terms of continuity. we worked very closely with the comptroller's office, and i think that we were called -- a large department with serious issues with the infrastructure group. we're very much in planning and exercising and doing things to bring the macro-port into operation. this is related to the transportation infrastructure. with the bridges down, the transportation is a big deal. there is a lot of activity going on.

as to how well the find that these plans are, we have to take our steps, and we have to build on this. coming back with the audit findings, we have a small group application -- and this is three people. we're working on maintaining and continually developing the systems, and we did not have this as a priority, and we brainstorm quite a bit. this has come up in the audit, and we're looking at providing some additional budget resources, where i had hoped

that we had some federal grant capabilities, and we're interested in seeing these ports coming up quickly, and there is the opportunity at one time, for us to leverage on the kind of money that has to do with the overall ability. we have to look to some internal resources. >> when is the timing of when you may have the back of >> there may be the additional process to determine. not to say -- that they have been missing this, but the staff has changed, coming up to the committee, like yours.

we have never had this issue. it is not to say that this is something that is necessary. this is a priority but this is not the highest priority. >> and is there something to this? >> this is one of the very few departments that has a subsidiary financial system, the overall system as the backup. together with the planning, the city-wide planning, they are doing consolidations were the departments are going to be combining their information, into the redundant recovery sites, and once the data center consolidation is complete, we will, on behalf of the ports, correct this. this is part of the

consolidation planning and participation, there are one of the departments that will be first and foremost to prioritize. and in 18 months -- they will go into this site. >> thank you. the last part of the response -- we're working in cooperation with the city. we were actually hoping that this issue of having a back up -- going back to when i was saying, this is somewhat mitigated.

since we are property management -- this is an issue that we need to address. this is on the radar screen. we have a comment to talk about this. the capital assets, and the fiscal inventory, they are just backing up, with 2009 -- we had one major audit adjustment, and there was a technical point about somehow of the new reporting models were supposed to pick up of the land improvement act, if this was permissible or not. the assertion that the

discrepancy and the missing information where the lack of taking things off were scrutiny -- on the capital assets account, this was merely taking care of. everything else is subject to a five-year cycle. this maintains the will -- the discipline, and then we agree that we have to look at the record. we did not agree with the concept of doing this, from wall-to-wall. there are 7.5 miles of waterfront needing improvement. we would like to continue on the five-year cycle. the last five-year cycle was actually completed in 2004. we just have to initiate this again and we are committed to doing this. the equipment, the last

equipment that was performed in 2006. and in 2011 we are up against a wall, so to speak. we will be doing this in 2011. >> and this is closed at a five- year cycle. we have the internal, success of policy. >> and how does this compare to the other jurisdictions? >> i think that this varies, and i do not think anyone does this every year. with what you do regularly. this is somewhat of a judgment call. in the context of the grants, we made the comment that we do not

have a lot of -- the director to it -- took it upon her group to create the record, and the grant for the equipment, the federal regulations were on a two-year cycle. we will have to grant funding equipment. and we will comply with the inventory. >> we get the feeling that the board is on top of this that has been identified. thank you for coming in giving us that presentation. >> thank you for the opportunity. >> is there any other department that is here to address anything else that we have left out? >> we have ktmg that needs to

go over the findings and the airport and the mass transit authority are here. >> good afternoon. i am the partner responsible for the work with the city and county of san francisco. we did complete the audit with the standard, unqualified opinions. there were no significant difficulties. i do want to comment on the deficiencies noted in a couple of the reports that were provided. on the financial statement, there was one statement of cash flows. this was not a huge concern. this is the first year doing the single audit, and we have three

comments included. one of them had to do with cash management. there were amounts repaid from the contractors, with oversight in the cash-management area. under reporting, we look at the quarterly recovery act funds, and there were mistakes made in the way that these were filled out. it should be relatively easy to correct, and another comment that you heard earlier, this has to do with the opinion of the weekly payroll in a timely manner. this is a little bit, but also easy to address. this is related to the federal funds office, and the demand -- mass transit authority, we were also looking at the federal funds. there were a couple of comments

relate to the financial statements reporting, and the first had to do with the inventory account process. i raise this as a matter in this report because there were similar comments in the previous few years. this would not have been a comment, but there were comments on this in the last few years to highlight this. the second thing had to do with the state auditor that actually found under-payment, and the share of the equipment had violations. there was an adjustment for those at the end of the report, and the current-year financials. i can try to answer any questions that you may have. >> going back on the inventory, you have any concerns about the fact that this is a recurring

issue? >> i think that this has gained a lot of attention. the overall structure and the attention to training has been given the tension and this has been proven. we not do a comprehensive number -- just to kick the tires and keep up on things, stumbling across these issues. >> can we hear briefly from the airport? >> good afternoon, supervisors. i am the comptroller from the business and finance division. we have three findings in this audit, and also, another one which is related -- and so, the

first one was the oversight, and this has been fixed. the second and third and fourth, i will go through these one by one. the second is the retaining of the airport improvement grant programs. we have already corrected and implemented new policies and procedures, taking the corrective actions as recommended in december 2010. regarding this section -- and the guidelines -- we have noted the errors that we made in the first few quarters, and we took action in march 2010. for the last one, relating to the payroll of march 2011, we

have implemented a new policy and procedures, with the submission of the certified payroll. basically, we have taken all productive actions as recommended. >> and are there any questions? is the mass transit authority here? >> we have a couple of management comments, the internal procedures for the inventors have been updated. modified to address these issues. the procedures will be included in the upcoming trading

inventory. the second item -- we have reports to identify the retro- calculations, for fiscal year 2011. and we are poised to have this be correct and timely, starting in march. >> thank you very much. and is there anything else from the staff? >> i think that is everything, unless you wanted to speak with the mayor's office. >> please come forward. >> good afternoon.

