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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Los Angeles County Grand Jury
• 1982-1983
Audit Committee . . . . . . . . . . . . . . . . .
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 16 findings
F1
Page 16
FORMALLY ADOPT A COMPREHENSIVE STATEMENT OF POLICIES WHICH GOVERN THE PROGRAM FOR PROPOSITION A CONTRACTING. THIS STATEMENT SHOULD BE FORMALLY AMENDED WHEN NECESSARY AND KEPT UP TO DATE AT ALL TIMES. Administrative Mechanisms Since 1978, administrative responsibility for Proposition A contracting has been lodged in the Chief Administrative Office. However, it has been assigned to five different divisions over that period. The contracting unit prepared a set of written contracting procedures in 1979, but they have never been updated. Each department has been encouraged to develop its own contracting program with minimal guidance, supervision or coordination. The inconsistencies which have resulted have caused a number of problems in various aspects of the program.
F2
Page 16
OFFICE EXERCISE SUBSTANTIALLY MORE RESPONSIBILITY AND BE HELD ACCOUNTABLE FOR THE DIRECTION AND COORDINATION OF THE \# "CONTRACTING OUT" PROGRAM.
F3
Page 16
OFFICE PROVIDE TO THE VARIOUS DEPARTMENTS UP-TO-DATE WRITTEN PROCEDURES FOR THE "CONTRACTING OUT" PROCESS AND TECHNICAL ASSISTANCE ON THE VARIOUS ASPECTS OF THE PROGRAM AS NEEDED. 11
F4
Page 17
OFFICE UNDERTAKE A COMPREHENSIVE REAPPRAISAL OF EXISTING PROPOSITION A PROCEDURES TO DETERMINE WHETHER EXISTING REVIEW STEPS ARE STILL NECESSARY AND USEFUL.
F5
Page 17
OFFICE ESTABLISH TIME FRAMES FOR THE REVIEW AND APPROVAL OF SOLICIT PROPOSALS DEPARTMENTAL REQUESTS TO AND AWARD CONTRACTS, THE CHIEF ADMINISTRATIVE OFFICE SHOULD MONITOR THE MOVEMENT OF REQUESTS THROUGH THE PROCESS TO IDENTIFY ROAD- BLOCKS AND ELIMINATE UNNECESSARY DELAYS. Projecting County Costs and Savings Because of various inconsistencies resulting from inadequate administrative direction and coordination, each department exercised its own judgment, and used its own devices to determine whether or not a contracting opportunity was cost effective. In addition, the same inconsistencies have been applied to projections of cost savings. As a result, some departments have calculated costs using budgeted positions, while others have used estimated actual positions. Some departments have included the costs of conducting feasibility studies, monitoring contractors, and restraining county employees, while others have omitted such costs from their calculations. The savings which have been projected by departments wishing to contract have rarely been verified, and projections continue to be reported as actual savings, when in many cases they are not. Finally, the county has consistently issued public reports claiming savings from Proposition A contracting when, in fact, at least 53 percent of those savings did not result from Proposition A, if they were achieved at all. The county has been slow to correct and clarify the record.
F6
Page 17
OFFICE, WITH ASSISTANCE FROM THE AUDITOR-CONTROLLER, ISSUE AN UPDATED, COMPREHENSIVE SET OF GUIDELINES FOR CONDUCTING COST COMPARISON ANALYSES.
F7
ASSIGNED RESPONSIBILITY FOR CENTRAL REVIEW OF ALL COST COMPARISON ANALYSES TO ASSURE THAT GUIDELINES ARE FOLLOWED CONSISTENTLY BY ALL DEPARTMENTS.
F8
Page 17
OF EXISTING PROPOSITION A CONTRACTING PROCEDURES, THE CHIEF ADMINISTRATIVE OFFICE DEVELOP A MANUAL WHICH SETS FORTH ALL 12 CURRENT POLICIES, PROCEDURES AND GUIDELINES, INCLUDING COST COMPARISON GUIDELINES, THE MANUAL SHOULD BE ISSUED TO ALL DEPARTMENT HEADS AND OTHER APPROPRIATE COUNTY PERSONNEL, THEN PERIODICALLY UPDATED AS A ONE-SOURCE DOCUMENT ON DEVELOPING PROPOSITION A CONTRACTS.
