Lack of Review Blamed for Big City, County Phone Bills

In the annals of scrupulous accounting, this won’t make anyone’s Top 10 list:

Last year, between June and September, somebody racked up $2,983 in charges on a city of Los Angeles cellular telephone.

That is an average monthly cellular phone bill of $746, among the highest of any employee or official in the city. But there is a problem: The city does not know who has the phone or to which department the phone is assigned. Or even with absolute certainty whether the phone is being used by a government employee.

Nor, as of a month ago, did the city know who was in possession of more than 150 other taxpayer-paid cellular telephones that had rolled up tens of thousands of dollars of charges in 1995. Monthly bills for some of the mystery phones were as high as $1,400.

“I am completely shocked and upset that they could not know where . . . the phones are,” said Los Angeles City Councilman Richard Alarcon. “I know who in my office has a cellular phone . . . and it just seems to me that they ought to, too.”

Such careless oversight, critics say, has opened the door to extravagant cellular spending by some employees of Los Angeles city and county government. Although more than 3,000 phones have been distributed through the bureaucratic ranks, there has been no concerted effort to crack down on their use, leaving taxpayers holding the tab for millions of dollars a year.

Recognizing the potential for waste and abuse, most major cities have taken measures to keep cellular phone costs in check. But in Los Angeles, where vital government services have been axed because of budget problems, a thorough review was undertaken only after The Times began requesting cellular bills in March.

For many of those interviewed by the newspaper, it was the first time they had been asked to compile complete cellular billings for their employees and confront repeated record-keeping lapses.

In the blunt assessment of county mental health official Kathy House: “It was not monitored as closely as it should have been.”

Among the most significant breakdowns in oversight unearthed in interviews and documents obtained under the state Public Records Act:

* The city’s list of cellular users is so outdated that it contains names of people who have not had phones for more than a year. Meanwhile, those phones are being used by others who continue to compile charges.

* There is no system for monitoring people who regularly amass large monthly bills, some of whom have jobs that seemingly would not require lengthy cellular conversations.

* Although county and city policy requires regular inventories, officials lost track of scores of phones for which the public is paying. Little effort was made to determine if the phones have been stolen, shut off or perhaps transferred to another employee.

* Because cellular bills have been poorly reviewed, at least tens of thousands of dollars have been spent on calls made by thieves who have electronically duplicated--or “cloned”--government phone numbers. Had officials been studying the bills, they could have asked the phone company to reimburse the public treasury for the cloned calls at the time.

Perhaps most, if not all, of these shortcomings could have been discovered and fixed if Los Angeles officials had conducted a full-scale audit of the system. When other municipalities have done so, problems were revealed and reforms were quickly instituted.

In the District of Columbia, the chief of telecommunications gets a monthly report listing every call made from every government cellular phone.

“It’s my job to go through it line by line,” said George Walker. “Once you establish a process of oversight, you automatically get decreasing costs.”

In Portland, Ore., telecommunications manager Vernon W. Emra tracks cellular use so closely that he can tell you how many minutes a phone has been used. “It’s a technology that is still thought of, certainly by the taxpayers, as a luxury,” he said of the phones.

After a 1994 audit in Seattle recommended tighter controls on the city’s 850 cellulars, officials devised computer surveillance programs that, among other things, track the most heavily dialed numbers.

“I can tell you right now, we’ve got one cellular telephone user, the top one in August 1995, she [spent] $1,359 on one cellular phone,” said William M. Schrier, Seattle’s telecommunications director. “This was twice as much as the No. 2 user in her department, and twice as much as whole departments.

“She’ll be getting a call,” Schrier said. “One of the parts of my job is to bring to the attention of departments anomalies. I’ll say to the solid waste department, where this woman works, ‘You probably ought to take a look at this--before the City Council does.’ ”

During the month of August, Schrier found one cellular user who had called the same number 42 times.

