>> good morning, everyone. welcome to the thursday, march

24th, 2011 meeting of the board of supervisors government bought it and oversight committee. and the chair of the committee. the clerk of the committee is here and we are joined by committee vice chair, supervisor mike farrell and board member david chiu. covering at the meeting for sfgtv -- >> please turn off all cell phones. you wish to speak during public comment, complete a speaker card and include any documents that should be submitted to the clerk. items will appear on the april 5th board of supervisors agenda unless otherwise stated. supervisor campos: thank you very much, thank you for being here today. please call item one. >> hearing on the office of comptroller city services

auditor annual work plan for 2010-2011. supervisor campos: this was previously introduced by supervisor mar. good morning, controller. >> thank you for having us here on our update for the work plan for the current fiscal year. we presented the work plan for our city services auditor function at this committee just after the start of the current fiscal year. it was a different committee at that point, so we appreciate the opportunity to come back and provide you an update on the status of our current projects. as we ramp down one year, we are starting the process for the coming fiscal year with the city departments and others. we look forward to coming back to this committee to hear him put on our work plan for fiscal year-20 -- fiscal year 2011 in the coming months. just briefly, this function

within our office was dramatically enhanced when the voters approved appendix after the city charter which enhanced the city auditor pension within the comptroller's office. it is funded with baseline funding requirements equal to 0.2% with any individual partner -- the individual departments of the city. it guaranteed funding going forward. that means we do have money coming from different parts of the city budget and different agencies, so our work is balanced across many departments within the city. we have a staff of approximately 45 people with and the city services auditor function. it is more than ably directed by our two directors within city services auditor, which you have met before in this committee. tonia heads the audit the side of the shop and will be presenting today and peg stevenson heads the city

performance side. it is balanced between auditing and performance management. there are some unique projects. our work is driven by a host of requirements, some legal sitting with that our charter, some within the administrative code. our work planning process is driven by a limited risk analysis which we do every year with departments and lastly, we formed the work plan like the one you've got here before you over several months, working with city departments, stakeholders and city bitter ship, including the mayor and board of supervisors. with that, i will turn it over to provide a quick update on the current work plan. supervisor campos: before you do that and i do look forward to hearing from her, just looking at the mandate the voters

provided on this item, it is a pretty broad mandate. i'm wondering if you could say a little bit more about that for purposes of the benefit of people who might be watching, just to remind them of what the 2003 charter amendment addition and what it proposed in terms of the function of the city's services audit. >> the 2003 ballot measure combined and enhanced a number of projects that already existed within the controllers office. it enhanced -- that measure designates the comptroller's office as the city services auditor for the city and county of san francisco. it gives us certain authorities to audit city departments, open city books, to engage in both performance, financial, and compliance auditing function

across the city department. you should all be receiving these reports as we issue them. we have a host of audit activities occurring at a given moment in time and this ballot measure enhanced the resources available we have to do auditing in the city and county of san francisco. it also established a whistleblower program within our office which was part of the ballot measure. this is an opportunity for city employees, members of the public, contractors, or anyone to report alleged misuses of the city resources, fraud or other activities and creates a way to investigate and follow up on those complaints. that same ballot measure dramatically enhanced resources we have available to help city with performance management. the comptroller's office has always had a role in helping to shape measures, for example ec

in the annual budget book and a system departments in this way. we now have, for example, a very regular reporting we do that is required by the charter on this condition of city streets, parks and sidewalks. you see those twice a year from less. -- from us. it expanded the resources we have for many city departments. >supervisor campos: before we turn it over to staff, and terms of what departments are audited and what functions are reviewed, how is that determined that what is the role of this committee or the board of supervisors in helping to make that happen? >> we have worked to grow and create a robust work planning process in prior years. we began about now developing

our work plan for july. what makes its way into the work plan is a host of different things based upon an assessment for our office from different risks in different departments, driven by more classical risk review, including how much money is being spent in that area, what kind of staff turnover we have seen in that sector, how many contracts, etc. risk analysis is part of it, but we have a consultation process -- department finance staff where we seek input from the citizens general oversight bond audit committee and review board. [no audio] we do consult with the mayor's office to hear thoughts on aircraft work plan and we do use

the audit committee of the board of supervisors for feedback from the board of supervisors and we will make modifications as this committee expresses preferences for what you would like to see us focused on for the coming year. we would like to keep it balanced across all city departments. we will typically have worked simultaneously going in each one of our city departments and that is partially driven by the way are funded works and partially driven by our desire to keep an eye on all place. supervisor farrell: when the formalize next year's work plan for the office? use a broad brush strokes right now, when does it get in concrete? >> we have a project we used to track projects we have had in the hopper in the past. we have a whole body of work we have talked about as in prior years that has not made the cut.