F9
Page 18
REPORTED CLAIMS OF DOLLAR SAVINGS FROM PROPOSITION A CONTRACT- ING BE CORRECTED AND CLARIFIED. AMONG THE FACTORS TO BE CONSIDERED ARE THAT SAVINGS DATA ARE PROJECTIONS, NOT ACTUAL SAVINGS; AND THAT EXPENSES SUCH AS MONITORING, RETRAINING, AND FEASIBILITY STUDY COSTS HAVE NOT ALWAYS BEEN INCLUDED IN THE CALCULATIONS BECAUSE OF INCONSISTENT COST COMPARISON PRACTICES. Impact of Contracting on Employees The county claims that during the first four years of Proposition A contracting program, through December 1982, only 82 employees have been laid off as a result of the program. (That compares with some 10,000 or more county employees laid off during the same period for reasons of budget reduction, program curtailment, etc.) The county says that 536 budgeted positions were eliminated as the result of contracting between July 1, 1981 and December 31, 1982, but it has no records of budgeted positions eliminated prior to fiscal year 1981-82. Impact of Contracting on Minorities Of the 82 county workers laid off as a result of Proposition A contracting, 95 percent are members of black or brown minorities. Contemplated future contracts will continue to heavily impact minority employees. This situation prevails because of the types of work the county has chosen to contract out.
F10
Page 16
THE GRAND JURY RECOMMENDS THAT THE BOARD OF SUPERVISORS ENCOURAGE THE IMPLEMENTATION OF PROPOSITION A CONTRACTING SO THAT IT ENCOMPASSES A BROADER RANGE OF JOB CLASSIFICATIONS. (This
F11
Page 16
THE GRAND JURY RECOMMENDS THAT THE BOARD OF SUPERVISORS ESTABLISH A PROGRAM, INCLUDING POSSIBLE SET-ASIDES, TO ENCOURAGE MINORITY CONTRACTORS TO BID ON PROPOSITION A CONTRACTS. Monitoring the Contractor Again, because of inadequate administrative direction and coordination, each department has been left to its own devices concerning such matters as contractual language, ensuring against contractor dependency, and monitoring the contractor. Some departments have handled these matters extremely well, using a variety of innovations.
F12
Page 16
THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE OFFICE ENCOURAGE AND EXPERIMENT WITH VARIOUS CONTRACTING COMPETITION MODELS, SUCH MODELS SHOULD AID IN MONITORING AND CONTRACTOR PERFORMANCE, THE EVALUATING CHALLENGE PRODUCTIVITY OF COUNTY EMPLOYEES PROVIDING THE SAME SERVICES. AND GUARD AGAINST CONTRACTOR DEPENDENCY.
F13
Page 16
THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE OFFICE, WITH ASSISTANCE FROM COUNTY COUNSEL, ESTABLISH UNIFORM CONTRACTING PROCEDURES AND CONTRACTUAL LANGUAGE FOR ALL DEPARTMENTS PARTICIPATING IN THE PROPOSITION A PROGRAM. Temptations and Dangers of Contracting Concerns have been raised about the degree to which contracting out of services has increased the temptations available to public officials and employees in the form of bribes, gifts, questionable campaign contributions, loans, conflict of interest, etc. While Proposition A contracting may add incentives for the unethical and provide a challenge to public confidence, such temptations were present prior to the adoption of Proposition A. It would be folly to say that because contracting out might encourage some individuals to behave unethically or illegally, contracting out is, per se, evil. What is required instead is greater public awareness and surveillance of any activities which smack of efforts to improperly influence the awarding of a contract.
