{"id":9699,"date":"2023-05-11T13:56:37","date_gmt":"2023-05-11T20:56:37","guid":{"rendered":"https:\/\/sandiegonewsdesk.com\/?p=9699"},"modified":"2023-05-11T13:57:00","modified_gmt":"2023-05-11T20:57:00","slug":"san-diego-countys-1b-transit-agency-is-under-fire-again-what-to-know","status":"publish","type":"post","link":"https:\/\/sandiegonewsdesk.com\/?p=9699","title":{"rendered":"San Diego County\u2019s $1B transit agency is under fire again. What to know"},"content":{"rendered":"

The original article can be read here<\/a>.<\/p>\n

by\u00a0Jennifer Bowman<\/a><\/span><\/p>\n

A series of damning internal audits at the\u00a0San Diego Association of Governments<\/a>\u00a0released in recent years have brought light to poor policies, improper spending and even resistance from agency leaders.<\/p>\n

The most recent audit,\u00a0as\u00a0inewsource<\/em>\u00a0reported this week<\/a>, showed that auditors find SANDAG\u2019s contracts process concerning enough that they\u2019re conducting further investigation on some matters and will refer findings to outside oversight agencies.<\/p>\n

The next movement on the audit will come Friday, when the agency\u2019s Audit Committee takes up the full report before SANDAG\u2019s full board discusses it later this month.<\/p>\n

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What is SANDAG?<\/h3>\n

The San Diego Association of Governments is a taxpayer-funded agency that makes decisions on long-term planning for the region. While it\u2019s best known for planning and funding public transportation, it also conducts criminal justice research and provides broad information dealing with the county\u2019s quality-of-life issues.<\/p>\n

SANDAG, a $1 billion agency with more than 400 employees, is governed by a board of directors comprising mayors, council members and county supervisors in the region.<\/p><\/blockquote>\n<\/div>\n<\/div>\n

But why are so many audits coming from the $1 billion regional planning agency? And what have the other audits revealed?<\/p>\n

Since 2019, SANDAG has employed what\u2019s known as the Office of the Independent Performance Auditor. Led by Mary Khoshmashrab, who previously held auditing positions at state and county agencies, the office\u2019s five-person team is tasked with investigating potential fraud, waste and abuse.<\/p>\n

This office exists because it was\u00a0created more than five years ago by a state law<\/a>\u00a0that specifically targeted SANDAG: In addition to ushering in a weighted voting system that shifted power to the board representatives of the county\u2019s largest cities, the new law also required the agency to employ an independent auditor.<\/p>\n

Introduced by then-Assemblymember Lorena Gonzalez Fletcher, the law was in response to a SANDAG scandal that revealed officials knowingly overstated how much revenue the TransNet sales tax would generate.<\/p>\n

Khoshmashrab\u2019s office conducts investigations based on citizen and employee complaints. (That\u2019s how it found SANDAG\u00a0lost some $1.8 million in toll revenue<\/a>\u00a0while it kept malfunctioning equipment operating on State Route 125 for months.) But it also conducts regular audits based on annually developed plans, like those that have reviewed contracts, agency-issued credit cards and severance payments.<\/p>\n

The audits haven\u2019t always been popular with SANDAG management.<\/p>\n

Here\u2019s what to know.<\/p>\n

Bonuses, severance payments<\/strong><\/h2>\n

The first audit from Khoshmashrab\u2019s office,\u00a0released in 2020<\/a>, found the agency improperly made severance and bonus payments worth hundreds of thousands of dollars.<\/p>\n

Three departing executive-level staffers received severance they were not entitled to because they left voluntarily, the report found.<\/p>\n

Auditors also found promotions and raises to mostly upper-management employees that weren\u2019t sufficiently justified by performance reviews and a failure to rely on comparable public agencies for salary surveys.<\/p>\n

\u2018Improper\u2019 agency credit card purchases<\/strong><\/h2>\n

SANDAG staff racked up hundreds of thousands of dollars in \u201cimproper\u201d and \u201cquestionable\u201d payments on taxpayer-funded credit cards \u2014 including nearly $70,000 at local restaurants and almost $250,000 in transactions on non-working days over a four-year period, according to\u00a0a March 2022 audit<\/a>.<\/p>\n

Auditors also flagged SANDAG\u2019s credit card policy, saying it lacked \u201cbasic elements\u201d seen in other public agencies\u2019 guidelines and that staff training to understand the rules was minimal.<\/p>\n

