San Diego Audit Committee Meeting – January 30, 2019
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San Diego Audit Committee Meeting – January 30, 2019
The Audit Committee of the City of San Diego met on January 30, 2019, at 8:45 AM PST to review the Fiscal Year 2018 Comprehensive Annual Financial Report (CAFR), quarterly fraud hotline activity, responses to a grand jury report on community planning groups, a performance audit of community planning groups, the process for hiring a new city auditor, and the city auditor's monthly activity report. The committee received a clean audit opinion on the CAFR, discussed compliance and transparency issues with community planning groups, and approved several motions.
Consent Calendar
- The committee approved the minutes of the previous meeting by unanimous consent (motion by Mr. Hebrink, second by Mr. Spencer).
Public Comments & Testimony
- Multiple speakers addressed the grand jury and audit reports on community planning groups. David Swearens (former planning group chair) expressed concern about the tone of the reports and emphasized the need for collaborative partnership. Maya Rosas (Circulate San Diego) supported reform and increased representation. David Modi (Community Planners Committee chair) requested videotaped training and clearer roster categories. Colin Parent (Circulate San Diego) raised concerns about voting eligibility barriers and representation of renters and military families. Heather Foley (Urban Land Institute) pledged support for training and outreach. Marcella Escobarek (former city staff) advocated for adequate staffing and resources, and noted that most groups want to do right but need support. Other speakers included Sean Kerrigan (San Diego Regional Chamber of Commerce), Molly Kirkland (Southern California Rental Housing Association), and additional supporters.
Discussion Items
- Review of FY2018 CAFR: City CFO Rolanda Trevelle and Finance staff presented the CAFR, which received a clean (unmodified) opinion from MGO auditors. Key changes included implementation of GASB 75 for OPEB, increasing the reported liability from $276 million to $550 million (no budgetary impact). The report also noted increased commitments and encumbrances due to capital projects like Pure Water. Committee member Tom Hebrink asked about fluctuations in SDG&E fees, debt activity, and encumbrances. The committee accepted the report and forwarded it to City Council (motion by Mr. Hebrink, second by Mr. Spencer, unanimous).
- Quarterly Fraud Hotline Activity Report: Fraud Investigator Andy Harida reported that in the second quarter of FY2019, the hotline received 46 reports; 42 were within purview, 48 were carried over from prior quarter, for a total of 90 active cases – the second highest inventory. Three department investigations were substantiated (theft of time, workplace conflict). Five investigations resulted in corrective actions. The office recently added a second investigator. The committee accepted the report (motion by Mr. Hebrink, second by Mr. Valdivia, unanimous).
- Grand Jury Report on Community Planning Groups (Item 4): Planning staff Laura Black and Brian Schoenfish summarized the city's responses to five grand jury recommendations. They noted that consolidation of planning groups had been reviewed with no further consolidation identified, tools to improve recruitment (standard rosters, electronic survey) have been developed, staffing all meetings would require seven new planners (not feasible), continued guidance and training are being expanded, and mandatory orientation/refresher training for all members is supported. Public comments followed.
- Performance Audit of Community Planning Groups (Item 3): Principal Auditor Chris Kime presented the audit findings. The audit found that the city should provide more oversight, guidance, and training; lack of transparency and compliance with Council Policy 624 and the Brown Act; incomplete rosters and missing annual reports; risk of renters not being adequately represented; and unclear project review deadlines leading to unreliable data. Of 299 Process 3/4 projects reviewed, community planning groups approved 263; of the 25 denied, the city still approved 21. Recommendations included annual training, formal project review mechanisms, and improved documentation. The planning department agreed to implement all recommendations. The committee voted to accept the report and refer it to the Land Use and Housing Committee and City Council as information (motion by Mr. Hebrink, second by Councilmember Campbell, unanimous).
