The Audit Committee meets on Wednesday morning and members will get a progress update on an enforcement mechanism to ensure that City staff accurately represent and inform City Council of all material facts or significant developments relating to real estate acquisitions. They’ll also hear a performance update on the city’s Grants Program.

From the Office of Council President Joe LaCava

Audit Committee Meeting – March 12, 2025 – 9 a.m.

Audit Committee Meeting Agenda

Consent Agenda

Item 1 – Approval of Committee Minutes

Discussion Agenda

Item 2 - Performance Audit of the City’s Grants Program

Grants can be a tool to bridge the gap between the City’s operational budget and its needs. The Office of the City Auditor conducted a performance audit with two objectives:

1. Determine if the City is competitive in planning for and pursuing grant funding
2. Determine if the City’s policies and processes for grant research and application are followed and align with industry best practices.

Since the last audit of the City’s Grants Program in FY2018, enhancements to the Grants Program have aided the City in becoming more successful in securing grant funding. Specifically, from FY2019 through FY2023, the City increased the amount of grant funding it has received by 81 percent, from $271 million in FY2019 to $491 million in FY2023. However, the City still lags behind other large California cities in grant awards, with other cities receiving 66 percent more grant dollars per capita than the City.

Item 3 - Proposed Amendment to SDMC Measure A: Retention & Use of Independent Legal for the City Auditor & Audit Committee

In March 2024, nearly 70 percent of voters approved Measure A, which established City Charter provisions permitting the Audit Committee and Auditor to retain and use independent legal counsel in certain circumstances. The approved Charter provisions allowed for the City to establish implementing procedures as may be needed.

This item would recommend the City Council adopt the proposed amendments to the San Diego Municipal Code to implement Measure A and Direct the Ad Hoc Subcommittee for Implementation of Measure A to continue to assist the Office of the City Auditor in preparing a Request for Proposals for independent legal counsel once amendments to the San Diego Municipal Code have been adopted.

Item 4 - 2024 Annual Report on Internal Financial Control

This Annual Report on Internal Control is issued pursuant to City of San Diego Municipal Code, adopted by the City Council in October 2004 via Ordinance 19320 to achieve a high standard of quality in and efficacy of the City of San Diego’s financial reporting and disclosure practices.

Within the last 120 days, management evaluated the City’s internal financial controls over financial reporting. Based on this evaluation, management concludes that the internal financial controls are effective and has certified the result in Attachment 1 of the 2024 Annual Report on Internal Financial Control.

Information Items

Item 5 - Report to Audit Committee on Request re. Staff Attestations for Unrepresented Management

At the March 13, 2024 Audit Committee meeting, the Office of the Independent Budget Analyst (IBA) presented options for the Committee Member’s consideration related to the City Auditor recommendation of an enforcement mechanism to ensure that City staff accurately represent and inform City Council of all material facts or significant developments relating to real estate acquisitions under the jurisdiction of City Council.

Councilmember Vivian Moreno made a motion for staff and the City Attorney’s office to:

• Develop language for staff attestation for unrepresented management level employees within staff reports to the City Council
• Update the employee code of conduct
• Develop and offer enhanced staff training

This item provides an update on progress made.

Item 6 - City Auditor’s Monthly Activity Report

This Monthly Activity Report provides information about the Office of the City Auditor’s activities in February 2025. This includes audit reports issued, the status of current audit projects, and a list of planned audits that have not yet started.

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