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supervisor campos: good more jim -- morning and welcome to the thursday, march 10, meeting of the board of supervisors government audit and oversight committee. i am joined by the committee vice chair, supervisor farrell, as well as a committee member board president david chiu. madam clerk, do we have any announcements? >> yes, mr. chairman. please turn off cell phones. if you wish to speak during

public comment, please fill out a speaker card and place it to the left of the podium. completed speaker cards and parts of documents are to be included as part of the file and submitted to the clerk. items discussed today will appear before the board on march 15 unless otherwise stated. supervisor chiu: -- supervisor campos: thank you very much. please call item 1. >> item 1, motion approving the budget and legislative analyst services were planned for 2010. supervisor campos: thank you. -- work plan for 2010. supervisor campos: thank you. this item basically approves the work plan for the coming year, allocating hours for the calendar year 2011. it authorizes the budget and legislative analyst to reallocate up to 10% of the hours, based on the board of supervisors service needs, and it also requires board of supervisors approval if there is

such a reallocation. this item would then go before the board of supervisors for approval. if we have anyone from the budget analyst who would like to present. >> good morning. supervisor campos gave a good overview of what this motion would do. under our contract with -- the budget and legislative analyst contract, we are simple -- required to submit performance goals. we did provide a letter to accompany this motion that lays out our performance goals for the year. at the end of the year, we would get a performance evaluation by members of the board of supervisors. i can walk through the goals if you would like, just briefly. the goals cover our main areas of work, which are our

legislative analysis, which is our report we give each week to the budget and finance and sometimes the government audit and oversight committee on the fiscal impact of legislation pending before the board. we do performance audits, and special projects as well as individual requests from members of the board of supervisors, analyzing specific schools, programs, or city departments. and we do a annual budget review of the city's general fund. our goals are associated with that. in terms of legislative reports, our goals include providing the reports to the committee in a timely manner. members of the committee or members of the board at their request. continuing to improve and revise to make the innovation

meaningful and accessible. continue to identify policy issues, not only through the actual content of the legislation itself but issues raised by the legislation that may not appear immediately before the board. and continue to work on new legislative reports. we want to continue to work with the committee to provide the topics and do projects that are meaningful to the members of the board and address significant issues before the city. to continue to keep the committee, the government audit and oversight committee, and keep the board of supervisors apprised of any status reports. and present their report in a manner that meets the objectives of the study. continuing to provide useful and usable recommendations to budget and finance committee to the board of supervisors, to ensure that we are finding necessary

savings in both the enterprise and general fund budget. that is the high level overview. through our differences in our proposed work membership from last year, we have proposed some changes in the hours allocation. the reason for this is we have requested adding hours to the budget analysis. last year, we did not review several significant city departments because we had fewer hours to do that. we believe it is important to add those back to our review process. we have been working with the chairman of the budget and finance committee on the department's she believes are important, and we will continue to work with the committee on that. supervisor campos: what are the kinds of things that you did not or could not do last year that you are proposing to do this year? >> one of the major things is reviewing departments that we

did not do. last year, we did not look at any of the museums, even though there are significant issues surrounding them, like the asian art museum, the fine arts museum. we are recommending putting that back into our budget review process. we did not review either the retirement system or health services system. not all of the departments, but some departments we did not review last year that we are recommending. we are also recommending that between now and may 1 and 21, -- and june 1 that we do more preliminary review. we want to continue to look at those. last year, we identified about $7 that needed to be returned to the fund balance, and we believe that will be necessary. >> with respect to the museums,

what you are talking about is reviewing their budgets in the context of a budget process that is not a separate audit of the museum. >> that is correct. we are talking budget allocation at this point. on the legislative analysis, we are recommending increasing those hours slightly. that has to do with our experience this year where we believe the bulk of our work is our weekly committee reports before the budget and finance committee. we also have been working since the beginning of the contract in 2010 with the click of the board in which members of the board are revising existing in that legislation, which defines what we report on. you will be seeing the proposed piece of legislation that expands and revises some of the context of fiscal impact that we do not currently have. one of the key ones being that

currently, fiscal and that legislation does not cover revenues, and we think it is important for us to look at fiscal impact legislation. supervisor campos: how do you, by the way, decide the allocation? you have a proposed allocation. how is that allocation determined? >> based on historical experience. we know where we have put our hours. we know where this request has been for hours. on the performance by its special projects and policy analysis, what we are requesting to do this year -- we had two different allocations last year. we are requesting to put them in a bigger budget so we can be more flexible in terms of responding to requests.

