San Diego Audit Committee Meeting Summary – June 12, 2024
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San Diego Audit Committee Meeting Summary – June 12, 2024
The Audit Committee of the San Diego City Council met on Wednesday, June 12, 2024, at approximately 9:00 AM. Chair Council Member Moreno presided, with Committee Members Halburn, Mafia, and Tavshori present. Vice Chair Whitburn was absent. The meeting covered a re-review of pothole repair operations, the creation of two ad hoc subcommittees, an appointment to the Disclosure Practices Working Group, an award recommendation for external audit services, the Fiscal Year 2023 Single Audit, fraud hotline updates, the Customer Experience Strategy, and the City Auditor’s monthly activity report. Numerous public comments were heard.
Consent Calendar
- No separate consent calendar was presented; all items were discussed individually.
Public Comments & Testimony
- Terry Ann Skelly (community volunteer) requested an audit of fees and taxes related to marijuana businesses, citing lower-than-anticipated tax collections and high costs to youth mental health. She expressed support for such an audit.
- Blair Beekman urged the committee to continue prioritizing tech accountability and open public policies, linking them to budget efficiency and broader peace efforts.
- The Original (caller) requested that the virtual meeting start earlier to include participants before it begins, and called for audits of NGOs receiving city funds, alleging money laundering and lack of accountability.
- Joyce Yata (District 3) asked about the status of a working group on competitive grants with the San Diego Housing Commission, inquiring if it could be included in an audit. She also expressed support for the pothole audit and the subcommittees, and urged transparency.
- Lori Saldania (former legislator) commented on the Customer Experience Strategy, noting her own experience with a water bill anomaly and urging better communication for homeless residents. She also asked about Councilmember Whitburn’s absence.
Discussion Items
- Item 1: Re-review Performance Audit of Pothole Repair Operations – City Auditor Andy Hanao and staff presented findings from a follow-up to the 2013 audit. The audit found that while most 2013 recommendations were still implemented, improvements in routing, truck availability, data management, and performance monitoring were needed. Key statistics: Transportation fills 30,000–40,000 potholes annually; four of nine patch trucks were out of service >20% of a 15-month period; using geographic mapping could increase responses by 27% and reduce miles driven by 40%; an additional truck (cost $174,000) would increase productivity 11% over five years with only a 1% cost increase, reducing cost per pothole from $263 to $240. The FY25 budget approved yesterday included funding for an additional truck. Transportation Director Bethany Bizak agreed to implement all 10 recommendations. Public comment was supportive. The committee voted to accept the report and forward it to City Council (motion carried with Whitburn absent).
- Item 2: Creation of Ad Hoc Subcommittee to Review Confidential Audit Reports – City Auditor Hanao and Assistant City Auditor Matt Helm explained that since 2021, two confidential IT reports (on body cameras and fire rescue 911 systems) and 30 open confidential recommendations exist. The subcommittee (composed of less than a quorum) would review these and report back by January 2025. Public comment included concerns about transparency and trust. The committee voted to appoint Committee Members Halburn and Tavshori to the subcommittee (motion carried unanimously).
- Item 3: Creation of Ad Hoc Subcommittee to Make Recommendations on Implementation of Measure A – Measure A, approved by 67% of voters in March 2024, allows the City Auditor and Audit Committee to use independent legal counsel. The subcommittee would draft the scope of work, recommend an RFP selection panel, and propose processes for using independent counsel. Public comment supported the idea but urged collaboration and oversight. The committee voted to appoint Committee Members Mafia and Halburn (motion carried unanimously).
- Item 4: Appointment to Disclosure Practices Working Group (DPWG) – The committee appointed a member to the DPWG to ensure the audit committee is informed about audited financial statements. Committee Member Mafia was nominated and appointed (motion carried unanimously).
- Item 5: Award Recommendation for RFP for Annual Audit Services – The evaluation committee recommended Crow LLP for the five-year contract (FY24–28) for up to $3.2 million. The process was conducted via competitive procurement. Committee Member Halburn recused himself due to prior history with the recommended firm. Public comment thanked the outgoing firm and expressed trust in the new one. The committee voted to accept the recommendation and forward it to City Council (motion carried with Halburn absent).
