By Niki Cervantes
Staff Writer

July 30, 2015 -- The Santa Monica City Council Tuesday approved the creation of a subcommittee to oversee audits of the city’s $1.1 billion biannual budget, a move one councilmember said could help overcome some of the public “aura of distrust” of City government.

“It’s a major and positive step forward,” City Manager Rick Cole said before the vote.

Delayed once because of wording issues, the motion was approved 6-0, with Councilmember Pam O’Connor absent.

Proposed in the wake of harsh criticisms of the City’s finance and governance practices, the new subcommittee will act as a watchdog of auditors, although it will not engage in auditing itself.

The five-member subcommittee will include O’Connor and Council members Sue Himmelrich and Tony Vazquez, along with two members of the community yet to be selected. The community members will be experts in governance and have auditing experience, officials said.

Although City officials issued strong denials, a Los Angeles County Civil Grand Jury report released two years ago found Santa Monica’s governance and financial management practices were among the worst in the county and criticized the City for such basic problems as failing to develop a healthy rainy day reserve.

Santa Monica was ranked 65 out of 88 municipalities in terms of “Governance and Financial Management. An audit committee was one of the report’s recommendations. (“Santa Monica to Hire Outside Firm for Internal Auditing,” August 28, 2014).

Himmelrich said Tuesday she hoped the audit subcommittee could help change public attitudes in Santa Monica. Some of the public, she said, expresses “distrust” in the City and has a perception that it lacks transparency.

“I am a big believer,” she said of the subcommittee’s potential to improve the situation. “I’m looking forward to seeing it get underway.”

The subcommittee will meet three times a year, officials said.

The terms of each member will be staggered, with Himmelrich and O’Connnor serving four years and Vazquez serving two years.

The Grand Jury’s report is a sour spot for City officials, who say it contained many errors. For example, the City was criticized for not having revenue and expenditure planning policies for balanced budgets. A report by City Finance Director Gigi Decavalles-Hughes, however, said the “staff repeatedly supplied” a number of such policies.

Additionally, the city was criticized for using one-time revenues to fund ongoing expenses, among other findings. The City has said it submitted documents that proved all those criticisms wrong.