Latest Audits

Audit calls out DCFS cell phone abuse

The Los Angeles County Department of Children and Family Services dialed up at least $514,000 in “potentially unnecessary and inappropriate” cell phone service charges in 2009—part of a pattern of loose oversight and lax management of the phones uncovered in a new county audit.

The report, released today by Auditor-Controller Wendy L. Watanabe, found that the department, which spends $2.2 million a year on cell phone services, had at least 250 phones for which it could not identify the users. It also paid monthly service fees for more than 1,400 cell phones and 220 broadband cards that were sitting idle in 2009.

Moreover, the department footed the bill for employees’ personal international long distance charges as well as other potentially inappropriate charges for roaming, directory assistance and call forwarding.

“Our review disclosed significant weaknesses in DCFS’ controls over its cell phones,” Watanabe said in a summary of the audit’s findings filed with the Board of Supervisors.

Watanabe’s report to supervisors said that the department’s management already is beginning to take corrective action by updating their cell phone inventory, cancelling service for unused phones and changing the ways in which they review monthly bills.

Among the questionable cell phone use cited in the audit:

–One employee racked up more than $2,000 in personal international long distance bills between December, 2008, and November, 2009, and did not reimburse the department.

–Another claimed to have lost her phone but didn’t report it missing. Over the course of 14 months, the department paid $8,000 in service charges on the phone, including roaming charges from Mexico.

–An employee ran up $2,827 in texting charges from December, 2008 through November, 2009. In all, the department paid $21,000 for employee texting in 2009.

–Employees dialing directory assistance from their cell phones cost the department more than $54,000 in 2009, and $9,000 for call forwarding charges between December, 2008 and November, 2009. A single employee accounted for $2,533 of the call forwarding charges during that period.

The audit recommends that DCFS management begin keeping an accurate cell phone inventory, including up-to-date records on who’s using the phones. It also urges the department to deactivate unassigned and unused phones and broadband cards and to institute monthly reviews of cell phone and broadband bills.

And it recommends tighter controls to ensure that extras such as directory assistance and texting are needed—and that employees who use those services for non-business purposes reimburse the county.

Posted 12/21/10

Audit released on “alleged intrusion” by Board deputies

Following his termination as head of the County’s Department of Regional Planning, former director Bruce McClendon stated publicly that his firing was in retaliation for protesting what he alleged was improper influence over his department by the board and its staff. The county commissioned an independent audit by Harvey M. Rose Associates to investigate McClendon’s charges.

The Rose report examined eight specific allegations, finding five of them “not substantiated” and three “not substantiated, with qualifications.” The full report may be found on the County Auditor-Controller’s site, here.

Posted 2/26/10

The $1.8 million office supply diet

Somewhere out there in the vast universe of Los Angeles County office supplies, a Mini-Jeweleria brown resin fountain pen ($40.50) is feeling the heat right about now.

So is the Victor 12-Digit Heavy-Duty Two-Color Printing Calculator ($202.46), the Deflect-O® Execumat Heavy-Duty Vinyl Chairmat For High-Pile Carpets ($131.54) and a certain aluminum beveled edge ruler ($4.75). All have been purchased by various departments in favor of far cheaper versions of similar products available through the county’s massive office supplies contract.

No more. As county belt-tightening shifts into high gear—and nearly a year after departments were originally asked to switch to cheaper office supply alternatives—the Chief Executive Office is getting ready to draw a line in the supply closet. And not with some expensive gel ink rollerball pen, either.

Led by Joe Sandoval, the county’s general manager of Purchasing and Contract Services, a team of Internal Services Department employees has been going line-by-line through 18,000 items currently offered as purchase options under the county’s Office Depot contract. The goal is to establish a narrower range of reasonably-priced items in a “formulary” that employees will be required to use when ordering supplies. (See graphic below).

Sandoval says he is not fixated on price as the only consideration. “A 12-cent pen is better than a 5-cent pen,” he acknowledges. But he says that having too many choices of writing implements can lead to some bad decisions.

As for who’s buying $18.63 scissors when there are $1.37 scissors to be had, Sandoval prefers not to name any supply scofflaws. “I don’t want to hang any departments out,” he says.

The interest in reining in the county’s $6 million-a-year office supply habit comes against a backdrop of a countywide push for greater efficiency in a tough economy. A pilot program was launched last year, for example, to use remanufactured toner cartridges, saving $23,847 and prompting a countywide switch to such cartridges for black and white desktop printers and copiers.

There’s also an insider’s website tracking efforts to save money and streamline operations across a wide range of departments. The site features an employee suggestion box, which has attracted 238 entries since October.

As for office supplies, the buy-cheaper memo from county CEO William T. Fujioka last March made the case that simply purchasing less expensive pens could yield a savings of $162,000 a year. A purchasing bulletin issued shortly after provided guidance on the right price point on dozens of items—from butterfly clamps and erasers to rubber bands and steno pads.

But a Jan. 25, 2010, memo from Fujioka announcing the formulary plan pointedly noted the “need for greater departmental attention to purchasing low cost office products.”

Sandoval estimates that the county has saved about $500,000 on supplies in the past 12 months. But he thinks it can do so much better.

“We’re looking at a 30% savings when we complete the 18,000 line items,” he says. “That’s a significant savings.” (A cool $1.8 million a year, in case you don’t have your county-approved calculator handy.)

“It’s the best bang for the taxpayer’s buck—that’s the philosophy,” says Sandoval, 52, a 19-year ISD employee and former member of the Air Force’s security police. “That’s what I’m here for.”

He will allow that out there in “Departmentland,” people can be so focused on their “core businesses” that adopting thrifty purchasing habits is not necessarily their highest priority.

And that’s where the new online formulary comes in.

The work on the project—by a team including Gerry Plummer, division manager of purchasing, and Ted Lo, purchasing and contract analyst—should be finished within the next month or so.

When the 9,000 or fewer approved supplies are listed, catalog-style, in the county’s “procurement module,” anyone who goes in to order will see a pull-down menu of just the right choices—not the extravagant ones.

“They won’t be able to see that $32 pen,” Sandoval says.