Los Angeles
Transportation Department Wasted $855,000 on Unused Equipment, City Controller
Reports. Los Angeles City
Controller Wendy Greuel reports that the Los Angeles Department
of Transportation (LADOT) wasted at least $855,000 of taxpayer dollars and
exceeded the original contract for automated vehicle locator systems (AVLS) by
nearly $2.5 million.
"This
investigation revealed significant issues of waste and financially
irresponsible decisions by LADOT, which in some cases defy comprehension,"
Ms. Greuel said. "We cannot allow this type of
wasteful spending to occur, if we want to rebuild the city's credibility with
the public."
LADOT contracted
with Integrated Systems Research (ISR) in 2001 to lease AVLS for the city's
parking enforcement vehicles. The controller's investigation found that now,
nearly 10 years later, only 11 percent of the city's vehicles have a fully
functional AVLS.
LADOT had the option
in May 2006 to purchase the devices for $1, but instead decided to continue
leasing the equipment – at an additional cost of $577,584 to taxpayers over the
past four years. Though the department claimed it needed to continue leasing so
that ISR would provide software upgrades, the audit shows that no upgrades have
been provided since 2006.
Other audit findings
include:
·
LADOT
has continued to pay for the monthly equipment lease and air service for 178
AVLS units that have been in storage since 2008. At a monthly cost of $7,462,
this is a total of $141,773 in wasted city funds.
·
LADOT
lacks an adequate inventory control to properly account for AVLS equipment and
cannot account for 44 units.
·
The
department's original contract for $1.57 million has been amended seven times,
which has resulted in the city spending more than $4 million to date.
·
When
LADOT was notified that its existing AVLS air carrier was leaving the industry
and that it would need to change providers, it amended its contract requesting
$213,110 in new hardware and software to accommodate the change in service. Yet
the contract's warranty explicitly stated that ISR would cover these costs.
The investigation
was conducted based on a tip to the controller's Waste, Fraud and Abuse Unit,
Ms. Greuel said. (Source: News release from Los
Angeles City Controller Wendy Greuel, August 10.)
Cal-Tax recommendation:
Reduce the department's budget to provide more of an incentive for department
leaders to seriously address the waste within their agency.
Cal-TaxReports, August 16, 2010
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