F14
Page 19
THE GRAND JURY RECOMMENDS THAT THE COUNTY ENACT A LOBBYIST REGISTRATION ORDINANCE SIMILAR TO LAWS NOW IN FORCE FOR THE CITY OF LOS ANGELES AND THE STATE OF CALIFORNIA. 14
F15
Page 16
THE GRAND JURY RECOMMENDS THAT THE BOARD OF SUPERVISORS ENSURE THAT THE CHIEF ADMINISTRATIVE OFFICE HAS THEIR FULL SUPPORT IN ENFORCING COMPLIANCE WITH CONFLICT OF INTEREST REGULATIONS IN ALL CONTRACTING ACTIVITIES, VIGOROUS ACTION IN THIS AREA WILL HELP BOLSTER PUBLIC CONFIDENCE IN THE CONTRACTING PROGRAM. Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of t CONCLUSIONS It is our conclusion that contracting out for services previously provided by county workers can be an effective management strategy and should be continued. The 577666 Proposition A contracting program has the potential for saving the county money; however, it should not be viewed as a panacea for all the county's ills. We on the Grand Jury are concerned about the economic and social implications of PartiesStereogy contracting. To some degree, the problems offset the management advantages the program offers. We believe that by implementing our recommendations, the county will come closer to realizing the goals and benefits of Proposition A contracting as originally envisioned. SERVICE SERVICES Sandra Klasky, Chair Maycie Herrington Sissilia Jean Hitchcock Edwin Kwoh Patricia Lofland STATE AND STATE OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PART Lidia Roth Eduardo Valdiviez
F16
Page 25
THE GRAND JURY RECOMMENDS THAT THE LOS ANGELES COUNTY BOARD OF SUPERVISORS ADD SUBSTANTIALLY TO MONIES BUDGETED FOR ESSENTIAL PROTECTIVE SERVICES FOR ABUSED AND NEGLECTED CHILDREN. Judy Richardson, Chair Juan Godoy Maycie Herrington Roberta Reddick Lidia Roth 1 . 20
Recommendations 16
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R1Page 15FORMALLY ADOPT A COMPREHENSIVE STATEMENT OF POLICIES WHICH GOVERN THE PROGRAM FOR PROPOSITION A CONTRACTING. THIS STATEMENT SHOULD BE FORMALLY AMENDED WHEN NECESSARY AND KEPT UP TO DATE AT ALL TIMES. Administrative Mechanisms Since 1978, administrative responsibility for Proposition A contracting has been lodged in the Chief Administrative Office. However, it has been assigned to five different divisions over that period. The contracting unit prepared a set of written contracting procedures in 1979, but they have never been updated. Each department has been encouraged to develop its own contracting program with minimal guidance, supervision or coordination. The inconsistencies which have resulted have caused a number of problems in various aspects of the program. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
-
R2Page 15OFFICE EXERCISE SUBSTANTIALLY MORE RESPONSIBILITY AND BE HELD ACCOUNTABLE FOR THE DIRECTION AND COORDINATION OF THE \# "CONTRACTING OUT" PROGRAM. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
-
R3Page 15OFFICE PROVIDE TO THE VARIOUS DEPARTMENTS UP-TO-DATE WRITTEN PROCEDURES FOR THE "CONTRACTING OUT" PROCESS AND TECHNICAL ASSISTANCE ON THE VARIOUS ASPECTS OF THE PROGRAM AS NEEDED. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
-
R4Page 16OFFICE UNDERTAKE A COMPREHENSIVE REAPPRAISAL OF EXISTING PROPOSITION A PROCEDURES TO DETERMINE WHETHER EXISTING REVIEW STEPS ARE STILL NECESSARY AND USEFUL. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
-
