THE CITY OF SAN DIEGO MEMORANDUM DATE: Ianuary 3, 2018 TO: Vic Bianes, Public Utilities Director FROM: Harold Barclay, Equal Employment Opportunity Investigations Manager, Personnel Department SUBJECT: Independent Review of the City Auditor? 5 Investigation of the Public Utilities Department?s Selection Process for Laborers The Office of the City Auditor (OCA) received an anonymous Fraud Hotline complaint alleging that Public Utilities Department (PUD) staff was manipulating the selection phase of the hiring process to create an unfair advantage for friends and family members of City employees. As a result, OCA investigated seven interview processes that were conducted between 2012 and 2015 for Laborer selections in the Water Construction and Maintenance Division of PUD. On August 4, 2016, OCA issued a report identifying a risk with the City?s selection process for Laborer which resulted in a system that unfairly favored certain individuals in the selection process. As part of its report, OCA recommended that the Personnel Department review its findings and conduct an independent investigation to determine if interview process participants, including the Appointing Authority, violated City policies or Personnel Regulations. METHODOLOGY The EEIO investigation focused on areas that the OCA report identified as areas for abuse. This investigation focused on the Public Utilities Department?s selection process for Laborer to determine if interview process participants,? including the Appointing Authority, violated City policies or Personnel Regulations. We interviewed both current and former City employees who either conducted, coordinated, or were responsible for the administration and results of the seven selection processes; and examined available selection process documents related to the various interview processes in question. In addition, EEIO consulted with Personnel staff who provide the Appointing Authority Interview Training2 (AAIT) and are the subject matter experts with respect to providing guidance to all departments on conducting the selection process in accordance with Civil Service Rules and Policies. For the purpose of our investigation, we considered interview process participants as those employees who conducted or coordinated the interview processes. 2 AAIT provides an overview of the City?s interview and selection policies and processes for hiring classified employees. Page 2 Vic Bianes, Public Utilities Director January 3, 2018 FINDINGS Our investigation found evidence that PUD did not administer the seven Laborer selection processes conducted between 2012 and 2015 in accordance with Personnel Regulations Index Code and AAIT guidelines. The investigation?s findings can be broken up into four areas: Missing and Incomplete Selection Process Documentation; Inconsistent Applicant Screening Criteria; Potential Liability in the Selection Process; and Appointing Authority?s Role in the Process. The investigation substantiated that some candidates were invited to interview for vacant Laborer positions in a manner not consistent with City policy and procedure. Although there was a lack of selection process documentation, and there were inconclusive statements made by interview process participants, EEIO determined that there were instances where candidates were afforded an opportunity to interview for a Laborer position based on word of mouth, and due to counting errors. We also found that the Appointing Authority failed to provide sufficient oversight and monitoring of the selection processes. Missing and Incomplete Selection Process Documentation One of the areas identified in the OCA report that this investigation focused on was missing and incomplete selection process documentation. We found that PUD staff did not maintain records of invitation letters sent to candidates for interviews, and that other documents such as candidates? responses to interview questions, interview rating sheets and interview results were also missing. Personnel Regulations Index Code Section states, ?in order to document fair employment procedures, complete records of all facts surrounding selection decisions must be made and retained for three years.? As the OCA report indicated, and our investigation also substantiated, some candidates were afforded an interview because Personnel Regulations Index Code P?l was not followed and because of the lack of oversight by the Appointing Authority. When investigators questioned interview process participants about the use of selection process documentation, some recalled using or viewing the documentation, while others were unable to recall. However, none of the interview process participants were able to confirm that the documentation used during their interview process was maintained. One interview process participant did admit that he had misapplied the applicant screening criteria because he miscounted the names on the list. Another interview process participant assigned to chair an interview process stated that he was unable to produce documentation or explain how or if he had applied the criteria during interviews. When he was questioned further about the hiring process documentation, he claimed to have used a working copy which he then shredded. When investigators pressed for a reason as to why he shredded the document, he stated that it was his working copy and that the administrative staff had the rest of the necessary selection documents to complete the process. The investigation found that this interview process participant shredded the working copy without the direction of an Appointing Authority. Inconsistent Applicant Screening Criteria The OCA report concluded that should not have hired 41 out of the 120 applicants who were hired.? Our investigation found that 26 out of 120 candidates who were invited to interview, should not have been afforded the opportunity to compete. For example, we examined certification list 4992?01 and found that the screening criteria required that the names of every 5th applicant on the list be invited for an interview. However, due to a miscounting of names by the interview process participant tasked with selecting applicants to interview, there was no consistency in applying the screening criteria, resulting in candidates being invited for an interview who otherwise should not have been invited. Page 3 Vic Bianes, Public Utilities Director January 3, 2018 We also found that one interview process participant seemed unaware of his responsibilities as a Chair and could not recall details of what occurred during the interview process. When investigators questioned the Chair about the interview process, he could not recall the process and claimed that it was the ?administrative staf who had applied the screening criteria. The investigation found numerous discrepancies in the way that some interview process participants applied the screening criteria, and found it unacceptable that these interview process participants could not accurately account for the use or maintenance of the selection process