City Auditor Leslie Tanaka reported that the audit came now because the semi-autonomous city agency has been unable to cover its operational costs and just this month began raising rates to customers. Coupled with the high number of water main breaks, Tanaka said this raises concerns "that resources for maintenance and repair of existing drinking water infrastructure may have been compromised by these organization changes."

Tanaka noted in the report that the board's re-engineering plan "shows that change cannot occur solely on the basis of one manager's vision, but particularly for a semi-autonomous municipal entity like the BWS, must be reinforced with accountability through documented systems of evaluation, monitoring and reporting that will institutionalize desired changes, preserve the strengths of the organization and protect ratepayers' interests."

While some change brought new efficiency in some areas, Tanaka said other parts of the reorganization initiated "wide-ranging, ambitious projects that strained BWS resources and overwhelmed its workforce, resulting in diminished support and delayed implementation."

Tanaka also found fault with the awarding of lucrative bonuses to top managers, noting that "the previous board of directors awarded bonuses and salary increases to the previous manager and deputy manager before efficiencies were realized."

Officials from the Board of Water Supply are expected to respond to the audit's criticisms later today.