Quarterly Audit and Performance
Review Report
FY 2024-25, Q4
September 9, 2025
Nancy L. Hom
Chief Financial Officer and AGM, Business Services
1 FY 2024-25 Audit Plan Status
Audits and Assessments to Date
Status Count
Completed 23
In Progress 14
Upcoming 6
Total 43
2 Completed In Progress Upcoming
Audits Completed and Reports Issued
Audit / Assessment Oversight Body Report
Date
FY 2023-24 Single Audit Controller’s Office 3/5/2025
CY 2024 CleanPowerSF Privacy Audit SFPUC 3/28/2025
Interdepartmental Services Management
Audit
Board of
Supervisors, Budget
and Legislative
Analyst
4/28/2025
FY 2023-24 Wholesale Revenue
Requirement, Statement of Changes in
Balancing Account Audit
Bay Area Water
Supply &
Conservation Agency
5/6/2025
3 4
Spotlight: Performance Audit, Management of
Interdepartmental Services (IDS)
Background:
Audit by the Budget and Legislative Analyst in response to November 2023 Board of Supervisors motion (M23-140)
Scope:
Review of citywide management of IDS for the period FY 2018-19 through FY 2022-23
• Budgeting, recording of expenditures, billings, and carryforwards • Measurement and management of performance and adherence to contractual requirements
• Comparison of the City’s processes to best practices
• Review of agreements for overbilling; justifications for establishment of such agreements
1. Inadequate planning creating surplus / deficits between city departments
2. Insufficient oversight and tracking of expenditures and carry forwards, MOUs, performance, and dispute resolutions.
Departments providing citywide services for centrally loaded IDS (e.g., Controller, Dept of Technology, Office of Contracts Administration, etc.)
• Causes: Lack of standardized templates for cost-sharing models, inadequate review of cost justifications/
3. Inefficient administrative processes creating billing delays and other issues (e.g., account errors, NSF, no supporting docs, etc.) • Exacerbates challenges of monitoring IDS performance such as budget vs actual, management review to validate costs, etc.
5 Spotlight: Audit of Interdepartmental Services
Summary of Findings
Spotlight: Audit of Interdepartmental Services
Recommendations
For Controller’s Office, Mayor’s Budget Office, Board of Supervisors and CFOs of City Attorney and Dept of Public Works:
1. Develop standardized policies, templates, reporting.
2. Monitor departments’ IDS performance (historical budget vs actuals) through timely review of:
• justifications and supporting documentation
• MOU agreements to ensure detail performance monitoring, dispute resolution, etc.
3. Require and enforce timely billing.
4. Codify the prohibition on use of Delegated Authority on new projects.
6 No findings attributed to SFPUC
Recommendations Tracking
7 # Audit Title
Report
Issued
Date
Open
Rec
Total
Rec
Months
Open
%
Complete
Close
Date
(or Target)
Revenue Lease Audit: Crystal Springs Golf Partners, LP
1 Crystal Springs Golf Partners, L.P., Paid Rent Owed for 2019 Through 2021, but a Few Improvements Can Strengthen
SFPUC’s Lease Administration
3/9/2023 0 8 16 100% 7/10/2024
Revenue Bond Oversight Audit, Phase II
2 The San Francisco Public Utilities Commission Spent Revenue Bond Funds for Allowable Purposes but Should Strengthen Its Compliance and Monitoring Controls
9/5/2023 0 3 10 100% 7/10/2024
Public Integrity Assessment: Procurement
3 Criminal Conduct by Former San Francisco Public Utilities Commission General Manager Harlan Kelly Undermined the
Integrity of City Procurements Despite Existing Rules
Governing Gifts, Disclosures, and Sole Source Waivers
3/27/2024 2 2 15 0% 11/31/2025
Chapter 6 Delegated Authority Audit
4 Performance Audit of the Authority Delegated to the San Francisco Public Utilities Commission for Public Works
Contracts Under Chapter 6 of the Administrative Code
12/20/2024 14 14 6 0% 1/1/2026
Total 16 27 41%
8 FY 2025-26, Q1 Outlook
Completing
• Mission Valley Rock Revenue Lease Audit
• Revenue Bond Audit Phase 3
• 14B LBE Compliance Audit
• CY 2024 Post Audit
• Annual Physical Inventory Counts, FY 2024-25
9 FY 2025-26, Q1 Outlook (Cont.)
Upcoming
• FY 2024-25 Interim Financial Statements
• Water, Wastewater, Hetch Hetchy Water & Power &
CleanPowerSF (3 reports)
• Network Penetration and Vulnerability Assessment
• Treasure Island Development Authority, Costs Reconciliation • Digital Accessibility and Inclusion Standard Assessment
THANK YOU
Feedback & Questions?
