LAPD did not properly track millions in spending, audit finds

The Los Angeles Police Department failed to adequately track the spending of millions of dollars in taxpayer money and frequently neglected to adhere to city policies on hiring vendors, an internal department audit found.

The audit examined 102 transactions made over a 12-month period in 2007 and 2008 -- a slice of the more than $60 million in purchases of goods and services made in that period -- and found a multitude of gaps in oversight. The report did not allege any fraud.

Rob Saltzman, a member of the civilian Police Commission that oversees the LAPD, called the findings “disturbing” and said the report left unclear whether the problems cited had been sufficiently remedied. The commission is scheduled to discuss the audit at a meeting this morning.

When confronted by auditors, department employees could not produce required receipts for more than half of the transactions in the audit. The undocumented purchases totaled about $2.6 million and left open the question of whether the goods and services that the department paid for were ever received.

Also, auditors found purchases that had not gone through the multiple levels of approval called for in department policies. For one $2.4-million purchase made by the department’s Emergency Command Control Communications Systems division, the commanding officer had signed a blank approval form that did not indicate what was purchased or at what price. And, in about 10% of the orders the commanding officer did not sign the required form at all.

LAPD administrators in charge of fiscal operations tried belatedly to address the procurement issues. In September, after being made aware of the audit’s findings, they implemented a policy ordering department commanders to justify purchases made outside of normal procedures and threatening employees that they could be forced to pay for improperly made purchases.

City agencies can make purchases of less than $1,000 without going through an exhaustive vendor-selection process. City policies, however, require agencies to seek the best deal by soliciting bids from three competitors. Auditors found that LAPD employees had secured multiple bids in only three of the 19 transactions that called for them. “It appears that some Supply Section personnel who were responsible for obtaining the bids were unaware of this requirement,” auditors said.

The audit also drew attention to a breakdown in anti-fraud policies that require departments to separate the offices that place orders and those that receive the goods.

Calling the existing policies “fragmented,” auditors concluded that the troubles were the result, in part, of the department lacking a comprehensive manual that spells out city policies. “Policies were inconsistently followed. Loosely enforced, and, in one instance, bypassed altogether,” auditors said.

In a written response to the audit, the top administrators who run the LAPD’s fiscal operations tried to mitigate some of the damage. A new procedures manual for employees is expected to be completed this month and more training will be given to employees, they wrote.

Police Chief Charlie Beck, who was appointed after the audit’s completion, said the findings underscored the need for changes he made recently to the chain of command on fiscal issues. He added that he has ordered a broader review of the department’s procurement practices to assess whether improvements can be made.

“We’re going to have to do better financially to survive the next few years,” he said, referring to the city’s gaping budget shortfall.

joel.rubin@latimes.com