San Diego Audit Committee Meeting Summary - January 21, 2026
San Diego Audit Committee Meeting Summary - January 21, 2026
The Audit Committee of the San Diego City Council met on January 21, 2026, to review the Fiscal Year 2025 Annual Comprehensive Financial Report (ACFR), the Office of the City Auditor’s (OCA) peer review, annual accomplishments, and the proposed FY2027 budget. Public comment addressed fraud, waste, and abuse concerns in city programs, particularly related to homeless services, marijuana enforcement, and unexplained city employee compensation. The committee voted to approve the consent agenda, forward the ACFR to the City Council, endorse OCA’s accomplishments, and recommend restoring OCA budget cuts.
Consent Calendar
- Item 1 & 2: Approved the committee minutes from November 12, 2025, and the City Auditor’s quarterly fraud hotline report for FY2026 Q2. No items were pulled.
Public Comments & Testimony
Non-Agenda Public Comment
- Blair Beekman: Urged de-escalation standards for ICE agents in San Diego, citing lessons from Minneapolis.
- Becky Rapp (connection issues; reconnected later): Requested a full audit; specific topic unclear.
- Al Del Mastro: Criticized the “trash tax” as misleading and claimed it was a bait-and-switch affecting apartment dwellers.
- Terry Ann Skelly: Requested an audit of marijuana business tax collection and enforcement, focusing on youth access and public safety costs.
- Andrea Ebbing: Alleged fraud, waste, and abuse at Tent City, including fentanyl trafficking, sex trafficking, and deaths; demanded audits of Dreams for Change and the Downtown Partnership.
- Madison Rapp: Raised concerns about upcoming federal restrictions on hemp-derived THC products and urged the city to prepare for enforcement costs and revenue impacts.
- Unnamed speaker: Asked for better oversight of the marijuana department and audits of tax collection.
Consent Agenda Public Comment
- Blair Beekman: Commented on item 1, linking park surveillance technology to delays in OTA Mesa parks.
- Andrea Ebbing: Criticized the fraud hotline as ineffective, citing unreported fraud in homeless and addiction programs.
Item 3 (ACFR) Public Comment
- Andrea Ebbing: Questioned $152 million in “other pay” to city employees (Transparent California data) and requested an investigation, citing an administrative aide who earned $530,000 largely in other pay.
Item 4 (OCA Accomplishments) Public Comment
- Andrea Ebbing: Suggested emulating Elon Musk’s DOGE approach for public engagement and criticized underfunding of oversight bodies.
- Blair Beekman: Praised OCA’s work on unhoused programs and trash issues, and urged sharing best practices with Oakland.
- Zoom user: Called for hiring outside forensic accountants and auditing federal funds diverted through NGOs.
Item 5 (OCA Budget) Public Comment
- Blair Beekman: Supported budget cuts but urged protecting low-income communities, citing Oakland’s approach.
- Andrea Ebbing: Argued that underfunding OCA is intentional to thwart oversight, and criticized placing the Office of Diversity, Equity, and Inclusion within IBA.
Item 6 (Peer Review) Public Comment
- Kathleen Lippitt: Questioned how OCA received a positive peer review given the city’s fiscal deficits and unpaid union pensions.
Item 7 (Monthly Report) Public Comment
- Andrea Ebbing: Repeated request for audit of $152 million “other pay” and alleged FPPC violations by treasurers Nancy Haley and C April Bowling.
- Blair Beekman: Encouraged streetlight equity audits to consider tech placement and community safety.
Item 8 (2026 Priorities) Public Comment
- Andrea Ebbing: Thanked committee members for transparency, criticized homeless spending fraud, and referenced the “Victim Center fraud” involving the Family Justice Center.
- Blair Beekman: Suggested whistleblower protections for police internal affairs and asked about auditing federal ICE agents for accountability.
Discussion Items
Item 3 – FY2025 Annual Comprehensive Financial Report Jeff Peel (Department of Finance) and Kathy Lai (Crow LLP) presented. The ACFR received an unmodified (clean) audit opinion with no material weaknesses or significant deficiencies. Two new GASB standards (101 and 102) were implemented. The consolidated general fund ended FY2025 with a fund balance of $414.6 million, including $17.6 million in emergency reserves and $99.5 million in stability reserves. The water fund net position was $2.3 billion, sewer fund $2.8 billion. Chair Moreno questioned the auditor about the lease revenue deposit issue and whether it should have been disclosed; the auditor stated no requirement existed but management could voluntarily disclose. Committee member Halpern asked about independence checks regarding Crow’s prior work for the city. Vice Chair Foster raised concerns about the limited scope of the audit (financial statement focus) and whether it truly identifies liabilities, citing unresolved issues like grant matching and expired contract overruns.
