Audit Committee Meeting Summary – July 27, 2016
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Audit Committee Meeting – July 27, 2016
The Audit Committee convened on July 27, 2016, with a quorum present. The meeting covered routine approvals, public comment, updates on prior audits, and new audit reports. Key topics included the Lifeguard Division performance audit follow-up, library matching funds, the Housing Commission Affordable Housing Fund audit, and implementation of grand jury recommendations for the police property and evidence room. All formal actions were passed unanimously.
Consent Calendar
- Approval of Amendments from June 29, 2016 Meeting: Approved unanimously without discussion.
Public Comments & Testimony
- Martha Welch (public speaker): Criticized the city for focusing on performance metrics instead of providing detailed numbers on spending. Alleged fraud and hiding of information regarding budget and park funds. Expressed frustration that money is not being accounted for properly.
Discussion Items
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City Auditor Monthly Activity Report (Mr. Luna): Reported three audits in report writing (Housing Commission, pedestrian safety, central stores inventory), audits in field work (IT on Excel implementation, SAP user access, Convention Center, expedite permitting), audits in planning (street lighting, CIP), and introduced two new staff members (Stephanie Charnot, Laura Reyes). Also noted a fraud prevention symposium and that the streets audit request will be incorporated into the ongoing CIP audit.
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Lifeguard Division Performance Audit Update (Chief Stall and Lifeguard Chief Wirtz): Presented progress on two findings from the 2015 audit: workforce planning and beach concessions. The workforce plan includes a specialty team for the boating safety unit, extended training, revised minimum qualifications for Lifeguard III, and a diversity/recruitment program (Operation Waterproofing San Diego). For concessions, the division works with Real Estate Assets to review fair market rates; next RFP due in 2018 (kayak) and 2019 (surf camps). Committee members praised progress and discussed potential for lateral hiring, outreach positions, and future budget implications. Motion to accept the report passed unanimously.
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Review of Library Matching Funds (Requested by Mr. Hebrink): The City Auditor provided an analysis showing that under the current 100% match model, branches like Kensington (smallest library, second-highest donations) receive $44,877 in match, but under a proposed 50% pool concept they would drop 37% to $28,116. Councilmember Zepp and Mr. Hebrink expressed support for keeping the current system to protect branches that successfully raise funds, especially underserved communities. Library staff noted that donations are community-driven and they encourage giving. The committee voted to forward the audit report to City Council (motion by Hebrink, second by Valdivia).
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Performance Audit of San Diego Housing Commission Affordable Housing Fund (Mr. Kime, Ms. Garth, Mr. Prisinho): The audit found small processing errors resulting in about $22,000 in under-assessed inclusionary fees, late collection of a $1.9 million fee (lost about $7,500 in interest), incorrect application of rates, and linkage fee assessment on initial rather than final square footage leading to inequities. Recommendations focused on process improvements and training; management agreed to implement all. Committee commented that dollar amounts are small and suggested focusing on moving forward rather than recovering minor amounts. Motion to accept and forward to council passed unanimously.
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Implementation of Grand Jury Recommendations on Property & Evidence Room (Mr. Elser, Mr. Ketter): The police department fully implemented two of five grand jury recommendations, partially implemented one (quality assurance), and two remain in progress (facility expansion, building code compliance). The City Attorney’s office chose not to implement the recommendation for an MOU with police but established a new process using a case management system. The audit made seven new recommendations to police and one to the City Attorney. SDPD Assistant Chief Guadarama agreed to all recommendations and noted that many will be implemented by November 2016. Committee discussed the “will not implement” label for the City Attorney item; after clarification, they added a short explanatory addendum. Motion to forward to council passed unanimously.
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Quarterly Fraud Hotline Report (Mr. Harita): Reported 20 new complaints in Q4 FY2016, 24 closed, leaving 24 open. Five complaints were substantiated, including poor oversight of park maintenance contracts, a refund processed after deadline, misuse of computers/theft of time, employees selling snacks during work hours, and wasting time. Corrective actions included increased training, revised procedures, and reminders to staff. Motion to accept report passed unanimously.
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Citywide IT Risk Assessment and Audit Work Plan for FY2017 (Mr. Gomez, Ms. Reyes): Identified four planned audits: security audit of Public Utilities plant control/SCADA, privileged user management, data security controls for police department data, and phase 2 of Development Services SL implementation. One carryover: SAP user access. Committee welcomed the focus on security. Motion to accept passed unanimously.
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Closed Session: The committee convened in closed session to evaluate the performance of City Auditor Mr. Luna (under Government Code §54957). No public comment was received. The committee reconvened in open session; no actions reported.
Key Outcomes
- Approved amendments from June 29, 2016 meeting (Consent Calendar).
- Accepted Lifeguard Division performance audit update.
- Forwarded the Library matching funds report to City Council with recommendation to keep current 100% match.
- Accepted and forwarded the Housing Commission Affordable Housing Fund audit to City Council.
- Accepted and forwarded the Grand Jury recommendations audit to City Council with an explanatory addendum regarding the City Attorney’s response.
- Accepted the quarterly fraud hotline report.
- Accepted the FY2017 IT risk assessment and audit work plan.
- Completed closed session performance evaluation of the City Auditor; no reportable actions.
Meeting Transcript
Good morning, everybody. Glad to see you all here. Might as well get started with the July twenty-seventh, twenty sixteen meeting of the audit committee. Uh Mr. Spencer will not be with us today, but we do have Tom Hebrink. Rolando's here from the mayor's office, Lisa Byrne with the IBA, Mara Elliott's here. Council Member Zepp communicated by phone. She'll be here shortly. Ricardo Valdebia. And of course, the committee consultant Riley Webb. So it looks like we have a quorum and we're good to go. Uh we need to do approval of amendments from the June twenty-ninth, twenty sixteen meeting. Uh approved by unanimous consent unless anybody has anything they want to discuss or change or then that will be approved by unanimous consent. And next on our agenda will be non-agenda public comment. We have one non-agenda public comment speaker, Miss Martha Welch. Martha Welch. By just doing performance on you give it untruth of the city. Pop Cons you not follow uh of the fraud. Because people don't follow the buddy we vote. So much fraud in the city. Why not? I see the gentle on the budget online. I want to see what don't say what you spent. That's something wrong. Now the park has a hundred fifty a hundred and fifty seven million. Now what I know that now why would buy uh a park and everything and pork it and all over why? If that's money, why why is going on? If that money, why what uh is it be fixed? Now what um now if I when I work a performance is a uh uh uh I can get uh money. That's what they when I'm working performance all you get a race. That's what you're doing right now. Because uh this we don't want that. It's a lie, and you're you're hiding something. Because if you're not hiding anything, why not follow some? Because what pop C's we are finding us that's numbers about how much you spend. Not performance. That's a lot. You're it's I can tell I can put I can do it. Every one of this uh everyone I can do this and saying the same thing. You're doing performance a performance. Why? What's going on? You don't have money, or are you hiding something to me? Because if you you're true and and if you're true people and ethics and all this stuff, you get numbers. Not performance. That's uh when informants when I was working, I said it's a raise, but no raise, just a all the raise go to the supervisors uh 11%. But not to people don't have any workers because it's awful you tell them because they have all this money, like I said, online the budget, they have money all over, but you don't tell you how you how you spend it, it's not detailed. Thank you, Miss Welsh. All right, moving on. Any committee comment?
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