[00:00:07] >> VIAGRAN: THE TIME IS NOW 10:01 A.M. ON NOVEMBER 4, 2026, AND THE MEETING OF THE AUDIT COMMITTEE IS NOW CALLED TO ORDER. MADAME CLERK, PLEASE CALL THE ROLL. >> CLERK: CHAIR, WE HAVE QUORUM. >> VIAGRAN: THANK YOU. I WILL BE ALLOWING THE SPEAKERS TWO ROUNDS OF COMMENTS PER ITEM WITH FIVE [Approval of Minutes  ] MINUTES THE FIRST ROUND AND THREE MINUTES THE SECOND ROUND. FIRST ITEM ON THE AGENDA IS APPROVAL OF THE MINUTES. ARE THERE ANY CORRECTIONS TO THE MINUTES? CAN I GET A MOTION AND A SECOND TO APPROVE THE MINUTES? I'VE GOT A MOTION AND A SECOND. ALL IN FAVOR SAY AYE. >> MOTION CARRIES. MADAME CLERK, ARE THERE ANY MEMBERS OF THE PUBLIC SIGNED UP TO SPEAK? >> CLERK: WE HAVE NO MEMBERS OF THE PUBLIC SIGNED [CONSENT AGENDA  ] UP TO SPEAK. >> VIAGRAN: WE'LL MOVE ON TO THE CONSENT AGENDA. THERE IS ONE FINAL INTERNAL AUDIT ON THE CONSENT AGENDA. WOULD ANY MEMBER LIKE TO PULL THE FIRE DEPARTMENT AUDIT FOR BRIEFING? IF SO, WE WILL TAKE IT IN EXECUTIVE SESSION AFTER THE INDIVIDUAL ITEMS. ANYONE? NO? ALL RIGHT. CAN I GET A MOTION AND A SECOND TO APPROVE THE CONSENT AGENDA? I'VE GOT A MOTION AND A SECOND. ALL IN FAVOR SAY AYE. >> >> VIAGRAN: ALL OPPOSED SAY NO. MOTION CARRIES. [Pre-Solicitation High Profile Briefings  ] WE'LL MOVE ON TO THE INDIVIDUAL ITEMS. MADAME CLERK, PLEASE READ THE CAPTION FOR ITEM 3. >> CLERK: ITEM NO. 3 IS A BRIEFING ON THE RELEASE OF A SOLICITATION TO EXPAND THE COURTESY CONTRACTOR LIST FOR NEIGHBORHOOD AND HOUSING SERVICES DEPARTMENT'S HOME REPAIR PROGRAMS FOR AN ESTIMATED TOTAL VALUE OF $85 MILLION FOR AN INITIAL THREE-MONTH TERM WITH FOUR, ONE-YEAR RENEWAL OPTIONS. >> VIAGRAN: ALL RIGHT. CAN WE GET A STAFF PRESENTATION? VERONICA, THE FLOOR IS YOURS. >> G.>> GOOD MORNING, I'M VERONICA GONZALEZ. TODAY WE'RE EXPANDING THE LIST FOR THE CITY HOME REPAIR PROGRAMS. THESE INDEPENDENT CONTRACTORS ARE ESSENTIAL TO DELIVERING QUALITY REPAIRS THAT HELP PRESERVE HOMES ACROSS SAN ANTONIO . THROUGH OUR HOME REPAIR PROGRAMS, THEY HELP US SERVE FAMILIES MOST IN NEED, ESPECIALLY CONTRACTORS TO THE LIST AND THIS SOLICITATION BUILDS ON THAT EFFORT BY EXPANDING THE POOL OF QUALIFIED CONTRACTORS AVAILABLE TO PARTICIPATE IN HOMEOWNERS. ACROSS SAN ANTONIO, MANY FAMILIES LIVE IN AGING HOMES THAT NEED REPAIRS. TO HELP PRESERVE THEM, THE CITY OFFERS THREE HOME REHAB PROGRAMS INCLUDING MAJOR REHAB, MINOR REPAIR, AND UNDER ONE ROOF. THESE ADDRESS HEALTH, SAFETY, ACCESSIBILITY, AND SUPPORT LONG-TERM SUSTAINABILITY. INCOME QUALIFIED HOMEOWNERS CAN HIRE A CONTRACTOR FROM THE COURTESY LIST AS A RESOURCE OR CHOOSE THEIR OWN BY OBTAINING MULTIPLE BIDS. CONTRACTORS SELECTED THROUGH THIS SOLICITATION MAY REMAIN ON THE COURTESY LIST FOR AN INITIAL THREE-MONTH TERM WITH FOUR, ONE-YEAR RENEWAL OPTIONS. THIS SCHEDULE OPERATES AT THE CURRENT LIST, WHICH EXPIRES JUNE 2031. THE CITY'S HOME REPAIR PROGRAMS SUPPORT APPROXIMATELY $20 MILLION ANNUALLY IN HOME REHAB ACTIVITY. THIS ESTIMATED AMOUNT REFLECTS PROGRAM FUNDING AND IS NOT A GUARANTEE OF WORK OR COMPENSATION TO ANY CONTRACTOR SELECTED. FUNDING COMES FROM THE AFFORDABLE HOUSING BOND, FEDERAL GRANTS, AND THE GENERAL FUND. TOGETHER, THESE RESOURCES HELP FAMILIES COMPLETE CRITICAL HOME REPAIRS. PROCUREMENT OUTREACH TARGETED OVER 1,000 VENDORS. NHSD EXPANDED OUTREACH THROUGH NETWORKS REACHING NEARLY 5,000 ADDITIONAL POTENTIAL RESPONDENTS. THE EVALUATION PANEL ON THE RIGHT INCLUDES VOTING MEMBERS FROM SEVERAL CITY DEPARTMENTS, INCLUDING THE CITY MANAGER'S OFFICE, NHSD, THE OFFICE OF HISTORIC PRESERVATION, DEVELOPMENT SERVICES, CAPITAL DELIVERY, AND THE WORKFORCE DEVELOPMENT OFFICE. IN ADDITION, ADVISORY MEMBERS INCLUDE STAFF FROM THE CITY ATTORNEY'S OFFICE AND NHSD PERSONNEL. THERE ARE THREE EVALUATION CATEGORIES. AS YOU SEE HERE, THE FIRST CATEGORY IS EXPERIENCE, BACKGROUND, AND QUALIFICATIONS WORTH UP TO 60 POINTS. HERE WE'RE LOOKING FOR STRONG PERFORMANCE RECORD, COMPANY STRUCTURE, AND ANY REQUIRED TRADE LICENSES AND PROFESSIONAL CERTIFICATIONS. THE SECOND CATEGORY IS THE PROPOSED PLAN WORTH UP TO 35 POINTS. [00:05:05] THIS EVALUATES HOW CONTRACTORS PLAN TO DELIVER THEIR SERVICES TO HOMEOWNERS. SO WE CONSIDER THEIR APPROACH TO COMPLETING PROJECTS, JOB SITE SAFETY, WARRANTIES, SUBCONTRACTOR OVERSIGHT, FINANCIAL CAPACITY, AND OVERALL PROJECT EXECUTION. THE VETERAN-OWNED SMALL BUSINESS PREFERENCE PROGRAM IS WORTH UP TO 5 POINTS. LASTLY, FEDERAL FUNDING REGULATIONS DO NOT ALLOW US TO APPLY LOCAL PREFERENCE, SO SBEDA AND THE LOCAL PREFERENCE PROGRAM DO NOT APPLY TO THIS RFP. THE SOLICITATION IS EXPECTED TO BE RELEASED ON NOVEMBER 6. RESPONSES ARE DUE JANUARY 5, 2027. WE PLAN TO RETURN TO THIS COMMITTEE IN MARCH WITH THE EVALUATION RECOMMENDATION FOLLOWED BY CITY COUNCIL CONSIDERATION. APPROVED CONTRACTORS WOULD BE ADDED TO THE COURTESY CONTRACTOR LIST AS A RESOURCE FOR HOMEOWNERS, EFFECTIVE APRIL 1ST. I WANT TO NOTE HERE THAT CONTRACTORS ARE REIMBURSED AND WE PAY THE CONTRACTORS ON BEHALF OF THE HOMEOWNER. THAT CONCLUDES MY PRESENTATION AND WE'RE AVAILABLE FOR ANY QUESTIONS. THANK YOU. >> VIAGRAN: THANK YOU, VERONICA. I KNOW WE HAVE TALKED TO THIS BEFORE. AS WE LOOK AT THE DIFFERENT ROLES WITHIN THE AUDIT COMMITTEE, I REALLY DO WANT THE PEOPLE THAT