City Warehouse Audit Cites Flaws : Government: Controller urges department to correct slipshod practices and accounting.

Call it the Case of the Missing Truck Tires. Almost 3,000 of them, in fact, which could not be accounted for by the city department that buys, stores, distributes and disposes of the vast array of supplies and equipment used by the nation’s second-largest metropolis.

According to a city controller’s audit released Monday, the Los Angeles Department of General Services engaged in slipshod practices that also led to overstocking in some of the department’s 20 warehouses but understocking in others, and provided few safeguards against theft.

Noting that the document is only “the latest of a series of critical reports and audits that have recommended a major overhaul in how the city of Los Angeles does its purchasing and warehousing business,” City Controller Rick Tuttle proposed several changes. They include analyzing warehouses with an eye toward consolidating or eliminating some, improving stock levels and finding better ways to keep tabs on materials.

Tuttle noted, however, that a number of changes already are under way “to make the corrections we desperately need” and called on General Services administrators to give the latest audit recommendations “immediate attention.”

John Muckri, the assistant general manager brought in 18 months ago to help improve department operations, called the audit “pretty fairly done, pretty thorough” and in line with improvement efforts already under way.

“This is saying, improve the system we have, put in some better controls,” Muckri said. “It’s not calling for completely overhauling things.”

Muckri said the department and the controller’s office are “working very well together,” but he does not agree with all the audit’s findings.

Take those truck tires, for instance. The controller’s audit found that the department was unable to account for 2,988 tires, about 30% of those issued by the department during fiscal 1992-93.

Auditors could not determine when the tires disappeared--when they were new, resulting in a $610,682 loss to taxpayers, or when they were about to be sold for salvage and were worth only $5,169, or $1.73 each.

“I’m confident we did not lose any new tires,” said Muckri, adding that the department puts much greater effort into keeping track of the new tires than it does into ones near the end of their usefulness. “We have two separate systems” that the auditors attempted to treat as one, he said.

“But I agree we can take a closer look at our operations and see where we can improve and save taxpayers money,” Muckri added.

The general services department has undergone several audits in recent years as city officials grappled with ways to modernize its cumbersome operations. Last fall, the controller’s office released an audit critical of the city’s purchasing practices, which often resulted in higher costs to taxpayers. Councilman Joel Wachs, who is leading an effort to improve warehousing operations, and Mayor Richard Riordan are supporting a measure on the April 11 municipal ballot aimed at overhauling the purchasing system.