San Diego City Council Audit Committee Meeting - October 18, 2017
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San Diego City Council Audit Committee Meeting - October 18, 2017
The City Council Audit Committee met on October 18, 2017, with quorum consisting of Council Member Sherman, Audit Committee Members Ricardo Valdivia and Tom Hebrank, along with Deputy City Attorney Priscilla Dugard, new Controller Scott Clark, City Auditor Eduardo Luna, and IBA representative Lisa Bern. The committee approved the July 26, 2017 meeting minutes, heard public comment, and reviewed four audit reports and the fraud hotline activity report, all of which were unanimously accepted.
Public Comments & Testimony
Martha Welch expressed frustration with the lack of financial audits, stating that performance audits do not provide sufficient transparency. She also alluded to issues with the city's handling of information regarding Mission Bay and overall government openness.
City Auditor's Monthly Activity Report
Eduardo Luna presented the monthly activity report, summarizing reports issued since July 2017, including audits of Mission Bay Fund, Central Stores, Lifeguard Tower, charitable activities, and IT security. He noted that several audits are in progress and that the office is meeting its work plan. New staff member Dr. Joseph Pisick was introduced. No action was required.
Central Stores Physical Inventory Audit
Representatives from MGO (Miyuki Freeman, Stephen Moreno) presented the agreed-upon procedures audit for FY2017. Physical inventories at Central Stores 1 and 2 showed a net discrepancy of $4,996 against a total inventory value of $1.7 million (less than 1%). All prior year recommendations have been addressed. Committee member Tom Hebrank noted that 1 in 4 items in Store 1 and 1 in 5 items in Store 2 had miscounts, but the net impact was minimal. The report was unanimously accepted.
Mission Bay and San Diego Regional Park Improvement Funds Audit (FY2016)
Deputy City Auditor Danielle Knighton presented the audit. FY2016 adjusted Mission Bay revenues totaled over $29 million, with $9.6 million subject to allocation. The San Diego Regional Parks Improvement Fund received $2.5 million, and the Mission Bay Improvement Fund received $7.1 million. Ending balances were $29.6 million and $12.8 million respectively. Discussion covered changes due to Measure J (effective December 2016), adjustments for Mission Bay RV Resort and Camp Lamplight revenue, and a Verizon lease issue. Two recommendations were made and management agreed to implement. The report was unanimously accepted.
La Jolla Children's Pool Lifeguard Station Performance Audit
Chris Kime presented the audit, which was initiated due to concerns about cost overruns and quality. The project's original budget of $2.7 million escalated to $4.3 million (a 21% increase), and construction took three years. Delays were attributed to changes in design, lifeguard requests, and seal pupping season moratoriums. Quality issues included rusting of exterior steel. Three recommendations were made to improve project scoping and oversight. Public Works is implementing them and presented a plan to standardize future fire station and comfort station designs. The report was unanimously accepted and forwarded to the City Council.
Fraud Hotline Activity Report (FY2018 Q1)
Investigator Andy Jorida reported 55 complaints received in Q1, with 32 closed and 52 open at quarter end. Four investigations were substantiated, including a city employee using city time for charity, inappropriate attire, a non-emergency vehicle driving 98 mph, and a speed monitor placement error. Corrective actions were taken. Discussion included concerns about GPS monitoring of city vehicles and the need for proactive oversight. The number of cases continues to trend upward. The report was unanimously accepted.
Key Outcomes
- All four audit reports and the fraud hotline report were accepted by unanimous votes (4-0).
- The committee did not take action on the monthly activity report as it was informational.
- The lifeguard station audit was forwarded to the full City Council.
Meeting Transcript
Good morning. We are going to welcome everybody to the October 18 meeting of the City Council's Audit Committee. For the record, we have quorum consistent of Council Member Sherman, Audit Committee Member Ricardo Valdivia, Audit Committee Member Tom Hebrank, also present our Priscilla Dugard, Deputy City Attorney. I want to welcome Scott Clark, new controller. Audit um Eduardo Luna, Auditor, and Lisa Bern from the Independent Budget Analysts. And I just want to acknowledge one of our committee members who is absent due to the passing of uh his mom, Mr. Spencer. Let's begin with the committee record of action. Oh, and my committee consultant Laura Gates. Let's begin with the committee records of action for the July 26, 2017 committee's meeting. Is there a motion to approve the record of actions for the July meeting minutes? Thank you, Mr. Saskard. Do I have a second? Thank you, Mr. Tom. They're considered approved by unanimous consent unless they are pool for discussion. Ah okay. We have a 301. I hear no request to poll the actions. They stand approved. At each meeting, we invite the public comment for public comment for two minutes to address the committees on any items that are related to our purview, but they're not agendized. And I we have one public comment, Mr. Marta Welch. Martha Welch, we still don't get performance audits. We don't get a picture right now what's going on. We voted for fashionable report we don't have. In the library, we only have uh this option 2009. This is not an open uh honest in government because they don't tell what's going on. I know it's going on. There's a caller says, man, um says don't look with the phone. Why? He wants to bring in somebody else, but Mel C me, because I go to the meetings all the time. You know, I've seen this a lot of times. Um you don't do this, it stopped in 2015. We had but we had budgets with financial, but it was out mostly uh private also, but in 2016 we changed to we changed it to performance uh um audit. It doesn't it doesn't tell what's going on. It's hard to tell what's going on with the performance. It maybe need that also, possibly, but we need the other side find um um um uh we need hard numbers. Um it's not uh it's not fair to the public. You're hiding things. And to me, you're hiding some something. Why? I I can tell one one we're talking about later, I can see what's going on. You hide a lot of stuff on Nation Bay. I'm looking forward to that one. But um, it shows that you don't tell what's going on in the city, and all you do is is is uh just numbers uh don't don't add up. What we what you're showing us doesn't add up. It's it's it does performance audits don't doesn't tell us everything I say. You're not open and fair to the people.
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