latimes.com/local/lanow/la-me-ln-auditor-finds-problems-with-sheriffs-special-funds-20140116,0,120076.story

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Auditor finds problems with sheriff's special funds

By Robert Faturechi

4:04 PM PST, January 16, 2014

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Every year, the Los Angeles County Sheriff’s Department makes more than $1 million from inmates who don’t claim the money they have on the sheriff’s books once they are released.

Rather than using that money to boost their own revenue, sheriff’s officials should have been alerting the county treasurer to put out a public notice about the funds. And if they would have remained unclaimed, the money should have gone to the county’s general fund, not the Sheriff’s Department.

That problem and others were detailed in a report released Thursday by the county’s auditor-controller. The audit found that Los Angeles County sheriff’s officials incorrectly handled at least $160 million in special funds.

The Sheriff’s Department, like many government agencies, maintains special funds to store proceeds from revenue streams that have legally restricted uses. For example, money from vehicle registration fees is supposed to be used combat car thefts.

According to state rules, when government agencies gather excessive revenues in these funds, they are supposed to reduce fees or create reserve accounts. But according to the report, sheriff’s officials accrued more than $160 million in these accounts.

Sheriff’s officials said the department is now creating plans to spend the money it controls, and implement all of the recommendations made by the auditor-controller.

“We appreciate this audit,” sheriff’s spokesman Steve Whitmore said.

County officials said that the problems found by the auditor related to accounting missteps, not anything more nefarious.

Glen Dragovich, a director for the sheriff’s administrative and training division, said the department would probably not be pushing for fees to be reduced but instead is in the process of creating formal spending plans.

“There is a balance year after year because I don’t know what the next year is going to bring so we’re conservative in how we spend it,” he said.

He said about $65 million of the $160 million was part of a countywide fingerprint database fund that sheriff’s officials did not solely control.

There are rules, in general, about what the various funds can be spent on, he said, which poses another challenge.

“We can’t just go out and buy stuff,” he said.

Dragovich downplayed the seriousness of the problems found by the auditor, saying that everything she took exception with related to accounting practices.

“These special funds are in each published budget,” he said. “There’s nothing being hidden here.”

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Twitter: RobertFaturechi

robert.faturechi@latimes.com