbyist Registration Programs • Compliance with Federal and State Codes • Identification of risk areas
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Methodology of Review Internal Document Review • LAUSD documents leading to adoption of Code of Ethics and establishment of Ethics Officer position. o
(Board minutes, previous benchmarking, reports with recommendations from LAUSD and external reviewers.)
Interviews • All members of the Board of Education • Superintendent of Schools and most of his executive staff • Ethics Officer • Representatives of organizations with whom Ethics Officer interfaces • Local School District Offices and school sites
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Methodology of Review Benchmarking School Districts: • • • • • •
New York City Chicago Baltimore Washington, DC Houston Miami/Dade County
• • • • •
San Francisco San Diego Fresno Sacramento Long Beach
Government Agencies: • City of Los Angeles Ethics Commission • City of San Diego Ethics Commission
• Metropolitan Transportation Authority • Metropolitan Water District
Other Organizations: • Ethics Officers Association • Ethics Resource Center • US Office of Government Ethics
• Ethics initiatives of the Defense and Healthcare Industries • Organizational Sentencing Guidelines
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Program Models and Best Practices Modeling Various models identify “Best Practices” but all are applied differently depending on unique history, culture, workforce and goals.
Best Practices: • Commitment of all persons in leadership is essential • Mission and Value Statements are included • Code of Ethics – insure employees understand obligations under the code • Ethics should be integrated into structure, not an isolated function • Training and reinforcing communications are required • Aim should be positive – teach and guide, not catch and judge • Tell employees what they can’t do as well as what they should do • Focus on right and wrong including the appearance of right and wrong • Establish a Helpline – to seek advice, report concerns • Discipline should be fair and consistent regardless of position • Build in the capability to measure results • Provide appropriate resources to establish and maintain an effective program
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Elements of Program Assessment Mission:
*To create a culture that develops deep trust and commitment.
LEGEND * Current status ⇒ OIG response
⇒ Definition is too broad. Need to emphasize how to get there. Approach: *Help improve District performance by enhancing trust. ⇒ Changing District culture, building trust and teamwork have been primary objectives. Ethical issues and obligations have not been central to training. Reporting Relationships: *Direct report to General Counsel. ⇒ Should have greater access to Superintendent and Board. relationships. Staffing and Budget:
Needs enhancement of informal reporting
*Ethics Officer plus a paralegal – no budget.
⇒ This is inadequate to reach minimum program standards. Code of Ethics:
*Adopted December 2000, not yet implemented.
⇒ A Code should be implemented, as soon as possible. It should be understandable, reflect District Values and identify positive benefits of ethical behavior. It should stress employee obligations and accountability as well as consequences of unethical behavior.
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LEGEND * Current status ⇒ OIG response
Implementation of Ethics Policy: * Very limited except for responses to questions seeking advice on ethical issues. There is very little documentation on ethics policy. ⇒ Ethics policies, practices and procedures should be documented and incorporated as a part of all District operations. Training:
*Ethics Officer has done all training personally. Emphasis has been on organizational development issues.
⇒ Training should be focused on ethics specific issues and problems to improve employee awareness of obligations under the Code of Ethics. Training responsibilities must be delegated throughout the District. Communications: *No pattern of communicating ethics message to the general population. ⇒ Following Code implementation and training, reinforcing communications including web, email, newsletters, KLCS and department communications should be used. Hotline:
*In place since April 2002 – No significant use as yet.
⇒ Change name to HELPLINE. It should be a dedicated line. Advertise broadly and encourage use for ethics advice in addition to reporting ethics concerns. Advice: *A major focus of ethics office. Can eliminate problems before they occur. ⇒ Advice contacts average thirty each month. This number will increase once program is communicated to employee population. Page 11
LEGEND * Current status ⇒ OIG response
Allegations: *Ethics Officer has identified ten reported allegations of unethical behavior in 17 months. Office records do not identify resolutions. ⇒ This number will increase as employees become aware of their obligations under the code. Ethics Database: *Ethics Officer and Paralegal maintain separate electronic logs of daily activities. ⇒ There should be a systematic ability to track recorded ethics activities by number, type and results, while
maintaining confidentiality. The Ethics Officer advises he is close to that capability. Risk Assessment: *No measurable means to identify risk areas. ⇒ An important piece of any ethics program. It allows the District to focus training and corrective actions in
problem areas. Enforcement: *No role in investigations, discipline or corrective actions. ⇒ A functioning ethics program should be able to monitor and track these activities. Measurement of Program Effectiveness: *No standards in place. ⇒ Program statistics, employee interviews, focus group results, press comments and input from major LAUSD constituencies are examples of measurement tools.
