San Diego Audit Committee Meeting - July 24, 2024
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San Diego Audit Committee Meeting - July 24, 2024
The Audit Committee of the San Diego City Council met on July 24, 2024, at 9:00 AM. The meeting was chaired by Councilmember Moreno, with Vice Chair Whitburn and members Halburn, Mafia, Tapsuri, and Moreno present. The committee reviewed minutes, heard public comments, and discussed five agenda items including performance audits of contract management and facility maintenance, the FY2025 audit work plan, a fraud hotline report, and a monthly activity report. All votes were unanimous.
Consent Calendar
- The committee approved the minutes of the June 12, 2024 meeting unanimously.
Public Comments & Testimony
- Original (public speaker): Expressed concerns about auditing NGOs, alleging funds go to executives rather than programs. Also urged audit of unaccompanied minors at the convention center, claiming trafficking and abuse.
- Blair Beekman: Praised the committee for clarifying minutes and urged continued public participation via Zoom.
- Joyce and Yada (District 3): Commented on the structural budget deficit, suggested using AI to analyze audit data, and urged implementation of all audit recommendations.
- Jan Boujois (East Village): Criticized a lease proposal, warned of losing beds, and advocated for a percentage fee on Comic-Con instead of burdensome regulations.
- Cesar Javier and Perita Javier (District 9): Requested audit of toxic emissions from a ceramic kiln in their neighborhood, citing health risks and lack of city action.
- Terry Ann Skelly: Cited a grand jury report on marijuana businesses, requesting an audit of cannabis taxes and fees.
- Becky Rapp (public health educator): Supported a grand jury report on cannabis impacts, asked for prevention education and public forums.
- The Original: Reiterated concerns about NGO audits and child trafficking.
- Judy Strang: Emphasized the need for law enforcement decoy operations at marijuana stores and urged city to respond to grand jury report.
- Multiple speakers on item 1: Joyce urged implementation of recommendations; Cesar Javier praised audit efforts; Blair Beekman stressed tech accountability; The Original questioned why only future mitigation; Kathleen Lippett thanked staff for fiscal responsibility.
- On item 2: Joyce noted deferred maintenance crisis; Cesar Javier urged cognitive audits of leaders; a speaker from the virtual queue questioned spending on private infrastructure like Crystal Pier and linked deferred maintenance to injury settlements.
- On item 3: Joyce supported the work plan; Cesar Javier praised audit division; Kathleen Lippett urged a cost-benefit analysis of marijuana ordinance; Lori Saldania asked about fraud hotline materiality; The Original questioned carryover audits; Blair Beekman supported emergency preparedness audits.
- On item 4: Joyce expressed concern about 52 open cases; Cesar Javier linked fraud to clean air/water; Blair Beekman praised the hotline; Lori Saldania urged deeper investigation of PRA abuse; The Original criticized pending litigation as a shield.
- On item 5: Cesar Javier asked about progress on pure water and backflow devices; Lori Saldania opposed limiting virtual comments; Blair Beekman opposed ending Zoom; The Original criticized potential delays due to litigation.
Discussion Items
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Item 1: Performance Audit of Contract Management
- City Auditor Andy Henous presented findings: 11% of contract alterations (worth $15 million) lacked required council approval; 19% (worth $64 million) were approved retroactively; 42% of alterations were untimely. Three findings: altered spending without approval, retroactive approvals, and incomplete/inaccurate contract data. 13 recommendations made. Purchasing and Contracting Director Claudia Barca agreed to implement and noted ongoing improvements.
- Committee members expressed frustration with lack of transparency and called for implementation. Motion to forward report to council passed unanimously.
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Item 2: Performance Audit of Facility Maintenance
- Audit revealed a $1 billion backlog in deferred maintenance. City owns 1,600 facilities worth $7 billion. Only spent $26 million in FY23 vs. recommended $143-287 million. Only 13% of maintenance was preventive. 10 recommendations made. Department of General Services Director Musharrah Little agreed, noting need for additional resources.
