San Diego Audit Committee Meeting - May 22, 2019
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San Diego Audit Committee Meeting - May 22, 2019
The San Diego Audit Committee met on May 22, 2019, at approximately 10:00 AM (PDT) to review audit reports, a recommendation follow-up, and other committee business. The meeting was chaired by Chair Sherman and included Vice Chair Councilmember Jen Campbell, members Alan Spencer, Tom Hebrink, and Ricardo Valdivia, along with interim City Auditor Kyle Elser, Deputy City Auditor Danielle Knighton, and other city officials. The committee recognized Tom Hebrink for his nine years of service.
Consent Calendar
- Approved the minutes from the April 24, 2019 meeting unanimously.
Public Comments & Testimony
- No non-agenda public comments were made.
Discussion Items
- Monthly Activity Report (Information Item): Interim City Auditor Kyle Elser reported that two audit products were issued since the last meeting (Mission Bay Fund audit and recommendation follow-up report), and four audits are in the report writing stage, including the Transportation Stormwater Tree Trimming Process, IT disaster recovery, Public Utilities call center operations, and AMI implementation. The audit of neighborhood services efforts to combat homelessness is in field work, with a target completion by end of June or early July. IT audits on network perimeter and ransomware are planned.
- Audit of Mission Bay and San Diego Regional Parks Improvement Funds FY2018: Presented by Danielle Knighton. The audit covered revenues, expenditures, and compliance. The Mission Bay Improvement Fund received $8.2 million in revenues, with $6.2 million in expenditures, leaving a balance of $38 million. The San Diego Regional Parks Improvement Fund received $4.4 million, with $2.7 million in expenditures, leaving a balance of $17.2 million. No audit findings were identified, but two matters were noted: the Regional Parks Committee had 7 of 11 members with 4 vacancies, and two members had exceeded 8-year term limits; and 127 citywide lease holdover agreements (24% of active agreements) were identified, with an immaterial number in Mission Bay. The Office of the City Auditor plans to audit citywide holdover agreements in FY2020. The committee accepted the report unanimously.
- City Auditors' Recommendation Follow-Up Report: Presented by Danielle Knighton and Andy Hanao. As of December 31, 2018, there were 145 open recommendations. Since the last report, 28 recommendations were implemented, leaving 117 outstanding. 41 of the in-process recommendations are over two years old. The committee discussed overdue recommendations from the 2013 audit of the Industrial Wastewater Control Program (IWCP), which had not been implemented for six years. The IWCP program costs were not tracked, and fees had not been updated since 1984, resulting in only 15% cost recovery. The Office of the City Auditor announced a follow-up audit of IWCP to address both public and confidential recommendations. The committee then reviewed attachment C, discussing delinquent recommendations with department representatives, covering areas such as pedestrian safety (Vision Zero Task Force – first meeting held May 1), Convention Center audit (on hold pending ballot measure), gas and electric utility billing (new system going live May 25), Brown Act training video (implemented, pending verification), AREBA contract system (target December 2020), IT cost allocations (RFP for automation tool), development services (Excel system implementation by February 2020), and many others. The committee accepted the follow-up report unanimously.
Key Outcomes
- Unanimously approved the minutes of the April 24, 2019 meeting.
- Unanimously accepted the Mission Bay and San Diego Regional Parks Improvement Funds audit report.
- Unanimously accepted the recommendation follow-up report.
- The committee requested that the City Treasurer review other management agreements for routine audits and close the loop on the Newport Pacific Capital management audit.
- The committee requested that the City Attorney's office consider retroactive billing for the IWCP fee underpayments dating back to 1984.
- The committee noted the importance of implementing the AREBA system and encouraged purchasing and contracting to expedite contract loading.
- The committee acknowledged the need for a follow-up audit on the IWCP, which will be conducted by the Office of the City Auditor.
- The meeting concluded with a move to closed session, with no public comment on closed session items.
Meeting Transcript
All right, good morning, everybody. Welcome to the May 22nd, 2019 meeting of the audit committee, and Mr. Hebrink's last committee meeting after, well, what's this nine years of service now? Almost. Yeah. Eight plus. With us today, we have Vice Chair, Councilmember Jen Campbell, Committee members Alan Spencer, Tom Hebrink, Ricardo Valdivia. Oh, there's Kyle over there. We have Kyle, our interim city auditor, Lisa Burnham with the IBA, Tracy McCraner, Director of Finance, City Comptroller, Joan Dawson with the City Attorney's Office, and Dan Manley, the audit committee consultant. So it looks like we're all present, and the quorum is ready to go. Do need to get a motion to approve the minutes from our April 24th, 2019 meeting, unless there's any changes that anybody saw. I have a motion by Dr. Campbell. Second by Mr. Hebrink. All in favor? That passes unanimously unanimously. I see we have no non-agenda public comment today. That brings us to committee member, mayor, independent budget analyst, city attorney, city auditor comment. And I'm going to take chair's prerogative and start off and try and recognize Tom for all the service that he has brought to this committee. I've been here on this committee in one fashion or another for six and a half years, and Tom has been guidance I looked to that seeing how he's been here longer and he has a lot more knowledge. He's been kind of the guiding post on the on the committee that I've turned to ever since I took office. And I just wanted to say thank you from the bottom of my heart for what you've done for the city. It it means a lot, and most people won't take the time to serve and do so without any request for recognition. And I just wanted to give it to you and say thanks. Thank you. Any other comment from any of the others? Also, really quickly, I noticed in the audience we have Mr. Stuart Halpern who will be filling your shoes. So welcome aboard, sir. And we have no request for continuance on any of the items before us today. Start off with item number three in our information agenda, monthly activity report. Mr. Elser, how are you, sir? Good morning. Thank you, Chair Sherman. Good morning, everyone. My name is Kyle Elser, interim city auditor. And with me is Danielle Knighton, Deputy City Auditor. And we'd like to present to you our monthly activity report. So since we last met, we've issued two audit products. We issued our annual mission bay fund audit for FY18 and our recommendation follow-up report, and both of those reports will be presented to you this morning. And we have four audits in the report writing stage. We have the Transportation Stormwater Tree Trimming Process Audit, the IT audit of disaster recovery preparedness, and our public utilities call center operations audit. And we've issued uh draft reports to management for all three of those projects, and we should be issuing them either this month or early in June. And we also have our public utilities AMI implementation project audit. We were finalizing the draft report and we'll be sending that to management for review probably this week. So we also have one audit in the field work stage. We have our audit of neighborhood services efforts to combat homelessness. And we have five audits in the planning stage.
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