San Diego Audit Committee Meeting, April 23, 2026: Independent Counsel Contract Approval and Audit Follow-Up

The San Diego Audit Committee met on Thursday, April 23, 2026, from 9:00 AM to 11:56 AM. The committee considered a consent agenda, a recommendation for approval of an independent legal counsel contract, a comprehensive recommendation follow-up report, the Office of the City Auditor's proposed FY27 budget, and the FY25 single audit results. All votes were unanimous. Public testimony was not provided on any item.

Consent Calendar

• Item 1: City Auditor's Quarterly Fraud Hotline Report, FY26 Q3.
• Item 2: City Auditor's Monthly Activities Report.
• Both items were approved unanimously (4-0); Vice Chair Foster was absent.

Discussion Items

• Item 5 – Request for Approval of Independent Legal Counsel Contract: Matthew Helm, Assistant City Auditor, presented a request that the committee recommend to the full City Council approval of a five-year, $900,000 ($180,000 per year) contract with the RENI Public Law Group. This contract would provide independent legal counsel to the Office of the City Auditor and the Audit Committee, as authorized by Measure A (approved by 70% of voters in March 2024). Chair Moreno noted that the contract amount matches the fiscal impact statement presented to voters. The committee voted unanimously to recommend the contract to the full City Council.

• Item 3 – Office of the City Auditor's Recommendation Follow-Up Report (Period Ending December 31, 2025): The report was split into Section A (actions) and Section B (informational discussion).

  • Section A – Proposed Actions:
    • Public Utilities Department (PUD) – Advanced Metering Infrastructure (AMI): PUD halted the AMI program and canceled the solicitation. The committee approved closing the last remaining recommendation (No. 3) as "not implemented – not applicable."
    • Development Services Department (DSD) – Code Compliance: DSD no longer enforces certain low-priority complaint types due to budget cuts and a reduction in force. The committee approved closing Recommendation No. 1 (voluntary compliance program) as "not implemented – not applicable."
    • Fraud Hotline – Unsafe Driving by City Employees: The Risk Management Department assumed responsibility after the Compliance Department was dissolved. The committee approved changing Recommendations 1 and 4 from "disagree – audit committee requested action" to "in process – past due" and closing Recommendation 2 as "partially implemented – no further action." The committee also recommended continued monitoring.
  • Section B – Informational Discussion: Committee Member Tapsuri led a review of outstanding recommendations across 10 departments. Key points included:
    • Fire Department: Progress on disaster preparedness recommendations, assisted by the merger with OES.
    • Purchasing and Contracting (P&C): Ongoing delays in contractor performance evaluations and municipal code changes for approval thresholds; target deadlines pushed to end of FY26 or FY27 due to workload and resource constraints.
    • Stormwater Department: Developing an inspection fee program to achieve cost recovery by calendar year 2027, but facing resource trade-offs.
    • Economic Development/Real Estate: Of 847 lease agreements, 183 (22%) are in holdover. A comprehensive real property management plan remains delayed due to budget constraints; 10 agents manage the entire portfolio.
    • Development Services: Moving away from deposit accounts to a monthly invoicing model, pending City Treasurer approval.
    • Parks and Recreation: 12 of 16 recommendations from the equity audit are overdue; progress tied to a community recreation needs assessment and a cost-of-service study. Budget cuts threaten staff positions supporting equity programming.
    • General Services/Fleet Maintenance: 3 of 10 recommendations implemented; others delayed but on track with auditor collaboration.
    • Environmental Services and Performance & Analytics: All recommendations on schedule.
  • The committee noted frustration with recurring budget and capacity excuses, urging departments to find innovative solutions.

• Item 4 – Office of the City Auditor's Fiscal Year 2027 Proposed Budget: Matthew Helm presented the budget request, noting that the Mayor's proposed budget includes a 3.5% cut ($208,228) to personnel, which would reduce the auditor's funding to $0.91 per $1,000 of city spending—nearly the lowest since the office's creation in 2008. The committee voted unanimously to recommend the Council restore the cut and fix a prior one-time reduction that had become ongoing, preserving operational capacity.

• Item 6 – Fiscal Year 2025 Single Audit (Informational): Kathy Lai of Crow LLP presented the results. The city received an unmodified (clean) opinion on compliance for five major federal programs tested. No action required.

Key Outcomes

• Unanimous votes on all items requiring action: approval of consent calendar, recommendation to Council for the independent legal counsel contract, approval of Section A closures/status changes, and recommendation to restore the auditor's budget.
• The committee directed staff to provide updates on outstanding recommendations, particularly for the Treasurer's approval of DSD's invoicing change and for expediting the Mission Bay boat storage fee study.
• The next regular Audit Committee meeting is scheduled for Wednesday, June 10, 2026, at 9:00 AM.