thank you. the mayor's office of housing has grant programs and a couple of those were identified in the single audit. the bloc program received a finding other than the supervisors signature on several time sheets. the mayor's office of housing has restated their policy procedures to all of the employees and their supervisors, with an internal review of those policies and procedures, with additional measures to ensure that the oversight will happen in the future. on the smaller program, the housing control program, as you may see in the comments, housing and urban development did visit to our office, and raised those issues with the findings in their review. since that time, the mayor's

office of housing has implemented time and activity reports for the personnel, because this is a small grant. they did not give 100% to the grant. the costs are charged directly to the grant instead of a budget projection of the costs. this is the expectation when they return next year, they will be able to see the corrective actions. we received a cash advance with the stimulus grant for the program, a large volume of units. we were not able to draw down the $300,000 advance, and so -- we began gathering interest, with the computer oversight in accounting in the system, the

accounting staff did not realize we were accruing $100 of interest. we have returned this interest, and we have reviewed the cash advance procedures. this will not happen in the future. >> this is great, thank you for your work. >> mr. chairman, supervisor. overall, we are concerned about the appropriate qualified management personnel in the finance area and we continue to work with everyone in the department with their own financial statements, and those working with us across the city. we continue to do training and we are looking at this issue. we do have a couple of staff that are able to work individually with these departments when the time comes. as the standards continue to change, we have to keep

ourselves trained and well- versed on all of the regulations on behalf of the city. >> and on that note, i will briefly -- the staff you have working on this, they do amazing work. but there are also limitations in terms of how much a small number of people can do. and are there any thoughts of expanding all of this? >> carmen lafrac -- lafrac and her staff --la franc and staff have been working as we look to bring additional expertise. we have a couple of accounting positions, and these would be funded from the other

departments, to give assistance to the various departments, with the financial process in order to beef up this section. >> the reason that i say this is because, having to have these late-night meetings to talk about the audits, this was the only time the staff had available, in addition to doing their work. i do not know -- if this is necessarily fair to the employees, having to put in this balance. >> to some extent, in this environment, we have to take the reduction. >> the fact is that they do great work, but there is only so much that you can ask of an individual. >> we are well aware and trying to make this easier. and ultimately, to bring in the steps that will be included.

>> we will openness to public comment. any member of the public who wishes to speak? mr. decosta? >> i am francisco decosta. i have been coming here since 2001. what we have here is a very general report. i would suggest putting the name of the company, and how much money was paid. having said this, we have a group of people with the documentation and the freedom of information act, the privacy act, and the other means given to us. what we have seen over the years, this cost the city millions of dollars. we had 100,000 -- going into the

watershed. we have millions of dollars, nothing was mentioned. millions of dollars, wasted by the san francisco redevelopment agency, and we know all of the corruption. this is on treasure island development -- nothing is given in detail. the san francisco general hospital, which is over their budget, much of this is not set. you have other types of -- what happened in wall street and on the national level. you have the algorithms, so far and so forth.

we are very astute people. we have the board of supervisors -- we cannot afford to push under the rug certain things that the constituents of said francisco have yet to hear about. we have to do is stop attending meetings like this. we have the documentation, we have the documentation -- and thank you very much for hearing my comments. i want to thank those with the freedom of information act for doing a wonderful job. thank you. >> to the next speaker? >> good afternoon, supervisors. i have lived here for 59 years.

lately, speaker mentioned that they did have jurisdiction under laguna at the general hospital. in her later comments, i did not hear about any other organization being mentioned. i am a little confused about these organizations -- or the other possibilities that there was anything studied at either of those organizations. and if this can be clarified. and if this is the case that both of them were examined, recently, then i would urge that they be examined by the external auditors, in regard to the everyday operations.

the organizations used so much general funding, and the hospital -- they haven't received noticeable, negative publicity lately. this does justify having more study put into this. and because the doctor is no longer here in san francisco, it is only fair to all of the user's to clarify the exact status of the operation of the department of public health, especially the general hospital. as i have said earlier, every dollar is so important to the users, so that if one or both was well-run, we would have no problem saying that these were well-run. if they are not, we owe this to everyone to examine this closely.

and they will see, whether or not this is well-run. >> the next speaker? >> ♪ government anudit and oversight make the budget turn out right. tonight, tonight. i'd like the audiot oversight. and they'd turn out late and bring the budget out right bring it back today here comes the budget night and i want it brought back oversight. here comes the budget knight again ♪ >> thank you, mr. paulson.

does anyone else wish to speak? public comment is closed. i want to thank the comptroller's office. i want to thank the outside auditors for their work, and i also want to thank the department's staff, who came to present to this committee, and you cannot have clean and open government without a robust oversight function. we take this very seriously. it is important for us to be very open about the areas where there is the need for improvement. it is important for us to hear back from the department, about the steps that they are taking to discuss these efficiencies. with this or any other report. hun-- we can file this item

without objection? i want to thank every member of the public for being here. is there any other business. >> no further business. >> meeting adjourned. thank you.