- Item 6: Fiscal Year 2023 Single Audit (Informational) – The Department of Finance and outside auditor Linda Hurley (MGO) presented the single audit report. The city expended over $300 million in federal awards. Two major programs were tested: Coronavirus State and Local Fiscal Recovery Funds ($159 million) and Disaster Grants Public Assistance ($2 million). The city received an unmodified opinion and was deemed a low-risk auditee. One repeat finding: failure to notify beneficiaries of funding source for a state pass-through program (administrative, not monetary). Public comment included questions about housing trailers and COVID funding. No action taken.
- Items 7 & 8: City Auditor’s Fraud Hotline Outreach Activities and Quarterly Report (Informational) – Senior Fraud Investigator Andy Harida and Assistant City Auditor Matt Helm presented. In Q3 FY24, 73 fraud hotline reports were received: 33 within purview (7 assigned to OCA, 26 to departments), 40 outside purview. 36 reports were closed, leaving 41 open. Eight department investigations were substantiated (time abuse, misuse of property, etc.). Outreach efforts include posters, emails, new employee orientation, and City TV. The office plans to create short videos, a Spanish-language poster, and a training module. Public comment suggested more multilingual outreach and community engagement. No action taken.
- Item 9: Customer Experience Strategy (Informational) – Kirby Brady, Alex Himpton, and Mariah Gainer presented the revised strategy. Core values: accessible, reliable, gratifying. Guiding principles: put people at the center, enhance at every step, services smooth from start to finish. Recommendations include creating a service directory, updating content, establishing feedback loops, and meeting people where they are. The strategy does not include a specific 311 call center but provides a memo with options. Chair Moreno expressed concern about the digital divide and the need for a phone-based option, noting that only four of the top 20 U.S. cities lack a 311 system. Public comment supported both digital and traditional methods. The committee discussed the need for universality and parallel incremental improvements. The strategy will be taken to City Council for adoption.
- Item 10: City Auditor’s Monthly Activity Report (Informational) – City Auditor Hanao highlighted the receipt of the Knighton Award for best performance audit of 2023 (brush management on city-owned land) and staff participation in the ALGA conference. Public comment congratulated the team and noted the audit’s importance. No action taken.
Key Outcomes
- Item 1: The pothole repair audit report was accepted and forwarded to City Council. All 10 recommendations will be implemented; an additional patch truck was funded in the FY25 budget.
- Item 2: Ad hoc subcommittee (Halburn and Tavshori) created to review confidential audit reports and recommendations by January 2025.
- Item 3: Ad hoc subcommittee (Mafia and Halburn) created to implement Measure A, including drafting RFP processes and potential municipal code amendments, with a report due by January 2025.
- Item 4: Committee Member Mafia appointed to the Disclosure Practices Working Group.
- Item 5: Award recommendation for Crow LLP as external auditor for FY24–28 (up to $3.2 million) forwarded to City Council.
- Item 6: The FY23 Single Audit was received as informational; no action required.
- Items 7 & 8: Fraud hotline reports noted; no action required.
- Item 9: The Customer Experience Strategy will be presented to City Council for adoption; the committee encouraged addressing the digital divide and considering a 311 system.
- Item 10: Monthly activity report received as informational; congratulations extended to the audit team.
Meeting Transcript
Good morning and welcome to the audit committee meeting of June 12, 2024. Our committee liaison, Natalie Kessler 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, June 12th, 2024 to order. Natalie, please call the roll. Vice Chair Whitburn. Committee member Halburn. Present. Committee member Mafia. Present. Committee member Tavshori. Present. And Chair, Council Member Moreno. Present. Also attending the meeting is Andy Hanao, the city auditor. Christina Gauger with the compliance office. Heather Ferbert with the City Attorney's Office. Thank you, Chair. If you are located 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 listed online in the preamble language of the agenda on the city's webpage. If you need to participate by telephone, you may dial 16692545252. Webinar ID 1607178861 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 are watching via City TV 24 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. 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 icon or if you are a call in participant, star nine on your phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you, Natalie, for reviewing those instructions for the benefit of the public. A quorum is now uh present and we will dispense with the approval of the committee minutes of April 10th, 2024. Natalie, please proceed. Thank you. The public comment period for the committee minutes is now open. And Chair, we have not received any speaker slips in person, and we do not have any hands raised in the virtual queues. This will conclude public comment on the past committee minutes. I'll second. And the motion passes with council member Whipurn absent. The council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech right at council and at committee meetings. Natalie, please proceed with non-agenda public comment. And Chair, we have not received any speaker slips from individuals in chambers, so I will begin the five-minute timer for the virtual queue.
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