Airports to Consider Own Audit

An airport commissioner said Tuesday that a recent audit of the city’s airport department by City Controller Laura Chick was biased and recommended that the commission hire its own auditor to review the agency’s business practices.

“The auditor seemed so focused on fulfilling its agenda that it ignored the facts,” Commissioner Peter Weil said at a commission meeting, the first since the controversial audit was released Dec. 15.

In an unusual 20-minute speech, the typically low-key Weil ticked off what airport officials have identified as errors in the audit and called for the commission to consider hiring its own auditor.

Weil’s comment drew a sharp response from Chick.

Ordering another audit “because the airport didn’t like the results of an independent one is just bad government,” the controller said in a prepared statement.

“This is exactly the problem my audit found with the airport. They want to do everything themselves out of the light of day, without transparency and without outside inspection.”

The controller and airport officials have been engaged in an escalating dispute since Chick released her audit, which was produced by Kurt Sjoberg, the state’s former auditor general, and his Sacramento-based firm, Sjoberg Evashenk.

It found that the airport agency lacked a formal process to evaluate and select bids on lucrative contracts and did not keep adequate records documenting decisions to hire one firm rather than another.

At the time, Chick said, she uncovered “potential illegal acts” during the audit and asked local, state and federal law enforcement agencies to investigate. She has refused to elaborate on what these acts were or who participated.

Los Angeles World Airports released a strongly worded response to Chick’s audit on Jan. 7, saying that the audit had overstated by 85% the money the city had lost on leases at Van Nuys Airport and that it based some findings on a transaction that had never occurred.

On Tuesday, the controller answered the airport’s claims in an eight-page letter that Chick sent to the agency’s interim executive director, Kim Day.

In it, the controller stands by the estimate of the revenue lost to the city on Van Nuys Airport leases, which have not been renegotiated since 1990. The auditor estimated that the city had lost as much as $15.6 million on the leases; the airport agency argued that the loss was closer to $2.3 million.

Airport officials failed to take into account its losses stemming from improvements on land designated for aviation use at Van Nuys Airport and from property used for non-aviation purposes, Chick said in the letter.

Chick told Day that she approved of the airport agency’s response to seven of the 15 recommendations made in the audit.

But, keeping up the pressure, she asked the agency to provide additional information on the remaining eight issues to her office in 10 days.