San Diego Audit Committee Meeting – March 12, 2025
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San Diego Audit Committee Meeting – March 12, 2025
The Audit Committee of the San Diego City Council met on March 12, 2025, to discuss performance audits, internal controls, proposed municipal code amendments, and staff attestation policies. The meeting included updates from the Independent Budget Analyst (IBA) on committee member reappointments and from the City Auditor on ongoing audits. The committee voted on several items, including approving the consent agenda, endorsing the grants program audit and forwarding it to the City Council, approving proposed amendments to implement Measure A (independent legal counsel), and accepting the annual internal financial controls report.
Consent Calendar
- Item 1 – Approval of Minutes (February 7, 2025): Approved unanimously (5-0) after public comment from Blair Beekman, who expressed general support for the prior meeting.
Public Comments & Testimony
- Non-Agenda Public Comment: Committee member Mafia voiced concerns about the cancellation of the March public safety meeting, stressing the need to expedite the Police Review Commission’s work. He also expressed disappointment over Councilmember Gloria’s reported travel to the Philippines for defense contracts, urging the city to maintain distance from the military-industrial complex.
- Public Comment on Item 2 (Grants Audit): Blair Beekman emphasized the need for accountability and transparency in grant programs, citing Memorial Park as an example where community engagement was lacking.
- Public Comment on Item 6 (Auditor’s Report): Blair Beekman discussed attitudes toward the military-industrial complex and stressed the importance of open, accountable processes.
Discussion Items
- Item 2 – Performance Audit of the City’s Grants Program: The Office of the City Auditor (OCA) presented findings showing San Diego received 66% fewer grant dollars per capita than other large California cities ($337 vs. $558 average) and 85% fewer capital improvement grants. The audit offered 13 recommendations, including creating a citywide grant strategic plan, clarifying the Grant Review Team (GRT) process, and improving training and internal websites. City management (Department of Government Affairs, led by Mr. Bishop) agreed to all recommendations and noted ongoing improvements. Committee members discussed the need for matching funds and proactive grant-seeking. The committee voted unanimously to accept the report and forward it to the City Council.
- Item 3 – Proposed Amendment to Municipal Code for Measure A (Independent Legal Counsel): The OCA presented language to codify procedures for retaining independent legal counsel for the City Auditor and Audit Committee, as approved by 70% of voters in March 2024. The proposal defines scope, procurement rules, and the committee’s role. An ad hoc subcommittee had worked with the City Attorney’s Office to develop the language. Committee member Whitburn opposed, citing the city’s $258 million budget deficit and the projected cost of ~$200,000. The motion passed 4-1, with direction for the ad hoc subcommittee to continue developing an RFP for independent legal counsel.
- Item 4 – 2024 Annual Report on Internal Financial Controls: The Department of Finance (Director Charvel) presented the report, based on COSO framework, concluding internal controls over financial reporting were effective. The city received a clean audit opinion and its 10th consecutive GFOA award. However, a risk was identified in the revenue compliance program regarding lease revenue posting: unapplied cash in a suspense account grew from $650,000 (FY24) to $6–8 million in recent months, later reduced to $2 million. The issue involved the Economic Development Department’s real estate division. Management stated it was not material to financial statements but was being addressed. Committee members questioned the timing of disclosure (not raised at the Feb 7 meeting) and materiality thresholds. The motion to accept the report and forward it to the City Council passed unanimously.
- Item 5 – Report on Staff Attestations for Charter Section 32.1: The Chief Compliance Officer reported that management would not implement staff attestations for unrepresented management on staff reports, citing existing approvals by directors, potential negative morale, and a desire not to be an outlier among peer cities. Instead, management will update the employee code of conduct (AR 9560) and personnel manual, and will provide training, with timelines by end of FY25. Committee member Halpern and Chair Moreno expressed disappointment, noting past instances of omitted information (e.g., 101 Ash, Othello). The item was informational only; the auditor noted that action may be taken at a future meeting as part of the recommendation follow-up report.
