Health agency for the poor spends $476,000 on meals, entertainment

Los Angeles County supervisors chided officials with the L.A. Care public health plan after an audit found that the agency spent $476,000 on meals and entertainment between October 2013 and January of this year.

The audit released last week found that the health plan -- an independent tax-exempt agency that has a $4.1-billion annual budget and provides managed healthcare services to low-income county residents -- was in good financial shape and that administrative costs were lower than those of other similar plans.

But the auditors raised concerns about the meal spending, which included $10,900 spent on a retirement dinner in December for the plan’s former chief executive, Howard Kahn, with entertainment and an open bar. Another $12,400 went to eight farewell lunches for Kahn.

The other spending included meals and catering at meetings of the L.A. Care board and at other employee meetings and training sessions.

“L.A. Care is a public agency that primarily served the County’s most vulnerable and low-income residents,” the audit report said. “Due to their high visibility within the community, the Agency’s management should consider establishing more detailed guidelines and dollar limits for discretionary spending on business entertainment and meals.”

The auditors also recommended reevaluating the policy that allows agency money to be spent on alcohol.

In a written response to the audit, the agency’s interim executive director agreed with the recommendations, but noted that “because L.A. Care was established to engage in the competitive health care sector, in order to support staff productivity and retention, we hold employee events and wellness activities that maintain the morale of our workforce.”

At Tuesday’s county board meeting, Supervisor Michael D. Antonovich decried the spending as “inappropriate, wasteful practices.”

“To spend nearly half a million dollars on extravagances, those dollars should be going into providing services,” he said.

Supervisors Sheila Kuehl said the “optics” and “message” of the meal and entertainment spending were problematic, but added, “I’m certain that the (L.A. Care) board has gotten the message.”

Antonovich asked the county auditor-controller to assist L.A. Care with developing new policies and to report back in 45 days.

Follow Abby Sewell on Twitter at @sewella for more county news.