Audit Committee . . . . . . . . . . . . . . . . .

Recommendations 16

• R1

  Page 15
  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. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
• R2

  Page 15
  OFFICE 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
• R3

  Page 15
  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. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
• R4

  Page 16
  OFFICE 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
• R5

  Page 16
  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. THE GRAND JURY RECOMMENDS THAT THE CHIEF ADMINISTRATIVE
• R6

  Page 16
  OFFICE, 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
• R7

  Page 16
  ASSIGNED 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
• R8

  Page 16
  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. THE GRAND JURY RECOMMENDS THAT THE COUNTY'S PUBLICLY
• R9

  Page 17
  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.
• R10

  Page 17
  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 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
• R11

  Page 17
  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.
• R12

  Page 18
  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.
• R13

  Page 18
  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.
• R14

  Page 18
  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
• R15

  Page 18
  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
• R16

  Page 15
  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