- Item 6 – City Auditor’s Monthly Activity Report: The OCA reported one report issued since last meeting (grants audit), seven audits in progress (including fire overtime, Pure Water, trash & recycling, disaster preparedness, cybersecurity, KPIs, Mission Bay), and progress on translating report highlights into Spanish. No action was taken.
Key Outcomes
- Consent Agenda (Item 1): Approved unanimously (5-0).
- Grants Program Audit (Item 2): Motion to accept and forward to City Council as informational item passed unanimously.
- Measure A Implementation (Item 3): Motion to forward proposed municipal code amendments to City Council passed 4–1 (Councilmember Whitburn opposed). The ad hoc subcommittee will continue developing an RFP for independent legal counsel.
- Internal Financial Controls Report (Item 4): Motion to accept and forward to City Council as informational item passed unanimously.
- Staff Attestations (Item 5): Informational; no vote. Management will proceed with updating the code of conduct and training but will not implement attestations.
- Auditor’s Report (Item 6): Informational; no action.
- Next Meeting: Scheduled for Wednesday, April 23, 2025, at 9:00 a.m.
Meeting Transcript
Good morning and welcome to the audit committee meeting of March twelfth, twenty twenty-five, our committee liaisons. Uh 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 key closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first. And 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. Committee member Mafia. Here. Um happy Wednesday to everyone. Um I wanted to first note that it's uh worrisome that the public safety meeting for March has been canceled. There was supposed to be important matters discussed about the future of the police review commission. Um that's being put off until April. Um they need the process expedited, you know, fairly soon. That their items were being brought back to the committee in March, it was important. And um the sooner they the committee can be the you know, the police review commission can be in progress, the sooner they can be working with the police themselves towards a more accountable process altogether. And that's to me at this point the only way the police will get their act together because they're having their own troubles in sharing of information. Uh the privacy advisory commission or the you know, the uh tech advisory uh commission, they're learning good steps how to do that, and I I hope the good lessons can be learned in the police learning how to better share information, and the the police review commission has to be put in good working order that I think they're ready to be in that uh for those for those steps to take place. Good luck in those efforts. Uh and to conclude, I spoke yesterday uh about concepts of peace, and I think I probably drove everyone crazy in that thinking. So I'll I'll try to be more straightforward today. I'm really disappointed in in uh hearing of Mary Gloria traveling to the Philippines to actually work on defense contracts. I've always suspected that our city council has a certain distance from the military industrial complex in San Diego, and I think it's a point of pride actually and respect and how to work well, actually, that I hope the mayor can learn to better understand and take heart and want to emulate because I think you guys can do a really good job at that. Uh we you know, the defense industry is a part of Sandy. Thank you for that concluding statement. This does conclude your time. And Chair, this concludes non-agenda public comment. Thank you. We're now going to move to committee members, mayoral staff, city attorney, or the IBA. My understanding is Ms. Aaron Knoll with the IBA has comments. Thank you, and good morning, Chair Marino and members of the committee. I'm Aaron Noel. Um, and I want to provide an update on public member reappointments and the city's open recruitment to fill one seat, which is currently ongoing. As you know, term terms for the three public members of the committee are expired. Um, to address this, our office in consultation with the city attorney's office. We'll be moving forward with public member reappointments for two member seats, uh, committee member uh Halpern and Committee member Mafia. And we anticipate this will go to city council uh likely in April. Um as a separate item, the city's currently conducting an open recruitment over the next few months for the seat currently filled by Mr. Tab Shuri, who's not moving forward with reappointment. Our office is actively recruiting with the goal of putting at least two candidates for the city council to consider uh for vacancy. Uh, we're advertising the recruitment to identify a candidate who may be interested and qualified, and note that eligible applicants must have at least 10 years of experience as a certified public accountant, a certified internal auditor or other professional financial or legal experience in audit management. Please contact our office if you're interested or know of anyone who is interested in serving in this role. And I'll continue to provide updates at future committee meetings. This concludes my comments. Thank you. Thank you. Does anybody else have any comments or okay?
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