Audit Committee Meeting - September 20, 2023
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Audit Committee Meeting - September 20, 2023
The Audit Committee of the San Diego City Council met on September 20, 2023, to review the Office of the City Auditor's recommendation follow-up report, approve the FY24 IT risk assessment and audit work plan, receive a fraud hotline investigation on purchase order approvals, and discuss revised management responses to an audit of homelessness services contract management. The meeting included public testimony on multiple agenda items.
Public Comments & Testimony
- Jan Bourgeois (East Village) questioned the revenue split between the Padres and the city for Petco Park events, sought clarification on the original bond status, and suggested the city return its suite to the Padres for sale. Also urged settlement of the SeaWorld lawsuit.
- Joyce Sunyata (District 3) expressed support for water quality but raised concerns about the 168% increase in chemical costs and the recently approved pay raises for 950 water workers, noting that these costs will be passed to ratepayers. Later, she praised the audit committee's open process and urged PUD to learn from past failures.
- Blair Beekman called for an extended public review of the smart streetlight contract, criticized the city for raising rates while receiving federal funds, and stressed the need for accountability and community participation in technology decisions.
- The Original claimed the city failed to inform the public about the number of protests needed to stop the water rate increase, opposed smart meters due to radiation and data privacy concerns, and criticized the city's reliance on technology and chemicals in water treatment.
- Joyce Sunyata (second appearance) spoke on PUD recommendations, supporting the auditor's stance, and thanked the Dream Team and HSSD for their work.
- Blair Beekman (second appearance) raised concerns about accessibility of PUD, emphasized responsible tech implementation, and urged caution in outsourcing smart metering.
- The Original (second appearance) warned about cybersecurity risks of technology and criticized the city's push for digital systems.
Discussion Items
- Approval of Committee Actions (July 26, 2023): Approved unanimously without public comment.
- Item 1: Office of the City Auditor's Recommendation Follow-Up Report (Period Ending June 30, 2023)
- The report covered 170 open recommendations, with 18 implemented during the period. Of the 152 remaining, 109 were past due.
- Attachment A – Recommendations for Committee Action:
- Advanced Metering Infrastructure (AMI) Audit (2019): PUD requested six recommendations be changed to “not applicable” due to a shift to a vendor-led deployment. The auditor disagreed, arguing the underlying risks (deployment plans, staffing, controls) remain. The committee voted to keep recommendations 3, 6, 8, 11, 12, and 13 in process, and closed recommendations 4, 9, and 10 as agreed.
- Public Liability Management Audit (2020): Recommendation 6 (enterprise risk identification) was closed as “will not implement” after management provided a briefing on the city’s risk approach. The committee approved the motion to close it.
- Attachment C – Past Due Recommendations: The committee discussed updates from five departments:
- Public Utilities Department (PUD): Reported progress on water billing, customer support, and industrial wastewater audits. The new call center software (Amazon Connect) was scheduled to go live September 27, 2023. KPIs will be developed after implementation.
- Department of Real Estate and Airport Management (DREAM): 17 recommendations are being addressed through updates to three council policies, with a presentation scheduled for Land Use and Housing Committee next month.
- Purchasing & Contracting Department: Working on a contract administration manual, standard vendor evaluation process, and SLBE program oversight. Drafts expected by October 6, 2023.
- Homelessness Strategies and Solutions Department (HSSD): Revised management responses to audit recommendations 3.1 and 3.2 were presented, indicating implementation of monthly shelter inspections and a centralized maintenance request process.
- Item 2: FY24 IT Risk Assessment and Audit Work Plan
- Proposed three projects: cybersecurity audit, audit of the city's building permitting system (Excel), and a non-audit project to improve the risk assessment process. The committee approved the work plan unanimously.
- Item 3: Fraud Hotline Investigation of Purchase Order Approvals
- Found that the city used “confirming purchase orders” (240 times in FY22, totaling over $4 million) without dollar limits or public disclosure. Most were due to staff errors or poor planning. One janitorial contract extension exceeded the five-year charter limit without council approval. The committee accepted the report and forwarded it to the City Council.
- Item 4: Performance Audit of SD Housing Commission’s Homelessness Services Contract Management
- HSSD presented revised management responses to recommendations 3.1 and 3.2, stating that all shelter sites were inspected (June 6–29, 2023) and a new maintenance request tracking procedure was implemented. The committee received the report as information.
- Item 5: City Auditor’s Monthly Activity Report
- Reported three reports issued since the last meeting, 10 reports in progress, and five reports issued in FY24 to date. Staffing updates included recruitment for an IT auditor and two new positions.
Key Outcomes
- Approved the committee actions of July 26, 2023 (unanimous).
- Voted (unanimous) to keep six AMI audit recommendations in process and close three, and to close the public liability management recommendation as “will not implement.”
- Approved (unanimous) the FY24 IT risk assessment and audit work plan.
- Accepted the fraud hotline investigation report and forwarded it to the City Council (unanimous).
- Received the revised management responses for the homelessness services contract management audit as an information item.
- Next meeting: Scheduled for October 11, 2023, at 9:00 AM.
Meeting Transcript
Well, greetings everyone. Welcome to the audit committee meeting of September 20th, 2023. Thank you very much for being with us this morning. While members of the public are able to attend the meetings in person, this meeting is being televised and live streamed on the city's website, and council administration will continue to make arrangements for the public to comment using the Zoom webinar platform. Members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first. This will allow for better meeting management between the two platforms and will ensure that the council is able to manage and conduct city business. We appreciate the public's cooperation. At this time, I will call to order the audit committee meeting of Wednesday, September 20th, 2023. And I will now call the roll. Committee member Helpern. Present. Committee member Tab Shuri. And committee member Mafia. Present. And I'm Stephen Whitburn, so we have a quorum. This committee is fortunate to have several attendees that will contribute greatly to our efforts this morning. If you're in person and would like to uh provide public comment this morning, please complete a speaker slip located at the entrance of 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 1669 254 5252. When prompted, input webinar ID 161-261-1956 pound. That information is also available on the agenda. Please note that if you're watching via City TV or online, there may be a delay. Please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. Please wait until the item to wish to wish you speak. Please wait until the item to wish to which you wish to speak has been called before raising your hand to speak. If you raise your hand during a non-comment period, your hand will be lowered. When I introduce the item you would 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. We will now take up the approval of the committee actions of July 26th, 2023. Natalie, please proceed with public comment. Thank you, Chair. The public comment period for the committee actions of July 26, 2023 is now open. If you're in person, please be sure to have your speaker slip submitted and come up to the front of the room. And if you're calling online and wish to give comment on the past committee actions, please raise your hand at this time. Each speaker will have two minutes. And Chair, we have not received any speaker slips in chambers for the past committee actions, nor do we have any hands raised in the virtual queue. So that will conclude the public comment period for past committee actions. Thank you very much, Natalie. I will now invite comments or questions at a motion from my colleagues on the approval of the committee actions. All right. And we have a second from committee member Mafia. Any further discussion on the approval of the committee actions? Seeing none, uh, we will uh go ahead and vote. So please cast your vote using the screen in front of you. And that passes unanimously. We will now take up non-agenda public comment. The council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech rights at council and committee meetings. Per temporary rule 2.7, non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but are within the subject matter jurisdiction of the committee.
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