R5Page 16OFFICE ESTABLISH TIME FRAMES FOR THE REVIEW AND APPROVAL OF SOLICIT PROPOSALS DEPARTMENTAL REQUESTS TO AND AWARD CONTRACTS, THE CHIEF ADMINISTRATIVE OFFICE SHOULD MONITOR THE MOVEMENT OF REQUESTS THROUGH THE PROCESS TO IDENTIFY ROAD- BLOCKS AND ELIMINATE UNNECESSARY DELAYS. Projecting County Costs and Savings Because of various inconsistencies resulting from inadequate administrative direction and coordination, each department exercised its own judgment, and used its own devices to determine whether or not a contracting opportunity was cost effective. In addition, the same inconsistencies have been applied to projections of cost savings. As a result, some departments have calculated costs using budgeted positions, while others have used estimated actual positions. Some departments have included the costs of conducting feasibility studies, monitoring contractors, and restraining county employees, while others have omitted such costs from their calculations. The savings which have been projected by departments wishing to contract have rarely been verified, and projections continue to be reported as actual savings, when in many cases they are not. Finally, the county has consistently issued public reports claiming savings from Proposition A contracting when, in fact, at least 53 percent of those savings did not result from Proposition A, if they were achieved at all. The county has been slow to correct and clarify the record. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
-
R6Page 16OFFICE, WITH ASSISTANCE FROM THE AUDITOR-CONTROLLER, ISSUE AN UPDATED, COMPREHENSIVE SET OF GUIDELINES FOR CONDUCTING COST COMPARISON ANALYSES. THE GRAND JURY RECOMMENDS THAT THE AUDITOR-CONTROLLER BE
-
R7Page 16ASSIGNED RESPONSIBILITY FOR CENTRAL REVIEW OF ALL COST COMPARISON ANALYSES TO ASSURE THAT GUIDELINES ARE FOLLOWED CONSISTENTLY BY ALL DEPARTMENTS. THE GRAND JURY RECOMMENDS THAT FOLLOWING THE REAPPRAISAL
-
R8Page 16OF EXISTING PROPOSITION A CONTRACTING PROCEDURES, THE CHIEF ADMINISTRATIVE OFFICE DEVELOP A MANUAL WHICH SETS FORTH ALL 12 CURRENT POLICIES, PROCEDURES AND GUIDELINES, INCLUDING COST COMPARISON GUIDELINES, THE MANUAL SHOULD BE ISSUED TO ALL DEPARTMENT HEADS AND OTHER APPROPRIATE COUNTY PERSONNEL, THEN PERIODICALLY UPDATED AS A ONE-SOURCE DOCUMENT ON DEVELOPING PROPOSITION A CONTRACTS. THE GRAND JURY RECOMMENDS THAT THE COUNTY'S PUBLICLY
-
R9Page 17REPORTED CLAIMS OF DOLLAR SAVINGS FROM PROPOSITION A CONTRACT- ING BE CORRECTED AND CLARIFIED. AMONG THE FACTORS TO BE CONSIDERED ARE THAT SAVINGS DATA ARE PROJECTIONS, NOT ACTUAL SAVINGS; AND THAT EXPENSES SUCH AS MONITORING, RETRAINING, AND FEASIBILITY STUDY COSTS HAVE NOT ALWAYS BEEN INCLUDED IN THE CALCULATIONS BECAUSE OF INCONSISTENT COST COMPARISON PRACTICES. Impact of Contracting on Employees The county claims that during the first four years of Proposition A contracting program, through December 1982, only 82 employees have been laid off as a result of the program. (That compares with some 10,000 or more county employees laid off during the same period for reasons of budget reduction, program curtailment, etc.) The county says that 536 budgeted positions were eliminated as the result of contracting between July 1, 1981 and December 31, 1982, but it has no records of budgeted positions eliminated prior to fiscal year 1981-82. Impact of Contracting on Minorities Of the 82 county workers laid off as a result of Proposition A contracting, 95 percent are members of black or brown minorities. Contemplated future contracts will continue to heavily impact minority employees. This situation prevails because of the types of work the county has chosen to contract out.
