member of the graffiti advisory board and a long-time resident and property owner of san francisco, where i live and work. i have been a member of the graffiti advisory board for over six yearyears, and i have seen challenges in terms of its hope to control graffiti vandalism in san francisco. and i am really delighted and in support of supervisor breed's legislation to prevent graffiti vandalism and shift policies to penalize vandals than victims. back in 2007 when i joined the graffiti advisory board. it was said that the city was spending over $20 million in the control of graffiti vandalism in the city. and that money could be better spent towards education for the kids. or for food for the elderly or

homes for the homeless. and so there are many, many things we could think of to better use that money. but instead we are becoming reactionary to someone's whim and desire to disrespect our properties [bell] it's not one cure of the problem, it takes a village to resolve it. i am happy that we have the city and the residents and all of us to control vandalism. thank you. >> thank you, any other members of the public that wish to comment on this item? seeing none public comment is closed. again, everyone thank you for coming out today. i am excited that we have an opportunity to really change the face of san francisco by reducing graffiti throughout our city. i am looking forward to just the visible changes i know will come in the next couple of months, i am sure.

with that colleagues, i have before you a few amendments that you received from the city attorney today. do you want to explain quickly what those specifics are? >> sure, deputy city attorney, just as you described clerical fixes. the title of the ordinance didn't exactly reflect the content of the ordinance, so we fixed the title to make it matchup. so that it accurately described the prohibition on graffiti materials and parks. and then just removing language in a few provisions in the park's code that referred to prescribed materials, a term that is in the definition of graffiti. >> thank you, colleagues, can i have a motion to support. >> motion to amend. >> without objection, the motion

p passes. is there a motion to move to the full board. i will recognize supervisor tang. >> thank you, i want to mention about this legislation, we have heard about those who have hit transit corder -- corridors, and i appreciate it and we are trying to take different steps. whether working with the arts commission or other entities to prevent graffiti by painting beautiful murals that represents our district's character. again i am really glad that we are taking this to the next level so we can be sure that the people committing these offenses are hopefully deterred if the -- in the future, i am happy to support this and move to the

full board. >> thank you, supervisor chiu. >> thank you, i want to echo supervisor tang's comments, and want to thank those working on this issue. i was first confronted with the challenge of graffiti in the d.a.'s office and know how difficult it is to go after the perpetrators of graffiti. i have been working with my district and i want to thank my reps, who have been working diligently for years, thinking of solution to move forward. this not only reflects a wonderful effort of the city departments but smart tools for the city. i want to thank supervisor breed for your efforts and i am happy to support and add my name as a

co-sponsor. >> thank you, supervisor chiu, with that we have a motion on the floor, and without objection this item moves to the full board for consideration, thank you. next item. >> item 2, hearing to receive an update from the city services auditor on the status of audit recommendations. >> okay. hello. >> good morning, chair breed. and supervisor tang and supervisor chiu. i am tonya letitur, and director of the city services auditor division. today i have an associate auditor, skogin, and i am here to highlight my office's work to follow up on recommendations we issued. and a summary of our follow-up

that we reported is on the summary page. the benefit is not in the findings but in the implementation of corrective action. and by conducting follow-ups it helps ensure that departments are implementing change and helps city management. and it allows us to assess the value of our audit work. and our office does two types of follow-up work, regular and field follow up. we do follow ups for two years after they are issued. in these follow-ups we periodically ask departments to report to us on the implementation status. we may select certain high-risk audits for the field follow up. where we go back into the department and gather evidence and determine if each is implemented.

for details of our follow-up process you can refer to the report. for the next slides i will provide a follow-up activity for the second quarter, and provide highlights for specific reports in the memorandum for the follow-up activity. and i will give an overview of the follow-up work. and i will highlight the recently issued report. for the second quarter of the fiscal year, we conducted 24 follow-ups, and nine recommendations. the follow-ups are responsive to the follow-up status. and with one recommendation open and contested by the department, six of these follow ups are still open. if still open after the two-year follow up, and we give a report

on recommendations not implemented after two years. two follow-ups had still open recommendations after two years, all had a status of closed and six of these are now closed. after we receive our response from the department and an auditor reviews the response and based on the reported actions. we determine if those actions would resolve the problem underlying recommendations. whether the department has fully implemented the recommendation or that the department has provided a specific alternative to the recommendation, or if the recommendation is not relevant due to an operational change. the department closed 82 of the 109 recommendations that we followed up. 22 recommendations remain open. three recommendations are elaps elapsed. that means they are over our