we have reduced some based on our experience of the prior year, but the change is last year, we recommended the supervisor had a bucket of 100 hours. this year, we are looking at more flexibility. we think each class can be 150 hours. after that, it would have to go to a motion of the board for further discussion. we just talk with supervisors over the course of the year so we can be more flexible with responding. supervisor campos: with respect to the performance of its portion, how many would you be able to complete within the proposal of 4500 hours? >> there is fewer hours. i would say that a department audit, we would probably want to put about 1000 hours in. other projects would be more like 500 hours.

if you are looking at that, four, five, six, depending on the size. last year, we did a lot of very small project and completed six reports. >> for me, i think that reducing this number from last year is not a good idea, from my perspective. i feel that one of the things we should do is provide as much oversight about the delivery of services, and at least my own perspective is that reducing the allocation by about an hour in my view is not necessarily the best way of distributing the hours. i do not know where other supervisors are, but that is my own sense of it. please continue. >> i think that covers it, but the question i have -- would you be -- what we did here was combine the special request and

performance audit into one bucket. if we still had the one bucket, we would move it back up to 5500 hours, that would be acceptable. supervisor campos: yes, i think, for me, that would be fine. i just think that we want to have some flexibility. i know that for a lot of members of the board, the delivery of service issue is a key issue, whether it is muni, or something happening around public safety, whether it is happening with rec adn park. there are many agencies where those issues come up, and it would provide board members the flexibility to make those requests as they deem appropriate. colleagues, any questions, concerns for the legislative analyst? in terms of the process, the

item is being heard here today. what would be the next step? >> if this committee approved it, it would go to the full board for approval. i do not believe looking at this that the legislation would need to be amended, but we would probably need to submit a work plan that would address your concerns and basically go back to last year's allocation, a budget legislative analyst. >> for purposes of -- supervisor campos: for members of the committee and board members who are interested in how this works, especially new members, at one. -- at what point will we have the opportunity to submit recommendations for subject areas? >> that can be done at any time. talking about audit areas, that could be done at any time.

there's two different ways this has happened in the past. two different avenues, i would say. last year, we had two different ways. individual members would request and audit or project they would want that would go to a full motion before the board. it would go to the committee and that the board. we would help them define the questions. or, in addition, this committee can also consider what the priorities are based on avis' proposal we could recommend. and this committee could approve the schedule. and one does not preclude the other. at any point, a supervisor could ask for his or her funny -- project to be moved up. supervisor campos: great.

what we open up to public comment -- i'm sorry, supervisor farrell. i think supervisor farrell has a question. supervisor farrell: just to be clear, if we are going to ask you to rejigger some of the hours, do we need to continue for a week to make sure you have the time to do that properly? >> that can be done -- i actually did not know -- because the motion itself does not actually specify the hours, so i do not know if it could go to the full board with that change or it it would have to connect to this -- come back to this committee. supervisor campos: it seems to me that since the legislation does not provide specifics that we can move it forward with the recommendation and simply directed budget analyst to make changes to their work plan as if we are sending it to the board. i imagine we could do that.

>> i wanted to be clear, what you want to do is go back to the schedule we had in 2010? on page two, we had 2010 hours. do you want us to go back to that? supervisor campos: my fear is we will have a number of issues coming up that will require -- that could be deemed to be special projects, but we need some work by the legislative analyst's office, whether it is pension reform or who knows what else? we want to make sure that we have flexibility in the hours in place that we can do that. >> a cake, i will look into that. supervisor campos: president chiu? supervisor chiu: could you tell us again, the hours that individual board members have -- they come out of the budget analysis? >> they come out of the performance -- what we are

recommending to give flexibility to everyone is -- last year, we had two buckets. i believe we had 1000 hours for special requests and another 4500 hours for projects approved through a motion of the full board. what we would like to do for 2011 is combine those hours and maintain it at the 5500 hours but allow a little more flexibility, whether the request comes from an individual member or a motion. instead of having a restricted motion -- restricted number for an individual -- because we found we had to be very flexible last year -- is that each request would be limited to 150