10 OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
BUSINESS SERVICES BUREAU
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.934.5707
F 415.554.1877
Date: September 9, 2025
To: Commissioner Kate H. Stacy, President
Commissioner Joshua Arce, Vice President
Commissioner Avni Jamdar
Commissioner Steve Leveroni
Commissioner Meghan Thurlow
Through: Dennis J. Herrera, General Manager
From: Nancy L. Hom, Chief Financial Officer and Assistant General Manager, Business Services
Subject: FY 2024-25 Q4 Audit and Performance Review Report This memorandum summarizes the San Francisco Public Utilities Commission (SFPUC) Quarterly Audit and Performance Review (QAPR) report for the fourth quarter of FY 2024-25, ending June 30, 2025.
I. Completed Audits
There are four completed audits to report since the last QAPR:
1. FY 2023-24 Single Audit | March 5, 2025
Report Link: https://tinyurl.com/3tkb4yfp
Report Summary: Third-party auditor Macias Gini & O’Connell LLP (MGO) audited the City and County of San Francisco’s (City) compliance with the types of compliance requirements described in the OMB Compliance Supplement for FY 2023-24. SFPUC is included as a department of the City.
Audit Findings Summary: MGO concluded the City of San Francisco complied with the compliance requirements described in the OMB Compliance Supplement for FY 2023-24.
2. CY 2024 CleanPowerSF Privacy Audit | March 28, 2025
(Report is confidential)
Report Summary: Third-party auditor Global Solutions Group, Inc. (GSG), reviewed and monitored CleanPowerSF’s compliance with data privacy and security commitments required by the California Public Utilities Commission Decision 12-08-045 Rule 9(d) Attachment B (Rule).
Audit Findings Summary: GSG concluded that CleanPowerSF complied with the Rule set for the for the 2024 reporting year with no outstanding issues.
3. Interdepartmental Services Management Audit | April 28, 2025 Report Link: https://tinyurl.com/49r3tyup
Report Summary: The Board of Supervisors’ Budget and Legislative Analyst conducted a performance audit of the citywide management of interdepartmental services between FY 2018-19 and FY 2022-23.
Audit Findings Summary: The performance audit contained nine findings and 24 recommendations, of which 13 were directed to the Controller’s Office, seven to the Mayor’s Budget Office, one to both the Controller’s Office and the Mayor’s Budget Office, one to the City Attorney’s Office, one to the Department of Public Works, and one to the Board of Supervisors.
Recommendations focused on the need for improved internal controls, inclusive of standardized templates, documentation to improve monitoring of interdepartmental services planned and actual spending, carryforward requests, and under/overspending by city departments.
No findings or recommendations were directed to the SFPUC.
4. FY 2023-24 Wholesale Revenue Requirement, Statement of Changes in Balancing Account Audit | May 6, 2025
Report Link: https://tinyurl.com/rkmp5k67
Report Summary: Third-party auditor Macias Gini & O’Connell LLP (MGO) performed the annual audit, as required by the Water Supply Agreement with Wholesale Water Customers, to review the allocation of operating and capital costs among retail and wholesale water customers.
Audit Findings Summary: In the auditors’ opinion, the Statement of Changes in the Balancing Account presents fairly, in all material aspects, the changes in the Balancing Account for fiscal year 2023-24.
No deficiencies were noted with respect to internal controls over financial reporting.
II. Audit Recommendation Status
As of 6/30/25, 2 audit recommendations were open for the Procurements Public Integrity Assessment and 14 were open for the Chapter 6 Delegated Authority Audit.