- Committee member Halburn asked about implementation timeline. Chair Moreno noted communities of concern need prioritization. Motion to forward to council passed unanimously.
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Item 3: City Auditor's Annual Risk Assessment and FY2025 Audit Work Plan
- Presented by Andy Henous and Matt Helm. 22 audits planned: 2 carryover issued, 6 carryover in progress, 8 new audits (including unsafe camping ordinance, disaster response, fire rescue dispatch, SDPD internal affairs, golf division, historic designation, brush management, KPIs). Also mandated audits and hotline administration.
- City Attorney Mara Elliott cautioned about litigation risks for audits of disaster response, pure water, and unsafe camping. Committee encouraged coordination. Motion to approve work plan passed unanimously.
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Item 4: Quarterly Fraud Hotline Report (FY24 Q4)
- Senior Fraud Investigator Gina Ruza reported 311 reports in FY24, a record high. 46 reports received in Q4; 35 closed, leaving 52 open. Two substantiated investigations led to corrective action. Accepted as informational.
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Item 5: Monthly Activity Report
- Andy Henous reported 4 reports issued since last meeting, 8 in progress, 23 recommendations made. Accepted as informational.
Key Outcomes
- Item 1: Motion to accept the performance audit of contract management and forward to city council passed unanimously. All 13 recommendations were agreed to by management.
- Item 2: Motion to accept the performance audit of facility maintenance and forward to council passed unanimously. All 10 recommendations agreed to, pending additional resources.
- Item 3: Motion to approve the FY2025 audit work plan passed unanimously. The city attorney’s caution regarding litigation risks was noted, and the auditor committed to coordinate with her office.
- Item 4: The quarterly fraud hotline report was accepted as information.
- Item 5: The monthly activity report was accepted as information.
The meeting adjourned at approximately 12:30 PM, with next meeting scheduled for September 18, 2024.
Meeting Transcript
Good morning and welcome to the audit committee meeting of July 24th, 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. Chair. Vice Chair Whitburn. Committee member Halburn. Committee member Mafia. Present. Committee member Tab Shuri. Present. And Chair Councilmember Moreno. Present. And committee member Tapsuri, please share your declaration. I'm notifying the audit committee that I will be attending the meeting today remotely due to age due to just cause related to a contagious illness. Pursuant to the Brown Act, I'm disclosing that there are no individuals 18 years of age or older present in the room with me. I will update this disclosure if it changes during the course of a meeting. Also attending the meeting today is Andy Hanao, our city auditor. Christiana Gauger with the compliance office. 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 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 website. If you need to participate by telephone, you may dial 1669-2545252. The webinar ID is 1607-8861 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 are watching via City TV 24 or online, there may be a delay. Yeah, um, in those minutes, I was talking about um auditing the NGOs, and I wanted to be specific. It needs to be because the money that is given to these NGOs, the majority of it goes into the CEOs and the higher echelons of the entity, and then there's less of it to go towards the program or whatever it is that you've divvied the money out to them uh for it to go to. So it should be something that is looked into because they shouldn't be making, you know, sometimes taking a third of the money and putting it into their pockets when that money could go towards the people and the program that it's supposed to be facilitating. Um so that's why I'm talking about the um NGOs needing to be audited and money laundering through them. Thank you. Oh, does this conclude your remarks? Yes, no, that's it. Okay, thank you. Our next speaker is Blair Beekman. Please begin. Hi, thank you. Uh I just wanted to uh quickly comment on a procedural item that uh thank you for uh the original's uh further explanation of her of what she was saying at previous meeting minutes. Uh you're trying to uh better clarify her words in the meeting minutes process. Thank you for that. Uh good luck on wanting to consider how uh meeting minutes uh public voice can be a part of the future of meeting minutes process uh more fully again in our future. I know you scaled it back a bit. You're you're better complimenting or better offering what original has been saying, and that's a really important step.
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