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SANDAG’s New Independent Auditor Digs Into Agency’s Risks

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The San Diego Association of Governments' new "independent performance auditor" says she will not shy away from debates over transportation funding on the agency's board of directors.

Aired: July 31, 2019 | Transcript

It's been a tumultuous two years for the San Diego Association of Governments. A scandal emanating from the agency's failed 2016 tax measure led to the ouster of the executive director and an independent investigation that revealed attempts by its leaders to skirt transparency laws.

In 2017, state lawmakers passed legislation that revamped SANDAG's governing structure. More recently, Hasan Ikhrata, its new executive director, has embarked on a radical re-imagining of the county's transportation network that has caused deep divisions among SANDAG's board members. Last week he announced the departure of three top managers.

Amid all that turmoil, SANDAG hired Mary Khoshmashrab as the agency's first independent performance auditor. The position was created as part of the reform law passed by state lawmakers. KPBS spoke with Khoshmashrab about how she will approach her job.

Q: You were hired in February after a pretty long recruitment process. What have you been up to since you started?

A: Well my actual start date was April, so it took a little time for me to get acclimated and move to San Diego from Sacramento. But I've been up to a lot. Part of the responsibilities of an auditor when they take on a new organization, especially one that has not had the position previously, is to really gain an understanding of the organization and perform a risk assessment. So that's really what I've been doing, along with creating some policies that will be coming to the board shortly that will bring some accountability and transparency to the agency. Working on my two-year audit plan (which) says where is the risk gap that I can see thus far, and really just getting into the habit or the environment and getting to understand it.

Q: Your position was created after SANDAG went through a scandal, and that involved revenue forecasting. But your position now really goes beyond just finances. You're also asked to look at program effectiveness, management structures, really the fundamental issues of this organization. Where do you start?

A: Absolutely, and that's where the risk assessment comes in. And you're right, it's kind of like a big bundle of "Okay, now what?" Right? There's a lot of external auditors that look at SANDAG, and they look at the fiscal aspects of it, and pieces of it. And then we do have an internal auditor here at SANDAG that looks at the internal controls and compliance and performance types. But my job really is to look at the riskiest of those areas and fill in the gaps where external auditors and the internal auditors are not looking at or considering. And there are a lot of risks, as a result of a lot of missed forecast revenues and such. That in itself is a big risk.

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Moving forward, we have a lot of unknowns, right? We have the "Five Big Moves" that are kind of unknown, and there's an unknown price tag to that. So me and Hasan have been working closely, and needless to say I'll be on him the whole step of the way to make sure that those projections and forecasts are more accurate and have really considered everything that we possibly can consider, so we're on target a little bit better.

Q: You brought up the "Five Big Moves." This is SANDAG's framework for the next Regional Transportation Plan, and there's a really strong debate going on right now at the board about what the future of transportation in this county should be. Should SANDAG continue with freeway expansion projects? Should it shift focus and invest more in public transit? Now that's a policy debate, but there are also some risks involved with both paths. So tell me — do you see it as your job to get involved in that debate?

A: Absolutely, and I'm at every board meeting listening to those debates. I pull up every article that Hasan participates in, and that all the board members are participating in, because I want to, again, learn all those perspectives, understand all those perspectives. And then also learning myself, gaining an understanding myself. But the nice thing is I don't have to get into the politics of it. I don't have to get into the, "Okay, here's what we're going to do with the money" of it. It's really just me providing additional information for decision makers, right? And helping them identify the risk ... and making recommendations for them to mitigate that risk.

Q: You invited SANDAG board members recently to meet with you personally. What's the purpose of that meeting?

Well it's really part of the risk assessment process, to meet with individuals throughout the organization all the way up to the top, because the tone at the top is really where it all starts. The culture, the expectations, the tolerance. So to define risk tolerance, or the appetite of risk, you really have to start with the top and move down. So really that is an invitation to the board members to chat with me. From their perspective, what keeps them up at night around SANDAG, and (what are) the risks associated with that? So that I can kind of take all of those considerations, including the ones with the executive director and the employees and the middle management, and put it all together and measure it, and determine, okay, where are the riskiest areas and where might it not be mitigated or enough mitigated? And those are what I designed the two-year audit plan around and where I'm going to audit.

Q: What makes a good auditor?

A: Integrity. A willingness to really not back down, as long as it's supported. You have to be unbiased. It's not about personal — it's not about an opinion, unless it's a professional opinion, which should be based on facts and evidence. So I think just the willingness to look from both perspectives — that of an auditor, that as management, but also that of the public.

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