regular two-year follow-up process. and contested means that the department has indicated that it would not implement recommendations, which we have two on this quarter. the report of the follow-up activity is on the controller website. today i want to highlight two of the 16 follow ups here. the 2011 record looked at different managements. the review found that many employees were working outside of their classification. some policies did not meet best practices and that the department needed control of his financial management and education of his cultural equity grants program. we better aligned the department

and to provide for management of the grants program. in the report, cfa found that boondocks underpaid on its lease, and on the report found that they overpaid for the audit period. and first i would like to show what allows the department to establish multiyear contracts for maintenance and minor construction work based on predetermined tasking of tasks and supplies. finding that the program had some strengths but also had room for improvement. the program found some projects that did not meet the intent of the program. the audit recommended the

program mission and establishing more rigid and specific criteria for using the job program. additionally asking for improvements in policies and procedures and how assigned to contractors and for better monitoring of contractor reports. the contested recommendation related to invoice review and to ask for staff outside of the job program and the contract administration bureau review for accurate pricing. the reason we did that, because it's best practices to separate the duties of awarding contracts and approving payment on the contra contracts, if one person has the ability to award a contract to a contractor, and receive and review invoice from that contractor.

there is increased opportunity to cause fraud to the city, we are here to review those recommendations. >> good morning, i am the director of assurance control of the cfpsc. i am joined by the manager of construction and management of bureau. in february we provided the responses of the contract program. and of the three recommendations that are still open, we had implemented one and contested two. the reason why two were contested were due to alternative internal controls in place. the first primarily recommendation, 10 and 11, were for a separate bureau, the

contract administration bureau to have access to the trojan software, with pre-priced costs for individual items that managers can use on their projects. what i understand there is a level of review that is provided by the project managers for that, and that's part of the alternative internal control. for the other item, no. 11, also related to using the contract administration staff, that's satisfied by the cost in the trojan software, and i will provide with more input into the program. >> good morning, i am the program manager for the bureau.

the software consists of pre-priced items. so when a task order is issued, the price for that project is based on pre-priced items. therefore the focus actually should be checking the duration of the work, or the amount of volume or the quantity of items that were invoiced. the line items do not change. and therefore it should be the project managers who are independent of construction management bureau. the project managers are aided by the construction managers who are the primary auditors i will say -- sorry, nervous, inspecting the contents of the invoices. but the line items are already pre-priced.

>> thank you. >> thank you. >> okay and the controller's officer response to that. >> i will spend a little more time exploring their response. there are a couple of things i want to get clarity on as it relates to where the program manager sits. they are within the program, and we are still looking for an appropriate segregation of duty. because they are overseeing the project that this individual is approving within the job spectrum. so we want to be able to still see where that level of separation of duties. >> based on what they are proposing it doesn't sound like that's the case. >> yeah. >> it sounds like it's still continuing, just an additional layer added to the system.

>> yes. >> okay, you want to address that? because that's what i heard. >> we love work with csa, i will make sure personally to work. >> we need that extra layer of checks and balances in order to address the concerns there. it's a concern that i also have. and it's clearly missing. and based on what you provided us in terms of your solution, it just doesn't cut it. >> i will work with the bureau manager to be sure that something is put in place or a response to resolve their concern. >> okay, so the next time we come back to the hearing for the controller's office we are highlight what is done since then. >> okay. >> the next report i would like to discuss is the 2013 audit for the public health structures.

the audit found that the structure of dph purposing, and they implemented solutions for medical supply purchasing in some divisions but not all. as a result transaction was not imperial for purchasing wide. policies were inconsistent across divisions and in some cases not clear. though dph allows them to bypass the city competitive, and with the discount on members behalf, the department did not have controls in place to be sure that the pricing was in fact competitive. as a result dph is here today to speak of their progress in

implementing these recommendations. >> thank you, good morning, right off the bat there are nine recommendation its that the dph wholeheartedly concurs and suppor supports. for the agenda to bring the entire dph in line with industry standards and expectations around technology and comparing benchmarks. we have been working diligently in my role around the hospital in contract management, and with changes and i work in an effort to collaborate and accocoordina across dph in the processes and as well sharing the tools around the authority. the bigger piece is getting the

infrastructure in place at the various divisions. that is still utilizing paper and pencil across orders, and to bring that up to speed and in par with other systems of technology. and we need to follow up with the education around the tool that is a topic, to ensura that we have benchmarks and industry pricing. everything is slowly coming together for us, and we hope to have policies and procedures to share in the next report. >> when are we talking about? what is the time line? because you still have nine open recommendations? >> of the nine, the latter, i believe 4-9 are around developing codify policies and procedures and to have a process to compare quarterly reports.