APPLY FOR THIS TO FEEL LIKE DOING BUSINESS WITH THE CITY HELPS THEIR BUSINESS. PART OF THAT IS ECONOMIC WORKFORCE AND DEVELOPMENT. SO I'M NOT SURE IF -- MY QUESTION IS: IS THIS LIST OF OUR COURTESY LIST, IS THIS ONLINE FOR PEOPLE TO GO TAKE A LOOK AT AND SEE WHO WORKS WITH THE CITY OF SAN ANTONIO? IS OUR COURTESY LIST ONLINE? SO IF I WAS A REGULAR HOMEOWNER AND I WAS LIKE, I WONDER WHO THE CITY USES. >> THANK YOU, COUNCILWOMAN, FOR THAT QUESTION. IT IS NOT ONLINE. IT'S ACTUALLY PROVIDED TO HOMEOWNERS UPON ELIGIBILITY. IT'S A COURTESY LIST. AND BECAUSE WE HAVE A LIMITED AMOUNT OF CONTRACTORS FOR RIGHT NOW, THAT'S HOW WE'RE APPROACHING IT. BUT WE'RE HOPING TO BUILD ON THAT. IF WE'RE ABLE TO DOUBLE IT, IT WOULD HELP US BALANCE CAPACITY WITH HOMEOWNERS AS WELL AS PERHAPS WITH PUBLIC INTEREST IN TAKING A LOOK AT THE LIST OF LICENSED AND INSURED CONTRACTORS PART OF OUR PROGRAM. >> VIAGRAN: WHAT I WOULD LIKE TO SEE IS WE EXPAND THIS LIST -- PART OF THIS IS WHERE COMMITTEE MEMBER PACHECO, THAT CUSTOMER SATISFACTION . EVEN IF WE DON'T PROMOTE IT THERE, IF THEY GET A GOOD REPORT FROM WHOEVER WE -- THEY CONTRACTED WITH. LET'S SAY IT'S ONE OF MY -- I ALWAYS GO TO MY SENIORS. AND THEY DID AN EXCELLENT JOB WITH MY SENIORS AND THEY GIVE THEM A GOOD REVIEW. MAKING SURE THE CITY CAN GIVE THEM THAT YOU GOT A FOUR-STAR REVIEW FROM THE PARTICIPANTS IN THE PROGRAM AND THAT'S WHAT THEY CAN USE AS THEY GO OUT AND SOLICIT MAYBE FOR OTHER WORK WITHIN HOMES AND TO DO THAT. THAT COULD BE PART OF THEIR ADVERTISEMENT INSTEAD OF US HAVING A LIST. THERE'S A WAY FOR US TO SAY THIS WAS GREAT CUSTOMER SATISFACTION. AND THEN THAT WAY, YOU KNOW, PEOPLE THAT USE -- HAVE REHABS OR MINOR HOME REPAIR PROGRAMS, WE CAN ASK THEM, THOSE IN THE KNOW CAN SAY, DO YOU DO ANY WORK FOR THE CITY? IF THEY SAY YES, WE CAN ASK THEM HAVE YOU BEEN REWARDED OR HAVE ANY REVIEWS THERE? I THINK IT'S IMPORTANT TO ASK WHAT SORT OF REVIEWS. THE HOMEOWNER DOES GIVE A REVIEW AFTER THE PROGRAM, CORRECT? >> YES. A TWO-PART ANSWER. SINCE THE LAST TIME WE WERE HERE AT THE COMMITTEE, WE HAVE IMPLEMENTED A SCORECARD. THAT SPEAKS TO YOUR POINT. WE WANT TO MAKE SURE WE HAVE STRONG OVERSIGHT OVER THE QUALITY OF THE PROJECTS. SO WE'RE EVALUATING KEY AREAS FOR EACH CONTRACTOR. YOU KNOW, HOW WELL DO THEY MEET TIMELINES? ARE THEY OVER BUDGET? UNDER BUDGET? THE QUALITY OF THE WORK. WE DO CONDUCT SURVEYS AFTER THE WORK IS COMPLETED. WE MAKE SURE THAT THE HOMEOWNER PROVIDES RESPONSES, WHETHER IN SPANISH OR ENGLISH. BUT THEIR FEEDBACK IS IMPORTANT BECAUSE I WANT TO EMPHASIZE THE HOMEOWNER HAS A VERY ACTIVE ROLE IN THIS PROCESS. THEY SELECT THEIR CONTRACTOR. THEY LET US KNOW, YOU KNOW, WHEN WE CAN PAY THE CONTRACTOR BECAUSE THEY APPROVE OF THE WORK. SO THE PERFORMANCE IS VERY IMPORTANT THAT WE EVALUATE AND SO I JUST WANT TO HIGHLIGHT THAT'S SOMETHING WE'RE MONITORING. >> VIAGRAN: GREAT. THAT'S WHAT I THINK I WANT TO DO. IF WE DON'T SAY, OH, THIS IS OUR LIST THAT WE USE WITH THE CITY, AT LEAST WE GIVE THEM FEEDBACK WHERE IF THEY WANT TO DO ADVERTISEMENTS OR THEY'RE OUT FOR A JOB, THEY CAN SAY, HEY, THIS WAS MY REVIEW WITH THE CITY OF SAN ANTONIO AND THESE ARE THE THINGS THAT THEY REQUIRE. SO I THINK THAT THAT'S GOING TO BE IMPORTANT AS WE MOVE [00:10:05] FORWARD. YEAH. I LOOK FORWARD TO MY MAJOR REHAB AND MINOR HOME REPAIR PROGRAMS ARE KEY AND I'M ENCOURAGED THAT WE'LL SEE MORE, AS THINGS CHANGE THAT WE'LL SEE MORE HOMEOWNERS AND LEGACY HOMEOWNERS OR FAMILY-OWNED HOMES LOOK AT WHAT THEY DO FOR HOME REPAIR. SEE WHAT THE CITY HAS TO OFFER AND IF IT DOESN'T, LOOK TO STILL FINDING A WAY TO MAINTAIN THEIR PROPERTY AND BUILD THAT UP. THANK YOU FOR THAT. ARE THERE ANY OTHER QUESTIONS WITH MY COUNCIL COLLEAGUES? COUNCILMAN WHYTE. >> WHYTE: THANKS, CHAIR. A COUPLE OF QUESTIONS. ONE, THE AGENDA SAYS $85 MILLION TOTAL FOR THE CONTRACT BUT THE PRESENTATION SAYS 70. >> $85 MILLION IS CORRECT. WHEN WE FIRST CAME TO THE COMMITTEE, WE WERE ESTIMATING $20 MILLION ANNUALLY. AND THAT'S BASED ON THE COMBINATION OF OUR FUNDING SOURCES. THE CORRECT VALUE IS $85 MILLION BECAUSE WE ARE LOOKING AT 4.25 TERM AND IT'S A LITTLE CONFUSING. WE STARTED WITH A THREE-MONTH INITIAL TERM BECAUSE WE'RE BRINGING NEW CONTRACTORS INTO THE EXISTING STRUCTURE WHERE CONTRACTORS ALREADY EXIST. IN ORDER TO ALIGN IT AND MAKE SURE WE ARE ADMINISTRATIVELY EFFICIENT, WE CAN START THEM AS SOON AS APRIL. THAT'S A THREE-MONTH TERM. YOU START SQUEEZING IN $5 MILLION FOR THOSE THREE MONTHS. THAT'S $85 MILLION, THAT IS CORRECT. THE $70 MILLION WAS A CLERICAL ERROR. >> WHYTE: HOW IS NHSD GOING TO VERIFY THAT THE CONTRACTORS HAVE THE FINANCIAL CAPACITY TO GET THESE JOBS DONE? >> WE MAKE SURE THAT THROUGH THE EVALUATION COMMITTEE AND WE WORK CLOSELY WITH FINANCE. THEY ARE PRODUCING REPORTS. I COULD RELY ON FINANCE FOR THEIR CLARITY ON FINANCIAL REPORTING. >> WHYTE: MY ONLY QUESTIONS ARE THAT AND SAFEGUARDS WE HAVE IN PLACE IN CASE THE CONTRACTOR ABANDONS THE PROJECT. THOSE SORT OF GO HAND IN HAND. >> ELLIOTT: COUNCILMAN, TYPICALLY WE ARE REQUIRED TO HAVE INSURANCE AND BONDING IN PLACE TO MAKE SURE THEY ARE FINANCIALLY SOLUBLE AND CAN DO THE WORK. IN THE EVENT THEY ABANDON, I HAVE TO GO BACK AND DO WORK TO SEE HOW THE PROCUREMENT