Audit Committee Meeting - March 8, 2023: Recommendation Follow-ups and Homelessness Services Audit
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Audit Committee Meeting - March 8, 2023
The Audit Committee of the San Diego City Council met on Wednesday, March 8, 2023, at 9:00 AM local time under the chairmanship of Councilmember Stephen Whitburn. Committee members present included Vice Chair Barreno, Helpern, Mafia, and Tab Shuri. Councilmember Moreno attended virtually due to childcare needs. The committee reviewed several items, including internal financial controls, audit recommendation follow-ups, a performance audit of homelessness services contracts, and the City Auditor's monthly activity report.
Public Comments & Testimony
- Non-Agenda Public Comment: Sandra Stahl (former executive director of MGEC, currently with Clean Earth for Kids) called for an investigation into the City Department of Real Estate and Airport Management for alleged wasteful spending on an unleaded fuel tank at Montgomery Gibbs Airport, stating a turnkey tank could cost $92,500 compared to the projected nearly $1 million. Joyce Sunyata (District 3) commended the City Auditor's office and highlighted a report on workplace safety costing up to $220 million per year. Francine Maxwell (Southeastern resident) requested an audit of police car shortages and questioned the use of SUVs for 7th floor staff.
- Item 1 (Internal Financial Controls): Joyce Sunyata expressed excitement over the doubling of grant awards and urged focus on the structural budget deficit.
- Item 2 (Recommendation Follow-up): Joyce Sunyata thanked the auditor for the report. Lori Saldania criticized the city’s failure to implement a data collection recommendation on homeless encampments, stating it has led to costly court proceedings.
- Item 3 (Homelessness Services Audit): Blair Beekman advocated for unhoused storage and notification processes. Joyce Sunyata stressed transparency and conflict-of-interest disclosures. Lori Saldania highlighted serious health and safety concerns at shelters (mold, broken fixtures) leading residents to leave. Francine Maxwell raised concerns about "Do Not Return" lists and racial inequity.
- Item 4 (Monthly Activity Report): Blair Beekman commented on police overtime and body cameras. Lori Saldania linked policing overtime to encampment sweeps and recommended exploring overlapping responsibilities.
Discussion Items
1. 2022 Annual Report on Internal Financial Controls Jeff Peel and William Yu (Department of Finance) presented the report, which concluded that internal financial controls are effective. Highlights included clean audit opinions, implementation of telework policies (AR 95.95), and a significant increase in grant awards (from $84 million in FY19 to $229 million in FY22). The committee voted unanimously to accept the report and forward it to the city council as informational.
2. Office of the City Auditor's Recommendation Follow-up Report City Auditor Andy Hanau, Deputy Auditor Daniel Knighton, and Assistant Auditor Matt Helm presented the semi-annual follow-up covering the period ending December 31, 2022. Of 197 open recommendations from 47 reports, management implemented 37—the most in several cycles. Items in Attachment A required committee action:
- Homelessness (#12): Auditor recommended closing as "will not implement" due to changed approach; committee agreed.
- Public Liability (#6): Keep open pending management's risk management presentation; committee supported.
- Major Building Acquisitions: Committee chose Option 2 (IBA to continue pursuing alternative methods to address remaining risks), recommendation to remain in process.
- Get It Done/311 (#6): Keep open until management presents a customer service strategy and roadmap with intent to create a 311 call center; committee supported.
- Towing Audit: Referred to Chair Whitburn's office. Committee member Tab Shuri led discussion on Attachment C (past-due recommendations) for Compliance, DREAM (Real Estate), Economic Development, HSSD, and Risk Management. Key updates: DREAM is updating three real estate policies (target Dec 2023); HSSD awaiting Measure C outcome for funding strategy (Vice Chair Moreno recommended developing two scenarios). The committee voted unanimously to accept the report and adopt all five Attachment A recommendations.
3. Performance Audit of the San Diego Housing Commission's Homelessness Services Contract Management The audit found the Housing Commission generally follows best practices but identified two issues: (1) failing to collect conflict-of-interest disclosures for 42 of 93 sole-source contracts (over $70 million); (2) lack of documented city procedures for maintenance at city-owned/leased homeless facilities, leading to unsafe conditions (e.g., mold, broken outlets) persisting for months. Four recommendations were made. All agencies agreed, but HSSD’s response on recommendations 3.1 and 3.2 was deemed insufficient by the auditor. After discussion, the committee approved a motion (amended by Vice Chair Moreno) to accept the report and forward to the city council only after management revises its responses with clear steps and target dates and returns to the audit committee for review. The motion passed unanimously.
