Audit Committee Meeting – March 17, 2021
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Audit Committee Meeting – March 17, 2021
The Audit Committee of the City of San Diego met virtually on March 17, 2021, due to the COVID-19 pandemic. The meeting was live-streamed and public comment was accepted via Zoom. All committee members were present (Vice Chair Locava, members Halburn, Tapsuri, Valdivia, and Chair Moreno). The agenda included approval of prior minutes, a report on internal financial controls, a performance audit of the Industrial Wastewater Control Program (Part 2), and the City Auditor's monthly activity report.
Consent Calendar
- The committee unanimously approved the committee action of February 24, 2021.
Public Comments & Testimony
- Non-Agenda Public Comment: No speakers.
- Item 1 (Internal Financial Controls): Joy Sonata (District 3) commended the report and requested that upcoming budget hearings include clarity on city service levels by department.
- Item 2 (Industrial Wastewater Audit): Lucero Sanchez, representing San Diego Coastkeeper, urged acceptance and forwarding of all recommendations, emphasizing the importance of ensuring unpermitted entities are covered and inspected.
- Item 3 (Auditor's Monthly Activity Report): Joy Sonata asked whether the planned parks and recreation audit would begin before or after the updated parks master plan.
Discussion Items
Item 1: 2020 Annual Report on Internal Financial Controls
Rolanda Travell, Director of Finance, and Jeff Peel, Assistant Director, presented the report. They explained the COSO framework, the city's internal control program, and highlighted 2020 accomplishments: pandemic risk response (remote work software, increased remote access), a clean audit opinion for FY2020 CAFR with no material weaknesses, creation of a risk oversight committee, and implementation of a formal materiality threshold policy for complex or large transactions. The Independent Budget Analyst (IBA) asked about the materiality policy, and staff detailed its risk-based approach. Committee members praised the work and emphasized continuous improvement. A motion by Vice Chair Locava to accept and forward the report to City Council as an information item passed unanimously.
Item 2: Performance Audit of the Public Utilities Department – Industrial Wastewater Control Program (Part 2)
City Auditor Andy Hanao, along with principal performance auditor Luisa Brezeno and performance auditor Shadi Mittar, presented the audit. Key findings: The Industrial Wastewater Control Program (IWCP) uses outdated methods (including the phone book) to identify industrial users; a comparison to county business data found that 58% of businesses in select categories were not in the city’s permit database, suggesting potentially hundreds of unregulated businesses. For Significant Industrial Users (SIUs), inspections occur on average every 12.7 months, while non-SIUs are inspected only every 5.9 years. Permit processing for non-SIUs averaged 6.5 months, and 12% of industrial users operated with expired permits (some for over five years). The audit made seven recommendations, including modernizing identification methods (e.g., using county data, adding IWCP permits to the city’s Open Counter portal), setting target inspection frequencies, monitoring performance, and conducting a staffing analysis. Public Utilities Department (PUD) Director Shauna Laurence and Program Manager Joy Newman agreed with all recommendations, noting that the program had already added six new positions and was working on improvements. IBA asked about implementation timelines. Committee members expressed support, with some criticizing past management and emphasizing the need for urgency. Vice Chair Locava moved to accept and forward the report to City Council as an information item. Chair Moreno added an amendment to also present the findings to the Environment Committee, which was accepted by the mover and seconder (Committee Member Tapsuri). The motion passed unanimously.
Item 3: City Auditor’s Monthly Activity Report (Informational)
Andy Hanao reported on the Office of the City Auditor’s activities since the last meeting: one audit report issued (IWCP Part 2), four audits in fieldwork (real estate assets, IT service delivery, CARES Act funding, Mission Bay fund), one in planning (user fees), and ten not started. Ongoing initiatives include recommendation implementation work plans, seeking independent legal counsel, and updating report templates. No action was taken on this informational item.
Key Outcomes
- Approved the February 24, 2021 committee action (unanimous).
- Forwarded the 2020 Internal Financial Controls report to City Council as an information item (unanimous).
- Forwarded the Industrial Wastewater Control Program performance audit to City Council as an information item, with a directive to also present it to the Environment Committee (unanimous).
- No action on the City Auditor’s Monthly Activity Report.
- The next audit committee meeting is scheduled for Wednesday, April 21, 2021, at 9:00 a.m.
Meeting Transcript
Mariana, are we ready to go live? Um then we'll see we are live. Thank you. Good morning. Good morning per executive order 2920, which suspends certain requirements of the Brown Act. The committee members will be participating via Zoom, and no member of the public will be in attendance at the meeting in the interest of public health and safety. In addition, this meeting is being televised and live streamed on the city's website and the committee's liaison has made arrangements for the public to comment using the Zoom webinar platform. We appreciate the public's cooperation. I will go over the specifics of how to join the webinar and we'll give details on how the public can offer their public testimony. I will now call the audit committee meeting of March 17th, 2021 to order. I will also call the role starting with Vice Chair Locava. Present. Present. Committee member Tapsuri? Present. And committee member Valdivia. I thought I thought I wonderful. Thank you. Each committee member is attending virtually. Also on the virtual meeting is Matthew Helm with the mayor's office, Lisa Byrne with the Office of the IBA, Joanne Dawson with the City Attorney's Office, and our city auditor Andy Hanao. And the public may view the meeting on public television on City TV channel 24 for Cox Communication and Time Warner Cable or Cable 99 for ATT. Or you could view the meeting online by going to the City Council Committee home page at Sandiego.gov and selecting the city's TV Live Webcast. The blue button on the right hand side of the page. And members of the public can offer public comment on uh on items by accessing uh the Zoom webinar online using a desktop, computer laptop, tablet, or smartphone, or simply by calling into the meeting using a phone. Uh the link to join the committee the committee meeting webinar by computer tablet or smartphone is listed on the agenda. It's on the how to join by iPhone one tab. To join the Zoom webinar by telephone, you may either dial 1 669 254 5252. Now, when prompted, please input webinar ID 161 700 3853 pound. Information is also available on the agenda and it will appear on the screen during the public comment period for each item. Now when I introduce the item, you will that you'd like to comment on. You will raise your hand by either tapping the raise your hand button on your computer, smartphone or tablet, or by pressing star 9 on your phone. You will uh you will be taken in the order in which you raised your hand, and you may only speak once on a particular item. When our committee consultant Kevin Smith indicates that it's your turn to speak, he will call you by your name as it appears on the Zoom webinar uh attendee list, or he will read out the last four digits of your phone number if you have called into the meeting. Um that is how you'll you're gonna know whether it's your turn to speak. If you have joined the webinar by computer, tablet, or smartphone, you will receive a pop-up notice to select to unmute your device. If you've called into the meeting um but via phone, please press star six on your phone to unmute yourself. I will review these instructions briefly again when the public comment period on an item has come up. Uh and I'll obviously please wait until your item if you wish if you when you wish to speak. Um let's see. Unmute yourself. Don't forget to unmute yourself and also uh please mute the volume on your TV or computer before you begin to speak. Um a quorum is now present. We're gonna dispense with the approval of the committee action of February 24th, 2021. Uh do I have a motion to approve the committee meeting uh committee action? I'll move approval. Is that Tabshuri? Uh Lakava. Lakava. Okay, can I get a second? Halburn second.
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