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Conclusion LAUSD does not have an effective Ethics Program at this time.
• The Ethics Office estimates that 95% of District employees are currently unaware of the existence of a Code of Ethics, Ethics Office, or Hotline. • The Ethics Program cannot function effectively as presently staffed and funded. • The additional responsibilities for administrating lobbyist registration and conflict of interest programs will further compound this problem unless appropriate resources are provided.
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Possible Causes • Goals and objectives of Ethics Office not well defined – too many – much too broad and far reaching • Unrealistic expectations from all segments of LAUSD without necessary resources • Lack of agreement between executive management and Board on goals, objectives or the role of the Ethics Office • Lack of resources • Failure to implement a Code of Ethics • Training thus far has been focused on Organizational Development issues • Ethics issues not central to training • Lack of delegation of program responsibilities – no training packages developed, no train the trainer initiative, all training done personally by Ethics Officer, training resources available through Human Resources and Personnel Commission not used • Too many responsibilities • “Cheerleader” approach • Ethics Officer does not have experience in running a workplace ethics program • Ethics Officer is new to the District, a credibility issue – “Hasn’t been in the trenches with us” • Wait and see approach, no initiatives have moved forward Page 15
Suggested Solutions Management: • Board of Education has taken a significant first step in establishing an ethics program for the District. • Board and Superintendent must agree on Ethics Officer role and communicate this. • Appropriate resources should be provided. • District leadership should support the program by word and example. • Reexamine organizational relationships.
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Suggested Solutions Ethics Officer: • Facilitate implementation of Code of Ethics and distribute to all employees (Explain why initiated and objectives). • Have training module ready to disseminate in support of Code of Ethics (use relevant examples). • Change current focus of training efforts to LAUSD Values, employee obligations under the Code, rewards and consequences. • Prepare follow up communications via email, website, newsletters, etc. • Provide appropriate training to those responsible for the cascading of training efforts in their respective organizations. • Identify coordinators responsible for program efforts throughout local districts and at District Headquarters. •
Reactivate the ethics advisory team of subject matter experts.
• Enlist the assistance of the Personnel Commission and Human Resources for help with training and communications. • Staff Helpline appropriately to handle increase in calls seeking advice or reporting a concern. • Consider developing a theme for program such as “Winning with Integrity,” “Integrity,” “Doing the Right Thing,” etc. • Develop role models such as the Superintendent or Board Members. •
Identify areas of ethical risks for the District to focus subsequent training.
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Suggested Solutions Resources: • Begin search for a deputy ethics officer, preferably an experienced, well-respected LAUSD employee capable of developing ethics training modules, conducting data analysis, and providing ethics advice. • Bring aboard a paralegal or employee of similar skills who can coordinate ethics office efforts dealing with lobbyist registration. • Other personnel resource needs are dependent on whether aspects of lobbyist registration and conflict of interest programs are handled by the City of Los Angeles Ethics Commission. •
Budget for program needs.
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Suggested Solutions Considerations • Limited resources mandate a staged, focused program development with specific objectives. • The ability to delegate responsibilities for delivering the ethics message to all employees is critical. •
Commitment to Lobbyist Registration and Conflict of Interest Program implementation will divert available resources from other program efforts.
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Lobbyist Registration and Conflict of Interest Lobbyist Registration: No current program – not legally required Conflict of Interest: Very limited program – mandated by Political Reform Act of 1974
Lobbyist Registration Projections for District – with full implementation, the Ethics Officer estimates: • 210 – lobbyists • 90 – lobbyist firms • 650 – lobbyist clients • 18 – lobbyist employers These figures are 10% above City of Los Angeles figures for same categories. Functions: Registration, filing quarterly reports, tracking, analyzing data, distributing reports to appropriate individuals and organizations, training, answering questions, providing advice, collecting fees and referring problems to enforcement authorities.
