City Audits Criticize Convention Center

The Los Angeles Convention Center needs to do a better job of keeping track of its assets and improve its accounting systems, according to three audits of the center released Wednesday by City Controller Laura Chick.

In a letter to Mayor James K. Hahn and the City Council, Chick said the convention center has given away $5.8 million more in discounts than allowed by city code.

In addition, Chick and her staff concluded that the center uses poor accounting practices that may have caused it to overstate its own revenue.

The center, for instance, has listed its gross receipts without accounting for discounts used to lure some convention visitors.

Those discounts can add up to $6 million a year, so failure to include them in the accounting has led to what Chick described as inadvertent overstatement.

In some cases, the center’s accounting slip-ups may have been magnified by its decision to use public relations staff rather than accountants to compile revenue reports, the audits said.

“The convention center has great potential as an economic engine and has brought much to Los Angeles, but past performance has not been optimal,” Chick said in a statement.

According to the audits, the center does not track expensive city equipment well, increasing the risk of theft.

The center also must increase its efforts to bring in money by going after unpaid bills and forwarding information on delinquent customers to the city attorney’s office, said Chick, who added that the center is owed almost $1 million from customers that may never be recouped.

George Rakis, general manager of the convention center, said he was reviewing the findings and preparing a response, but called the report “a fair audit.”

“Generally, these are minor things that are very easily rectified,” Rakis said.