that's the next report to the controller's office will closed. the first one or two require a recommendation of personalized structure whether at san francisco general or dph that will acquire additional software. a previous update to this system took 24 months. now this contractor is sitting in a review process with the city attorney and oca. we are looking at i would say 12-18 months to have a full electronic system to have comparable data. >> can i mention something in your report? you mentioned there was no clear

, can you provide this process. >> oca has provided a waiver for the process, what is an admin-code -- i apologize, it's in the admin-code that aprovides for allowance for dph to have a different kind of bidding process. they belong to a medical group where that group is bidding for services. >> we talked about that for medication as well. >> right, in order to be effective for dph they need this centralized method to assess what they need. so we are buying at a better rate. >> but they have not done any comparison to determine how it actually is a better rate? there is no comparison, for example, one rate against another outside of the department specifically. >> she worked on the audit form. >> the issue, their system has

really excellent reporting tools. and as part of that system -- >> sorry, can you introduce yourself. >> i am kat skogin, the auditor that led this audit. in this system they had great reporting tools, and part of the contract had someone come in from the vendor that has their reporting structure to look at their pricing and to make sure they were maximizing the pricing tiers, and maximizing the leverage with the individual contracts. but there was not a comparison with the vendors outside of this group of the organization. that's what we were asking for to periodically look at is this comparable to what you get outside of this group organization. or are we just trusting them to get the best price. >> okay, i got it, thank you. and you are saying that process

will take between 12-18 months? >> for the entire organization, it's in place for two locations. to share those tools and to leverage that volume across the department and achieve the maximized savings. >> okay, thank you. >> any other questions? >> no thanks. >> now i would like to highlight some field follow-up work as related to a 2010 audit, two audits, sfp release division. release audits were hanson and aggregate rock in alameda county, lease to operate a public golf course, and they

located the facilities in the county. the audit sounds serious with the leases. the real estate division did not have compliances for leases and did not verify payments and did not consistently assess late charges. as a result they had a combined 248,000 and more in unpaid rents and improperly charges. my office conducted a report on both of these this year. as reminder we gather evidence and whether protective actions resolve the issues with the underlying recommendations.

as a result of that audit, collecting funds beyond the leases, and resolved the issues causing the problems. the department affected changes with a new director in 2011. the division implemented changes for the staff. the director shifted to a system to increase accountability internally. the contractor had a technology solution that will monitor some tasks and enhanced controls, in the reporting procedures. and seeking advice with the city attorney whether they can pursue certain payments. because of these findings with systemic changes, we report all

reports resolved. in our final part of the presentation, i would like to highlight two recently issued reports. the first is audit of parks and rec of lease of a city-owned building, the lease began in 1997, looking at whether beach chalet had adequately obtained their lease. and we found that beach chalet owed 53,000 in late fees and $33 in interest. and found that rec and park did not assess for the late payments and monthly payments over the three-year period. rec and park has collected these funds from beach chalet. and we found that there is a

lack of clarity about water uses and janitorial services. the lease allows for beach chalet to allow for water for the rent, with a portion of the facility use of the facilities. rec and park accepted beach chalet with reduction of 40%, with over $97,000 for the three-year audit period. if our test results are typical of the lease overall, the 20-year impact would be over $650,000. however the lease does not state how the deduction should be calculated. and neither beach chalet or rec and park could provide for this reduction. rec and park expected to have completed the implemented database percentage for the water usage credit by the end of last month.

we will check back in on the status of what the percentage should actually be. and the lease does not state that beach chalet with deduct janitorial expenses for its rent. on an average they are deducting $236 per month. in our six-month period that we test in the audit. if the test results are accurate, it would be $26,000, we have asked rec and park to further investigate this process. and determine if there are any additional funds owed by the end of the calendar year from rec and park to beach chalet. and i want to highlight our audit of human services agency, $19 million contract with guards

mart to provide security at the buildings. the audit had findings and most were agreed but one significant finding that i would like to discuss. because of the value of this contract, approved by the board of supervisors. the contract has expired and sha has entered in a contract with the same vendor, requiring guards mart to provide for services. however as approved by the board, it does not require sha to pay guard marts for security services in other departments, and due to cancel of buildings closed for city holiday. as a result sha paid security services that it did not need or receive at cost of $600,000 for the contract five-year term.

and you see on the slide how sha came to that figure. paying for 11 holidays for 12 guards for five years. sha agreed in earlier negotiation meetings to pay for the holidays. however this agreement is not reflected in the contract approved by the board of supervisors, sha is here today to discuss this finding. >> good morning, chairman breed, supervisors, dave corto, director of contracts for human services. though we agree with the findings that our contract was silent about the closure on holid holidays, we did negotiate with the contractor early on that we would account for these hours by as