- Informational Report on Hiring the City Auditor: Felipe Monroeg (Mayor's office) and search consultant Bob Slavin provided an update on the nationwide search for a permanent city auditor. A search committee has been formed (including Chair Sherman, Mr. Hebrink, IBA, others). Slavin outlined a 90-day process including recruitment, screening, interviews, and background checks. The cost is approximately low-to-mid $20,000. Councilmember Campbell asked about criteria and background checks. The committee discussed the need for independence and transparency. No vote required.
- City Auditor's Monthly Activity Report: Interim City Auditor Kyle Elser reported that the office issued three audit products since the last meeting (IT security audit (confidential), community planning groups audit, quarterly fraud report). Four audits are in report writing or fieldwork stage, two in planning. Three staff vacancies have been filled. The committee took no formal action.
Key Outcomes
- The committee accepted the FY2018 CAFR and forwarded it to the City Council (unanimous).
- The committee accepted the quarterly fraud hotline activity report (unanimous).
- The committee accepted the performance audit of community planning groups and referred it to the Land Use and Housing Committee and City Council as information (unanimous).
- The committee heard updates on the grand jury response, auditor hiring process, and monthly activity report; no formal votes were taken on those items.
- The next audit committee meeting is scheduled for February 20, 2019, at 9:00 AM.
Meeting Transcript
I know for you and for those very young children who walk through these doors for the very first time, knowing that this space was built for them, for them to enjoy. It means the first sense of membership that their library card represents. And that is a connection to our community, to our neighborhoods, that we can all celebrate. And finally, as your congressional representative, I just wanted to make us a small link to history. Back to our American history and the place of libraries essential to our society. Thomas Jefferson is quoted as saying, I cannot live without books. I cannot live without books. Reading is the greatest of all amusements. And that love of reading was really tested in the War of 1812. Because the collection of lot of books for the Congress in the Capitol was all burned down. And when it was reduced to ashes, the president, or that at that time, um Thomas Jefferson wanted to do something in return. So he bought, he brought his own collection and sold that to the government. Those books at that time, about 6500. Today, the Library of Congress, as you know, is the biggest library in the world. And we celebrate that together, and we're a part of that history. And so I want you to be part of that as well today. I'm happy to donate these books from the Library of Congress to the Mission Hills Hillcrest Branch with the joy, with the joy that you must all be feeling today. As you share, as you share in the knowledge that people from all walks of life can join together to read, to create, to innovate, and to explore in what is provided here. Thank you all for your efforts. Thank you, Peter. Thank you, Congresswoman. And next up is a gentleman that I served on the city council with. So we had districts right next to each other from the very beginning. We said we were going to make this library a very special place. Please join me in welcoming my friend and colleague, Assemblymember Todd Gloria. Thank you, Mr. Mayor. He is exactly right. I remember uh sitting with you in a very not tense, I would say, community meeting at the top of the Park Manor Hotel many, many years ago, where as council members we committed that this project would get done. Well, ladies and gentlemen, here we are. This is now done. Uh before I go any further, can I just point out that we have the best member of Congress in the United States and Susan Davis? Would you please give her a pause? Susan, thank you so much for your leadership and your donation to this library. And God bless you. We're so grateful to have you in Washington, D.C. fighting on our behalf. Am I right? Exactly. So this is truly a momentous day for this community. I could not be more excited to officially open the Mission Hills, Hillcrest, Harley and Betsy Knox Branch Library. That's a that's a lot of letters, everybody. That's probably how you get to about 20 million. And just because I was I'm a history major from the University of San Diego, I want to point out for those who may not know, uh, Harley Knox was our 25th mayor of our city. Bessie, of course, is his wife. They served during the 1940s and 1950s. This memory is to commemorate them and their contributions to this city. There's a fabulous book written by USD professor Iris Ingstrand, which I'd encourage you to read that talks about a time when our city came together to get big and important things done. That is why this library is named after uh the Knox uh Harley and Bessie Knox, and I hope that you'll always remember them. We should remember our mayors, right?
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