WAS STRUCTURED AND WHAT WE HAVE IN THE CONTRACTS. >> WHYTE: ALL RIGHT. THANK YOU. >> VIAGRAN: COUNCILMEMBER MEZA GONZALEZ. >> GONZALEZ: THANK YOU FOR THE PRESENTATION. JUST A COUPLE OF QUICK QUESTIONS. I AM SUPPORTIVE OF EXPANDING THIS CONTRACTOR LIST BUT JUST CURIOUS AT WHAT PROMPTED THIS. WAS IT JUST TO INCREASE THE AVAILABILITY OR TO SAVE COSTS ON OUR END? >> HOME REHAB, WE RELY ON A POOL OF LICENSED AND INSURED CONTRACTORS. THEY ARE A PART OF A COURTESY LIST. A, IT'S TO MAKE SURE WE HAVE A POSITIVE HOMEOWNER EXPERIENCE AND THEY'RE ABLE TO SELECT CONTRACTORS IN AUDIO]. BUT SECOND, IT'S IMPORTANT THAT WE KEEP THE POOL OF CONTRACTORS ROBUST. THERE ARE SOMETIMES CONTRACTORS THAT FALL OUT. SOME DON'T LIKE PERHAPS WORKING WITH THE CITY BECAUSE WE ARE ON A REIMBURSEMENT BASIS AND WE HAVE TO GO THROUGH REVIEW. IT'S IMPORTANT FOR US TO HAVE A LARGE POOL OF CONTRACTORS AVAILABLE. AND THE REASON WHY WE'RE BACK IS WE WANT TO BUILD ON THE PREVIOUS EFFORT. WE SAID WE WOULD COME BACK AND KEEP GROWING. THAT HELPS US INCREASE OUR CAPACITY. THAT MEANS CONTRACTORS COULD HOPEFULLY HELP MORE FAMILIES IN A SHORTER AMOUNT OF TIME. SO IT HELPS INCREASE AND STREAMLINE THE EFFICIENCY OF THE PROGRAM ITSELF. >> GONZALEZ: I MIGHT HAVE MISSED THIS BUT HOW MANY CONTRACTORS ARE WE SEEKING TO ADD? >> CURRENTLY WE HAVE 15. WE WOULD LOVE TO DOUBLE IT, IF POSSIBLE. >> GONZALEZ: THANK YOU. >> VIAGRAN: MEMBER TAINO. >> YES. SO IS THIS THE SAME PROGRAM THAT WAS THE CITY COMMISSIONED AN INDEPENDENT STUDY OF IT EARLIER THIS YEAR? I DON'T KNOW IF THIS IS THE SAME ISSUE WHERE THERE WAS SHODDY WORKMANSHIP AND CORRECTIVE ACTIONS WERE PUT IN PLACE. OR IS THIS A DIFFERENT NHSD PROGRAM? >> THERE WAS AN AUDIT OF THE PROGRAM JANUARY -- I THINK IT WAS PRESENTED JANUARY 2026. WE DID HAVE A FOLLOW-UP AUDIT AND THAT WILL COME BACK TO THIS COMMITTEE. >> COULD YOU GUYS STATUS US ON THE CORRECTIVE ACTIONS THAT WERE SHARED TO HAVE BEEN IMPLEMENTED AND WHAT THAT LOOKS LIKE TODAY? >> YES. THAT WILL BE PART OF THE [00:15:04] FOLLOW-UP AUDIT, YES. THANK YOU. >> VIAGRAN: MEMBER PACHECO. >> THANK YOU. I JUST WANT TO REITERATE SOMETHING FROM LAST MEETING. WE DO A GOOD JOB IDENTIFYING PROBLEMS THROUGH AUDITS. BUT WHAT ARE WE DOING ON THE FRONT END TO PREVENT THOSE PROBLEMS? I UNDERSTAND THIS IS AN EXPANSION. I DON'T THINK WE HAVE INFORMATION ON THE ORIGINAL PROGRAM AND WHAT ALL THAT ENTAILS. SO IN REVIEWING THIS LAST NIGHT, SOME OF THE QUESTIONS THAT I HAD ASKED IS JUST WHAT HAS BEEN THE PERFORMANCE OF THOSE EXISTING 15 CONTRACTORS? A LOT OF THE QUESTIONS THAT ARE BEING ASKED. LIKE COUNCILMEMBER WHYTE SAID, WHAT SAFEGUARDS PREVENT NOT JUST SUBSTANDARD WORK BUT OVERBILLING PAYMENTS FOR INCOMPLETE PROJECTS. IF WE CAN GET SOME OF THAT INFORMATION TO REVIEW WHENEVER WE GET THE POST-AUDIT INFORMATION, THAT WOULD BE HELPFUL. >> I SHOULD HAVE ADDED TO TAINO'S QUESTION ABOUT WHAT ARE WE DOING TO MAKE SURE. WE DO HAVE THE CONTRACTOR SCORECARD, SO IT'S A MORE FORMAL PROCESS WE'RE IMPLEMENTING TO REALLY TRACK HOW MANY. ARE THEY STAYING ON TIME. ARE THEY STAYING IN BUDGET. HOW MANY CHANGE ORDERS ARE THEY DOING. WHAT IS THE CUSTOMER SURVEYS. THAT IS A PROCESS WE HAVE STARTED IMPLEMENTING AS A RESULT OF THE FIRST AUDIT. IT WAS A RECOMMENDATION. AND THE QUESTIONS THAT YOU'RE ASKING, WE DO LOOK AT THAT. FOR THIS FIRST 15 CONTRACTORS, THEY WERE JUST APPROVED BY CITY COUNCIL IN JUNE. SO THEN WE HAD TO PUT THEM THROUGH A NEW CONTRACTOR ORIENTATION. THE SHORTER ANSWER IS THEY HAVEN'T ALL BEEN WITH THE PROGRAM FOR VERY LONG. HAVING SAID THAT, SOME OF THEM ARE REPEAT. THAT MEANS THEY WERE A PART OF THE PREVIOUS LIST AND WENT THROUGH A FULL VETTING PROCESS WHEN THEY REAPPLIED TO BE ON THIS NEW CONTRACTOR LIST. THE REASON THEY WERE INCLUDED ON THE NEW CONTRACTOR LIST IS BECAUSE THEY HAD A POSITIVE REPUTATION, EXPERIENCE FROM BEING A PREVIOUS CONTRACTOR ON THE LIST. TO PUT IT SUCCINCTLY, LOOKING AT THEM COMPREHENSIVELY AS A GROUP, THAT IS PART OF OUR PROCESS BUT THEY ARE STILL A NEW GROUP UNDER OUR PROGRAM STANDARDS. >> VIAGRAN: THANK YOU. THANK YOU FOR THOSE QUESTIONS. SO THIS ITEM WAS FOR BRIEFING ONLY. SO IF THERE ISN'T ANY OTHER [Final Internal Audit Report  ] DISCUSSION, WE'LL MOVE ON TO THE NEXT ITEM. ITEMS 4 AND 5. >> CLERK: ITEM NO. 4 IS ACCEPTANCE OF THE OFFICE OF THE CITY AUDITOR REPORT AU25-015 AUDIT OF FINANCE UNAPPLIED DEPOSITS ACCOUNT. >> VIAGRAN: THE FLOOR IS YOURS. THANK YOU. >> GOOD MORNING. PRESENTING THE RESULTS FOR THE AUDIT OF FINANCE AND APPLIED DEPOSITS ACCOUNT. OUR OBJECTIVE WAS TO DETERMINE IF THE ENTRIES IN THE UNAPPLIED DEPOSITS ACCOUNT WERE MANAGED EFFECTIVELY TO INCLUDE BOTH TIMELINESS AND PROPER POSTING TO THE CORRESPONDING ACCOUNTS. OVERALL, WE DID DETERMINE THAT FINANCE WAS NOT EFFECTIVELY MANAGING THE ENTRIES IN THIS UNAPPLIED DEPOSITS ACCOUNT. TO PROVIDE SOME BACKGROUND, THIS UNAPPLIED DEPOSITS ACCOUNT WAS CREATED BACK IN 2018. NOW, THIS WAS A POSITIVE ESTABLISHMENT AS IT'S ALLOWED FINANCE TO DEPOSIT INCOMING PAYMENTS WITHIN THE BANK THAT DON'T HAVE IDENTIFIABLE INFORMATION SUCH AS CUSTOMER OR INVOICE NUMBER. AGAIN, THE CASH PROCEEDS ARE DEPOSITED IN THE BANK AND THE ENTRIES GO INTO A HOLDING ACCOUNT WHERE DEPARTMENTS ARE RESPONSIBLE