Conflict of Interest Ethics Officer estimates 2,000 people required to register to meet standards defined by the Political Reform Act of 1974. There are currently 65 registered. Function: Identifying those “designated employees” who must file, providing them with the forms and instructions for filing, and tracking their compliance. Training and answering questions are other responsibilities. Page 20
Full Implementation In-House Additional Resource Requirements: • Two employees – Lobbyist Registration • One employee – Conflict of Interest
Benefits: • Control over entire process • Could collect approximately $120,000 in lobbyist registration fees
Disadvantages: • Expensive • Substantial time and effort required to “gear up” • Impact on time available to devote to ethics program implementation
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Alternative Implementation Pursue efforts to have City of Los Angeles Ethics Commission handle most of the process involved with Lobbyist Registration and some of the Conflict of Interest process. The City Ethics Commission administrates and enforces laws relating to governmental ethics, campaign finance, and lobbyist registration for the City of Los Angeles. Preliminary contacts have been positive.
City of Los Angeles Ethics Commission: Total Staff - 24 Annual Budget - $1.9 million The Policy and Advice Unit within the Commission handles all aspects of the conflict of interest and lobbyist registration programs. Current Lobbyist Registrations: • 190 lobbyists • 82 lobbying firms • 588 clients • 16 lobbyist employees Current Conflict of Interest Filers: • Approximately 5,000
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Current Resources of Policy and Advice Unit: 1-Ethics Officer 3-Management Analysts 1-Clerk Typist Total Salary of 5 employees: $310,000 per annum In addition to filings, it handles: • • • •
Training Advice Policy Analysis and Research Legislative proposals and draftings
Breakdown of responsibilities: 2 employees1 ½ employees1 employee½ employee-
Advice, Policy Analysis and Research Lobbyist Registration and Analysis Conflict of Interest As needed
The Lobbyist Registration Program is being converted to an electronic “on-line” format, which is scheduled to begin functioning in June 2003.
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Benefits: • Program is already in place • More cost effective • More time to focus on Ethics Program issues
Disadvantages: • Possible unforeseen problems • May take longer for full implementation • Conflict of Interest will still involve substantial LAUSD effort
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Organizational Issues Included in this report are suggested modifications to the reporting responsibilities of the Ethics Office. These include both formal and informal responsibilities. To be effective, the Ethics Office should have visibility and the support of executive management. The Ethics Office should have direct access to the Board and Superintendent on significant matters and have scheduled meetings with the Superintendent and the Board to brief them on program status and ethical issues. With limited resources it is imperative that Ethics Program responsibilities be shared. This includes providing support and direction to the ethics office, communicating the ethics message and providing subject matter expertise. This delegation of responsibility will have to be endorsed by executive management with specific individuals identified for the various roles. The document entitled “Informal Reporting” suggests an approach.
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REPORTING RESPONSIBILITIES (FORMAL) Option 1
General Superintendent
Board of Education
General Counsel
Ethics Officer
- Reports to General Counsel - Discretion to go direct to Board or General Superintendent on significant issues - Scheduled meetings with Board and General Superintendent on program status and issues
REPORTING RESPONSIBILITIES (FORMAL) Option 2
Personnel Commission
General Superintendent
Ethics Officer
- Reports direct to General Superintendent - Receives administrative support from Human Resources and Personnel Commission - Scheduled meetings with Board and General Superintendent on program status and issues
Human Resources
REPORTING RESPONSIBILITIES (FORMAL) Option 3
Personnel Commision
Chief Operating Officer
Ethics Officer
- Reports to Chief Operating Officer - Receives administrative support from Human Resources and Personnel Commission - Scheduled meetings with Board and General Superintendent on program status and issues - Discretion to go direct to Board or General Superintendent on significant issues.
Human Resources
INFORMAL REPORTING
COMMITTEE OF THREE
SUBJECT MATTER EXPERTS HR, IG, Procurement, Facilities School Site, Personnel Commission
Local District Representatives
A
Ethics Officer
B
C
D
Committee -
Well respected, knowledgeable Executives Provide active leadership, support and oversight of the Ethics Office Identify need for policy change Provide feedback on ethical climate and management practices Function as the "Ethics Champions"
E
F
G
H
I
J
Subject Matter Experts - Provide expert advice and assistance to Ethics Officer Local District Representatives - Coordinate Ethics program efforts in each district
K