that provides a universe of things that will help to populate next year's work plan. we are really starting now, i hope we will be back before this committee to seek input in the next six weeks or thereabouts. the goal is to have a completed work plan by july 1st so we know what we're doing for the year before we start the year. supervisor farrell: i think it is important to have that input. we have always had that in the past and i know you keep in touch with all of us to get our feedback before you are vested in whatever work plan in have. -- would ever work plan you have. >> good morning. tonia lediju with the

comptroller's office. it is broken up into city performance and operations. we performed performance audit which focuses on assessment of city services and processes and provides recommendations for improvement to a dance performance and reduce cost and facilitate decision making for parties. we also have the whistle-blower investigation under our purview. on the city performance and operations, their performances on analysis, standards and performance measures and technical assistance and professional contracting. that is shared by our controller for the fiscal year 10-11. the audits we have completed since january 27th, we have completed 49 of its during this fiscal year. we have completed audits for puc

and conducted cash transaction audits and completed a financial management audit of laguna honda gift fund, we have completed an audit of the fire department and, in that, we have several projects in progress. major progress, to capital construction projects for san francisco general hospital rebuild and day construction of audit of the top and park. we have the redevelopment agency and to management audits, one that mta for sustainable streets and one for affordable housing. we have a final payroll audit of human services agency. it is our endeavor to conduct to payroll audits each year and at least 12 city-wide cash transaction of its yearly.

we also have other audits in the special review that are ongoing. currently, we have 37 audits in progress. there are some audits we will not complete this year. if you look at our audit plan on the web site or what you have in your hand, we will not complete our audit simply because we have had the federal agencies come in and audit mta and audit the airport in very poor -- in various organizations in the city. our desire is not to duplicate efforts, therefore we will follow-up on the audits in various organizations this year. we will be postponing our at&t contract audit due to the fact that our i.t. department will be revamping that particular contract. we want to give them the opportunity to make the changes

that we will go in and look at the changes they have made. we have been requested by charter to look at the review of hunters point. that has been delayed as well as a couple of construction audits with the puc. >> the morning. i'm from the comptroller's office and want to talk to you briefly about some of the projects we of completed this fiscal year and a couple that are in progress just to give you a sense of the brunt of the issues we cover. i think people have a strong intuitive sense of what an audit looks like a may be less of what a technical assistance looks like. i hope this will give you a stronger sense. as was mentioned earlier, the charter requires we work with parks and recreation to assess the cleanliness of our streets and parks. we have issued annual reports on

those two activities this fiscal year. reports were issued and show our parks and streets were cleaner than in past years. so yay for us on that. >> supervisor farrell: how much did we spend on the audit to confirm our streets were clean? >> that's a good question. it is not technically an audit. it is an evaluation. how much did we spend? i would have to get back to you on the exact figure. i think our total work order budget was something like $200,000. we spent less than half of that on this street of valuation. we do some of that in house. dpw hires vendors to do inspections. supervisor farrell: as

background, what kind of bang for our buck are getting in san francisco? we are just confirming our streets are clean than before? i'm just trying to understand if there's anything actionable that comes out of this. >> absolutely. if you pose a question to the general public, i don't know you get a consensus. i may have sounded casual in the way i described it, but there is a great variety in the cleanliness of streets across the city, of course. helping the department figure out where things are clean let's the reallocate sources. there is a lot of actionable information. or where things are very dirty, they need to replay resources. we are -- supervisor farrell: mbe you can speak to the process by where once an audit or review is completed, what happens in terms

of making sure the findings are followed up want, that some of the recommendations are implemented, what action is taken and what is the process by which you ensure that remedial action takes place. >> one of the reasons that technical assistance function was created as part of the charter amendment. part of that was the comptroller office was issuing audit saying you should do such and such a job at the departments did not have the capacity to implement those changes. they did not have the wherewithal. many of our technical assistance projects involve all lot of up close, detailed assistance to help departments implement these improvements. in terms of the accountability, it is shared accountability when audits and reports about that say departments can improve in these ways. the comptroller's office follows up but it is a shared obligation

across city leadership to follow up and say have been made these improvements? we do not always have the authority to demand a make those changes. supervisor campos: is there a way we can find out what recommendation with respect to all the audit to have done are still waiting or awaiting action on the part of departments? is there someone in your office responsible for making sure those are followed up on? >> there is a regular process where we check back in with the audited function to check in on what progress they have made. >> are you speaking to the technical assistance or -- supervisor campos: i think the point -- what i understand and i think he is absolutely right, if we are making the investment in doing a review, whether it is an audit or providing technical assistance, that we do want to

get the most bang for that investment. that means making sure that if there are specific recommendations for action items that they are in fact done. >> for every audit that is issued, there is a follow-up process. it requires prior to releasing the audit, we request a response with concurrence or non concurrence and a plan of action. at the six month mark of that publication of the audit, we do a follow-up and require certain documentation. at 12 months and then that two years. if it has not been completed, we continue to fall out actively with the department to make sure findings and our recommendations are actually implemented. six, 12, and two years. so after the 1-year mark, we may

