Assessor’s Shortcomings Cost $11.5 Million a Year, Audit Says

Failure of the assessor’s office to fully implement recommendations made two years ago could cost Los Angeles County more than $9 million annually in lost interest, according to an audit report issued Monday.

Conducted by the public accounting firm of Ernst & Young, the audit determined that the county could lose an estimated $9.1 million in annual net interest because of processing delays and problem billings, and an additional $2.4 million in uncollected tax revenue because of problem billings--problems that were addressed in recommendations made by the county grand jury in fiscal 1987-88.

The review, completed in April at the request of the 1989-90 county grand jury, comes as Assessor John J. Lynch is facing a November runoff against Kenneth P. Hahn, a mid-level manager in the assessor’s office, to head the department that determines tax bills for 2.2 million properties throughout the county.

Besides advising the assessor’s office to begin or continue the implemention of seven recommendations by the grand jury, the report offered 11 new suggestions for improving the office’s efficiency, including the development of procedures to better deal with the public’s confusion over tax matters.

Although Lynch has been criticized for not getting tax bills out on time and, therefore, costing the county revenue, the assessor said that many of the problems raised in the audit are being addressed and that the estimated losses are largely speculative.

“The grand jury auditors can only do so much in a given time,” Lynch said. “While they’re doing their very audit, improvements are locking into place.”

Saying many problem bills have been reprocessed since the office review was completed in April, reducing interest losses, Assistant Assessor Roy Sharman said an Ernst & Young auditor has already reduced the $9.1-million estimate of lost annual interest to $6.3 million, and cut the $2.4-million figure in half.

“A lot of this is supposition,” said Sharman, referring to the report’s estimates of lost revenue. “They’re supposing this will happen and projecting years into the future.”

Ernst & Young could not be reached for comment.

Assessor’s spokesman Robert Knowles said a written response to the report will be issued through the county Board of Supervisors.