“I got curious so I called it,” Schrier said. “I got an answering machine that said, you know, ‘Bill and Mary will be back soon.’ It wasn’t a business number at all. And I just wonder how many more of those are out there.”

Like New York City, Seattle has a computer program that flags any monthly cellular bill over $80. “The City Council told us after the auditor’s report, ‘You will respond, and you will find ways to keep this under control,’ ” Schrier said.

Meanwhile, in Los Angeles, the bills continue to mount, even in such departments as the county’s health services agency, where thousands of employees were laid off last year and clinics for the poor were almost closed.

Cellular users here insist that taxpayers are getting their money’s worth. They say cell phones have transformed their cars into rolling offices, eliminating unproductive dead time on the road.

While that view is open to argument, everyone agrees--including chagrined county and city officials--that there is no reason the public should be stuck for calls not even made by government workers.

Between November 1994 and last April, for example, taxpayers were billed in excess of $13,000 for calls from phone numbers belonging to the county’s public health department--including a huge one-month tally of $3,439, according to records obtained by The Times.

After The Times raised questions about the charges, health officials reviewed the bills for the first time and contended that someone had electronically cloned the numbers. The county has asked its phone carrier for credit for the calls.

“I have no excuse whatsoever,” said William H. Mitchell, acting administrative deputy for public health services and programs. “We weren’t monitoring individual bills. There was nothing in place that would flag high bills.”

Employees, for their part, did not catch the problem because they had not been shown copies of their bills for more than two years, said Mitchell, who assumed his post in April.

Other city and county departments also blamed their high bills on cloning, although one ranking county official questioned whether that rationale was being used as an excuse because the bills were being scrutinized.

The county’s Department of Mental Health, for one, said it will seek a credit for apparently cloned calls totaling more than $17,000 between June 1994 and last February. The county’s Olive View/UCLA Medical Center is reviewing nearly $8,000 in suspected cloning charges from October, November and December 1994.

“It’s very obvious that this [review] should have been done a long time ago,” said Richard Hanson, a cell phone user and chief of the county’s solid waste program. “I’m a taxpayer, too, and I’d be as incensed as anyone.”

Making matters worse is the billing system itself. For the most part, cellular bills are paid by the city and county before individual departments receive copies of them. Months later, the bills finally trickle down to the users.

“We’re operating in the dark here,” Public Works Commissioner Ellen Stein said in a recent interview. “When I get my bills at home, I pay my bill. Here, you’re getting the bill late, and you’re being told some of the calls were cloned. Well, is the bill being paid anyway? There is no way to know.”

Chronic gaps in oversight have created wastefulness in other respects as well.

Numerous cellular phones, for example, were supposed to have been disconnected for as long as three years but remained activated because of miscommunications or mistakes.

A cellular telephone in the county’s Public Health Department should have been cut off in July 1992. But between July 1993 and last March, someone ran up $5,094 in charges. The department did not know who was using the phone.

“Public health stopped this phone in July 1992,” said Mitchell, the department’s acting administrative deputy. “But [the Internal Services Department] continued to get bills, and ISD continued to pay the bill. . . . We have informed them that these charges needed to be reversed.”

In the chief administrative office, the budgeting nerve center of the county bureaucracy, four cellular telephones were ordered shut off but remained operational.

Although none were used, the county continued to pay hundreds of dollars in cellular access fees. One of them, which belonged to the chief administrative office’s second-in-command, continued to be paid for nearly a year after she stopped using it.

“For whatever reason,” said office spokeswoman Judy Hammond, “whether it was miscommunication, ISD was never notified. The phones were not in use, but they were being paid for.”

So disorganized is the cellular record-keeping that some city and county departments could not produce billing histories on employees they know have phones. Nor were they able to say how much money workers spent on their cellulars for months at a time or even identify who is ringing up large bills on phones assigned to their agencies.

When The Times first asked the county’s Department of Children’s Services for records on its nearly 600 cellular telephones, it could find none for more than 200 of them and only partial records for many of the remaining 400. When pressed, the department pulled together at least partial records on 218 additional cellulars. But, to this day, it cannot provide any billing histories for 17 phones.

