San Diego City Audit Committee Meeting - September 30, 2020

The San Diego Audit Committee convened virtually on September 30, 2020, at approximately 9:00 AM, with members participating via teleconference per the executive order suspending certain Brown Act requirements due to the COVID-19 pandemic. Chair Sherman presided, joined by Committee Members Tufik Tabshuri, Ricardo Valdivia, Stuart Halpern, Vice Chair Councilmember Marino, Interim City Auditor Kyle Elser, and staff from the Mayor's Office, IBA, and City Attorney's Office. The meeting included a closed session, four audit presentations, a compensation discussion, appointment process updates, and public comments. The meeting was televised and live-streamed on the city's website, with public comment accepted via phone (619-541-6310, access code 877-861).

Closed Session (Morning)

• The committee discussed candidates for city auditor in closed session. Public comment was taken prior to adjournment, with Joy Sanyata stating she wants the new auditor to: be ever vigilant, leave no stone unturned, and tell it like it is. Martha Wells expressed concerns about the lack of pension for the auditor position and demanded financial audits.
• The committee adjourned to closed session and reconvened at approximately 12:30 PM. The report out indicated the committee voted 5-0 to recommend three candidates for city auditor to the city council, as required by the San Diego City Charter.

Non-Agenda Public Comment

• Lewis Rodolico spoke about the U.S. Supreme Court's 2010 Citizens United ruling, arguing corporate influence on politicians has led to a "collapsed economy" and over 200,000 deaths nationally from COVID-19. He stated corporations pit citizens against each other on issues like masks and bridges.
• Martha Wells demanded financial audits, expressed concerns about pensions for city auditors, and criticized the city's legal compliance and tax collection practices.

Discussion Item: Performance Audit of San Diego Police Department Data Analysis

• Steve Grom, Joe Pisick, and Zoya Ahmed of the City Auditor's Office presented the SDPD data analysis audit. Key findings included: SDPD accounts for one-third of general fund expenditures and employees, but has fewer officers per resident than other major cities.
• The audit found internal controls for crime data and RIPA stop reports, but could not directly test data accuracy due to COVID-19. SDPD received unofficial notice from the FBI of successful completion of NIBERS (National Incident-Based Reporting System) certification.
• Minor inconsistencies in RIPA training and guidance were noted, with risk that some stop reports may not include all outcomes (e.g., verbal warnings).
• The audit found SDPD uses data primarily for tactical purposes (researching individuals/locations) rather than evaluating operational outcomes like community policing effectiveness or response times against Part 1 crime rates.
• Citizen complaint procedures may inadvertently discourage anonymous complaints; the online CRB form requires name and address. The Community Review Board on Police Practices (CRB) lacks access to data systems to independently verify complaints.
• Nine recommendations were made; SDPD agreed with all nine. Recommendations 8 and 9 target July 2021, and recommendations 2, 4, 5, and 6 target June 2022.
• Chief Nisleit thanked the committee and said his team would implement the recommendations. Chris Haley (program manager) noted that training models and curriculum need development for recommendations 2, 4, and 5, with milestones to be communicated to the audit team. Chief Nisleit noted that some CRB-related recommendations may be affected by the November ballot initiative on a new oversight commission.
• In response to Committee Member Tabshuri's question about complaint trend analysis, Chief Nisleit stated he meets weekly with internal affairs and professional standards teams to review trends and best practices.
• Committee Member Valdivia asked about the use of the word "should" in the report; Joe Pisick clarified this was due to the inability to directly test data during the pandemic.
• Stuart Halpern moved to accept the report, seconded by Valdivia. The motion passed unanimously.

Discussion Item: Consideration of Compensation for City Auditor Appointees

• Per Charter Section 39.1, the audit committee recommends annual compensation of the city auditor to the city council. The FY2021 adopted budget has an annual salary range of $63,127 to $239,144 for the city auditor (unclassified executive 4 position).
• Public comment: Joy Sanyata urged the committee to set compensation at the high end, stating "let's go on the high end if possible." Martha Wells expressed concerns about pensions and financial audits.
• Chair Sherman moved to recommend a salary range of approximately $190,000 to $239,000, citing comparisons to other large city auditors. Committee Member Halpern abstained, stating he would prefer to see an actual salary survey before voting. Valdivia seconded the motion.
• The motion passed 3-0 with one abstention (Halpern).

