REGION — As the SANDAG board of directors continues to wrestle with the fact that it was kept in the dark about issues related to the state Route 125 tolling system, several members remain suspicious about who else knew about these issues early on.
Recent audits completed by SANDAG’s Independent Performance Auditor Courtney Ruby confirmed that agency executives were aware of significant financial reporting issues with operator ETAN Tolling Technologies in mid-2022 but did not tell the board until late 2023.
Ruby’s office also found that when SANDAG rushed into a $28 million sole-source contract with Deloitte and A-To-Be to migrate over the back office system technology earlier this year, the agency failed to ensure that its financial accounting needs would be met.
This oversight created a host of new problems that will extend the timeline for transferring over to the back office system by several months.
The Office of the Independent Performance Auditor presented the findings of two reports to the SANDAG board of directors on Oct. 25 after sharing it with the board’s audit committee earlier this month.
Board members expressed disappointment with the findings and claimed that a toxic culture of mismanagement under former CEO Hasan Ikhratra allowed shady practices to snowball.
“I think the findings presented today are crucial for understanding how we can improve our operations and make sure they serve our community effectively,” said County Supervisor Nora Vargas, chairwoman of the SANDAG board.
Solana Beach City Councilmember Dave Zito, chairman of the SANDAG Audit Committee, pointed out that while the findings indicate poor management and a lack of process, there was no evidence of fraud or other illicit activities requiring further investigation.
“Their opinion is that further investigations around that type of activity aren’t warranted, but clearly there’s a lot of work to be done,” Zito said.
Reports indicate that the board first learned about ETAN’s issues in October 2023, a timeline also confirmed by Ruby’s office in the recent audit. However, some board members questioned Ruby’s decision not to interview individual board members or the former CEO to verify the information.
Ruby explained that interviewing former employees isn’t standard practice in her investigations, so her office did not request their participation.
“I think that’s a failure of a report,” said Coronado City Councilmember John Duncan. “If the board members want to know, why wouldn’t we ask the former CEO?”
Del Mar Deputy Mayor Terry Gaasterland inquired whether previous board leaders might have known about the issues earlier, specifically naming former SANDAG board chair, state Sen. Catherine Blakespear, and former vice chair, San Diego Mayor Todd Gloria, who led the board in 2021 and 2022.
“I hope you reached out to them and asked, ‘Did you know anything in 2022?’ They would have been in a position to know something,” Gaasterland said.
Ruby stated that her investigation found no evidence that board members were informed of the issues before October 2023.
“I did not see any evidence that that information was shared. It was an operational issue, and it wasn’t a matter that was being discussed with the board prior to the October timeline,” Ruby said.
The Coast News contacted Blakespear’s office for comment, but she did not respond.
Vargas warned that questioning whether the audit report was just or fair would not be productive and that the Office of the Independent Performance Auditor is independent for a reason.
Along with Ikhrata’s resignation late last year, several of SANDAG’s top brass have also left the organization after further details surfaced about the toll road scandal. Former Chief Financial Officer Andre Douzdjian resigned in April, interim CEO Coleen Clementson left in May, and new CEO Mario Orso dismissed Chief Economist Ray Major in July.
Ruby’s office outlined several recommendations to address issues like what happened with Deloitte’s sole-source contract. This includes requiring further analysis for vendors to ensure they meet clearly defined project requirements before being awarded multimillion-dollar contracts, revising sole-source contract policies, and requiring a formal post-evaluation of all multimillion-dollar projects.
Orso said the agency has already implemented several of these recommendations, such as requiring evaluations for closed-out projects and re-evaluating all sole-source contracts.
“These are all standard project procedures. We’re not going to reinvent the wheel — we’re going to do what everyone else already does,” Orso said.
