City of San Diego Audit Committee Meeting - March 9, 2016
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City of San Diego Audit Committee Meeting - March 9, 2016
The San Diego Audit Committee met on March 9, 2016, at 9:00 AM to review audit reports, receive updates on prior audits, and consider new performance audits. Key items included approval of February 2016 minutes, a non-agenda public comment, the city auditor's monthly activity report, an update on the Lifeguard Division audit, a performance audit of the Street Preservation Ordinance (SPO), the internal controls report, and the auditor's annual accomplishments report.
Consent Calendar
- Approval of Minutes (February 2016): Unanimously approved without changes.
Public Comments & Testimony
- Martha Welch (non-agenda): Criticized the committee for not auditing financial statements, specifically sewer and water funds, and stated the committee is a problem for the city.
- Mr. Harris (on Lifeguard Division update): Expressed concern that the workforce plan is still in draft form after six years, noted that 48% of lifeguard staff are scheduled to leave in the next five years (up from 40% in the original audit), and warned of a public safety crisis. He requested the matter be referred to the Public Safety and Livable Neighborhoods (PS&LN) committee.
Discussion Items
- City Auditor's Monthly Activity Report (Eduardo Luna): Reported two audit products issued since last meeting: performance audit of the Street Preservation Ordinance (SPO) and 2015 Accomplishments Report. Provided status of ongoing audits, including pedestrian safety, convention center, and IT audits.
- Lifeguard Division Audit Update (Chief Rick Wirtz): Presented progress on the workforce plan, noting a draft plan created by an advisory committee, six identified workforce gaps (e.g., boating safety unit, training, diversity), and early implementation of recommendations (e.g., advanced scheduling for seasonal lifeguards, extended boating academies). On beach concessions, the next RFP is for kayak concessions in 2018. Committee members asked about attrition (average age 48 at boating unit), diversity outreach (Tots to Teens program, 430 free swim lessons, 9 interns becoming lifeguards), and coordination with military.
- Performance Audit of Street Preservation Ordinance (Danielle Knighton): Found that city departments (e.g., Public Utilities, Street Division) did not always comply with SPO requirements for emergency excavations, waiver submissions, and coordination. Key findings: 4,655 emergency excavations not properly repaired (e.g., lacking final mill and pave after 30 days); poor communication in the MCAT system (65% of survey respondents said conflict resolution was sometimes difficult, leading to project delays/cancellations); and lack of systematic tracking of street damage fees (approximately $2.5M collected from FY2013-Sept 2015, but no process to ensure all fees assessed). Eight recommendations made; management agreed to implement all. Public Works and Transportation/Stormwater staff discussed hiring 12 new FTEs, purchasing a milling machine, and upgrading coordination software.
- Internal Controls Report (Rolando Charvel): Presented the annual report on internal controls over financial reporting, using the COSO framework. Noted strong control environment (independent audit committee, code of conduct, fraud hotline). Documented 118 processes in 2015, improved petty cash procedures, and enhanced monitoring of payroll entry/approval. No material weaknesses identified. Committee praised progress.
- Auditor's Annual Accomplishments Report (Kyle Elser): Highlighted completion of 14 performance audits, 2 hotline investigations, 3 follow-up reports, and 69 recommendations (100% agreed to by administration). Commended staff and administration for cooperation.
Key Outcomes
- Lifeguard Division Update: Motion passed unanimously (Mr. Hebrink, seconded by Mr. Valdivia) to have the Lifeguard Division return in 90 days to present the finalized workforce plan addressing all audit recommendations.
- Street Preservation Ordinance Audit: Motion passed unanimously (Mr. Hebrink, seconded by Mr. Spencer) to forward the audit report to City Council and request the administration provide an update in July 2016 on implementation status, including billing for unbilled street damage fees and repair backlog.
- Internal Controls Report: Motion passed unanimously to accept and forward the report.
- Auditor's Annual Accomplishments Report: Noted for information; no formal vote required.
Meeting Transcript
All right, let's see if we can get this thing started. Everybody ready. Councilmember Zaps will be here shortly. She's let us know she's on our way. But we'll get started with March's audit committee meeting. So for with us today, we have Mr. Eduardo Lunin, our city auditor, committee member Alan Spencer and Tom Hebrink. Rolando Charvel from the City's Comptroller's Office, Lisa Byrne from the IBA. We've got Riley Webb, our committee consultant. We've got Mar Elliott from the City Attorney's Office. And Ricardo Valdevi is another committee member. Just miss and Ms. App and she'll be here shortly. Looks like we have enough to call the meeting to order. We need to do approval of the minutes for the February 2016 meeting from the audit committee. Unanimous approval unless anybody has any changes or anything they need to make to the minutes. That will stand approved then. We will then move on to non-agenda public comment. We have one non-agenda public comment speaker today, Martha Welch. Two minutes. Good morning, Martha Welch. As I see it, this committee is one of the problems of the city. Performance auto. If you don't audit, um they can dismiss um take your money or um nothing um because who does this? The chairman or the mayor or Jack uh Scott are not uh does say anything. I I I I read I um the CAFR and CAPER and the mid com uh term. I saw that my fact um what happens if you don't audit uh finally um seven and one and seventy-one that's sewer and water. You know what the city has? You don't audit for f um you don't do this. All this money. Now sewer has um hundred million and uh that's water, and the sewer has 150 uh uh 11 million. Now it's not a for um five you don't do that. You hide the money all the time. It the now government government uh uh is one one point million, a billion. Well, what's that? And also a business activity is three hundred and forty four nine eight uh million. Now what now today later we're gonna we're gonna um we're the sewer we're gonna have three thousand one and two thousand uh seventy um for the water this is it's not audited for that uh uh not right because performance doesn't tell you what's going on the city financially, because that's what we want because you don't do this. This that's the this problem. This committee might be the the problem of this city because you don't do the financial stuff. Thank you, Ms. Welch. All right, that will take us on to item number one, which is our city auditor's monthly activity report. Mr. Luna Certainly good morning, members of the audit committee. I'm Eduardo Luna, City Auditor. I'm heard you present our monthly activity report since our last meeting. Um since our last meeting, we've issued two audit related products. Um this includes our performance audit of the streets preservation ordinance, which will be heard later this morning. In addition, we issued our activities and accomplishment report for calendar year 2015. Uh moving on to audits are in progress.
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