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SANDAG's auditor found nearly $250,000 in non-working day expenditures. Courtesy photo
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SANDAG auditor reports staff spent funds on ‘questionable’ purchases

REGION — A SANDAG auditor’s report found the metropolitan planning agency’s staff spent hundreds of thousands of dollars on purchases deemed “improper” and “questionable.”

The Office of Independent Performance Auditor, led by Mary Khohmashrab, said during the March 11 Board of Directors meeting due to a lack of documentation it was difficult for her office to determine a total of improper charges.

However, the audit found credit card purchases for about $70,000 at local restaurants and nearly $250,000 for non-working day transactions. The auditors also flagged 34 purchases exceeding SANDAG’s policy of a $3,500 limit, while they also noted the agency lacked basic elements compared to other public agencies’ policies.

Over a four-year period, SANDAG’s purchase cards totaled $2.5 million with as many as 20 cardholders, although the board and officials are reducing the number of cardholders to six.

“Management, you really dropped the ball on this one,” Carlsbad Mayor Matt Hall said, who represents the city on the board. “Anytime you’re dealing with public funds, and we find out that after a period of time this much money can’t be accounted for, that doesn’t say much for this establishment’s leadership.”

Some of the other purchases included five $100 gift cards without explanation, unexplained Amazon buys, dozens of payments for utilities and other unallowable transactions, according to the report.

SANDAG also spent $180,00 on laptops and devices in March 2020 as the pandemic began and workers transitioned to remote work. The report chided SANDAG for using taxpayer funds for a staff retreat at a San Diego hotel in December 2019.

“The policy does not address a delegation of signature authority, email approvals of transaction logs, and payments through alternative payment service providers (PSPs),” Khohmashrab’s report reads. “Auditors also noted that training on the policy is minimal resulting in personal purchases that were left undetected. Additionally, based on a test of controls performed during dual testing, system controls around the purchase card are lacking or not being followed.”

Here are some notes from the auditor’s report:

— A combined 18 transactions were missing one or more forms of support, six transactions were missing some form of supporting documentation such as a receipt,12 transactions did not include a justification or an explanation for why a purchase card was used and a combined 12 transactions were unallowable with the majority of them occurring at San Diego area restaurants;

— The total food establishment charges in the San Diego area, including fast food and “drinking places,” amounted to $69,130, “meaning that the vast majority of charges at eating and drinking establishments were spent in the San Diego area and not associated with traveling outside the region for business or training events;”

— “SANDAG’s procurement card policy explicitly disallows using purchase cards for individual purchases larger than $3,500,” however the auditor discovered several split purchases (breaking up larger purchases into several smaller transactions) which could be used to “circumvent the $3,500 limit.”

— Auditors noted four transactions that had proper support but could be considered unreasonable;

— $99.95 purchase of a Target gift card for a monthly prize gift card;

— $306.53 at the Kimpton Palomar Hotel for a one-night stay for an interview candidate;

— $1,250 spent on Target gift cards for “Survey Incentives”;

— $549.74 at Panera Bread for an “All Hands” staff meeting and Draft Regional Plan debrief for all staff on May 29, 2021, however, a large portion of SANDAG staff was still telecommuting and not in the main downtown office, though still within the San Diego Region and required to commute to the office for necessary business.

Lobbying to reverse ballot measure law

The SANDAG board is launching a new lobbying effort to roll back voting requirements for ballot measures.

During its Feb. 25 meeting, the board majority approved “efforts to lower the current two-thirds voter requirement for special purpose taxes, such as transportation and quality of life improvements, to a simple majority vote,” as part of its legislative platform.

The effort must pass through the state legislature and be signed by the governor. The current law states any public agency asking for a tax increase must have a ballot measure passed by two-thirds of voters.

The last SANDAG tax passed was the TransNet tax in 2004, which was a one-half-cent measure. Since then, though, tax revenues have been well below original projections due to the 2008 Great Recession, according to previous SANDAG reports.

Currently, SANDAG is asking voters to approve two half-cent tax measures — one this year and another in 2028 — to help fund the $172 billion “5 Big Moves,” which plans to invest most of the money in transit projects, technology, toll roads and create mobility hubs with flexible fleets to cut down on greenhouse gas emissions and increase transit ridership.

The recently adopted transit plan also calls for a road user charge, a per-mile tax on motorists, although it is scheduled to return to the board for further discussion later this year.

However, a group of labor unions and two out-of-state design firms are currently working toward getting the 2022 tax measure on the ballot through a citizen’s initiative, which would only require a majority vote. Opponents of SANDAG’s funding and the plan have said it’s a workaround due to the unpopularity of increasing taxes.