documentation. We find that based on these responses, interview process participants either misplaced or failed to complete selection process documentation as required in Personnel Regulations Index Code In addition, based on statements from one interview process participant, it is apparent that counting errors was a factor in inviting applicants who did not meet the screening criteria to interview. However, we find that it is highly unlikely that counting errors alone could account for the discrepancy. Finally, with respect to the use of screening criteria, we found that after discrepancies were identified and corrected, the Appointing Authority responsible for the selection process did not follow up with interview process participants and failed to monitor the process to ensure that screening criteria were applied correctly. Potential Liability in the Selection Process Another area the investigation looked into was to determine if the circumstances surrounding the way in which PUD conducted its seven interview processes between 2012 and 2015 for Laborer positions abused the City?s selection process, or exposed the City to liability. As mentioned earlier, EEIO determined that interview process participants, including the Appointing Authority, failed to comply with City policies and Personnel Regulations Index Code which opened the selection process and the City to potential liability. The Addendum to Personnel Regulations Index Code Section ?Notes and Record Keeping,? indicates the importance of maintaining all records related to the interview process, including the interview rating sheet. The interview rating sheet is designed to record the final evaluation and decision and allows the department to use the same interview results in the event a subsequent vacancy occurs in the same classification. During the course of the investigation, one Chair made allegations that several candidates hired for a Laborer position were either related to or had ties to current or former City employees. The Chair provided investigators with the names of at least nine candidates who were hired from the ?Qualified? list established by the interviews. After further review, we found that at least three of those candidates did not meet the screening criteria and therefore, should not have been granted an interview. Although the specific relationships could not be substantiated, it is important to note that such allegations made particularly by the Chair of one of the interview processes, contributes to the mistrust of the entire selection process. Furthermore, the Chair also noted that even though some candidates on the ?Qualified? list may have met the screening criteria, he alleged that the final selections were ultimately ?hand?picked? because they were related to or had ties to a current or former City employee. The Chair alleged that there was no systematic method used in the selection of candidates from the ?Qualified? list after the ?Highly Qualified? list was exhausted. However, these specific allegations could not be substantiated. Page 4 Vic Bianes, Public Utilities Director January 3, 2018 Appointing Authority?s Role in the Process The investigation found that the Appointing Authority seemingly applied a ?lax? approach in trusting that the interview Chair would follow the Civil Service Rules and Policies governing interview and selection processes for Laborer positions. This created a situation where there were no checks and balances, and interview process participants compromised the integrity of the selection process by providing candidates who did not meet the screening criteria with an opportunity to interview. The investigation also found that the Appointing Authority failed to monitor the selection process or review the Chairs? recommendations for hire. When questioned, one Appointing Authority stated that he was too busy with the day?to?day operations of the department and relied on the expertise of the Program Manager and the interview Chair. Although the explanation is plausible, it does not relieve the Appointing Authority of his duty to provide sufficient oversight and monitoring of the selection process as required by Personnel Regulations Index Code Section D, which states, appointing authority is responsible for ensuring that the selection process is done in a manner which re?ects the City?s commitment to the Norms and the prohibition of favoritism required by the City Charter.? In addition, we believe that had the Appointing Authority monitored the process, it would have been conducted according to City policies. CONCLUSION We conclude that some findings from our investigation are consistent with those identified in the OCA report. Specifically, PUD failed to conduct the Laborer selection processes in accordance with City policies, Personnel Regulations Index Code and AAIT guidelines; some applicants who did not meet the screening criteria were afforded an invitation to interview for a Laborer position; and the Appointing Authority responsible for the selection process failed to provide sufficient oversight and monitoring, exposing the City?s selection process to potential liability. As an Appointing Authority, delegating one?s responsibility to a Chair for an interview process is an important task and one that should be fully vetted, because ultimately, the Appointing Authority can be held personally responsible for any violations of equal employment laws. After the investigation was concluded, EEIO reviewed the most recent Laborer selection processes and found major improvements in the way they were conducted. We found that PUD implemented the recommendations described in the OCA report and has put procedures in place to ensure that the recommendations are followed. There have been instances where individuals presented documents to PUD staff for family members or friends that are on the Laborer certification list who were not invited to interview, but PUD staff has been taking the appropriate steps to change the workplace culture by applying new measures to the interview process. PUD staff has been maintaining a firm tone when responding to City employees and the public about their requests, and they must continue to maintain this approach in order to change the workplace culture and preserve the integrity of selection phase of the hiring process. Page 5 Vic Bianes, Public Utilities Director January 3, 2018 City Charter Section 136 states, ?It shall be the duty of the Personnel Director to supervise the execution of the foregoing Civil Service provisions of this it shall be the duty of all persons in the service of the City to comply with such rules and to aid in their By putting strong measures in place and ensuring they are adhered to, PUD Appointing Authorities would meet their obligation under City Charter Section 136 and Personnel -u ations Index Code as well as protect the City from potential liabilities. Equ. Employment 0 nvestigations Manager HB:th cc: Hadi Dehghani, Personnel Director, MS 51P Eduardo Luna, City Auditor, MS 6053 Andy Horita, Performance Auditor, MS 6053