San Diego City Council Audit Committee Meeting - July 26, 2017
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San Diego City Council Audit Committee Meeting - July 26, 2017
The Audit Committee met on July 26, 2017, to review the City Auditor's monthly activity report, a performance audit on street repaving quality management, the FY 2018 audit work plans (including IT), and the quarterly fraud hotline report. The committee accepted all reports and recommendations, forwarding them to City Council. The meeting also included public comments and a closed session for the City Auditor's performance evaluation.
Consent Calendar
- Approved the June 14, 2017 meeting minutes by unanimous consent.
Public Comments & Testimony
- Martha Welsh (member of the public) spoke on two items. First, she expressed concern about the lack of performance audits and financial transparency, stating the city is "hiding the money" without them. Second, she expressed support for the street repaving audit, citing widespread cracks and potholes, and advocated for different approaches to road maintenance.
Discussion Items
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Monthly Activity Report (Item 1) – City Auditor Eduardo Luna presented updates on issued audits, including the street repaving audit and FY 2018 risk assessments. Committee members questioned audit hours, budgeting, and efficiency. Auditor Luna explained that audits continue beyond budgeted hours to cover critical issues. Councilmember Sherman requested data on audits exceeding budgets and a breakdown of fieldwork progress. The report was information-only.
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Performance Audit on Street Repaving Quality Management (Item 2) – Supervising Auditor Chris Kaim and staff presented findings: resident engineers met qualifications, but quality control documentation was lacking, making it difficult to verify specifications and diagnose early deterioration. They reviewed 3,800 repaved blocks; 244 declined from good to fair sooner than expected. Recommendations included requiring contractor quality control plans and analyzing underperforming streets. Transportation & Stormwater Director Christy Fatherman and City Engineer James Nagelvoort responded, agreeing with recommendations and noting 94% of repaved streets performed as expected. They discussed factors like subgrade issues, trenching, and the 2012 change in trench repair standards. The committee accepted the report and forwarded it to City Council.
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FY 2018 Citywide Risk Assessment and Audit Work Plan (Item 3) – Auditor Luna presented 22 projects, including carryovers and new audits. He noted a request to defer the public liability audit and proposed replacing it with a community planning process audit. Committee members discussed carryover hours, audit budgeting, and the human capital audit. They requested more detailed reporting on actual vs. budgeted hours. The committee approved the plan with the substitution.
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FY 2018 IT Risk Assessment and Audit Work Plan (Item 4) – Principal IT Auditor Steve Gomez presented the plan, including two new audits (disaster recovery preparedness and City Hub security). Carryover audits included the Excel implementation and police data security. Councilmember Sherman asked about the delayed Excel audit, citing staffing changes. The committee accepted the plan.
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Quarterly Fraud Hotline Report (Q4 FY 2017) (Item 5) – Fraud Investigator Andy Horita reported a marked increase in complaints (203 in FY17, up from 120 in FY16). During Q4, 53 complaints were received; 38 were city-related. Two city auditor investigations were substantiated, resulting in public reports (theft of recreation fees and false vendor statements). Four department investigations were substantiated. Six additional investigations led to corrective actions. Committee members discussed trends, case outcomes, and disciplinary actions. The committee accepted the report.
Key Outcomes
- Approved minutes of June 14, 2017.
- Accepted the street repaving performance audit and authorized the auditor to present it to City Council (unanimous).
- Accepted the FY 2018 Annual Citywide Risk Assessment and Audit Work Plan, with the revision to replace the public liability audit with the community planning group audit (unanimous).
- Accepted the FY 2018 IT Risk Assessment and Audit Work Plan (unanimous).
- Accepted the Q4 FY 2017 Fraud Hotline Report (unanimous).
- Moved to closed session for a public employee performance evaluation of the City Auditor.
(Note: No agenda or minutes were available; the summary is based solely on the raw transcript.)
Meeting Transcript
You're watching City TV 24. Your access to City Hall of the Command. Good morning, everyone. We are going to start our July twenty-sixth, twenty seventeen meeting for the City Council's Audit Committee. For the record, we have Quorum consisting of Council Member Sherman, Audit Committee Member Alan Spencer, and Audit Committee member Tom Herb uh Hebreck. Also present are uh from the deputy attorneys uh Priscilla Dugard, as well as from the controller, Rolando Shavel, uh from the auditor's office, Eduardo Luna, and Lisa Byrne from the Independent Budget Analysis Office, as well as committee consultant Laura Gates. Let's begin with the record of action for June 14, 2017 committee meeting. Uh is there a motion to approve the record of action for June meeting meeting minutes. Sure. Thank you, Mr. Hebreck. Uh there's a second. Thank you, Mr. Allen. Uh, they're considered approved by a unanimous consent unless they are pool for discussion. I see none, so we're gonna uh uh they're they're considered approved. Moving on to public comment, we have one slip for public comment. Uh Miss March uh Martha Welsh, you have two minutes. Good morning, Martha Welsh. As member of the public, I like to see um performance of Favento uh also with performance of uh if only have the ones only it would be half of the pit uh the pitcher. What are you hiding? I'm not sure. You know, uh if the UN council four years, you saw that we have that we had the uh budget la uh four years, about three years we had budgets all the time. Now we don't have performance only, and that's not right, it's only the half of the picture. Because um you're what do you um uh if you don't tell us what's for found uh um can't sell what you're doing where the money goes or anything. You're hiding the money that way because all the money goes to funds, we know that, but you're hiding the money that way if you don't have a um financial um audits. So that's what's wrong with with the city. Thank you, Miss Walsh. Uh do are there any comments from the committee members? I see none gone controller's office. IBA or City Attorney or Mr. Auditor. I have no comments this morning either. Are there any requests uh for continuance? Hearing none for continuance, we will move to item one. Um we will hear presentation on item one, which is the monthly activity report. I would like to welcome Mr. Eduardo Luna, our city auditor. Thank you for being here today. I will now turn it over to you. Certainly good morning, Madam Chair, members of the audit committee at Waterluna. I'm here to give an update of our office's activities since our last meeting. Since we last met, we've issued several audit reports and um audit related products. This includes the audit of the city's quality management at street repaving projects, which will be heard at this meeting. In addition, we've issued the annual citywide risk assessment and audit work plan for fiscal year 2018, our annual IT risk assessment and audit work plan for fiscal year 2018. Uh other reports we've issued, it includes the fraud hotline investigation of a city vendor, a hotline investigation, uh recreation activity permit calculation errors and abuse, and finally our quarterly fraud hotline report for the last quarter of fiscal year 2017. We have several audit reports that are in the report writing phase. This includes a capital improvement program, lifeguard tower. We expect to provide a draft to the department by next week. In addition, um, with regards to the Economic Development Department audits, um we have two separate written products.
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