Audit Committee Meeting - March 13, 2024: Reports on Internal Controls, Housing Acquisitions, Police Overtime, and Charter Compliance
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Audit Committee Meeting - March 13, 2024\n\nThe San Diego City Council Audit Committee met on March 13, 2024, at 5:00 PM UTC. The meeting was chaired by Councilmember Moreno and included Vice Chair Whitburn, Committee Members Halpern, Mafia, and Tap Shuri. The committee reviewed reports on internal financial controls, performance audits of the San Diego Housing Commission property acquisitions and San Diego Police Department overtime, and discussed options to implement a prior audit recommendation regarding Charter Section 32.1.\n\n### Consent Calendar\n- The committee unanimously approved the minutes of the February 14, 2024 meeting with no public comment.\n\n### Public Comments & Testimony\n- Non-Agenda Public Comment: Joyce Sanyata (District 3) spoke about the challenge of moving the budget from paper to implementation and its connection to audit work.\n- Item 1: Joyce Sanyata expressed appreciation for the internal controls report and emphasized the importance of oversight and transparency.\n- Item 2: Joyce Sanyata commended the audit, expressed sadness over the Hotel Circle appraisal issue, and urged follow-up on recommendations. She also questioned the Housing Commission's disagreement on setting annual acquisition goals.\n- Item 3: Joyce Sanyata praised the audit, highlighted officer fatigue concerns, and called for limiting shifts to 10 hours and increasing civilian positions.\n- Item 4: Joyce Sanyata thanked the IBA for their work and supported the city attorney's suggestion for a deeper dive on Charter Section 32.1.\n- Item 5: Joyce Sanyata commented on the auditor's activities report, requesting prioritization of IT audits and follow-up on recommendations.\n\n### Discussion Items\n\n1. 2023 Annual Report on Internal Financial Controls \nStaff from the Department of Finance presented the report, noting the city received a clean audit opinion, a GFOA Certificate of Achievement for the ninth consecutive year, and a budget presentation award. They concluded that internal financial controls are effective. Committee members discussed the importance of attestations and the ongoing risks of uncompetitive compensation and employee performance reviews. The report was unanimously accepted.\n\n2. Performance Audit of San Diego Housing Commission Property Acquisitions \nThe City Auditor's office presented findings that the Housing Commission largely followed best practices except for the 2020 acquisition of The Residences at Hotel Circle. The appraisal used a pre-COVID valuation that potentially overvalued the property by $6.7 million. The audit also found the Housing Commission lacks a formal acquisition strategy and annual acquisition goal. Four recommendations were made; the Housing Commission agreed to three but offered an alternative on the annual goal. The committee accepted the report with a modified motion to have the Housing Commission provide updates on their alternative approach. Motion passed unanimously.\n\n3. Performance Audit of San Diego Police Department Overtime \nThe audit found that the city spent $50.8 million on police overtime in FY 2023, $10.6 million over budget. While overtime tracking is accurate, 50 officers (3%) worked excessive overtime (over 1,000 hours each), and some worked shifts of 19+ hours. The audit recommended requiring an 8-hour break between shifts, prioritizing overtime allocation, and analyzing civilian positions (PISOs) to reduce overtime. SDPD agreed to all four recommendations. The committee accepted the report and forwarded it to the city council unanimously.\n\n4. Presentation of Options Related to Recommendation 7 from the Building Acquisition Audit \nThe Independent Budget Analyst's office presented five options to address potential violations of Charter Section 32.1 (requiring staff to inform council of material facts). Options ranged from making violations a misdemeanor to staff attestations, updating the employee code of conduct, training, or maintaining the status quo. The city auditor supported options 1 or 2; the city attorney noted the charter provision is outdated. After debate, Chair Moreno motioned to direct city management and the city attorney to create staff attestation language for management-level employees, update the employee code of conduct, and develop training on Section 32.1, with a progress report due March 2025. The motion passed 4-1 (Whitburn dissenting).\n\n5. City Auditor March 2024 Activities Report \nThe auditor reported two reports issued (housing and police overtime), nine audits in progress, and a request for audit topic suggestions. This item was informational.\n\n### Key Outcomes\n- Approved consent calendar (Feb 14 minutes).\n- Item 1: Accepted the 2023 internal financial controls report.\n- Item 2: Accepted the housing commission property acquisitions audit report and forwarded to city council, with a request for follow-up on the alternative approach to recommendation 2.2 (annual acquisition goal). Motion passed unanimously.\n- Item 3: Accepted the SDPD overtime audit report and forwarded to city council. Motion passed unanimously.\n- Item 4: Motion passed (4-1) directing city management and city attorney to develop staff attestation language, update the employee code of conduct, and provide training on Charter Section 32.1, reporting back by March 2025.\n- Item 5: Noted as informational.
Meeting Transcript
Good morning and welcome to the audit committee meeting of March 13th, 2024. Our committee liaison, Natalie Kessler, it will go over instructions for today's meeting. Thank you, Chair. 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 the 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 virtual 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 ensure the committee is able to manage and conduct city business. We appreciate the public's cooperation. I will now call the audit committee meeting of Wednesday, March 13th, 2024 to order. Natalie, please uh call the roll. Vice Chair Whitburn? Here. Committee member Halburn. Present. Committee member Mafia. Present. Committee member Tab Shuri. Here. And Chair, Councilmember Moreno. Present. Also attending the meeting today is Andy Hanao from the City Attorney's Office. Christiana Gagger with the uh compliance office, City Attorney Mara Elliott, Amy Lee with the Independent Budget Analyst Office, Natalie Kessler with the committee uh our committee liaisons. Uh Natalie, please continue with public comment. Thank you, Chair. If you are in person, please complete a speaker slip located at the entrance of chambers and place it on top of the box indicated at the speaker's lecture and 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 also join the webinar by computer, tablet, or smartphone by accessing the link which is located online in the preamble language of the agenda on the city's webpage. If you need to participate by telephone, you may dial 1669-2545252. Webinar ID is 160717-8861 pound. This information is also available on the agenda and will appear on the screen during the public comment period for each agenda item. 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. Please note that if you're watching via City TV 24 or online, there may be a delay, so please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. If you wish to speak on a particular item, wait for that item to be called and then raise your hand to speak by tapping the raise your hand button. Or uh if you're a calling participant, star nine on your cell phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you. A quorum is now present, so we are going to dispense with the approval of the committee actions of February 14th, 2024. Natalie, please proceed. Thank you, Chair. The public comment period for the past committee actions or minutes is now open. If you've already joined the Zoom webinar online or by phone, please raise your hand at this time if you wish to speak on the past committee minutes of February 14th, 2024. And Chair, we do not have any speakers in chambers who have indicated that they wish to speak, nor do we have any hands raised in the virtual queue, so that concludes public comment on the past committee minutes. So there's a motion on the floor, and let's go ahead and uh vote. And now we're gonna take up non-agenda public uh comment. Uh the council members uh respect and appreciate the public's input and are fully committed to protecting every participant's free speech right at council and at our committee meetings. Uh Natalie, please proceed with non-agenda public comment. Thank you, Chair.
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