Former officials of the San Diego Association of Governments (SANDAG) are facing scrutiny after an internal audit revealed they withheld critical information from the board regarding the toll-collection system for state Route 125. The audit concluded that these officials hastily entered into a $28 million contract with a new vendor, Deloitte, without proper due diligence, raising concerns about the agency's financial oversight and accountability.
Key Takeaways
- Audit Findings: Former SANDAG executives failed to disclose significant issues with the toll-collection system.
- Rushed Contract: A $28 million contract with Deloitte was approved without adequate evaluation of the vendor's capabilities.
- Leadership Changes: All implicated officials have left SANDAG amid ongoing investigations.
- Future Implications: The findings come just before a crucial vote on Measure G, which seeks to increase sales tax for SANDAG funding.
Audit Revelations
The internal audit, released on October 7, 2024, highlighted serious lapses in the management of the toll-collection system. It was revealed that senior SANDAG leaders took shortcuts to expedite the approval of the contract with Deloitte, neglecting essential financial reporting needs. The audit stated:
- Lack of Due Diligence: The finance department's requirements were not considered during the procurement process.
- Missing System Requirements: The contract with Deloitte lacked necessary specifications for the back-office implementation.
Courtney Ruby, the independent auditor, noted that the former executives were aware of significant performance issues with the previous contractor, ETAN Tolling Technology, as early as June 2022 but failed to inform the board.
Leadership Accountability
The fallout from the audit has led to significant changes in SANDAG's leadership. Longtime CEO Hasan Ikhrata resigned in December 2023, and other senior officials, including Deputy CEOs Coleen Clementson and Ray Major, have also departed. The agency is now under investigation by the U.S. Department of Justice, further complicating the situation.
In response to the audit findings, Mario Orso, the new CEO, emphasized the importance of transparency and accountability. He stated that the agency is committed to cooperating with the Office of the Independent Performance Auditor and is implementing measures to ensure proper oversight moving forward.
Implications for Measure G
The timing of the audit's release is critical, as San Diego County voters are set to decide on Measure G, which proposes a half-cent sales tax increase to fund SANDAG initiatives. The audit's findings could influence public perception and voter support for the measure, as concerns about financial mismanagement loom large.
Future Actions
SANDAG is expected to provide formal responses to the audit reports in the coming weeks. Chair Nora Vargas has committed to ensuring that public funds are used effectively and that the community remains informed throughout the process. The board is scheduled to meet soon to discuss the audit's implications and the agency's path forward.
As SANDAG navigates these challenges, the focus will be on restoring public trust and ensuring that future contracts are handled with the necessary diligence and transparency.
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