Audit Critical of Top County Administrator

In a report highly critical of the county’s most powerful bureaucrat, the Los Angeles County Grand Jury said Thursday that Chief Administrative Officer Richard Dixon exercises unchecked control over public funds, spending millions of dollars without notifying the Board of Supervisors.

The 31-page audit by the accounting firm of Price Waterhouse described Dixon as “among the most powerful public administrators in America.” And it criticized the Board of Supervisors for giving Dixon open-ended authority that allowed him to operate without sufficient public oversight.

Among the auditor’s most damaging findings was that Dixon had discarded virtually all documents related to a controversial $6-million renovation of his offices and spent twice what the board had publicly authorized for furniture.

The grand jury report called for the Board of Supervisors to give greater support and independence to the auditor-controller, who, the jury said, should undertake a thorough review of the CAO’s expenditures and management practices.

Members of the Los Angeles County Grand Jury said they ordered the audit “after receiving news reports and complaints concerning allegedly questionable personnel and fiscal practices.” A series of stories published earlier this year by The Times detailed Dixon’s extraordinary authority to spend public funds and the expensive perks that go with his job.

The grand jury report was ordered in the jury’s role as a government watchdog and did not allege any criminal conduct.

Still, the report was a rebuke to Dixon, a 54-year-old career bureaucrat who is responsible for the day-to-day management of the nation’s most populous county. The $13-billion budget Dixon controls is larger than that of many states.

Responding to the audit, Supervisor Gloria Molina and others renewed calls to restrict Dixon’s power and to restore public accountability to the CAO’s office. Molina earlier had called for Dixon’s ouster.

“There are no paper trails and anytime a bureaucrat destroys records, we can’t go back to examine what he did,” said Robert Alaniz, a spokesman for Molina. “The board is going to have to re-establish control over how the county operates.”

A spokeswoman said Dixon was out of town and unavailable for comment. He was aware of the findings, however, because auditors briefed him in an “exit interview.”

Mary Jung, assistant chief administrative officer, said, “We always welcome constructive review of our office. We have not had a chance to review the entire report. We will ask the auditor-controller to conduct a full review based on the grand jury’s recommendation.”

Dixon and the power of the CAO’s office have become issues in the campaign for two seats on the five-member board. At least two candidates are calling for Dixon’s removal.

“I’m beginning to think Dixon has reached the point of irreversible arrogance,” said Rolling Hills Mayor Gordana Swanson, who forced Supervisor Deane Dana into a runoff for the 4th District seat.

Swanson’s call for Dixon’s removal joins that of state Sen. Diane Watson, front-runner in the race to succeed retiring Supervisor Kenneth Hahn in the 2nd District.

Supervisor Dana, along with Supervisors Michael Antonovich and Ed Edelman, did not return phone calls Thursday. The three, along with Hahn, have been strong supporters of Dixon and have thwarted efforts by Molina to have him fired.

Earlier this week, Antonovich asked the grand jury to make a formal presentation to the board on July 7. He asked that the CAO respond in writing to many of the report’s findings by that date.

George Ackerman, foreman of the grand jury, would not comment on the audit, saying “the report speaks for itself.” The grand jury submitted its findings directly to the Board of Supervisors for review. It remained unclear Thursday what action, if any, the board would take.

Among the report’s key findings:

- Dixon spent $1.4 million on furniture for his spacious offices in the downtown Hall of Administration, nearly double the amount budgeted by the Board of Supervisors. Auditors said “such a material discrepancy raises unanswered questions concerning overall management” of a $6-million program to refurbish the offices.

Nearly all financial records of the controversial program were discarded by CAO employees, making it nearly impossible for auditors to conduct a thorough review.

- Dixon controls a $75-million fund called “Nondepartmental Special Accounts” which apparently has never been reviewed by county auditors. The report found that Dixon had made several expenditures from the fund without reporting them to the Board of Supervisors, including $449,680 related to the development of the Disney Concert Hall.

The report was critical of supervisors’ policies adopted in recent years that have “weakened some traditional controls” over budgeting and expenditures by county bureaucrats.

Supervisors voted in 1988 to give the CAO authority to approve contracts for financial, economic, accounting, engineering and administrative services of “virtually any size.”

Earlier this year, a Times survey of other large counties in the state showed that none give such broad authority to non-elected officials. In most counties, bureaucrats are limited to expenditures of $25,000 without the approval and authority from their boards of supervisors.

Dixon earns approximately $200,000 a year in salary and benefits, which include a bullet-proof car with a sheriff’s deputy as chauffeur. He has an open-ended expense account, which amounted to $117,000 last year.

In his fifth year as CAO, Dixon also has become the focus of a November ballot proposal to turn his job into the new elected position of county executive. Similar proposals were rejected by voters in 1970, 1976 and 1978.

Dixon has said he takes pride in running the county as he would a major corporation. Many of his management practices, however, were criticized in the audit.

The report singled out the failure of his office to retain key records. Dixon, the report said, “expressed an opinion that record-keeping is not a priority” in his office.