Audit finds weak governance at Ocean Avenue Association; OEWD reports 12 of 19 recommendations implemented

The Government Audit & Oversight Committee reviewed the controller's June 2023 audit of the Ocean Avenue Association (OAA) and the Ocean Avenue Community Benefit District annual report, and voted to file the audit hearing and forward the annual report to the full Board with a positive recommendation.

Mark De La Rosa, director of audits for the Office of the Controller, and audit manager Helen Bowe said the audit (covering July 2018–June 2022) found four overarching problems: an ineffective board tone and weak internal controls; failures to comply with key provisions of the management agreement (including reporting and eligible expenditures); shortcomings in strategic‑planning implementation; and gaps in grant management and records. The audit included 19 recommendations to address governance, financial controls, grant administration and reporting.

Jackie Hazelwood, OEWD’s CBD program director, told the committee that 12 of the 19 recommendations had been implemented as of January 2024. Pending items mostly hinge on completion of a gap financial audit for fiscal year 2022–23; OEWD said that audit is expected to conclude by mid‑February 2024, after which the remaining recommendations will be tracked and closed. Hazelwood said OEWD has worked directly with OAA, a contracted CPA firm, and a board consultant to strengthen bookkeeping, policies, and board practices.

Christian Martin, OAA’s executive director, described operational changes since joining in late 2022: new bookkeeping systems, staff and board changes, a corridor office at 1720 Ocean Avenue, cleaning and maintenance operations, ambassador and bike patrols, marketing efforts and events. Martin said OAA is working to recruit Cantonese‑speaking staff to better serve merchants and hopes the organization is ready for a district renewal in June 2025 and possible expansion.

Supervisors asked about an October event cancellation (Phoenix Day) for which OAA paid a vendor who did not deliver; Martin said the association is pursuing recovery and OEWD said the subcontractor had no active city contracts and is not on the city's debarred list. After public comment, the committee voted to file the audit hearing (Item 2) and send the annual report (Item 3) to the Board with a positive recommendation.