Fiscal Reform Called For in Sheriff’s Dept.

The Los Angeles County Sheriff’s Department, buffeted by criticism over its spending practices, should implement nearly two dozen fiscal reforms to plug holes that may be costing taxpayers tens of millions of dollars, according to a county report released Wednesday.

The report, the first in a series of audits ordered by the county Board of Supervisors after a series in The Times last fall, found that “the department is generally keeping accurate financial records” but that key areas for improvement remain--including more aggressive collection of revenues and tighter accountability over the budget process.

“There’s no smoking gun here,” board Chairman Zev Yaroslavsky said in an interview, “but there’s clearly an accumulation of things that the sheriff and the county need to undertake to get every last nickel out of that department that we can, to maximize our returns.”

The Sheriff’s Department agreed Wednesday, saying in a statement that it concurred with virtually all of the 23 recommendations made by county Auditor-Controller Alan T. Sasaki. “We . . . will take action to improve the noted deficiencies, and enhance the fiscal management practices of the department,” the statement said.

The Sheriff’s Department--traditionally given virtual free rein over its $1.1-billion budget--has faced unprecedented financial scrutiny in recent months.

A series in The Times in November questioned millions of dollars in purchases and contracts, prompting county supervisors--and Sheriff Sherman Block--to call for the first broad audit of the agency in memory. The state auditor weighed in a few weeks later, finding that the department, through its “gold-plated” spending, was potentially wasting as much as $44 million a year.

The sheriff’s budget has become a hot political issue because the department has closed several jails in recent years to remedy fiscal shortfalls and has cut the time served by county inmates to record low levels. The newly opened Twin Towers jail stood empty for more than a year in the wake of fiscal haggling.

Sasaki’s report was more limited in its scope and milder in its criticism than the state’s critique.

“While we did note areas where improvements in accuracy can be made, the dollar amounts of the misstatements identified are relatively minor when compared to the volume and total dollar value of the sheriff’s financial activity,” the report said.

The broadest need for change comes in the way the department organizes its massive budget, the report found.

While other county departments break down their budgets into as many as nine categories to allow for greater accountability and controls, the Sheriff’s Department has only one, meaning that internal transfers of large sums of money “are not approved by the board and not necessarily discussed during budget deliberations or otherwise made readily available to the public,” the report said.

The auditor recommended that the board divide the sheriff’s budget into seven categories--an idea that Yaroslavsky has unsuccessfully championed in the past.

The Sheriff’s Department said it plans to expand the number of budget units as proposed, and it also agreed to institute more formalized fiscal guidelines. As it stands now, the auditor found that the sheriff “does not maintain written procedures for its financial operations,” leaving some employees with only “limited knowledge of the entire process.”

Auditors also found that the Sheriff’s Department has become a de facto creditor in some operations, failing to collect on millions of dollars it is owed.

For patrol services to contract cities, the department was owed more than $2.4 million at the end of last year for billings more than 90 days old. Paramount, Palmdale, Artesia and Malibu owed the most.

The department has not enforced late fees against any delinquent cities, and it “needs to more aggressively pursue these collections,” the report said.

The department was owed an additional $800,000 in uncollected payments for security operations at filming locations, special events services and other law enforcement areas, failing to require upfront deposits or cut off debtors from future service.

The report also projected that the county is losing $3 million a year because it often fails to bill the state for providing security for state prisoners receiving medical care at the County-USC jail ward. In one sampling, the state was billed for only four out of 42 prisoners who fell under its responsibility, the report found. Nor are cities billed when their prisoners receive medical care in a county lockup facility.

Meanwhile, the state has already withheld $15 million in payments to the county because it insists the sheriff charged for hospital service for inmates who were not really hospitalized. The two sides are now negotiating to resolve the dispute.

The Sheriff’s Department agreed with most of the criticisms leveled over its uncollected billings, pledging to take steps to correct the problem.

The auditor noted that the department has successfully made several pledged cutbacks to reduce its costs, including closing several jails and cutting narcotics positions. But in one critical area--the elimination of 22 administrative positions in a department that some critics believe is too top-heavy--auditors found no sign that any costs were reduced.

Auditors also looked at several specific purchases reported by The Times in its series, offering a mixed assessment on the severity of the issues raised.

The $466 purchase of a four-slice jail toaster may have been “reasonable” in light of state health standards, according to the audit, while an $18,661 purchase of office furniture for a top administrator falls within the area of “a department policy decision.”

But other expenses were more troublesome and will be examined in greater detail in the county’s upcoming audits on the sheriff, the report said.

Auditors found that normal bidding procedures apparently were not followed last year when the department made the “unauthorized purchase” of several hundred Zenith televisions.

The report also noted that a $100,000 bus washing system at the main jail, while justified, should have come to the attention of the department’s top fiscal officer, which it did not.

Auditors were also concerned about the dual role played by a former aide to then-Supervisor Deane Dana who transferred to the Sheriff’s Department last year.

The aide, Debbie Crawford, served as a financial analyst to Dana on law enforcement issues last year while her salary was being paid by the sheriff. The situation “gives the appearance of a conflict of interest,” auditors found, but “there is no way to determine if this affected her objectivity in providing information to Supervisor Dana.”

California Assembly Majority Leader Antonio R. Villaraigosa (D-Los Angeles) is sponsoring a bill--approved in committee Wednesday--that would impose tighter controls over the sheriff’s fiscal operations, and he saw the report as a positive step in that direction.

“This shows that some good things are happening at the department,” he said in an interview. “But the downside is that a number of concerns remain.”