Audit committee hears 2010 bond oversight report; whistleblower advocates seek stronger protections

The Government Audit and Oversight Committee on Jan. 12, 2012 received the Citizens General Obligation Bond Oversight Committee's 2010 annual report and heard public calls for stronger whistleblower protections.

Thea Selby, presenting a report prepared under former chair Abraham Simmons, summarized the oversight committee's review of major bond programs, saying the committee changed its reporting year to match the fiscal year and plans to meet more frequently. Selby detailed problems and lessons from several projects, including Laguna Honda Hospital and the Branch Library Improvement Program.

Selby told the committee Laguna Honda began with an authorized amount of $299,000,000 and "has a completion cost of $585,000,000," and described that project as one that "didn't go particularly well." She said the oversight committee expects to apply lessons from Laguna Honda to current projects, including the General Hospital rebuild.

On branch libraries, Selby said 22 of 24 branch libraries are complete and reopened but the program has experienced budget and schedule overruns; a memorandum of understanding between Public Works and the library program has helped improve project management. She described Recreation and Park as a multi-project program with earlier change orders and ongoing schedule delays and said the committee requested Rec and Park provide 10 ideas to reduce schedule overruns.

Selby identified the General Hospital Rebuild program as the largest bond, with an authorized amount of $887,000,000. She said current work was on budget but faced schedule risks and that the project manager estimated an on-schedule completion in 2015.

Thea Selby also reviewed oversight of the City Services Audit Division and the controller's whistleblower program. She said the oversight committee will shift to six meetings a year, establish liaisons for each major bond and begin receiving quarterly, more detailed whistleblower reports and regular public hearings to improve transparency.

Public commenters questioned whether those changes go far enough. Dr. Derek Kerr, a former Laguna Honda employee who identified himself as a whistleblower, told the committee the 2010 report omits tracking of retaliation and asserted that "neither Golbach nor the whistleblower program monitor retaliation against whistleblowers." He also told the committee the oversight body lacks independent staff and resources because administrative support and some functions are handled by the controller's office.

Citizen Patrick Manet Shah criticized the timing of the hearing and urged closer review of change orders, saying a $183,000,000 cost overrun at Laguna Honda represented a 46.7% increase over the original budget and should have been more thoroughly documented and monitored.

Dr. Maria Rivera, another former Laguna Honda employee and whistleblower, urged board members be given guidance beyond controller materials and recommended distributing external resources such as the National Whistleblower Center's guidebook and materials from the Government Accountability Project to members and prospective whistleblowers.

After the presentation and public comment, President David Chu moved to table discussion of the 2010 annual report for further consideration; the motion passed without objection.

The committee did not take final action on the report at the meeting but directed additional follow-up and scheduled continued oversight work.

The committee is expected to revisit the annual report and the committee's oversight steps at a future meeting, timed to the committee's revised fiscal-year-aligned schedule.