After they failed to disclose serious lapses in the toll-collection system regulating state Route 125, senior San Diego Association of Government leaders rushed into a contract with a new vendor whose financial systems did not meet agency standards, an internal audit released Monday concluded.
In fact, former executives at the regional planning agency known as SANDAG took deliberate shortcuts to get the contractor approved by the Board of Directors rather than performing the due diligence needed for the $28 million agreement, the audit found.
The rushed process means SANDAG will have difficulty tracking and recording revenue from the toll road — almost the same problems as those identified in the earlier contract, the auditor said.
“The finance department’s financial reporting needs were not considered during the procurement process,” the agency’s Office of Independent Performance Auditor said in one of two reports Monday.
“System requirements were not developed for the replacement (back office) implementation and therefore are absent in the contract with Deloitte,” the report adds.
Courtney Rudy, the independent SANDAG auditor who was appointed last year, issued another, separate conclusion: None of the former SANDAG executives alerted the Board of Directors to problems with the toll operations conducted by longtime contractor ETAN Tolling Technology, the company that was fired earlier this year after an internal finance officer reported the failures.
“The executive team had knowledge of the significance of ETAN’s performance issues in June 2022,” the other report noted.
The findings come less than a month before San Diego County voters are being asked to approve Measure G, which would increase the sales tax by a half-cent to generate new money for SANDAG.
Delays in informing the Board of Directors about the ETAN failures caused those same SANDAG officials to rush into the Deloitte agreement without completing the proper due diligence, Ruby said.
All of the SANDAG officials singled out in the audits have now left the organization, which became the subject of a U.S. Department of Justice investigation earlier this year.
Longtime Chief Executive Officer Hasan Ikhrata resigned in December 2023. Deputy CEOs Coleen Clementson and Ray Major and Chief Financial Officer Andre Douzdjian all left earlier this year.
It is not clear what, if any, consequences those former SANDAG officials might face.
No additional information about the ongoing federal investigation into SANDAG’s business practices has been publicly disclosed since The San Diego Union-Tribune reported the probe earlier this year.