-
R10Page 17THE GRAND JURY RECOMMENDS THAT THE BOARD OF SUPERVISORS ENCOURAGE THE IMPLEMENTATION OF PROPOSITION A CONTRACTING SO THAT IT ENCOMPASSES A BROADER RANGE OF JOB CLASSIFICATIONS. (This Recommendation was added by the Audit Committee after publication of the McManis report.) At the same time, the county has no affirmative action contracting program or requirement to ensure that certain percentages of Proposition A contracts are awarded to minority-owned, female-owned or small businesses. 13
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R11Page 17THE GRAND JURY RECOMMENDS THAT THE BOARD OF SUPERVISORS ESTABLISH A PROGRAM, INCLUDING POSSIBLE SET-ASIDES, TO ENCOURAGE MINORITY CONTRACTORS TO BID ON PROPOSITION A CONTRACTS. Monitoring the Contractor Again, because of inadequate administrative direction and coordination, each department has been left to its own devices concerning such matters as contractual language, ensuring against contractor dependency, and monitoring the contractor. Some departments have handled these matters extremely well, using a variety of innovations.
-
R12Page 18THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE OFFICE ENCOURAGE AND EXPERIMENT WITH VARIOUS CONTRACTING COMPETITION MODELS, SUCH MODELS SHOULD AID IN MONITORING AND CONTRACTOR PERFORMANCE, THE EVALUATING CHALLENGE PRODUCTIVITY OF COUNTY EMPLOYEES PROVIDING THE SAME SERVICES. AND GUARD AGAINST CONTRACTOR DEPENDENCY.
-
R13Page 18THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE OFFICE, WITH ASSISTANCE FROM COUNTY COUNSEL, ESTABLISH UNIFORM CONTRACTING PROCEDURES AND CONTRACTUAL LANGUAGE FOR ALL DEPARTMENTS PARTICIPATING IN THE PROPOSITION A PROGRAM. Temptations and Dangers of Contracting Concerns have been raised about the degree to which contracting out of services has increased the temptations available to public officials and employees in the form of bribes, gifts, questionable campaign contributions, loans, conflict of interest, etc. While Proposition A contracting may add incentives for the unethical and provide a challenge to public confidence, such temptations were present prior to the adoption of Proposition A. It would be folly to say that because contracting out might encourage some individuals to behave unethically or illegally, contracting out is, per se, evil. What is required instead is greater public awareness and surveillance of any activities which smack of efforts to improperly influence the awarding of a contract.
-
R14Page 18THE GRAND JURY RECOMMENDS THAT THE COUNTY ENACT A LOBBYIST REGISTRATION ORDINANCE SIMILAR TO LAWS NOW IN FORCE FOR THE CITY OF LOS ANGELES AND THE STATE OF CALIFORNIA. 14
-
R15Page 18THE GRAND JURY RECOMMENDS THAT THE BOARD OF SUPERVISORS ENSURE THAT THE CHIEF ADMINISTRATIVE OFFICE HAS THEIR FULL SUPPORT IN ENFORCING COMPLIANCE WITH CONFLICT OF INTEREST REGULATIONS IN ALL CONTRACTING ACTIVITIES, VIGOROUS ACTION IN THIS AREA WILL HELP BOLSTER PUBLIC CONFIDENCE IN THE CONTRACTING PROGRAM. Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of the Section of t CONCLUSIONS It is our conclusion that contracting out for services previously provided by county workers can be an effective management strategy and should be continued. The 577666 Proposition A contracting program has the potential for saving the county money; however, it should not be viewed as a panacea for all the county's ills. We on the Grand Jury are concerned about the economic and social implications of PartiesStereogy contracting. To some degree, the problems offset the management advantages the program offers. We believe that by implementing our recommendations, the county will come closer to realizing the goals and benefits of Proposition A contracting as originally envisioned. SERVICE SERVICES Sandra Klasky, Chair Maycie Herrington Sissilia Jean Hitchcock Edwin Kwoh Patricia Lofland STATE AND STATE OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PARTY OF THE PART Lidia Roth Eduardo Valdiviez
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R16Page 15THE GRAND JURY RECOMMENDS THAT THE LOS ANGELES COUNTY BOARD OF SUPERVISORS ADD SUBSTANTIALLY TO MONIES BUDGETED FOR ESSENTIAL PROTECTIVE SERVICES FOR ABUSED AND NEGLECTED CHILDREN. Judy Richardson, Chair Juan Godoy Maycie Herrington Roberta Reddick Lidia Roth 1 . 20