FOR REVIEWING DAILY RESEARCH LOGS AND RECLASSIFYING ENTRIES TO THE APPROPRIATE ACCOUNT, WHICH OFTENTIMES WOULD BE A REVENUE ACCOUNT. TO PROVIDE CONTEXT REGARDING ACCOUNT BALANCE, BETWEEN JANUARY 2023 AND JUNE 2025, THE BALANCE RANGED FROM 2.5 TO $4 MILLION. BEFORE WE GET TO OUR RECOMMENDATION, WE DID WANT TO HIGHLIGHT SOME POSITIVE RESULTS AS WE DETERMINED THAT INCOMING DEPOSITS WERE APPROPRIATELY RECORDED AND DEPOSITED IN THE CITY'S BANK ACCOUNT BY FINANCE. ADDITIONALLY, FINANCE WAS CONSISTENTLY SENDING OUT A LIST OF INCOMING DEPOSITS VIA THE DAILY RESEARCH LOGS TO ALL DEPARTMENTS FOR DEPOSITS THAT DID NOT HAVE THIS IDENTIFIABLE INFORMATION SUCH AS CUSTOMER OR INVOICE NUMBER. WE DID HAVE ONE OVERARCHING RECOMMENDATION AS IT PERTAINED TO ACCOUNT GUIDANCE AND OVERSIGHT. AS WE DETERMINED THAT FINANCE WAS NOT EFFECTIVELY MANAGING THE FUNDS IN THIS ACCOUNT. WE ATTRIBUTED THIS TO THREE PRIMARY VARIABLES. THE FIRST OF WHICH WAS DEPARTMENTS WERE NOT REVIEWING THE RESEARCH LOGS OR COMMUNICATING IDENTIFIED DEPOSITS TIMELY. SO AGAIN TO GIVE A LITTLE CONTEXT REGARDING THE WORK WE DID, WE LOOKED AT A [00:20:01] SAMPLE OF 52 DAILY LOGS. AND AFTER TAKING INTO CONSIDERATION THE ITEMS THAT WERE RESPECTIVELY CLAIMED AND RECLASSIFIED TO THE APPROPRIATE ACCOUNT, ABOUT HALF OF THE REMAINING ENTRIES DID HAVE SOME IDENTIFIABLE INFORMATION. SO AGAIN, WE CONCUR WITH FINANCE THAT THERE WASN'T INFORMATION SUCH AS THE CUSTOMER OR INVOICE NUMBER BUT OFTENTIMES THERE WAS IDENTIFIABLE INFORMATION SUCH AS DEPARTMENT NAME, PROGRAM NAME, WHICH WOULD HAVE ALLOWED DEPARTMENTS TO CLAIM THESE ITEMS MORE TIMELY. THE SECOND VARIABLE WAS THAT THERE WERE NOT EFFECTIVE CONTROLS IN PLACE AT THE TIME OF THE AUDIT TO PERIODICALLY REVIEW THIS ACCOUNT AND RECLASSIFY THESE ITEMS TO THE CORRESPONDING ACCOUNT. AND FINALLY, THERE WEREN'T ESTABLISHED PROCEDURES TO PROVIDE GUIDANCE FOR HOW TO IDENTIFY, RESEARCH, AND THEN CLAIM THESE ENTRIES IN CONJUNCTION WITH FINANCE. IN LINE WITH THOSE OBSERVATIONS, WE'RE RECOMMENDING THAT FINANCE DEVELOP WRITTEN PROCEDURES AND TRAIN STAFF ACCORDINGLY AND THAT THEY DEVELOP CONTROLS TO PERIODICALLY REVIEW THE UNAPPLIED DEPOSITS ACCOUNT AND RECLASSIFIED THE ENTRIES ON A PERIODIC BASIS. MANAGEMENT DID AGREE WITH OUR RECOMMENDATION AND HAS DEVELOPED AN ACTION PLAN WITH AN ANTICIPATED COMPLETION DATE OF SEPTEMBER 20. THAT CONCLUDES MY PRESENTATION BUT BOTH MYSELF AND FINANCE ARE AVAILABLE TO ANSWER ANY QUESTIONS YOU MAY HAVE. >> VIAGRAN: THANK YOU, ABIGAIL. WOULD THE FINANCE COMMITTEE LIKE TO SAY A FEW THINGS? >> ELLIOTT: TH THANK YOU, CHAIR. THANKS TO BUDDY AND ABIGAIL, WE HAVE HAD A LOT OF CONVERSATIONS ABOUT THIS AUDIT . APPRECIATE THE AUDIT AND THE WORK THEY DID. JUST TO PUT THINGS IN CONTEXT, THIS WAS SOMETHING THAT WE AS FINANCE HAS IDENTIFIED AS AN AREA OF IMPROVEMENT BACK IN 2018. WHAT WAS HAPPENING PRIOR TO THAT WAS WE HAD A NUMBER OF CHECKS AND THESE MAY NOT HAVE ANY KIND OF ACCOUNT INFORMATION OR YOU KNOW WHEN YOU GET YOUR CHECK, THEY DIDN'T HAVE THE INVOICE WITH IT. YOU MAY BE ABLE TO KNOW WHO SENT YOU THE CHECK BUT WHERE WAS IT TO BE APPLIED, WE COULDN'T FIGURE OUT WHAT ACCOUNT IT WENT TO. WE CREATED THIS PROCESS TO KEEP IT OUT OF THE DESK DRAWERS AND TO ACTUALLY GET THE MONEY INTO THE ACCOUNT FOR TRACKING PROCESS SO WE ACTUALLY COULD DO THE FOLLOW-UP. WHEN THE AUDITORS CAME IN, THEY IDENTIFIED THESE AREAS, WE RECOGNIZED THE AREAS THAT WE NEED TO IMPROVE UPON, AND WE HAVE PUT THOSE IN PLACE. WE PUT THE STANDARD OPERATING PROCEDURES IN PLACE. WE HAVE REDUCED THE AMOUNT OUTSTANDING CONSIDERABLY TO ABOUT $777,000 AT THE TIME OF THIS REPORT CAME OUT, IT'S BEEN REDUCED SLIGHTLY TO $730,000. THE NUMBER OF ITEMS HAVE CONTINUED TO DROP. TO BE CANDID, THIS WILL NEVER BE AN ACCOUNT THAT WILL BE ZERO. THERE WILL ALWAYS BE SOMETHING RUNNING THROUGH THIS ACCOUNT BECAUSE SOMEONE WILL ALWAYS PAY US AND WE WON'T KNOW WHERE TO APPLY IT. WE HAVE PUT A TEAM IN PLACE. WE HAVE GONE THROUGH THIS AND REMEDIATED A LOT OF IT. AGAIN, THANK YOU TO BUDDY AND ABBY. WE APPRECIATE THE WORK AND WE'LL CONTINUE TO CHIP AWAY AT THIS. >> VIAGRAN: THANK YOU, TROY. I WANT TO START BY THE FACT THAT WE'RE HERE WITH THIS AUDIT BECAUSE WE KNEW THAT, AS A CITY -- THIS WAS A LITTLE BEFORE MY TIME, MAYBE A FEW YEARS BUT I THINK I KNEW OF IT. WE KNEW THERE WAS SOMETHING GOING ON. 42 DEPARTMENTS HAVING THIS COME IN, ALL THE INVOICES. WE KNEW WE NEEDED AN AUDIT ON THIS TO MAKE SURE THAT WE COULD FOLLOW IT BECAUSE WE WANT TO KEEP TRACK OF OUR ACCOUNTABILITY. I APPRECIATE YOUR EFFORTS. THANK YOU FOR IDENTIFYING AN AUDIT, WHAT YOU HAVE DONE. IN TERMS OF IF WE MOVE FORWARD, TROY -- AGAIN, 42 DEPARTMENTS. MY CONCERN IS IDENTIFYING ANY TRENDS THAT MAY BE HAPPENING WITHIN CERTAIN DEPARTMENTS OR CERTAIN PROJECTS. AS WE MOVE FORWARD FROM THIS POINT -- AND I THINK YOU KNOW THAT -- WE WILL CONTINUE, AS WE FACE OUR FINANCIAL STRUGGLES, TO HAVE THAT PUBLIC-PRIVATE PARTNERSHIP AND WANT TO MAKE SURE THERE IS A PROCEDURE FOR DEPARTMENTS -- RESILIENCY AND SUSTAINABILITY. PUBLIC WORKS, SOLID WASTE, WHEN WE HAVE PARTNERS THAT ARE LIKE I WANT TO BE A PART OF THIS PROJECT, THIS IS HOW WE WANT TO HELP. THERE'S A WAY FOR YOU ALL TO IDENTIFY THAT ALSO. SO I