do it six months later. we do actively follow up on their recommendations. some of those recommendations we do not always go and attest to those recommendations because some of those recommendations maybe policies and procedures of those different types of things. depending on the recommendation, that will determine whether be allowed into actual testing of what has been reported to us. supervisor farrell: in terms of the financial audits, there are a lot of them here listed. would you characterize them more as trying to save money or ensure there is a process in place at whatever agency your auditing? >> in terms of the financial audit or compliance audit, with a compliance audit, we are

looking to determine are you following the criteria in which this program is operating under? in those processes, we are looking at dollars and we will identify if there are any potential abuse, fraud, waste. we look at that, that's part of the auditing standards we follow. any time we see any waste, we acknowledge it in our report. if we see ways in which the department could do something better and more efficient, we will acknowledge that as well. supervisor farrell: i'm trying to think of all the lines for financial-services audit. does this become a cost saver for the city or is this an expense that because we want to ensure there is correct compliance and how to think about these? >> that's a great question. maybe it is helpful to briefly describe how the audit function fits within the comptroller's

office overall so that the charter obligates the controller's office to establish accounting procedures and financial controls for the city. that's the first enlisted in the charter about what our office is responsible for. we really provide or create that internal control framework couple of ways in the office using different parts of the shop. we have preventive controls and where reviewing transactions before they occur and that will truly have accountants taking documents and reviewing them. that happens on the operations side of the shop. then we have detective controls in the office where knowing it would not be cost-effective for the city to give us enough accountants to have every transaction posted reviewed by a live human being, we sample the pre approval at have the auditing function in place, especially on the financial

audit portion to detect later. and all up in case after something has been detected, was this appropriately that? probably more so than cost savings, a financial audit has that in mind. it is the balance to our pre approvals as opposed to just maintaining a controlled environment within the city. supervisor campos: please continue. >> i think it might also answer some of your questions about whether we go through this list of technical projects, he will get a better sense of things we do and recognize a lot of them are not just analyses that have the potential to sit on the shelf. all lot of our engagements are working with department thought implementations may have committed to making the changes necessary to do that. i will go through these relatively quickly and you may feel free to ask me to questions at the end.

we collect a fair amount of performance information from city departments. we're trying to share that information better with the leadership of the city and the public. we have a number of reports we issue, including some might have seen. we issue a buy monthly government broader that profiles the city's performance relative to measures of general interest. as a follow-up to the better streets plan, we had some tools for departments to help them make decisions about what streetscape decides they should use its air considering greener alternatives streetscape design set create a pedestrian for like, more beautiful environment, we helped implement a cost of -- we help with the cost of the building those designs. we do work with larger departments, work with dph, a

recent project was helping them streamline their medical procurement process. we're working with them what i.t. solution that will help them get better prices. we have been caught -- we have been involved with an ongoing conversation with various agencies around how to get the biggest bang for the buck out of our engagement with community- based organizations that provide resources to the community on behalf of the city. a few more projects in progress this year -- in june of 2010, the city passed proposition 8 which required moving to budgeting and developing a five- year plan and we're providing a lot of heavy lifting to get that plan together which is due to the board of supervisors on july 1st. we are working on a number of efforts to improve the contract in process. we're working with the main city agencies involved with that.

every two years, the city conducts a survey of its residents. that is addressing one of the requirements of the charter. we will be reporting on that in june. as you know, the comptroller's office has been working with an eta on the trend the effectiveness process. -- working with the mta the transit effect of this process. a number of other things you can see on the slides, but i know we are under a time constraint, so we're happy to answer any questions you have. supervisor farrell: but in terms of the nonprofit monitoring and capacity building, does that

correspond to the hsa line item here or is this the broader tracking system we have in the place now? >> good morning. another deputy in the city performance group and i direct the health and human services portfolio including the non- profit program. that particular project, it turned out a couple of months ago that hsa no longer needs that analysis and have moved forward and adopt a contract management system that is actually a great outcome. we thought we were going to need some analysis around that, but we are not going forward with that project after all. while it was related to our on going profit monitoring and understanding performance, it

was not otherwise related to that. we have a very robust program working with not profits, improving accountability, setting financial standards, building their capacity, and helping the city have consistency and better information sharing with not profit performance. supervisor campos: i do want to give kudos to the comptroller's office. i know we have been working to make sure we bring in that level of accountability and assistance with the nonprofits. the road -- the most recent example being pried -- being pride. we asked for a somewhat limited management government's review which highlighted some issues that needed to be addressed and was very useful. not just useful in pointing out some of the issues that need to be addressed but providing the

assistance. the more we can do that, that's something that think this committee can help play a role in helping to identify those kinds of agencies where that help is needed. what i would say might general reaction to this work, i think this is some of the most important work that goes on in this city. because insurers we fulfill our mandate of serving the public and the charter amendment that was passed makes it clear that one of the main objectives is to report on the level of effectiveness of public services and actually create benchmarks for how those services are provided. what i am trying to understand is maybe if we can create a