hours. after that, you would either have to go before the board, which we had an example of that happening in 2010 -- supervisor chiu: i guess if you're saying last year was 1000 hours for specific legislative requests, another 4500 for larger performance audit-type, things, where is that number? >> that is what we were saying. supervisor chiu: i think i understand that. >> we actually spent about 1300 hours in a special class and about 4000 hours in projects and audits. -- about 1300 hours in special requests and about 4000 hours in projects and audits. supervisor campos: great, thank you, ms. campbell. why don't we open up to public comment? is there any member of the

public who would like to speak on this item? if so, please come forward. you each have three minutes. come on out. >> good morning, supervisors. i have lived in san offices go for 59 years. i would like to thank supervisor campos for today's hearing. also, since we are on the subject of possible audits, i would like to make my own suggestion for the budget analyst. based on numerous newspaper articles, i think laguna honda hospital needs to be further investigated publicly for how it handled the public fund for the patients, and also, san francisco general hospital needs to have further audits based on juvenile police department investigation into pornography

allegations on work computers at the hospital. i would like to thank the police department for doing that. also, i would like to cite three different articles on those two subjects. on the subject of pornography, there was an article dated march 8, and the headline reads, "sec employees in denver busted for looking at foreign -- looking at porn." locally, there was an article in "sfgate" with the headline reading "ex-cub scout leader sentenced in child porn." on subject finances for medicare, there was a headline on yahoo!'s news dated february

17, talking about medicare scams worth $225 million. this was something that was described as a massive, nationwide bust that snared more suspects than any other in history. i think those items need to be included in the work for this committee. in regards to the committee in terms of audit and oversight, i had a long discussion with the supervisor who started the committee, and he mentioned that he thought it would be an aggressive committee. unfortunately, after he left as head of the committee, in my opinion, i feel that this committee has underperformed, especially under supervisors mar and elsbernd. i hope under the current leadership, that it will be an aggressive committee, and it

will look into items that deserve attention, especially the department of public health, which, in my opinion, has not been examined closely ever since the 2003 performance audit done by the controller's office, done at the request of the board of supervisors. thank you. supervisor campos: thank you very much. is there any other member of the public who would like to speak? seeing none, public comment is closed. a quick note, the issue of the management of the patient fund at laguna honda, we did introduce a hearing request that the board of supervisors, so that item will be coming up before the committee in the very near future. if you could please call the next item. >> is there a motion on -- supervisor campos: i'm sorry. yes, we need a motion. supervisor farrell: i would like

to make a motion to approve item one and send it forward to the full board and similarly direct the office to revert back to the 2010 hours. just as a common of the new person at the board, i do agree. the principle of being flexible on the hours is beneficial to me. who knows what comes before us through the year? and especially this year, given the number of things that may come up, to have greater flexibility and not be so rigid i think is a valued asset from my point of view. supervisor campos: we have a motion. can we take that without objection? thank you. next item please. >> item two, hearing on the controller's office audit on the public utilities commission. supervisor campos: thank you very much. this is an item that has been

actually in the works for quite some time. it was submitted previously by the chair of the committee, supervisor mar. i will turn it over to the comptroller's office -- to the controller's office. thank you for being here. we have here copies. are there copies of the presentation available to the public? madam clerk, i think we have some extra copies here for members of the public who would like to see that. >> ok. good morning.

i am the director of audit, and our presentation will be on the -- thank you. as requested, we will be presenting the six audits we have performed at the san francisco puc for fiscal year 2009-2010 and 2010-2011. over the last two fiscal years, we have completed six performance audits of various puc functions and leases. we have also conducted ongoing non-audit services, including some whistleblower investigations. performance of its focus on assessments of city services and processes and provide recommendations for improvements to enhance department performance with these -- to

reduce cost and facilitate performance. as you can see, performance audit is not financial audit and includes different types of audits. for example, they include compliance audits and management audits. while we generally do not use the term management audit, we are using it this year for ease, since the city is already familiar with the term. most of its do not always fit specifically into one type. so compliance audits are 80 gritty detail comparison between the terms of a lease or contract and what is actually happening, in terms of the lease see -- lessee. compliance audits are important because they test the city -- test tha