Audit finds agency wasted $1 million

Los Angeles County’s child welfare agency wasted more than $1 million on unnecessary or overpriced equipment and failed to adequately keep track of hundreds of thousands of dollars more in supplies, a county audit has found.

The audit, which was sent to county supervisors last week and first reported by the Daily News of Los Angeles on Wednesday, was sharply critical of the way the Department of Children and Family Services has overseen its procurement operations and recommended a wide array of reforms.

The report said the deficiencies could have resulted in misappropriation of county property and said procurement staff misled auditors to conceal storage locations that housed unneeded or obsolete supplies.

“I think it’s probably the most significant departure from purchasing practices that I’ve ever seen,” said Auditor-Controller J. Tyler McCauley, who has worked for the county for 37 years. “We’re surprised at the extent of it, but we’re taking care of it.”

McCauley said his office is continuing to investigate many of the transactions cited in the report but noted that managers in the child welfare agency have already taken steps to implement many of the audit’s recommendations.

The agency requested the audit after receiving several internal complaints about the procurement section failing to deliver supplies in a timely manner.

Auditors singled out for particular criticism a purchase by the department last year of more than 3,000 printer cartridges for $800,000. The supplies were enough to last the agency three years, even though the cartridges have a shelf life of two years.

During the same month, the department paid $450,000 to buy more of the same cartridges at a 15% higher price. Additional toner cartridge purchases over the next nine months cost the county $150,000. The agency has been left with an estimated 4,500 cartridges due to expire before they can be used, the audit said.

The department also failed to improve oversight of its gift cards in the wake of a theft of about $15,000 in gift cards in 2003, the audit said. The cards, which can be used at stores such as Target and Wal-Mart, are typically distributed to children and foster parents to buy food, clothing and other household necessities.

The department could not show documentation to support about $115,000 of the $700,000 gift card purchases that auditors reviewed. Auditors said that without the documents they could not be sure the cards were used appropriately.

Auditors also said they discovered several storage facilities that procurement staff had not disclosed when asked. Among the obsolete items the department was keeping in storage were more than 1,000 outdated legal reference books; hundreds of printers and expired toner cartridges; 120 office cabinets that each cost more than $700; and 70 unused digital cameras.

Susan Kerr, the department’s chief deputy director, said the agency has started emptying the units and will use all of the functional equipment or offer it to other county departments.

She said auditors kept the department apprised of their work, allowing the agency to take steps to improve oversight of the procurement section, including the appointment of a new section manager in recent months. Discipline is likely for some employees, she said.

“We’ve been taking action on an almost daily basis as we learned of problems,” she said.

jack.leonard@latimes.com