San Diego Fails to Report $52 Million in Employee Compensation

The city of San Diego failed to report to state officials approximately $52 million in employee pension contributions last year, a new audit found.

The State Controller’s Office began in 2010 collecting pay information from cities and counties across the state. San Diego has prepared and submitted employee compensation reports each year since.

The 21-page audit report says the city omitted critical information in each report: the contribution toward each employee’s pension, estimated at about $7,900 for each pension-eligible worker.

“Job seekers or other stakeholders may be conducting inaccurate compensation comparisons between the city of San Diego and other jurisdictions,” the report said, adding that the omission makes it appear that employees with 401(k)-style retirement plans are “more highly compensated than their traditional pension-plan peers.”

Scott Clark, chief accountant of the city’s department of finance, said in a letter to auditors that annual contributions represent the city’s cost to fund the pension system, not compensation to the employee, so the information is not necessary to meet state guidelines.

The audit recommends that the city calculate employer contributions for each employee using the most accurate methodology possible by April 2019. It asks officials to fix the data currently posted on the city’s website and provide the State Controller’s Office with a corrected report for 2017.

If possible, the city should also look into correcting and resubmitting reports for previous years, the report said.

A spokesperson for Mayor Kevin Faulconer said the mayor agrees with the audit recommendations and will implement the changes. (Source: San Diego Union-Tribune, November 27.)

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