APPRECIATE THE EFFORT. I THINK THIS IS GOING TO BE KEY. I THINK WE NEED TO -- I'D LIKE, IF I COULD GET A TIMELINE FROM AUDIT ABOUT WHAT Y'ALL ARE PLANNING TO DO. BECAUSE I'M JUST THINKING ABOUT MY DISTRICT, IN PARTICULAR. [00:25:01] I'M PUBLIC-PRIVATE QUEEN ON THINGS BUT I REALLY WANT TO MAKE SURE THERE'S A PROCESS SO THAT IF SOMEBODY IS, LIKE, WE WANT TO HELP WITH THIS PROJECT AND WE'LL DO IT THROUGH THIS DEPARTMENT. AND THERE'S SO MUCH PROGRAMMING COMING UP, THE SUSTAINABILITY SYMPOSIUM, THAT PEOPLE ARE SAYING WE WANT TO HELP WITH THIS AND Y'ALL BEING ABLE TO FIND OUT WHERE THAT COVERS. THE OTHER THING, IN TERMS OF THE 42 DEPARTMENTS, I DO THINK WE NEED TO LOOK AT THE COUNCIL DISTRICTS TOO BECAUSE THERE IS MONEY THAT WE RECEIVE FOR OUR PROJECTS AND OUR EVENTS THAT I HOPE WE ARE LABELING CORRECTLY TOO. IF WE COULD GET THAT INFORMATION ALSO. BUT I WOULD REALLY LIKE TO SEE A TIMELINE, AS WE CONTINUE TO MOVE ON THE PUBLIC-PRIVATE ON SOME OF THESE PROJECTS COMING THROUGH THE CITY OF SAN ANTONIO WHERE WE HAVE THE PRIVATE DOLLARS WORKING TO CONTINUE WITH SOME OF THE THINGS WE HAVE. I THINK SPECIFICALLY ABOUT THIS BUDGET SESSION AND THE ASK WE HAVE MADE REGARDING SOME OF THOSE CITY-OWNED FACILITIES WE HAVE. IF THAT DONATION IS GOING TO GO STRICTLY TO THE FACILITY OR COME THROUGH THE CITY. AND SOME OF THE MAINTENANCE WE DO THERE. THAT'S ALL MY COMMENTS. DO ANY OTHER MEMBERS HAVE ANY COMMENTS? COUNCILMAN WHYTE. >> WHYTE: SO THE $777,000 THAT'S REMAINING, WE'RE STILL WORKING ON THAT? >> ELLIOTT: YES, SIR. IT'S BEEN REDUCED SLIGHTLY. IT'S BEEN REDUCED TO ABOUT $730,000. AT THE TIME, THE $777,000 REPRESENTED ABOUT 1500 CHECKS OR ITEMS IN THE UNAPPLIED DEPOSIT ACCOUNT. THAT'S BEEN REDUCED BY ANOTHER 100. WE ARE CONTINUING TO WORK ON IT. I WOULD LIKE TO GET THIS DOWN TO NO MORE THAN A YEAR, TWO YEARS OUTSTANDING SO WE CAN ACTUALLY MANAGE IT. >> WHYTE: HOW FREQUENTLY IS FINANCE GOING TO RECONCILE THE ACCOUNT? >> ELLIOTT: WE'RE GOING TO RECONCILE ON A DAILY BASIS. WE'LL SEND OUT REPORTS TO THE DEPARTMENTS. THE TEAM IS HERE TODAY THAT WILL BE MONITORING IT. AND WORKING WITH THE DEPARTMENTS. EVERY MONTH WE WILL BE LOOKING AT THIS AND MAKING SURE THAT'S BEING DONE BEFORE WE CLOSE. >> WHYTE: HAS AUDIT CHECKED IN WITH THEM NOW AND ALL THE RECOMMENDATIONS HAVE BEEN IMPLEMENTED AND WE HAVE BETTER PROCESSES AND PROCEDURES NOW ON THIS? >> THIS IS GOING TO BE PART OF OUR FOLLOW-UP PROCESS SO WE HAVEN'T EXECUTED THAT STEP YET. BUT I DO JUST WANT TO ADD SOME ADDITIONAL CONTEXT. THIS ACCOUNT, THE CITY DID RECEIVE THEIR MONEY. WHAT IT CREATES THOUGH IS THERE'S AN EFFICIENCY COMPONENT CITYWIDE, TO COUNCILMEMBER'S POINT, THERE'S 42 DEPARTMENTS. THE 42 DEPARTMENTS MAY HAVE AN ACCOUNTS RECEIVABLE BALANCE AND THEY'RE WORKING ON IT BUT IT MAY BE SITTING IN HERE. SO TO TROY'S POINT, WE'RE NEVER GOING TO GET THIS TO ZERO SIMPLY BECAUSE WE'RE GOING TO HAVE FOLKS PAYING US WITHOUT ENOUGH INFORMATION TO RECONCILE. BUT WE WANT TO GET IT TO A MANAGEABLE NUMBER. I DO WANT TO EMPHASIZE WE DID RECEIVE OUR FUNDS IN THIS ACCOUNT. AND TO ANSWER YOUR QUESTION, YES. WE'RE GOING TO FOLLOW UP AND THAT WILL BE PART OF OUR FOLLOW-UP PRESENTATION. >> VIAGRAN: COUNCILWOMAN MEZA GONZALEZ. >> GONZALEZ: THANK YOU FOR THAT CONTEXT. I APPRECIATE THAT. MY QUESTION WAS -- YOU MAY HAVE ANSWERED IT. AND I APPRECIATE -- I THINK YOU HAD AN ACCOUNT BALANCE OF $3.3 MILLION SO YOU BROUGHT THAT DOWN TO THE 770 AND MAYBE A LITTLE BIT MORE SINCE THEN. I APPRECIATE THE WORK THERE. BUT THERE'S STILL THE 1500 ITEMS THAT ARE STILL OUT AND SOME OF THEM ARE FROM 2018. SO I GUESS WHAT'S THE TIMELINE? YOU MIGHT HAVE MENTIONED WITHIN THE YEAR? >> ELLIOTT: WE ARE, AS FAR AS THE TIMELINE, WE'RE GOING TO GO LIVE WITH OUR SAPD IMPLEMENTATION OCTOBER 1ST. OUR CONVERT THE DATA. SO OUR GOAL IS BY OCTOBER 1ST, BY THE TIME WE CONVERT TO THE NEW SYSTEM, THAT WE HAVE ALL THESE OLD BALANCES CLEANED UP. AS YOU COULD EXPECT, 2018, WE'RE REACHING OUT TO SOME OF THE ENTITIES THAT MAY HAVE SENT US A CHECK. THEY MAY NOT BE IN BUSINESS SO THERE MAY BE A PORTION WE NEED TO FIGURE OUT WHAT TO DO. OUR GOAL IS BY OCTOBER 1ST TO BE DONE. >> GONZALEZ: I GUESS THE PAYMENTS THAT REMAINED UNAPPLIED, ARE ANY VENDORS AFFECTED BY THAT? >> ELLIOTT: NOT VENDORS. IT'S GOING TO BE MORE ON THE CUSTOMER SIDE. THE CUSTOMERS THAT ARE DOING BUSINESS TO US. WITH THE PROCESS IN PLACE, ARE THEY BEING IMPACTED? NOT SURE I CAN ANSWER THE QUESTION. WE DO HAVE PROCESSES IN PLACE THAT WE'RE GOING TO, IF THERE'S A CUSTOMER [00:30:01] ACCOUNT BALANCE -- THIS IS PART OF THE AUDIT THAT BUDDY MENTIONED PREVIOUSLY. THERE WILL BE ACCESSIBLE PROCESSES PUT IN PLACE, THIS MONEY HAS GONE INTO THIS ACCOUNT BUT THEY MAY HAVE AN ACCOUNTS RECEIVABLE OPEN WITH THE CITY. ONCE WE HAVE THE CITYWIDE ON A REGULAR BASIS, THEY SHOULD BE GETTING NOTIFIED THAT YOU HAVE AN OUTSTANDING BALANCE. HOPING THEY CALL US SAYING I PAID MY CHECK. THAT PROMPTS UP TO RESEARCH WHERE IT NEEDS TO BE APPLIED TO CORRECTLY. THERE'S A BUNCH OF CONTROLS IN PLACE. >> GONZALEZ: THANK YOU SO MUCH. THANKS. >> CHAIR, ESSENTIALLY, AS TROY TALKED ABOUT, I'LL MAKE SURE THE CONTEXT DOESN'T GET LOST. THE VAST MAJORITY OF THE PEOPLE THAT PAY US, CUSTOMERS, THEY'RE SENDING