“We do have an auditing function,” said children’s services spokesman Schuyler Sprowles. “But . . . how can you audit something when you don’t have a record?”

And children’s services was no exception.

At the city Department of Water and Power, one or more unknown users ran up monthly tabs of $470 and $391 in July 1994, and $423 in August 1994--on phones that were supposed to be in storage.

“We’ve got some investigating to do. That’s definitely not right,” Donnie Lewis, the DWP’s manager of voice and data communication, said in response to a Times inquiry.

So how did things end up in such disarray?

Critics say the most fundamental problem--and the most easily rectified--was that few officials have given cellular phones more than a passing thought.

At best, there are only vaguely worded policies governing the use and distribution of cellular phones. Even where procedures urging restraint are in place, they are not strictly obeyed.

One of the few departments with a written policy is the DWP, where the number of phones has been significantly reduced and employees are told that cellular use must “be based on critical needs of the department and not only upon the preference or convenience of the user.”

But Lewis conceded that he doesn’t know whether the policy “has ever been disseminated to users.”

The DWP’s policy also calls for each division to keep track of who has cellulars and to be responsible for “controlling the cost of cellular telephone usage.” But again, Lewis acknowledged, “the department has not always followed its own procedures on this.”

Troubled by what they have learned about their own cellular use and the lack of guardianship since The Times began its review, numerous Los Angeles city and county officials have vowed to mend their ways.

Many, including the county’s chief administrative office and Health Services Department, have appointed cellular coordinators to bring records up to date.

Some, such as the county’s Community and Senior Citizens Services Department, are drafting or revising policies on cellulars.

“Our former procedures did not deal with cell phones in sufficient detail and specificity that we want to deal with now,” said Susan C. Widman, an assistant director with the agency.

“I just want us to be sure that we are appropriately monitoring the expenditures and the use of the phones.”

In other changes, William F. Stewart of the county’s Internal Services Department, which pays the cellular phone bill for most county departments, said his agency is now receiving its billings from AirTouch and L.A. Cellular on magnetic tapes. This means that departments will be able to review their bills in a matter of weeks instead of months.

In the six weeks since responding to The Times’ inquiry, the city said it has accounted for about 100 of the 160 mystery phones. Some of the charges, the city contends, may have been the result of cloning, and credit for the calls will be sought.

Of the phones that have been accounted for, at least 10 should have been disconnected. But for still-unexplained reasons they weren’t, and more than $6,000 was billed to them between June 1995 and September 1995.

As for the rest?

“We still don’t know who has them,” acknowledged Kelly Wong of the city’s information technology agency, who has the tough task of sorting out the city’s cellular phone records. “Originally, we just began calling the numbers to see who answers, to ask them to identify themselves and their departments. But that was not working so well.”

At one point, Wong considered disconnecting the phones to see who called her to complain. She described it as a “last resort.”

Instead, Wong said Friday that she would soon set up a meeting with the city’s carrier, AirTouch, to try to straighten out the mess.

“The city needs to be more conscientious about cellular phone usage,” Wong said. “It’s only going to increase.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

L.A.’s the Place

There’s no place in the nation where local government has more phones and higher bills than Los Angeles. Here’s how the city and county’s monthly expenditures stacked up in the last fiscal year.

L.A. and county

Phones: 3,000

Bill: $242,000

****

SAN FRAN. and county

Phones: 940

Bill: $50,000

****

CHICAGO and Cook county

Phones: 635

Bill: $42,700

****

ATLANTA and Fulton county

Phones: 440

Bill: $19,800

****

NEW YORK

Phones: 1,100

Bill: $108,000

Source: Interviews and public records

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Case Study: How the System Failed Taxpayers

What happened in the county’s public heath department exemplifies the far-reaching breakdowns in oversight of cellular phones. Although procedures are in place to protect public money from waste and abuse, they are not always followed.