If you have questions, please contact me at [email protected] or Christopher Crane, Acting Audit Director, at [email protected].
cc: Christopher Crane, Acting Audit Director
att: FY 2024-25 QAPR Audit Plan, By Status
# Quarter Status Audit Type Enterprise /
Bureau Audit Name Oversight
Body
1-5
Completed Financial Water
Annual Physical Inventory Count, FY 2023-24 SFPUC,
Finance
Completed Financial Wastewater
Completed Financial Hetch Hetchy
Water & Power
6 Completed Financial Business Services,
Finance Post Audit, CY 2023 Controller
7 Completed Financial Business Services,
Finance
Wholesale Revenue Requirement: Statement of Changes
in Balancing Account, FY 2022-23 BAWSCA
8 Completed Financial Power Franchise Fee Audit: Energy Center SF LLC Controller
9 Completed Financial Power Franchise Fee Audit: Pacific Gas & Electric Company Controller
10 Completed Financial Water
Audited Financial Statements, FY 2023-24 Controller
11 Completed Financial Wastewater
12 Completed Financial
Hetch Hetchy
Water & Power
& CleanPowerSF
13 Completed Financial Business Services,
Finance Annual Comprehensive Financial Report, FY 2023-24 SFPUC
14 Completed Financial Business Services,
Finance Popular Annual Financial Report, FY 2023-24 SFPUC
15 [Updated] Financial Business Services,
Finance Single Audit, FY 2023-24 Controller
Completed
16 [Updated]
Financial Business Services,
Finance
Wholesale Revenue Requirement: Statement of Changes
in Balancing Account, FY 2023-24 BAWSCA
Completed
17 [Updated] Financial Business Services,
Finance Post Audit, CY 2024 Controller
In Progress
18-
22 [Updated] Financial Water
Annual Physical Inventory Count, FY 2024-25 SFPUC,
Finance
In Progress
[Updated] Financial Wastewater
In Progress
[Updated] Financial Hetch Hetchy
Water & Power
In Progress
23 Upcoming Financial Business Services,
Finance TIDA Costs Reconciliation SFPUC
Quarterly Audit & Performance Review Report
FY 2024-25 Audit Plan, By Status
As of June 30, 2025
Status
Completed: 23
In Progress: 14
Upcoming: 6
Total: 43
# Quarter Status Audit Type Enterprise /
Bureau Audit Name Oversight
Body
24 Upcoming Financial Water
Interim Financial Statements, FY 2024-25 Controller
25 Upcoming Financial Wastewater
26 Upcoming Financial
Hetch Hetchy
Water & Power
& CleanPowerSF
27 Completed Performance Hetch Hetchy
Water & Power Cybersecurity Maturity Assessment, FY 2023-24 SFPUC
28 Completed Performance All SFPUC SFPUC Chapter 6 Delegated Authority Audit BOS
29 Completed Performance Hetch Hetchy
Water & Power EPA Cybersecurity Guidelines Self-Assessment SFPUC
30 Completed Performance Human Resources
Services Public Integrity Assessment: Status of City Contracts CSA, Controller
31 Completed Performance Human Resources
Services Citywide Management of Conflicts of Interest Audit BOS
32 [Updated] Performance CleanPowerSF CleanPowerSF Independent Privacy Audit SFPUC
Completed
33 [Updated]
Performance All SFPUC Management of Interdepartmental Services Audit BOS
Completed
34 In Progress Performance Human Resources
Services Citywide Payroll Audit CSA,
Controller
35 In Progress Performance Human Resources
Services COVID-19 Emergency Procurement Audit CSA,
Controller
36 In Progress Performance Infrastructure FY 2024-25 Construction Close-Out Audit: Sunol Long Term Improvements - Corporation Yard
CSA,
Controller
37 In Progress Performance Customer
Services Bureau
Customer Assistance Program and SuperGreen Saver
Post-Enrollment Verification SFPUC
38 In Progress Performance Hetch Hetchy
Water & Power
Critical Infrastructure Protection and Operations and
Planning Reliability Standards Audit
WECC /
NERC
39 [Updated]
Performance
Contracts
Administration
Bureau
14B LBE Compliance Audit CSA,
Controller
In Progress
40 Upcoming Performance All SFPUC Network Penetrati on and Vulnerability Assessment SFPUC
41 [Updated]
Performance All SFPUC Digital Accessib ility and Inclusion Standard Assessment CSA, Controller
Upcoming
42 In Progress
Concessions, Real Estate
Services Revenue Lease Audit: Mission Valley Rock CSA,
Controller
Lease
Revenue
43 In Progress Revenue Bond Business
Services, Finance SFPUC Revenue Bond Programs Audit: Phase III CSA, Controller