Subsequent reporting by\u00a0inewsource<\/em>\u00a0found that some of the highest-paid staff\u00a0used their credit cards hundreds of times<\/a>, often at upscale dining spots and with bills topping out at more than $100 per visit. CEO Hasan Ikhrata was one of the agency\u2019s most frequent spenders, charging $17,000 in meals over roughly two years and mostly at local restaurants.<\/p>\n

Contracts audit \u2018hindered\u2019 by management<\/strong><\/h2>\n

Khoshmashrab\u2019s last two audits have focused on the agency\u2019s process of awarding contracts.<\/p>\n

The first report, released in October, found that SANDAG\u00a0increased vendor contracts<\/a>\u00a0by tens of millions of dollars more than their original amounts. The agency\u2019s 10 vendors with the highest percentage changes originally were awarded nearly $48 million in work, but that total more than doubled over a four-year period to nearly $106 million.<\/p>\n

Last week,\u00a0part two of the audit was released<\/a>, and Khoshmashrab\u2019s office said its findings are concerning enough that it\u2019s conducting further investigation and referring matters to outside oversight agencies.<\/p>\n

From large contract amendments that lacked board approval, missing and poorly kept paperwork and millions of dollars in consultant work for services that could have been done by in-house staff, auditors warned SANDAG management that it was opening itself up to a slew of serious potential risks \u2014 including collusion and loss of funding.<\/p>\n

What is SANDAG management\u2019s response?<\/strong><\/h2>\n

It\u2019s a mixed bag. At times, SANDAG leaders have agreed with the findings and implemented policy changes, like\u00a0tightening rules on agency credit cards<\/a>\u00a0and increasing reporting to the board.<\/p>\n

Other times, however, they have fiercely disputed the reports \u2014 and have been accused by auditors of impeding their work.<\/p>\n

Ikhrata disagreed with the results of the 2020 audit on severance and bonus payments, saying auditors included findings \u201cthat sometimes lack sufficient information and context and therefore might lead a reader to believe the discretion exercised by management was not reasonable.\u201d He also argued the payments were within the scope of his authority as CEO.<\/p>\n

Management also disagreed with many findings from the latest contracts audit, including an accusation that some members were unwilling to hand over information that Khoshmashrab\u2019s office requested.<\/p>\n

Ikhrata again argued that some of the findings \u2014 specifically, contract amendments that exceeded $100,000 without obtaining board approval \u2014 were within his authority and even argued that the audit\u2019s criticism of using outside consultants instead of in-house staff was outside the scope of auditors\u2019 objectives.<\/p>\n

Khoshmashrab stood by her office\u2019s work in a response to management, saying the findings remain concerning and policy changes are still needed.<\/p>\n

What\u2019s next?<\/strong><\/h2>\n

All of Khoshmashrab\u2019s reports are reviewed by the agency\u2019s\u00a0Audit Committee<\/a>, which consists of both board representatives and outside members, and later the full Board of Directors.<\/p>\n

The board ultimately considers an action plan presented by SANDAG in response to the findings. That will happen later this month for the most recent contracts audit.<\/p>\n

And even though that audit is likely the last from Khoshmashrab, who is set to retire later this year, her office\u2019s work will continue. Next, the team will focus on auditing the agency\u2019s inventory of assets, as well as employee travel and reimbursement costs. Then they\u2019ll follow up on reviewing the agency\u2019s credit card practices.<\/p>\n

Meanwhile, SANDAG is actively recruiting for Khoshmashrab\u2019s replacement. (The board had discussed the idea of\u00a0replacing her with outside consultants<\/a>, but has since decided to keep the position in-house.)<\/p>\n

Original Article Link: What\u2019s up with all the SANDAG audits? We explain. (inewsource.org)<\/a><\/p>\n

Image Credit: Canva<\/p>\n","protected":false},"excerpt":{"rendered":"

The original article can be read here. by\u00a0Jennifer Bowman A series of damning internal audits at the\u00a0San Diego Association of Governments\u00a0released in recent years have brought light to poor policies, improper spending and even resistance from agency leaders. The most recent audit,\u00a0as\u00a0inewsource\u00a0reported this week, showed that auditors find SANDAG\u2019s contracts process concerning enough that they\u2019re…<\/p>\n","protected":false},"author":3,"featured_media":9700,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-9699","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"yoast_head":"\nSan Diego County\u2019s $1B transit agency is under fire again. 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