LAPD fiscal practices are called risky

The Los Angeles Police Department relies on outdated and deficient fiscal controls that expose the agency to “significant financial risk” and hinder it from deploying more officers to fight crime, according to a city audit released Monday.

City Controller Laura Chick found that the LAPD does not possess the technology, staff or procedures to properly track such things as false-alarm fees and purchasing, and that policies on timekeeping, travel expenses and other areas vary from one field division to another.

The department’s finances are so poorly coordinated that some uniformed officers travel from the field every two weeks to Parker Center headquarters downtown to pick up paychecks, Chick said.

Her audit recommended 51 measures to overhaul financial practices, including hiring a chief financial officer, giving more independence to an internal auditing unit, stepping up efforts to collect money owed to the department and developing uniform procedures for stations to account for funds.

“You cannot have an effective crime-fighting organization whose business operations are teetering,” Chick said at a news conference at the department’s downtown dispatch center, where she was joined by Chief William J. Bratton. “The situation at LAPD’s fiscal operations is serious, and it needs immediate attention,” Chick added.

Bratton said he generally agreed with the findings but believed the LAPD’s own auditors could handle much of the work recommended by Chick.

“It’s a report we totally embrace [with] its many significant and useful recommendations,” Bratton said.

Chick’s audit arrives at a time when the city has raised trash fees to pay for an additional 1,000 new officers over five years. But she said the LAPD could make far better use of existing resources if it embraced smarter accounting methods and newer technology instead of “business functions that are stuck in the 1950s.”

Chick’s report, which examined the department’s Fiscal Operations Division from July 2004 to February 2007, found:

* The unit assigned to audit departmental finances does not have the independence to root out waste, both operating within and reporting on the Fiscal Operations Division. Instead, Chick said, it should answer to Bratton or one of his deputies and be more rigorous.

* Redundant databases and management systems hamper the department’s ability to keep track of overtime, supply requisitions and expenditures. Also, staff members do not have enough training to use the management systems.

* The department is missing an opportunity to recover more false-alarm fees. That responsibility now falls to the Police Commission, which has more pressing responsibilities, such as formulating department policy and evaluating cases of alleged misconduct. The billings should be transferred to another entity.

“Without the proper fiscal control mechanisms in place, the LAPD is exposed to significant financial risk,” Chick wrote in the audit, which she conducted with an outside firm, Arroyo Associates in Pasadena.

Chick also cited the city’s “restrictive budgeting” practices that fail to allocate enough money for police overtime, forcing the department to shuffle funds among accounts to meet financial obligations.

With a budget of $1.1 billion, the Police Department is the city’s largest department in financial terms, accounting for nearly 20% the municipal budget.

Chick said the city’s budgeting system makes it impossible for the LAPD to rely on its budget as an internal control -- a point echoed by Bratton. “We’re constantly robbing Peter to pay Paul,” he said.

City Councilman Jack Weiss, chairman of the council’s Public Safety Committee, called the overtime funding gap “an unfortunate perennial of public safety budgeting in Los Angeles” and said he planned to hold a hearing on Chick’s recommendations.

“If this audit can point to better practices, I’m all ears,” he said.

duke.helfand@latimes.com