Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Slippery SEDC bonus requests underneath City Council radar

In our distinguished daily paper today (Sept. 6), a letter by Mel Shapiro points out several facts regarding the Southeastern Economic Development Corporation (SEDC) self-dealing bonus approvals by outgoing president Carolyn Smith for herself and other staffers.

From Shapiro's letter: "A lot has been written about the unauthorized bonuses received and given by Carolyn Smith... [b]ut were they really unauthorized? How many people saw them but didn't question them?

"The SEDC budget for fiscal 2008 shows $114,000 budgeted for 'overtime, temporary, bonus.' The budget does not show who would get a bonus. None of the City Council has asked this important question. Did they actually read SEDC's budget? I have my doubts. But the council approved it."

Shapiro, a former accountant and interested taxpayer, then described how SEDC receives at least part of its funding: "Every month, SEDC sends a 'Request for Payment' to the City Comptroller Department for reimbursement for administrative expenses, including payroll. The 'request' lists each employee's biweekly salary. So there was nothing clandestine about Carolyn Smith's bonuses. ... [sample detail of budgeted salary for given two-week periods plus the amount of salary overpaid past the budget] ... The Comptroller's Department, which is under Mayor Sander's jurisdiction, dutifully reimbursed SEDC for those salaries, apparently with no questions asked."


First of all, I have to agree with Shapiro that the auditing firm Macias Gini & O'Connell was quite possibly overpaid, given its failure to discover the budget-bonus discrepancies before they were uncovered by voiceofsandiego.org earlier this year.

At the same time, I have to withhold any judgment that the bonuses paid were not clandestine.

If they were truly done in sunshine, so that everybody could see what was going on, then the entry cited by Shapiro above, "overtime, temporary, bonus", was just plain wrong.

As a salaried president of any corporation, what was Smith doing by approving any kind of "overtime" bonus for herself?

If it wasn't an overtime bonus, then did she actually divert funds from the named overtime-bonus budget line item from other employees to her own benefit and enrichment?

Further, without seeing the documentation obtained by Shapiro, I would have to say that unless the monthly administrative reimbursement request from SEDC to the City Comptroller's Department actually contained an item-by-item breakdown of each SEDC check paid out with enough details to figure out why it was being paid, the Comptroller was stuck in the position of being unable to challenge a lump sum reimbursement because the self-dealing bonuses were "hiding" in the total request amount for each employee every month this went on.

I make this assumption based on the Independent Budget Analyst's repeated requests back in 2006 that city redevelopment agencies submit budgets and budget changes with enough details for auditors and the public to figure out just what was going on. (See http://www.sandiegoreader.com/weblogs/encanto-gas-holder/2008/aug/28/lack-of-budget-standardization-at-redevelopment-ag/)

As it was, voiceofsandiego.org didn't have anything to say until after it had compared SEDC's city-approved budget with the tax information SEDC had sent to the State of California.

Now, how many of us ordinary taxpayers would have thought to do that?

Clandestine, indeed... as befitting Enron by the Sea.


One thing I'm not certain that Shapiro has seen is that part of SEDC's 2006-07 revised budget that actually breaks down the proposed salaries to be paid. To me, what's most interesting is the listing of job titles:

One president

One vice president of operations

One director of finance

One director of corporate communications

One manager of projects/development

One senior planner

One projects coordinator

One executive assistant

One assistant projects coordinator

One accounting technician

One administrative support coordinator

One assistant community development coordinator

One receptionist

One communications coordinator (half time)

One messenger clerk (half time)

There seems to be a lot of chiefs but few indians in this tribe.

Of the 15 positions listed, two are listed as being related to finance and accounting.

It would be interesting how the outgoing president, the director of finance, or even the accounting technician can explain why the Independent Budget Analyst's warning of inadequate budget and budget change detail was never been addressed by SEDC to the point where auditor Macias Gini & O'Connell could even figure out what was going on.

As I said before, I don't know that a proper audit has ever been done at SEDC... internally, there doesn't seem to be enough qualified people to do one without the internal auditors auditing their own work.

Any accountants want to offer up any comment on the ethics of that in a public benefit corporation?

Here's something you might be interested in.
Submit a free classified
or view all

Previous article

Time’s up for Doubletime Recording Studio

Owner Jeff Forrest is trading El Cajon for Portugal
Next Article

Was Reddit ghost sighter hired by Hotel del Coronado?