4. City Auditor's Monthly Activity Report Andy Hanau reported recent activities: three reports issued (including the two presented and a confidential IT audit), two reports in writing (body camera IT security, CIP funding), two in fieldwork (classified hiring, brush management), four in planning (street maintenance, SDPD overtime, pedestrian safety, Mission Bay). The office is fully staffed with new hire Stephanie Potts. No action required.
Key Outcomes
- Approved minutes of January 25, 2023 (unanimous).
- Accepted 2022 Internal Financial Controls report (unanimous).
- Accepted Recommendation Follow-up Report with all five Attachment A staff recommendations, including Option 2 for the major building acquisitions audit (unanimous).
- Accepted Homelessness Services Contract Management audit with additional requirement: management to revise responses to recommendations 3.1 and 3.2 and return to committee before council referral (unanimous).
- Noted the City Auditor's monthly activity report.
Meeting Transcript
Greetings, everyone, and welcome to today's meeting of the audit committee. Thank you very much for being with us. While members of the public are able to attend the meetings in person, this meeting is also being televised and live streamed on the city's website and council administration will continue to make arrangements for the public to use the Zoom webinar platform to make comments. Additionally, members of the public who wish to provide testimony via a call-in or internet-based services option must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking cue is exhausted, whichever occurs first. This will allow for better meeting management between the two platforms and ensure that the council is able to manage and conduct city business. We appreciate the public's cooperation. As we go forward, I'll go over the specifics on how to join the webinar and we'll give details on how the public can offer public testimony. At this time, I will call to order the audit committee meeting of Wednesday, March 8th, 2023. I will now call the roll. Vice Chair Barreno. Present. Committee member Helpern. Present. Committee member Mafia. Present. And Committee Member Tab Shuri. Present. And I'm Stephen Whitburn, so we have a quorum. Councilmember Moreno, please proceed with your declaration. Thank you, Chair. I am present and I also have some brief comments. That I would attend today's committee meeting virtually due to just cause related to my child care needs. And pursuant to the Brown Act, I am disclosing that there are no individuals in years of age or older present in the room with me. And additionally, pursuant to the Brown Act, I will also take this opportunity to notify the committee and the public that I will be attending the April 26th, 2023 audit committee virtually due to just cause related to my child care needs. Thank you. Thank you, Vice Chair Moreno. This committee is fortunate to have several attendees will contribute to our efforts this morning, uh, including City Auditor Andy Hannau, City Attorney Mara Elliott, Chief Compliance Officer Christian Agger, and from the Office of the Independent Budget Analyst, Amy Lee. Thanks to each of you for being here today. For members of the public who wish to comment at today's meeting, if you're in person, please complete a speaker slip located at the entrance to chambers and place it in the box indicated at the speaker's lectern at the front of the room. Please do so in a timely manner to ensure proper meeting management. In-person testimony will conclude before virtual testimony begins. Members of the public can join the webinar by computer, tablet, or smartphone by accessing the link, which is listed online in the preamble language of the agenda on the city's webpage. To join the Zoom webinar by telephone, you may dial either one 669-254-5252 or 1646-828-7666. When prompted, input webinar ID 161-261-1956 pound. And that information is also on the agenda. Or you may view the meeting online by going to the City Council Committee's homepage at Sandieago.gov and selecting the City TV Live Webcast blue button on the right-hand side of the page. Please note that if you're watching via City TV or online, there may be a delay. So please participate via the audio on your phone and mute your TV or computer when it's your turn to speak. Thanks as always to the City TV staff for broadcasting this meeting today. If you're in person, please come up to the reserve seats at the front of the room when your name is called and be prepared to come up to the lectern in the order called. When I introduce the item you'd like to comment on, please raise your hand by either tapping the raise your hand button on your device or by pressing star nine on your phone. When our committee liaison, Natalie Kessler indicates that it's your turn to speak, she'll call you by your name or she'll read out the last four digits of your phone number. At that time, please unmute your phone by tapping the unmute button on your device or by pressing star six on your phone. Also, please mute the volume on your TV or computer before you begin to speak. We will now take up the approval of the committee option opt uh committee actions of January 25th, 2023. Natalie, please proceed with public comment. Thank you. The public comment period for the committee actions of January 25th, 2023 is now open. If you're in person, please be sure to have your speaker slip submitted and come up to the reserve seats in the front of the room when your name is called and be prepared to come to the lectern. Members of the public who wish to provide testimony via a call-in or an internet based service option must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first.
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