San Diego audit finds evidence of insider hiring at utilities department

The San Diego Public Utilities Department abused the hiring process to unfairly favor job applicants with inside information from City Hall, putting the city at legal risk, according a new report from City Auditor Eduardo Luna.

Acting on a hotline tip, auditors reviewed five recruitment efforts that the Utilities Department conducted between December 2012 and July 2015. Of 120 applicants the department hired, 41 shouldn’t have been interviewed in the first place because the city didn’t follow its own processes, the report found.

Required documentation was often inaccurate and incomplete. On at least one occasion, the report said, selection criteria explicitly favored current department employees and candidates “who called as word got out about the process.”

“These criteria likely favored applicants with connections to city staff, including family, friends and relatives who presumably would have benefited from a word-of-mouth selection process,” the report said. “Likewise, relying on word-of-mouth to select candidates for interviews is inherently unfair to the applicants who the PUD staff selected based on an objective, systematic method.”

Auditors did not try to verify the hotline tip that utilities staff was unfairly hiring family members and people with connections, the report said. But auditors found evidence that was consistent with the allegation.

The city’s Code of Ethics requires employees to put the public’s interests before their own, the report said. City policy also forbids managers from hiring relatives or business associates.

“Failing to confirm that the applicant selection panel applied the criteria could compromise the city’s ability to defend against alleged violations of city regulations and state and federal employment laws,” the report said.

Auditors made eight recommendations, including directing the department to independently investigate whether employees involved in hiring violated city policies or regulations.

Department managers agreed with all the recommendations and said they would implement them by June 2017.

morgan.cook@sduniontribune.com

Cook writes for the San Diego Union-Tribune.

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