Item 6 – Office of the City Auditor Peer Review Lauren Evans (City of Raleigh) presented the peer review results for the period July 1, 2022 – June 30, 2025. OCA received the highest pass rating (“clean opinion”) with no significant deficiencies. The review team praised OCA’s supportive management, staff training, and thorough risk assessment process. The item was informational.
Item 4 – OCA Annual Activities and Accomplishments (2025) Andy Hanau and Matt Helm presented. Key stats: 16 reports issued (including audits, hotline reports, and follow-ups); 80 recommendations made with 100% management agreement; 84 recommendations implemented (up from 48 the prior year). The fraud hotline received 349 reports, closed 113 cases. Two staff members won ALGA Rising Star awards. OCA added Spanish translations and an online dashboard for recommendations. Ongoing and planned audits include leased golf courses, unsafe camping ordinance, and police internal affairs.
Item 5 – OCA Fiscal Year 2027 Proposed Budget Andy Hanau presented the budget request. The city’s FY2027 general fund deficit projection led to a requested 7% reduction for OCA, which would severely impact audit capacity. OCA requested restoration of personnel and legal counsel cuts from FY2026 ($54,910 in non-personnel cuts continued on a one-time basis). OCA noted it is increasingly under-resourced compared to peers (96 cents per $1,000 city spending vs. $1.50 at peer agencies). IBA reported that a majority of council members support restoring OCA’s budget. The committee discussed the importance of OCA’s work, especially during a budget deficit, and the charter mandate.
Item 7 – City Auditor Monthly Activity Report Andy Hanau provided a status update: three audits in report writing (leased golf courses, brush management, fire rescue dispatch); three in fieldwork (cybersecurity, police internal affairs, unsafe camping ordinance); three in planning (citywide vehicle rentals, streetlight equity, arts funding equity). Vice Chair Foster asked for details on the police internal affairs audit scope and raised constituent complaints about IA discouraging complaints. Hanau confirmed the audit covers complaint categorization and disciplinary consistency and includes public outreach.
Item 8 – Audit Committee Member Priorities for 2026 Chair Moreno noted priorities submitted by members and the public, including auditor term limits and sufficient OCA funding. The item was informational. Committee member Halpern emphasized the need to address auditor term limits proactively given the difficulty of finding qualified successors.
Key Outcomes
- Consent Agenda (Items 1-2): Approved by voice vote (committee member Tapsuri absent).
- Item 3 (ACFR): Motion to receive and forward to City Council passed (Tapsuri absent).
- Item 4 (OCA Accomplishments): Motion to accept report passed (Tapsuri absent).
- Item 5 (OCA Budget): Motion to recommend restoring personnel and legal counsel cuts and continuing $54,910 non-personnel cuts on a one-time basis passed (Tapsuri absent).
- Items 6-8: Informational; no votes required.
Next Meeting: The committee will next meet on Wednesday, February 11, 2026, at 9:00 a.m.
Meeting Transcript
Good morning, Lauren. Can you please do an audio check for us? Sure, absolutely. Good morning. How are y'all? Thank you. Great thanks. You sound great. Awesome. Thank you. Good morning and welcome to the audit committee meeting of January twenty first, twenty twenty-six. Our committee liaison, Natalie Kessler will go over instructions for today's meeting. Thank you, Chair. Well, members of the public are able to attend the meetings in person. This meeting is being televised and live streamed in this 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. Natalie, please call the roll. Committee member Halpern. Here. Committee member Mafia. Present. Committee member Tapsuri. And Chair Council Member Moreno. Present. Also attending the meeting today is Andy Hanao, our city auditor. Jeff Peel, Assistant Director for the Department of Finance. David Carlin with the City Attorney's Office. Aaron Noel with the IBA. Kevin Smith, Committee Liaison. And I'm sorry, committee consultant and Natalie Kessler, Committee of the Aison. Natalie, please continue with public comment instructions. If you're in person, please complete a speaker slip located at the entrance of chambers and place it in the box near the public comment microphones. 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 listed online in the preamble language of the agenda on the city's webpage. If you need to participate by phone, please dial 16692545252. The webinar ID is 1612 1114 pound. This information is also available on the agenda. Members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the virtual queue closes. And 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. Please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. And 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're a column participant, press star nine on your phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you for reviewing those instructions for the benefit of the public.
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