AN INVOICE, THEY'RE GIVING US THE INFORMATION WE NEED TO DEPOSIT IT. THIS IS A RELATIVELY SMALL PERCENTAGE THAT ENDS UP IN THIS UNAPPLIED CASH ACCOUNT THAT WE TURN INTO A MANUAL PROCESS TO FIGURE OUT WHERE THAT'S COMING FROM. AND, YOU KNOW, THE CHAIR MENTIONED THIS. WE'VE GOT 40-PLUS DEPARTMENTS. WE ALSO HAVE A LOT OF SYSTEMS. THOSE SYSTEMS ARE NOT COMPLETELY INTEGRATED SO WE DON'T HAVE COMPLETE VISIBILITY ACROSS THERE TO BE ABLE TO PUT IN, HEY, BEN GORZELL PAID X. WHERE'S THAT GOING TO POP UP? WHEN WE SEND THAT LIST OUT, IT'S GETTING IT TO THE RIGHT DEPARTMENT, THE RIGHT INFORMATION, IT'S DOING ALL THAT FOLLOW UP. IMPORTANT THAT WE NEED TO BE ABLE TO DO THAT AND MAKE SURE THIS STUFF GETS CLEARED OUT ON A TIMELY BASIS. THAT WAS A PIECE THAT WE NEED TO BE DOING A BETTER JOB AT WAS CLEARING THAT. MANUAL PROCESS BUT WE'VE GOT TO FIGURE IT OUT. WE HOPE AS WE MOVE INTO THE SAP UPGRADE, MAYBE THERE WILL BE SOME TECHNOLOGICAL PIECES TO HELP WITH THAT . THE OTHER THING WE HAVE SEEN HAPPENING IS WE'RE GIVING CUSTOMERS MORE OPTIONS TO PAY. SO IF YOU'RE PAYING DEBIT OR CREDIT CARD, THAT LINK IS HAPPENING RIGHT AWAY. WE KNOW WHAT IT'S FOR. IT'S CLEARING. IT'S EASIER. I THINK THE AMOUNT OF CHECK DEPOSITS WE GET WILL CONTINUE TO GO DOWN. I THINK, CHAIR, AS YOU TALK ABOUT SOME OF THE OTHER PROGRAMS. WHEN PEOPLE WANT TO CONTRIBUTE TO THINGS, THOSE ARE THE ONES WE TYPICALLY WILL GET THE RIGHT INFORMATION ON AND CAN CLEAR QUICKLY. IT'S A LOT OF THESE SMALLER AMOUNTS THAT WE END UP HAVING TO SPEND SOME TIME ON TRYING TO FIGURE OUT. JUST A LITTLE BIT OF CONTEXT. WE'LL CONTINUE WORKING ON IMPROVING THAT PROCESS TO MAKE SURE IT'S GETTING TO THE RIGHT DEPARTMENT AND THE RIGHT REVENUE ITEM. >> GONZALEZ: THANK YOU SO MUCH. >> VIAGRAN: I MOVE TO PASS. CAN I GET A MOTION AND A SECOND ON THIS ITEM? I'VE GOT A MOTION AND A SECOND. ANY DISCUSSION? ALL RIGHT. NO FURTHER DISCUSSION. WE HAVE A MOTION AND A SECOND. ALL IN FAVOR SAY AYE. >> SAY NO. MOTION CARRIES. WE'LL MOVE ON TO ITEM NO. 5. MADAME CLERK, PLEASE READ THE CAPTION. >> CLERK: ITEM NO. 5 IS AN ACCEPTANCE OF THE OFFICE OF THE CITY AUDITOR REPORT AU25-034 AUDIT OF OFFICE OF RISK MANAGEMENT WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR. >> AGAIN, GOOD MORNING. MY NAME IS ABIGAIL AND I WAS AN AUDIT MANAGER FOR THIS PROJECT AS WELL. I'LL BE PRESENTING THE RESULTS FOR RISK MANAGEMENT WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR CONTRACT AUDIT. OUR OBJECTIVE WAS TO DETERMINE IF THE CONTRACT WAS ADEQUATELY MANAGED AND WHETHER THE SYSTEM DATA WAS ACCURATE AFTER THE TRANSITION AND THIRD PARTY ADMINISTRATORS. OVERALL, WE DETERMINED THAT RISK MANAGEMENT HAD EFFECTIVE PROCEDURES IN PLACE TO MONITOR CLAIM EXPENDITURES AND ADMINISTRATIVE FEES PAID TO SEDGEWICK, THE THIRD PARTY ADMINISTRATOR. REQUIREMENTS WERE MET FOR LICENSING, STAFFING, AND DATA SECURITY CONTROLS BUT WE DID IDENTIFY SOME AREAS FOR OPPORTUNITY AS IT PERTAINED TO CONTRACT MONITORING, WORKERS' COMPENSATION CLAIMS, AND DATA ACCURACY. TO PROVIDE SOME BACKGROUND, RISK MANAGEMENT WORKERS' COMPENSATION DIVISION SUPPORTS INJURED EMPLOYEES BY MANAGING CLAIMS THROUGH THIS TPA, WHICH IS SEDGEWICK. SEDGEWICK IS RESPONSIBLE FOR CASE MANAGEMENT SERVICES, MEDICAL COST CONTAINMENT, PHARMACY, AND OVERSIGHT OF THE CLAIMS PROCESS. FROM OCTOBER 2024 THROUGH AUGUST 2025, THE CITY RECEIVED AND SENT APPROXIMATELY 1400 CLAIMS TO SEDGEWICK AND PAID OUT $2.8 MILLION IN TOTAL WORKERS' COMPENSATION CLAIMS. TO HIGHLIGHT A COUPLE OF THE POSITIVE RESULTS BEFORE WE MOVE INTO OUR RECOMMENDATIONS. WE DETERMINED THAT CLAIM EXPENDITURES WERE ACCURATE AND PROPERLY SUPPORTED. ADDITIONALLY, ADMINISTRATIVE FEES PAID TO SEDGEWICK, THE CONTRACTOR WERE ACCURATE. [00:35:03] PROPERLY SUPPORTED AND AGREED TO CONTRACTUAL RATES. WE ALSO CONFIRMED THAT SEDGEWICK MET STAFFING REQUIREMENTS AND THEIR EXAMINERS PROCESSING THESE CLAIMS WERE PROPERLY LICENSED. FINALLY, WE CONFIRMED THAT SEDGEWICK HAD CONTROLS OVER PERSONALLY IDENTIFIABLE INFORMATION AND PROTECTED SECURITY . OUR FIRST RECOMMENDATION PERTAINED TO CONTRACT MONITORING. AS DURING THE TIME OF THE AUDIT, RISK MANAGEMENT DID NOT HAVE A CONTRACT ADMINISTRATION PLAN IN PLACE. AGAIN, THIS IS A CITYWIDE TOOL THAT'S COMMONLY USED TO HELP ENSURE THAT KEY CONTRACTUAL REQUIREMENTS ARE MONITORED AND IN COMPLIANCE WITH THE CONTRACT. TO PROVIDE SOME EXAMPLES DURING THE AUDIT, WE CONFIRMED THERE WAS AN APPROPRIATE MONITORING FOR KEY CONTRACTUAL CLAUSES SUCH AS INSURANCE COVERAGE, ENSURING THAT DAILY SYSTEM BACKUPS ARE OCCURRING AND THERE ARE SUBROGATION PROCEDURES IN PLACE. WE ARE RECOMMENDING THAT THE DEPARTMENT DEVELOP A CAP AND THEY ALSO DEVELOP MONITORING PROCEDURES TO MAKE SURE THAT THESE REQUIREMENTS ARE BEING MET BY THE THIRD-PARTY ADMINISTRATOR. OUR NEXT RECOMMENDATION WAS OVER WORKERS' COMPENSATION CLAIMS. WE REVIEWED A SAMPLE OF 100 CLAIMS AND DETERMINED THAT THE CLAIMS WERE NOT CONSISTENTLY PROCESSED TIMELY PER THE CONTRACT TIME-FRAMES THAT THEY WERE MISCATEGORIZED, AND/OR DID NOT HAVE APPROPRIATE SUPPORTING DOCUMENTATION. NOW, DURING THE SAME PERIOD, ORM HAD A THIRD-PARTY AUDIT WHICH NOTED SIMILAR OBSERVATIONS SO WHAT WE ARE RECOMMENDING HERE IS THAT ORM ENSURE THAT POLICIES AND