Sheriff’s Dept. Criticized for Lax Controls

The county’s top fiscal watchdog issued a scathing critique of the Los Angeles County Sheriff’s Department on Tuesday, saying it routinely ignores controls on personnel costs and overtime, fails to seek competitive bids for contracts and services and misleads the Board of Supervisors and other officials.

The report by Auditor-Controller Alan Sasaki is the last of three fiscal probes of the Sheriff’s Department finances that were ordered by the Board of Supervisors last year in response to a series of Times articles on Sheriff Sherman Block and his management of the huge law enforcement agency.

“I am shocked and very troubled by the findings, as any taxpayer would and should be,” said Board of Supervisors Chairman Zev Yaroslavsky, who last year called for the audits out of concern that he knew too little about how Block was spending more than $1 billion in taxpayer money a year.

“This is a wake-up call for the board and the Sheriff’s Department to do a complete overhaul of the procurement [system] and financial management of the department,” Yaroslavsky said.

Block could not be reached for comment. Undersheriff Jerry Harper said he agreed that the audit uncovered significant “problem” areas that require reform, just as two other audits released in recent months have found. In the report, auditors add, the Sheriff’s Department management “consistently demonstrated concern over problems noted and has recognized the need for change.”

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In all, Sasaki and his team of auditors recommend 60 specific improvements. “The areas requiring improvement . . . are significant and indicate that the [Sheriff’s] Department should change the manner in which it manages its fiscal operations,” the audit concludes.

Among the most serious problems uncovered in the audit:

* There is rampant overtime in the department. The department budgeted $52 million for overtime over the last two years and spent an estimated $82 million. At least eight sergeants in the jail system earned $50,000 to $60,000 in overtime alone last year.

* The sheriff lacks basic fiscal controls, such as requiring employees to sign their time cards to verify their hours worked--even though the county’s fiscal manual specifically requires it. Employees often do not sign in and out on department work logs, while in other instances, clerical workers signed for them, making it impossible to determine whether employees actually worked. The department’s Internal Control Certification submitted to the auditor-controller indicated that general fiscal controls “were in effect when they actually were not.”

* Auditors found significant abuses of contracting policies, including contracts that were continued year after year without being competitively bid to get better prices. The department saved 50%, or $300,000, just by rebidding one small contract. Yet dozens of others have not been rebid, including one for $8 million that has been rolled over for 24 years. Also, the department’s evaluations of contract proposals “are not well-structured or documented,” and often are inaccurate or incomplete.

* The department lacks the appropriate checks and balances to make sure it gets competitive prices on goods, and, as a result, often makes purchases without competitive bids. Sheriff’s officials sometimes order items without obtaining the necessary prior approvals from county purchasing agents. “This circumvents controls” and can force the county to buy things it doesn’t need or doesn’t have the money for, auditors said.

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Harper said that the overtime is required because the department has mandatory staffing levels in the jails and that the overtime costs are offset by not hiring people for vacancies. But he agreed with auditors’ observations about procurement and contracting.

Auditors also concluded that sheriff’s officials at times kept important information from the Board of Supervisors, which is supposed to sign off on major purchases--though they stopped short of saying such withholding was done on purpose.

For instance, the department kept the Board of Supervisors in the dark about “significant” aspects of one contract “that could have affected the board’s decision” on whether to approve it. Because the contractor ultimately was paid “a significant amount above that approved by the board,” auditors have referred the matter to their special investigations unit, which can handle inquiries into potential criminal wrongdoing. Auditors would not say if they believed any laws were broken.