Parking 1/2 mile away and complaints of vandalism

In our distinguished daily paper today (Sept. 6), a letter by Mel Shapiro points out several facts regarding the Southeastern Economic Development Corporation (SEDC) self-dealing bonus approvals by outgoing president Carolyn Smith for herself and other staffers.

From Shapiro's letter: "A lot has been written about the unauthorized bonuses received and given by Carolyn Smith... [b]ut were they really unauthorized? How many people saw them but didn't question them?

"The SEDC budget for fiscal 2008 shows $114,000 budgeted for 'overtime, temporary, bonus.' The budget does not show who would get a bonus. None of the City Council has asked this important question. Did they actually read SEDC's budget? I have my doubts. But the council approved it."

Shapiro, a former accountant and interested taxpayer, then described how SEDC receives at least part of its funding: "Every month, SEDC sends a 'Request for Payment' to the City Comptroller Department for reimbursement for administrative expenses, including payroll. The 'request' lists each employee's biweekly salary. So there was nothing clandestine about Carolyn Smith's bonuses. ... [sample detail of budgeted salary for given two-week periods plus the amount of salary overpaid past the budget] ... The Comptroller's Department, which is under Mayor Sander's jurisdiction, dutifully reimbursed SEDC for those salaries, apparently with no questions asked."


First of all, I have to agree with Shapiro that the auditing firm Macias Gini & O'Connell was quite possibly overpaid, given its failure to discover the budget-bonus discrepancies before they were uncovered by voiceofsandiego.org earlier this year.

At the same time, I have to withhold any judgment that the bonuses paid were not clandestine.

If they were truly done in sunshine, so that everybody could see what was going on, then the entry cited by Shapiro above, "overtime, temporary, bonus", was just plain wrong.

As a salaried president of any corporation, what was Smith doing by approving any kind of "overtime" bonus for herself?

If it wasn't an overtime bonus, then did she actually divert funds from the named overtime-bonus budget line item from other employees to her own benefit and enrichment?

Further, without seeing the documentation obtained by Shapiro, I would have to say that unless the monthly administrative reimbursement request from SEDC to the City Comptroller's Department actually contained an item-by-item breakdown of each SEDC check paid out with enough details to figure out why it was being paid, the Comptroller was stuck in the position of being unable to challenge a lump sum reimbursement because the self-dealing bonuses were "hiding" in the total request amount for each employee every month this went on.

I make this assumption based on the Independent Budget Analyst's repeated requests back in 2006 that city redevelopment agencies submit budgets and budget changes with enough details for auditors and the public to figure out just what was going on. (See http://www.sandiegoreader.com/weblogs/encanto-gas-holder/2008/aug/28/lack-of-budget-standardization-at-redevelopment-ag/)

As it was, voiceofsandiego.org didn't have anything to say until after it had compared SEDC's city-approved budget with the tax information SEDC had sent to the State of California.

Now, how many of us ordinary taxpayers would have thought to do that?

Clandestine, indeed... as befitting Enron by the Sea.


One thing I'm not certain that Shapiro has seen is that part of SEDC's 2006-07 revised budget that actually breaks down the proposed salaries to be paid. To me, what's most interesting is the listing of job titles:

One president

One vice president of operations

One director of finance

One director of corporate communications

One manager of projects/development

One senior planner

One projects coordinator

One executive assistant

One assistant projects coordinator

One accounting technician

One administrative support coordinator

One assistant community development coordinator

One receptionist

One communications coordinator (half time)

One messenger clerk (half time)

There seems to be a lot of chiefs but few indians in this tribe.

Of the 15 positions listed, two are listed as being related to finance and accounting.

It would be interesting how the outgoing president, the director of finance, or even the accounting technician can explain why the Independent Budget Analyst's warning of inadequate budget and budget change detail was never been addressed by SEDC to the point where auditor Macias Gini & O'Connell could even figure out what was going on.

As I said before, I don't know that a proper audit has ever been done at SEDC... internally, there doesn't seem to be enough qualified people to do one without the internal auditors auditing their own work.

Any accountants want to offer up any comment on the ethics of that in a public benefit corporation?

Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Previous article

SEDC board member: "It's all about perception"

Next Article

Redevelopment Agency Block Grant Scandal: No Quick Resolution Here

Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.

This Week’s Reader This Week’s Reader