City auditor details follow-up on 22 audits; police, Laguna Honda and airport among items still in progress

The Board of Supervisors’ Government Audit and Oversight Committee heard on July 28 from the City Services Auditor about the office’s audit follow-up process and the status of recommendations to city departments.

Audit director Tania Lettigier told the committee the office requires an initial departmental response when a draft audit is issued, then follows up at six months, one year and, if necessary, two years. "Once we determine that it is sufficient, then we deem that particular recommendation or audit finding closed," she said.

Lettigier said the auditor’s office had 10 closed reports, 10 open reports and two active reports at the time the agenda was posted, and that a later review closed an additional 10 audits. She highlighted systemic problems at several agencies: the Arts Commission’s African American Arts and Culture Complex showed weak controls over expenditures and payroll; the Municipal Transportation Agency and Police Department share responsibility for an auto-return contract that lacked sufficient oversight; and multiple airport concession audits revealed reporting and reconciliation gaps.

Airport Controller Wallace Tang said his office has billed Air Canada for about $24,000 in underpaid fees and received payment, and that several other airport items — including a shuttle bus company contract and system upgrades to aircraft-landing data — are in progress and will be addressed in contract renewals or system implementation phases.

On the Human Rights Commission, Lettigier said two recommendations remain outstanding: one in process and one the commission declined to implement due to resource constraints, and she urged risk-based sampling to target oversight.

Laguna Honda Hospital officials disputed the need for a quarterly solvency assessment of a donor gift fund. "We do report quarterly spending and donations and the fund balance as of the end of the quarter," Deputy CFO Cha Ma said, saying the hospital believes its current balances would cover expenses for many years at recent spending levels. Lettigier cited audit findings that, over six years, the fund had roughly $434,132,000 more in expenditures than receipts and said quarterly review or another feasible mitigation was appropriate.

The Police Department acknowledged delays in producing formal written responses to audit follow-ups. Captain Pardini said he was assigned to address the matter recently and that staff are now working with the auditor’s office to close the gaps. Lieutenant Eric Vintero described steps already taken on court overtime — a new human-resources management system implemented in May 2010, centralizing overtime-card input, and unit orders and bulletins — and said the court-liaison unit has implemented 12 of 15 related recommendations.

Comptroller Mark Tipton noted the premium-pay and overtime audit was completed Aug. 18, 2010, and that the department had not provided a written follow-up as requested.

SFMTA said it has developed an internal parking-audit program and issued consistent facility management regulations; it is also revising operator contracts to hold managers accountable for ticket audits and overnight-parker tracking.

Public commenters urged continued oversight, with speakers raising concerns about the Laguna Honda gift fund and alleging whistleblower retaliation; one commenter asked the committee to review a grand jury report about the controller’s office whistleblower program.

Chair David Campos said the committee would keep the Laguna Honda fund item under watch and the committee moved to continue the item "to the call of the chair," a motion taken without objection. The committee concluded by thanking the controller’s office and departmental representatives and said it would return to audit follow-up as needed.