1)

What should have happened: County’s Internal Services Department gets monthly bill from carriers.

What did happen: Followed procedure.

****

2)

What should have happened: Internal Services forwards total bill to central phone fund for payment.

What did happen: Followed procedure.

****

3)

What should have happened: Internal Services then sorts each bill by department.

What did happen: Followed procedure.

****

4)

What should have happened: Each department, after receiving its bills, distributes them to individual users.

What did happen: Public Health says it did not get billings from Internal Services until July 1994 and did not distribute them to individual users until the summer of 1995--after the Times’ inquiry. Internal Services says it was not alerted that Public Health was not getting its bills until July 1994.

****

5)

What should have happened: Users look at bills to:

a) be aware of how much they spent.

b) make sure there was no “cloning” charge for which the county should be credited.

c) mark off any personal calls and reimburse the department.

What did happen: From January 1993 until summer of 1995, the 100 cellular users in the health department never saw their individual bills. Yet the bills were paid anyway.

****

6)

What should have happened: Each department checks over the billings and then pays back the county’s central phone fund.

What did happen: Each department did pay back the central phone fund but without reviewing the billings. This also prevented supervisors from reviewing users’ bills, as is required by county policy.

****

7)

What should have happened: If there are “cloning” charges, the department alerts Internal Services, which negotiates a credit from carrier.

What did happen: Since the individual users did not see their bills, they were not able to ferret out the fraudulent cloning charges, a major problem in Los Angeles.

****

THE UPSHOT

* EXTRA CHARGES: The public was billed for at least $13,000 that the health department now says were “cloning” charges, including single-month bills of $3,439 and $2,583 for January and February of 1995. The department has sough a credit from carriers.

* LOST PHONE: For three years, the public was billed for a cellular phone that was to have been disconnected in 1992. The total bill: $5,094--including some charges that the department now believes were “cloned” but were paid anyway.

* REIMBURSEMENT: All 100 cellular users were given records back to January 1993 and asked to reimburse for any personal calls.

* REVIEWER: The department now has a cellular coordinator who is to investigate phone bills that seem out of the ordinary--including some with monthly charges of up to $666.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

How Cloning Works

Every cellular phone has two pieces of unique information: its actual telephone number (called in the industry a mobile ID number) assigned by the cellular carrier and an electronic serial number installed by the manufacturer. These numbers are programmed into the phone.

1. Thieves stand on freeway overpasses, outside airport terminals or in other areas with high cellular phone traffic to steal both the phone number and the electronic serial number. They use a high-tech scanner that steals the numbers out of the air (cellular phones communicate via radio frequencies) or out of the cellular phone itself.

2. Thieves then use computer software to reprogram another phone, and the phone and the caller appear legitimate.

3. Calls can then be charged to unsuspecting customers whose phones have been “cloned.” The industry calls this cellular fraud and is trying various ways of cracking down on the crime. Cellular phone carriers in North America projected a 1995 loss or more than $500 million because of fraud involving cloned phones and stolen access codes.

Source: Air Touch Cellular Public Relations Department and Times reports.

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The Paper Trail

In preparing this report on the extravagant use of cellular phones by Los Angeles government workers, The Times studied more than 20,000 pages of billing records obtained under the state’s Public Records Act.

The records detail monthly charges compiled on 3,400 cellular telephones used by employees of Los Angeles city and county government.

In addition, the newspaper interviewed officials and collected records in 32 other cities and counties across the United States.

For its part, Los Angeles County responded relatively promptly to The Times’ requests for records, providing bills for the years 1993 to 1995. The city initially refused to provide any detailed information, citing privacy concerns and the difficulty of the task.

Eight months after the newspaper’s first requests, city officials relented and began turning over documents detailing phone charges for a six-month period in 1995. The city’s cellular phone records were so poorly kept that complete billing histories for seven City Council members were not provided until late Friday.

Neither the county nor the city would release telephone numbers being dialed by employees, even though public funds were used to pay the bills.