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SANDAG board will decide Audit Committee’s proposal for more independence

pershing-drive-san-diego.jpg
Zoe Meyers
/
inewsource
Construction is ongoing on Pershing Drive in San Diego, Calif. July 4, 2022.

The committee overseeing a series of damning audits at the San Diego Association of Governments is again seeking more independence despite past opposition from the agency’s Board of Directors.

But this time, the members will try to push for approval during a massive board turnover at SANDAG, including new leadership.

The regional planning agency’s Audit Committee will recommend changing how its members are selected and their term lengths, a move supporters say would lessen the board’s authority over what should be an independently functioning body free from political influence.

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Part of its proposal mirrors what the SANDAG board shot down last year, though several members — including Chair Catherine Blakespear — are exiting. Whether the board’s new makeup will boost the committee’s chances of getting any changes approved, however, remains to be seen.

Emails obtained by inewsource reveal longstanding tensions between the two bodies — and concerns expressed within the last month by Independent Performance Auditor Mary Khoshmashrab and one committee member that board leadership was interfering in the latest process.

The Audit Committee, made up of public representatives with financial backgrounds and elected officials, is a lower-level but important component of SANDAG: It helps oversee the work of Khoshmashrab, whose audits exposing policy and documentation problems have dogged the agency in recent months.

Yet despite its independent role, it remains largely controlled by the SANDAG board, which picks the committee’s members. The board chair decides who will serve in its leadership positions.

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That would change under the latest proposal, instead allowing committee members to decide among themselves who will serve as chair and extending public members’ terms to three years in part to avoid coinciding with election cycles. Members also want to expand their involvement in the selection process for open committee seats.

Committee members unanimously recommended a similar proposal last year, but the board instead created its own subcommittee and then voted to leave the rules unchanged.

At the time, Blakespear said there didn’t seem to be a problem with the current system. Fellow SANDAG board member Steve Vaus, who also served on the subcommittee, said the two-year terms provided an opportunity “to have people of their selection on the audit committee” amid election cycles.

‘Years of disregard’

Messages between committee members and Khoshmashrab over the past month reveal that Blakespear may have tried to get involved again as the proposal was being drafted.

As the committee prepared for its Nov. 18 meeting to advance policy recommendations to the full board, Chair David Zito gave notice that Blakespear did not want staff working on the changes until they received full board support. Instead, he said, Blakespear wanted a subset of the board to lead talks — similar to how the issue was handled last year.

The suggestion was not well-received.

In her response to Zito late last month, Khoshmashrab said Blakespear’s idea to create a board subcommittee would be “disrupting the standard practice” at SANDAG.

“I believe the pathway we discussed at the (Audit Committee) and agreed upon, and the process that stands here at SANDAG is still the most appropriate way,” the internal auditor wrote. “I would ask that Blakespear not interfere with that process. As I shared in the past, elections have no place in this process.”

Stewart Halpern, a longtime financial executive who serves as a public member, said board leadership’s “apparent fear of an independent Audit Committee has intruded yet again,” and questioned whether Blakespear’s proposal was “more of (another) effort to engineer the outcome than it is to make genuine progress.”

“We’ve literally had years of disregard and what I believe can be objectively characterized as subversion from Board leadership,” Halpern said in an email to Zito.

In a statement provided to inewsource after this story was published, Blakespear said SANDAG’s newly elected board members “have the charge to improve this agency and make it stronger.”

“We must allow them to exercise their mandate and structure the agency as they see fit, not push through any last-minute organizational changes with votes from departing members,” she said.

Since joining SANDAG, Khoshmashrab has flagged improper severance payments, questionable spending on agency-issued credit cards and large increases to vendor contracts. Her first report prompted a dispute with agency management and the Audit Committee’s chairman at the time.

The most recent report from Khoshmashrab’s office found SANDAG’s 10 vendors with the highest percentage changes originally were awarded nearly $48 million in work, but that total more than doubled over a four-year period to nearly $106 million. The audit said there appears to be a “disproportionate preference to certain vendors” and a “potential overuse of on-call contracts,” though officials stressed the review didn’t find any fraud or intentional wrongdoing.

SANDAG board members took up the audit’s findings last week, more than a month after the report was released. Zito, the Audit Committee’s chair, told them to review the report while keeping in mind that it’s meant to improve the agency.

“I fully admit these audits are just like a shiny object that can be looked at and said, ‘Hey, this is a way that maybe we can realize some of our objectives,’” he said. “I just think it’s worth pointing out that when we do that, we are damaging the agency and thus likely damaging the region.”

Staff is expected to present what’s known as a corrective action plan once auditors complete the second part of their review, due early next year.

Board turnover

Blakespear, however, has wrapped up her SANDAG tenure after winning her race for the state Senate’s 38th District. At least eight others are exiting, including veteran board members like Carlsbad Mayor Matt Hall and Chula Vista Mayor Mary Casillas Salas.

Some Republicans on the board have pointed to the party’s recent mayoral gains: Chula Vista, the county’s second-largest city, elected John McCann, and Dane White’s victory in Escondido will mean that the city’s SANDAG seat likely will no longer sit vacant.

Coronado Mayor Richard Bailey, a Republican on the SANDAG board, told Voice of San Diego that the election was “a referendum on SANDAG.” El Cajon Mayor Bill Wells, another Republican member, called it a “paradigm shift,” according to the Union-Tribune.

“SANDAG is going to be a completely different story,” Wells said on election night. “There are a lot of very, very sad SANDAG folks right now, ’cause they’re going to have to come and deal with a whole new reality.”

Blakespear said she expected the board’s divisions to persist and acknowledged some members’ opposition to the agency’s weighted voting structure that gives more power to San Diego County’s larger cities.

“It always really upsets me when I perceive that others are trying to burn this agency down,” she said during her final meeting last week. “Because we need to have a functioning transit agency that has the buy-in of board members and hires staff to accomplish goals, even when we don’t all agree on the board.”

The board recently canceled its remaining meetings for 2022 and is expected to elect its new leadership at a January meeting.

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