PROCEDURES INCLUDE REFERENCE TO THIS THIRD-PARTY AUDIT. THAT THEY VERIFY THESE AUDITS ARE BEING PERFORMED AS INTENDED, AND THAT ACTION PLANS WERE APPLICABLE OR IMPLEMENTED TO BRING THE CONTRACTOR THE TPA INTO COMPLIANCE WITH THE CONTRACTUAL REQUIREMENTS. OUR FINAL RECOMMENDATION WAS OVER CLAIM DATA ACCURACY. AS WE DETERMINED THAT RISK MANAGEMENT, AT THE TIME OF THE AUDIT, DID NOT HAVE PROCEDURES IN PLACE TO CONFIRM THE ACCURACY OF EMPLOYEE CLAIM DATA. TO GIVE A LITTLE CONTEXT HERE, WE EVALUATED THE DATA IN VIA 1, WHICH IS SEDGEWICK'S CLAIM DATABASE AGAINST THE CITY'S EMPLOYEE MASTER FILE. WHAT WE IDENTIFIED IN SOME INSTANCES WERE INACCURACIES AS IT PERTAINED TO EMPLOYEE FIELD SUCH AS EMPLOYEE NAME, DATE OF BIRTH, AND/OR SOCIAL SECURITY NUMBERS. AGAIN, IT'S SIGNIFICANT THAT THIS DATA BE ACCURATE AS PERIODICALLY REPORTING IS PROVIDED TO THE CENTER OF MEDICAID AND MEDICARE SERVICES. DURING THE COURSE OF THE AUDIT, THEY STARTED DEVELOPING WORKING WITH SEDGEWICK TO DEVELOP AN INTEGRATION BETWEEN THIS VIA 1 SYSTEM AND THE CITY'S MASTER FILE . WHAT WE'RE RECOMMENDING FOR THIS ITEM IS THAT CONTROL PROCEDURES BE DEVELOPED TO MAKE SURE THIS DATA IS ACCURATE AND THAT INTEGRATION CONTINUES WORKING AS INTENDED. RISK MANAGEMENT DID AGREE WITH OUR RECOMMENDATIONS AND HAS DEVELOPED ACTION PLANS TO ADDRESS THESE ITEMS WITH AN ANTICIPATED COMPLETION DATE OF SEPTEMBER 2026. THAT CONCLUDES MY PRESENTATION BUT BOTH MYSELF AND RISK MANAGEMENT ARE AVAILABLE TO ANSWER ANY QUESTIONS YOU MAY HAVE. >> VIAGRAN: ALL RIGHT. BEFORE WE START DISCUSSION, CAN I GET A MOTION AND A SECOND TO ACCEPT THE AUDIT? WE'VE GOT A MOTION AND A SECOND. WHO WOULD LIKE TO BEGIN? >> GORZELL: CHAIR, CAN I HAVE DEBORAH, OUR RISK MANAGER COME UP AND TALK ABOUT THE MANAGER RESPONSE TO THE AUDIT? THANK YOU. >> GOOD MORNING. DEBORAH OJO, THE OFFICE OF RISK MANAGEMENT. FIRST, I WOULD LIKE TO THANK BUDDY AND HIS STAFF FOR THE AUDIT, FOR THEIR PROFESSIONALISM DOING THE AUDIT, AND ALSO FOR EDUCATING US ON SOME OF THE ITEMS THEY FOUND. THIS PARTICULAR CONTRACT IS HIGHLY REGULATED AND HELD AGAINST THE LABOR CODE. SO THE ITEMS THAT THEY FOUND, WE TOOK SERIOUSLY. THE CONTRACT ADMINISTRATOR PLAN THAT THEY RECOMMENDED, WE WORKED WITH FINANCE STAFF AND WE DEVELOPED THAT PLAN, NOT ONLY FOR THIS CONTRACT, FOR ALL THE CONTRACTS WITHIN RISK MANAGEMENT BECAUSE WE WANT TO MAKE SURE THAT WE CATCH AND MONITOR ALL OF THE KEY ITEMS WITHIN THE CONTRACT. AS IT RELATES TO THE ACTUAL AUDIT, WE DO HAVE A THIRD-PARTY AUDIT THAT'S EMBEDDED IN THE CONTRACT BUT WE DIDN'T HAVE THAT LISTED AS PART OF OUR POLICIES AND PROCEDURES. IN ADDITION TO THAT AUDIT, THE THIRD-PARTY AUDIT, WE [00:40:05] ALSO CONDUCT INTERNAL AUDITS QUARTERLY AND WE HAVE A STATE AUDIT EVERY TWO YEARS THAT'S CALLED THE PERFORMANCE BASE AUDIT, WHICH WE PASSED THIS YEAR WITH HIGH STANDARDS. SO WE DID RECOGNIZE THAT WE NEEDED TO HIGHLIGHT THAT AUDIT WAS BEING PERFORMED AND THAT WE WERE MANAGING THE ACTION PLANS AND THE RECOMMENDATIONS. AND AS IT RELATES TO OUR LAST FINDING ON OUR DATA ACCURACY, THE OFFICE OF RISK MANAGEMENT WORKED WITH ITSD TO DEVELOP A DATA FEED THAT GOES FROM SAP TO THE TPA SO THAT THE INFORMATION THAT'S BEING ENTERED IS CORRECT. JUST TO GIVE SOME CONTEXT WITH THAT, THE EMPLOYEE ACTUALLY FILLS OUT THEIR FORM, THEIR INJURY FORM. SO THEY MAY HAVE PUT BILL ON THE FORM AS THEIR NAME WHEN THEIR NAME IS WILLIAM . WHAT GOES IN THE SYSTEM IS WHAT THE EMPLOYEE ACTUALLY SUBMITS. SO NOW BY US HAVING THIS DATA FEE, IT WILL BE ABLE TO CATCH WHENEVER A FIELD IS NOT CORRECT, BASED ON THE DATE OF BIRTH OR THE SOCIAL OR ANOTHER DATA ELEMENT. SO IN ALL, AGAIN WE THANK BUDDY AND THE STAFF. WE DO AGREE WITH THE AUDIT. WE HAVE IMPLEMENTED ALL OF THE RECOMMENDATIONS THAT WAS RECOMMENDED. THANK YOU. >> VIAGRAN: THANK YOU. ARE THERE ANY COMMENTS? COUNCILMAN WHYTE. >> WHYTE: YEAH, BRIEFLY. THANKS SO MUCH FOR THE WORK ON THIS. JUST TWO QUESTIONS. ONE, THE AUDIT FOUND 32 CLAIMS THAT POTENTIALLY QUALIFIED FOR SUBROGATION. CLOSE TO $300,000 IN POTENTIAL RECOVERIES. ARE WE WORKING ON THAT? HOW MUCH HAVE WE RECOVERED? WHAT'S THE STRATEGY THERE? >> WE ARE WORKING ON IT. THE PROCESS -- WELL, I THINK DURING THE SCOPE OF THE AUDIT, WE HAD ALREADY SOLICITED OUR THIRD-PARTY ADMINISTRATOR, WHO NOT ONLY DOES WORKERS' COMPENSATION BUT DOES SUBROGATION. WE TRANSITIONED TO TPA AND THERE WERE SOME OPPORTUNITIES THERE FOR US TO GO BACK TO MAKE SURE THAT ALL THOSE CLAIMS HAD BEEN TRANSFERRED FROM OUR SYSTEM TO THEIR SYSTEM. WE CAN GIVE YOU ADDITIONAL INFORMATION AS TO HOW MUCH OF THAT MONEY HAS BEEN RECOVERED. >> WHYTE: AND YOU'RE TALKING ABOUT SEDGEWICK, RIGHT? >> YES, SIR. >> WHYTE: SO THEY'VE MISSED SOME CONTRACTUAL PERFORMANCE REQUIREMENTS AND THINGS, IT LOOKS LIKE. WHAT REMEDIES ARE AVAILABLE TO THE CITY IF WE DON'T LIKE THE PERFORMANCE WE'RE GETTING FROM THEM? >> WELL, WE ALWAYS HAVE THE OPPORTUNITY TO CANCEL THAT CONTRACT AND GO BACK OUT FOR BID. BUT I WOULD LIKE TO STATE THAT WE DO HAVE PERFORMANCE GUARANTEES BUILT INTO THEIR CONTRACT SO WE LIST ITEMS THAT'S CRITICAL FOR THEM TO PASS IN THE AUDIT. AND IF THEY DON'T PASS THOSE, EACH ONE IS ASSOCIATED WITH A FEE. SO THAT'S ONE WAY WE HOLD THEM ACCOUNTABLE FOR MAKING SURE