An external audit commissioned by San Diego County exposes a lack of centralized oversight in its $2 billion annual contracting operations, highlighting inconsistent monitoring across departments despite a clear bidding process. The review follows scandals involving a nonprofit that received over $12 million despite its CFO's embezzlement charges and prior conviction. Recommendations target standardization, especially within the Health and Human Services Agency, while supervisors launch their own reform probe.
Every year, San Diego County spends more than $2 billion on contracting, which is roughly a quarter of its total budget exceeding $9 billion. However, a new review of county contracting practices reveals a lack of countywide standards for monitoring thousands of contractors and how taxpayer money is used.
The review, commissioned by the county in March and conducted by external auditors, highlights that the county has few overarching rules or criteria for assessing contractor performance and associated operational risks. Released on Monday, the 40-page report repeatedly points out the 'decentralized' approach to contracting compliance, allowing various departments and agencies to create and apply their own rules with minimal oversight or consistency.
Moreover, the review found no unified system for staff to report when a contract underperforms or other performance issues arise.
'There is no compliance coordination or oversight across the county,' the review states. 'Without a countywide framework establishing minimum monitoring standards, the county's ability to demonstrate consistent, transparent and well-controlled contract governance across departments is limited. ' The review examined both contract awarding and ongoing performance monitoring. While it criticized contract monitoring, it commended the county's clear bid selection process, staff training, and decision-making authority rules.
This praise raises questions given the context that prompted the review: how the county awarded millions in contracts to a nonprofit whose top financial executive faces charges. In February, the San Diego County District Attorney's Office charged Amy Knox, former CFO of the Harm Reduction Coalition, with stealing from the nonprofit to finance personal expenses like cosmetic surgeries and vacations; she pleaded not guilty in April. County officials defended their practices but still ordered an outside review.
The Harm Reduction Coalition received over $12 million in county contracts to distribute drug-testing kits and naloxone to prevent opioid deaths. Public records reviewed by The San Diego Union-Tribune earlier this year revealed that Knox had a prior embezzlement conviction about a decade ago. When the county contracted with the nonprofit, it was unlicensed in California and hadn't filed public tax returns.
A whistleblower alerted the county about Knox's criminal history in 2023, triggering an audit; the county continued contracting and paying the nonprofit before terminating agreements in 2025, per Voice of San Diego. Although the review was ordered due to the Knox case, it omits mention of her or the Harm Reduction Coalition.
Instead, it offers dozens of suggestions for reforming countywide contracting practices, including four targeted at the Health and Human Services Agency (HHSA), the largest division that initially hired the nonprofit. The review recommends HHSA standardize site visits to contractors and minimize frequent changes to monitoring workflows to avoid staff confusion.
'HHSA has a defined monitoring framework with documented policies, standardized tools and established expectations,' the review notes. County spokesperson Tammy Glenn confirmed the review cost $44,000 and was performed by Eide Bailly; she declined to comment on any other ongoing reviews regarding the Harm Reduction Coalition.
'The County is evaluating the recommendations in the auditor's assessment to determine the next steps needed to strengthen contracting practices and protect public resources and will continue to take all opportunities to identify improvements,' Glenn said. The review coincides with a separate initiative by two Board of Supervisors members to investigate county contracting.
In November, Democrat Paloma Aguirre and Republican Joel Anderson formed a subcommittee to study reforms aimed at saving the county money; the panel has met only twice so far
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