Discussion Item: Performance Audit of Transportation & Stormwater Department Street Sweeping

• Megan Garth, Chris Kime, and Danielle Kish presented the audit. The street sweeping section has 17 motor operator positions, 27 sweeping machines, and sweeps 2,700 miles of improved streets across 215 routes (ranging from 1 to 62 miles, average 24 miles).
• Findings: Route priority levels in the jurisdictional runoff management plan were based on 2015 existing frequencies and historical anecdotal information, not actual debris volume. High priority routes are swept weekly (above the planned twice per month); low priority routes are swept every other month (above the planned once per year).
• Analysis of FY19 data showed 86 routes with high debris per mile: 18 high, 21 medium, and 47 low priority. Many routes in Los Penasquitos and Tijuana River watersheds have high debris but are designated low priority. Regenerative air sweepers were used on only ~25% of those watersheds, similar to the citywide average.
• Only 24% of the 215 routes are posted routes; none have been added since 2012. Posted routes increase debris removal by over 50%.
• The current KPI (annual miles swept, target 117,000) has not been met in the last four years; routes are incomplete primarily due to heavy debris, equipment problems, and staffing issues.
• Four recommendations were made: develop a periodic report, perform a comprehensive reassessment in the next permit cycle, create additional KPIs (including total debris collected and percent of miles completed), and request budget approval for selective posted routes.
• Chris McFadden, director of Transportation & Stormwater, agreed with all recommendations. He noted the program underwent a 2012 management competition and won, and that $186,000 was included in FY21 for street sweeping efficiency but was eliminated during budget reductions. He noted 56 new median routes and 11 enhanced sweepers were added.
• McFadden stated posting additional routes requires budget approval for signage, parking enforcement, and public outreach, as parking enforcement officers are already fully taxed with current posted routes.
• Valdivia asked if work was outsourced; McFadden confirmed all work is performed by city employees in-house.
• Halpern moved to accept the report, seconded by Tabshuri. Passed unanimously.

Discussion Item: Central Stores Inventory Agreed Upon Procedure Review

• Kevin Starkey from MGO presented the review, conducted on behalf of the city auditor's office to comply with city municipal code requiring annual inventory. The inventory was conducted June 29, 2020.
• 223 stock items were sampled (213 per procedure plus 10 additional). Total sampled inventory value: $227,500. Net errors found: approximately $8,500. Extrapolated population error: approximately $49,000 net ($106,000 over, $58,000 under), significantly higher than last year's $9,500 net error.
• A recurring recommendation was made to procure handheld devices compatible with the SAP inventory module to improve record accuracy.
• Five negative write-off adjustments and one positive adjustment were noted, attributed to staff errors.
• Christiana Gagger, interim director of purchasing contracting, noted the pandemic created a "perfect storm" of increased PPE/cleaning item demand and reduced staffing. She identified line item 50 (thermal zebra) overstated by $8,000 because the stock was physically present but misplaced.
• Halpern asked about the cost of handheld scanners versus variance losses; Gagger stated she did not have a cost figure available but would provide one later. Valdivia noted the scanner issue was previously considered a budgetary matter and should be reconsidered given the increased variance.
• Halpern moved to accept, seconded by Tabshuri. Passed unanimously.

Discussion Item: 2020 City Auditor Appointment Process Status Update (Informational)

• Lisa Byrne of the IBA presented IBA report 2020. The appointment process began with a June 17 committee direction; the job announcement was posted June 26. Applications were accepted until September 9, with 36 applications received, but only 20 possessed the charter-required CPA or CIA licenses.
• A numerical scoring mechanism was used by the subcommittee (Stuart Halpern and Ricardo Valdivia) and IBA team. Top applicants were interviewed; closed session selections were made, contingent on pending background and reference checks.
• The city targets filling the position by November 2020.
• Joy Sanyata thanked the IBA and added a fourth quality she wants in the new auditor: "spike the work with a dash of lightness and fun."
• Chair Sherman noted the recruitment effort cost only $1,125 on outreach, compared to approximately $50,000 spent on a headhunter in a prior recruitment, and thanked the IBA office for its cost-effective work.

Discussion Item: City Auditor's Monthly Activity Report

• Interim City Auditor Kyle Elser presented the monthly activity report. Since the last meeting, four audit products were issued: a memo requesting independent legal counsel (to be brought to city council in October), the Central Stores Inventory audit, the Street Sweeping audit, and the SDPD Crime Data Analysis audit.
• Two audits are in report writing stage: IT audit of legacy applications and equal opportunity contracting program audit. Two in field work: sustainability climate action plan and human capital audit (employee discipline and incentives). Two in planning: IT service delivery effectiveness and industrial waste control program part two.
• Elser stated the human capital audit is targeted for issuance by November, potentially requiring a special audit committee meeting.
• Halpern asked about COVID-19 impacts on data access and audit scheduling. Elser noted delays but stated no anticipated issues that would prevent eventually obtaining data; carryover of two to three projects to the next fiscal year is expected.

Key Outcomes

• Accepted the SDPD Data Analysis Performance Audit with nine recommendations (unanimous).
• Recommended city auditor salary range of $190,000 to $239,000 to city council (passed 3-0, one abstention).
• Accepted the Street Sweeping Performance Audit with four recommendations (unanimous).
• Accepted the Central Stores Inventory Agreed Upon Procedure Review (unanimous).
• Committee voted 5-0 in closed session to recommend three city auditor candidates to the city council.
• Next meeting scheduled for Wednesday, October 21, 2020 at 9:00 AM.