Audit Shows City of Los Angeles Misplaced 45 Percent of Purchases. A new audit reports that the city of Los Angeles, facing a budget deficit of $222 million, has misplaced hundreds of purchased items worth a total of almost $1 million. Auditors also found that the city spent taxpayer dollars on many items that were unneeded and sat in storage.
Auditors could not locate 115 items (45 percent of the items purchased by the city), including a $60,000 video camera purchased by the Los Angeles Information Technology Agency (ITA).
The audit also found that ITA and the Los Angeles Recreation and Parks Department purchased 138 items that were unneeded, including some that have remained in storage for more than seven years. These items include refrigerators, stoves, a swimming pool heater, a deep fryer, two televisions, nine microwaves, and several computers and printers. The unused items in storage are worth $237,000. (Cal-Tax: Of course, a seven-year-old computer isn't worth much now.)
City Controller Wendy Greuel said: "With the city facing such a large budget deficit, it's essential that any equipment that we are able to purchase is easily located if needed and utilized immediately. It's critical that we keep tight controls on the city's scarce resources. Unfortunately, we found in this case that no one was minding the store."
Ms. Greuel offered several recommendations: departments should update their inventories at least once a month when assets are disposed or transferred; departments should conduct biennial physical inventories of all equipment, as required; guidelines should be developed for departments to follow when conducting physical inventories of the city's assets; departments should use purchased items by putting them into service as soon as possible, and such items should not go into storage upon being purchased; departments should develop policies to monitor and track assets that cost less than $5,000 and are susceptible to theft or loss; and departments should place identification tags on every asset owned by the city, to assist in the inventory process. (Source: News release from Los Angeles City Controller, May 3.)
Cal-Tax recommendation: Other cities and counties should follow Controller Greuel's lead and review recent purchases. It is critical that officials conduct oversight of taxpayer dollars, especially in times of fiscal hardship. The audit included a number of recommendations that all local governments should follow.
Cal-TaxReports, May 10, 2010
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