County Audit Criticizes D.A.’s Financial Record Keeping

Lax financial procedures may lead to bad records and insufficient monitoring of the Los Angeles County district attorney’s $300-million budget, according to an audit released Monday.

County auditors concluded that some financial procedures that Dist. Atty. Gil Garcetti’s office had claimed were in place in fact were not.

Without those procedures, the office may keep “erroneous financial records,” the audit stated, concluding that “department management needs to increase the monitoring of its financial operation.”

The audit found that the district attorney’s office needs to improve its control of overtime and performance bonuses, the way it distributes $11 million worth of contracts and the bookkeeping of millions of dollars of government grants for its child support unit.

In a written response to the audit, Garcetti said his office was taking steps to improve matters. Auditors noted in their report that the office had said certain accounting procedures could not be implemented because of staffing shortages.

“We’re always looking for ways to improve the fiscal operation, and this gives us something else to use,” said John Paccione, assistant director of the office’s budget division.

The audit found that in two of the past three years the office took as much as $12.1 million it received in child support grants during one year and recorded it in the next year’s books. This led it to understate the amount of money it had received in the previous year and to overstate its current revenue.

Similarly, auditors found that the office inaccurately tracked money it owed other agencies at the end of the year. Failure to track these accounts payable “misstates the county’s financial position and distorts the fund balance available to finance the following year’s budget,” the audit stated.

Contracting is another area that needs improvement, the audit said. The office has not told the Board of Supervisors, as is required by county law, that it did not select the lowest bidder in three contracts the auditors reviewed.

Auditors found that the office’s files generally justified selecting those higher bids, but warned that supervisors must be told of the reasoning before they vote on whether to approve the contracts.

Additionally, the office uses “overly subjective” criteria to rate contractors, and evaluators do not always document how they rank bidders, the audit found.

The department needs to tighten its control of overtime--which cost the agency $700,000 last year--and compensatory time off, the audit said, citing findings from samples of 10 employees that several were awarded overtime or compensatory time in violation of county policy.

And the department lacks procedures to ensure that employees receiving bonuses continue to be entitled to the money, the audit stated. In three of 10 cases sampled by auditors, personnel files did not include documentation showing the employees’ bonuses were ever justified.