THAT THE WORK IS GETTING DONE. >> WHYTE: OKAY. THANKS. >> VIAGRAN: MEMBER PACHECO. >> JUST A FOLLOW UP TO THAT. REQUIREMENT OF 24 HOURS. I UNDERSTAND THAT WE CAN GO TO SEDGEWICK TO ASK SOME TYPE OF REIMBURSEMENT OR CREDIT. HAVE WE ALSO REACHED OUT TO ANY INJURED EMPLOYEES TO SEE IF THERE WAS ANY GOSH IF THEY WERE ADVERSELY AFFECTED BY THIS? >> YES. THE FIRST PART OF YOUR QUESTION WAS THE DELAY IN PROCESSING THE PARTICULAR CLAIM. I'M NOT FAMILIAR WITH THE PARTICULARS OF THAT ONE CLAIM. I DON'T REMEMBER WHICH CLAIM IT WAS. BUT TYPICALLY IT DOESN'T TAKE THAT LONG. ALL I CAN THINK OF IS PERHAPS MAYBE WE MISSED MAKING A DECISION ON A CLAIM TO FURTHER PROCESS IT IN THE SYSTEM. >> ARE WE DOING ANY OUTREACH TO CITY EMPLOYEES THAT MAY HAVE BEEN ADVERSELY AFFECTED BY THESE MISSES? >> WE DO A SURVEY WITH EMPLOYEES BUT IF YOU'RE ASKING FOR A PARTICULAR CLAIM THAT WAS DELAYED DID WE MAKE CONTACT WITH AN EMPLOYEE, I WOULD SAY YES. THAT'S THE ROLE THAT THE OFFICE OF RISK MANAGEMENT PLAYS. >> MAKES SENSE. >> WE ARE THE LIAISON BETWEEN THE TPA AND OUR EMPLOYEES. SO ANY TIME WE SEE THERE'S AN OPPORTUNITY THAT OUR EMPLOYEES MAY NOT HAVE BEEN PAID, BEEN PAID LATE, THAT'S WHERE OUR OFFICE STEPS IN AND TALKS TO SEDGEWICK AND THE EMPLOYEE TO MAKE SURE [00:45:06] THAT THEY RECEIVED THEIR BENEFITS. >> IT WOULD BE GOOD IF WE CAN GET ACCESS TO THE DATA FROM OUR CITY EMPLOYEES ON WHAT THEY FEEL -- HOW THIS PROGRAM IS WORKING. >> CHAIR, THIS CONTRACT WITH SEDGEWICK STARTED IN OCTOBER OF 2024. WE HAVE HAD A THIRD-PARTY ADMINISTRATOR IN PLACE FOR AS LONG AS I CAN REMEMBER. PROCESSING CLAIMS FOR US. SO WE PERIODICALLY GO THROUGH A PROCESS TO SELECT A CONTRACTOR. PRIOR TO THIS MOST RECENT CONTRACT, WE HAD SOME CHALLENGES IN THAT AREA AND WENT THROUGH A SOLICITATION TO GET A NEW THIRD-PARTY ADMINISTRATOR. AS THE AUDIT TEAM IS AUDITING HERE -- CORRECT ME IF I'M WRONG, BUDDY, AUGUST OF 2024 THROUGH THE CURRENT. WHEN WE MAKE THAT TRANSITION TO THIS ONE, YOU'VE GOT A LOT OF OPEN CLAIMS. SOME CLAIMS ARE OPEN FOR A LONG PERIOD OF TIME. ALL OF THAT IS TRANSITIONING OVER AND SOME OF THAT IS GETTING CAUGHT UP IN THAT EARLY PART OF THE CONTRACT. AND SO I'LL GIVE YOU AN EXAMPLE. IF YOU LOOK AT OUR STATE SCORE ON THE PVO PRIOR TO 2024, IT WAS NOT VERY GOOD AND THAT WAS CONCERNING FOR US. THE MOST RECENT ONE WE DID CAME BACK AS EXCEPTIONAL, WHICH IS THE HIGHEST TIER YOU CAN GET. NOT TO SAY THERE AREN'T SOME THINGS WE NEED TO CONTINUE TO WORK ON BUT WE CERTAINLY HAD SOME CHALLENGES. WE TURNED THE CORNER, I THINK, ON THOSE. BUT WE WOULD ACTUALLY WELCOME A FOLLOW-UP AUDIT AS WELL. THIS IS AN IMPORTANT AREA FOR US. YOU TOUCHED ON IT PERFECTLY. THIS PROGRAM IS IN PLACE TO HELP INJURED WORKERS. WE WANT TO MAKE SURE THEY ARE GETTING THE SUPPORT THAT THEY NEED SO THAT THEY CAN RETURN TO THEIR JOB AS QUICKLY AS POSSIBLE AND WE'RE PROVIDING THE CARE AND THE SUPPORT THAT THEY NEED. IF THIS IS ONE THAT YOU ALL OR BUDDY WOULD LIKE TO DO A FOLLOW UP ON, WE WOULD WELCOME ANOTHER LOOK AT THIS ONE. THIS IS AN IMPORTANT PROGRAM FOR US. I'LL GIVE YOU CONTEXT IN TERMS OF THE TIMING AND WHEN WE TRANSITIONED TO THE THIRD-PARTY ADMINISTRATOR. >> VIAGRAN: THANK YOU FOR THAT, BEN. I THINK PART OF IT IS WHY WE HAVE OUR REPRESENTATIVES AND WHY THEY'RE BOTH STARTING SUBCOMMITTEES TO HELP. TO BE THAT KIND OF ACTION BOARD. BECAUSE I THINK -- AND THANK YOU, MEMBER PACHECO FOR BRINGING IT UP. WHEN IT GETS TO THE OFFICE OF RISK MANAGEMENT, THEY'RE ALREADY HURT. SO IN TERMS OF COSA WELLNESS, HR, IT'S LIKE IF THIS HAPPENS TO YOU, LET'S DISCUSS BEFOREHAND WHAT ARE THE STEPS YOU ARE SUPPOSED TO TAKE. IF YOU THINK YOUR INJURY THAT WAS JUST GOING TO BE A COUPLE OF DAYS TURNS INTO SOMETHING THAT LEADS TO WORKERS' COMP, THIS IS WHAT YOU NEED TO KNOW BEFOREHAND. BECAUSE TRYING TO TELL THEM IN THE MIDDLE OF THE PAIN AND IN THE MIDDLE OF THE DIAGNOSIS OR WHATEVER'S GOING ON, IT'S REALLY HARD FOR THEM TO FOCUS ON. SO I THINK THAT'S PART OF WHAT WE DO BEFOREHAND IN TERMS OF CUSTOMER SERVICE. HOW ARE WE COMMUNICATING WITH OUR EMPLOYEES AND OUR EMPLOYEES TALKING TO EACH OTHER TO REMIND THEM, MAKE SURE YOU PUT YOUR BIRTH NAME, NOT JUST BILL OR THE JERRY THAT WE USE AT WORK WHEN YOU'RE FILLING OUT THIS INFORMATION BECAUSE YOU'VE GOTTEN TO THIS POINT. THANK YOU FOR THE RECOMMENDATIONS AND WE'LL BE LOOKING AT THAT BUT I THINK THIS TAKES IN A LARGER PICTURE WITH HR AND WELLNESS AND KIND OF DESTIGMATIZING THAT STRESS AND ANXIETY THAT HAPPENS WHEN YOU GET KIND OF AN INJURY ON WORK. YOU KNOW, I'M SPEAKING FROM EXPERIENCE BECAUSE I HAVE STAFF THAT'S BEEN HURT ON WORK AND THEY JUST THOUGHT, THIS IS JUST A LITTLE THING. THREE DAYS LATER WE'RE LIKE, YOU GOT TO GET THAT CHECKED OUT. I APPRECIATE YOUR EFFORTS ON THIS. ANY OTHER COMMENTS? ALL RIGHT. SO WE LOOK FORWARD TO THAT. REPRESENTATIVE PACHECO AND I WILL BE WORKING ON THIS. THIS MIGHT BE OUR FIRST PROJECT BUT THANK YOU, BEN FOR OFFERING. AND THANK YOU, BUDDY AND THE AUDIT TEAM FOR THAT. WE HAVE A MOTION AND A SECOND. IF THERE'S NO FURTHER DISCUSSION, ALL IN FAVOR SAY AYE. >> >> VIAGRAN: ANY OPPOSED? MOTION CARRIES. ALL RIGHT. THE TIME IS NOW -- LET ME MAKE SURE. THE TIME IS * This transcript was compiled from uncorrected Closed Captioning.