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Statement of Inspector General David Hoffman to the City Council Budget Committee

Mr. Chairman, Aldermen, good morning. It is a pleasure to be appearing before the Budget Committee again.

As of today, I have been Inspector General for exactly one month. During that time, my efforts have been focused on one thing – turning the Inspector General’s Office into a first-class investigating agency that roots out corruption and fraud.

On my first day as Inspector General, we began an investigation into allegations that a large health care provider had been defrauding the City by sending false medical certifications to the Police Department, the Fire Department, and other City departments. The City had paid the health care provider about $4 million since the contract began. Conducting the first phase of the investigation quickly was critical because the allegedly false medical certifications created potential health and safety issues for police officers, firefighters, and others. Within two weeks, we had gathered a substantial amount of evidence, including identifying and interviewing three cooperating witnesses and reviewing thousands of documents. At the end of two weeks, we executed a federal search warrant along with federal agents at the health care provider’s offices. This was the first search warrant the Inspector General’s Office had conducted this year, and the first federal search warrant it had executed in its history. The investigation is continuing.

Since the day I began, I have also been working on improving the Office’s performance. In the future, the Inspector General’s Office needs to be more productive and more efficient. I believe that if the right changes are put into place, we will achieve that goal.

Here are some of the changes I have started to implement.

First, I have changed our complaint intake process to streamline it and make it more effective. Previously, complaints were handled on a random basis by supervisors and had to be summarized within a bureaucratic formula based on the type of complaint. Then, before the complaint was assigned to an investigator, it had to be reviewed by the Inspector General himself. Because of the high volume of complaints, this created a bottleneck in the system. In our new system, we will have an investigator on “complaint duty” each day to handle the complaints that come in that day. Summaries of the complainant’s statement will not be forced into bureaucratic formulas. Instead, whatever the complainant says will be the substance of the complaint. After a short amount of research and docketing work, the case will be given to the supervisor for the appropriate team. This should happen quickly and should be almost immediate in urgent or serious cases. The supervisor will then either assign it to an investigator, or decide with the new Director of Investigations to refer the case to a City department or take no action if the complaint is deemed baseless.

Second, I have streamlined the review process for completed investigations so that our recommendations are communicated to the Mayor and the departments more quickly. Previously, each detail of every sustained case was reviewed single-handedly by one of the top two people in the office. This tended to created a backlog and substantially slowed down the completion of the process. Now, more work will be done by the investigators and their supervisors to summarize the investigation for the reviewers. This will make the review quicker and more efficient. The review function will be spread across several people in senior management. The level of review will depend on the type and seriousness of the case. These changes will make the review process quicker, without sacrificing thoroughness.

Third, I have started analyzing what types of investigations the Inspector General’s Office has been conducting and how long it has been taking the Office to complete investigations. Important or difficult investigations may well take more than a year. But the run-of-the-mill case should not, absent extraordinary circumstances. This was clearly a problem in the past. Streamlining the complaint intake process and the review process will help. In addition, for certain disciplinary investigations, I am examining whether we can expend fewer investigative resources per case, which could significantly shorten the length of the investigation. I will be coordinating with the Law Department to ensure that shortening these investigations would not decrease our chance of achieving a positive result before the Personnel Board. Overall, if we spend too high a percentage of our resources on smaller cases, we will not have sufficient resources to devote to the larger cases. This analysis was not done before and I am undertaking it now.

Fourth, I am creating a system to track the results of our completed investigations. This was not being done before, so the Inspector General’s Office did not know how often its disciplinary recommendations were followed, or how often disciplinary actions were upheld by the Personnel Board. Nor was there any system to keep track of the number of cases that resulted in criminal prosecutions. This needs to change as soon as possible, and I am in the process of implementing such a tracking system. Accountability requires that the Office be able to measure its performance. One important measure is how often its recommendations are followed and are upheld on appeal. Another is how often its investigations led to successful prosecutions. In the same vein, I am creating a system to regularly analyze our closed investigations so that we can measure the quantity and quality of our cases. In the future, we will be able to measure our performance in these ways.

Fifth, I will also increase our accountability by changing the way we draft summary reports at the end of administrative investigations. Previously, the summary reports simply stated the type of allegation and the recommended discipline. In the future, our summary reports will summarize the evidence and explain the reasoning behind our recommendation. This will make it easier for the department head to judge whether our recommendation is proper, and will make review of the investigative file by the department head and the Law Department more efficient. It will also make us more accountable by creating a record that shows why we believed the evidence was sufficient to justify a certain outcome.

Sixth, I am creating a legal section in the Office, which will have several beneficial effects. Drafting more detailed summary reports without slowing down the process will now be feasible, since this job will be spread among the four lawyers in the section, including two Deputy Inspectors General. In addition, pairing lawyers up with the investigators, just as prosecutors are paired with agents in good investigations, will help ensure that the investigations produce results that the Law Department or a prosecutor’s office can defend in court or before the Personnel Board. And having a legal staff will improve our coordination with the Law Department, which is critical in ensuring that our successful investigations result in disciplinary actions that are upheld.

Seventh, I am reorganizing the investigations section to increase its productivity and efficiency. Previously, the Office had a large number of teams with a small number of investigators who were mostly assigned investigations in a random way without regard to connections between investigations. In the future, each team will have a mission based on types of cases or parts of City government. This is consistent with the way other investigative agencies are organized, and it makes sense. Working on consistent types of cases creates expertise and makes it easier to see connections between investigations.

I will be also be placing a greater priority on investigating contract fraud. There is currently a contract fraud team in the Office but I plan to add resources and experience to that team to improve its performance. Conducting fraud and audit investigations requires training and experience, and increasing the training we give our young fraud investigators should pay dividends in terms of money saved for the City when fraudulent contractors are caught. I will also be working to increase the sophistication of our investigations by adding computer forensic training so that our ability to uncover wrongdoing through computerized evidence is enhanced.

Finally, I am increasing the use of technology in the office. Smart use of technology makes us function better and saves resources, but the Inspector General’s Office has made relatively little use of technology. A great deal of upgrading is needed if the Office is to make the maximum use of its resources. For instance, the case management database dates from 1989. A new case management system needs to be developed to allow for efficient case tracking and performance management. I have started that process. In addition, in the future I will create a website to allow for the filing of complaints by email. I will also create automatic links between our system and the 311’s whistleblower complaint system.

After one month in the Inspector General’s Office, I am enthusiastic and optimistic about the future. The investigators and other staff members are very hard working and are dedicated to the Office’s mission. Changes to our approach should bring changes in our results. I believe we are turning the ship around, although it will not happen overnight.

As public servants, we work for the people, and the people cannot have faith in their government if the public servants do not act with honesty and integrity. I took this job because I believe that a strong Inspector General’s Office can be a guardian of honesty and integrity in City government. But my office cannot do this alone. We need everyone’s help. I call again on the many thousands of honest, hard-working City employees to contact us if you see corruption, fraud, or other wrongdoing. You can make a difference in helping us succeed.

I look forward to working with the City Council to help transform the Inspector General’s Office into an effective, efficient investigative agency.