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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
• 2007-2008
County Fleet Costs and Vehicle Purchase Inconsistencies
⚠️ 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 6 findings
F1
Page 163
The County has no internal controls in place to ensure County departments do not purchase vehicles that have features that exceed those required for routine County business.
F2
Page 163
There are dozens of vehicles that appear to have features that exceed need based on intended use, resulting in unnecessary costs for the County.
F3
Page 163
Some departments have vehicles that are not expensive, other departments have purchased luxury vehicles for the Department Director or other senior managers. Without clear direction from the Board of Supervisors, departments do not have any clear incentives to purchase vehicles that minimize cost.
F4
Page 163
There are discrepancies between the databases that individual departments, the Internal Services Department and the Auditor-Controller maintain.
F5
Page 202
The Purchasing Branch lacks internal management controls to effectively monitor staff compliance with and enforcement of District Top 30 policy and to ensure that appropriate steps are taken by Buyer staff to minimize non-stock purchases of non-Top 30 like items.
F6
Page 202
The Purchasing Branch does not consistently analyze non- stock data for the purposes of identifying items that should be moved into stock. 2007-2008 Los Angeles County Civil Grand Jury Final Report - 195 -
Recommendations 10
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R1Page 1711: Require that the Purchasing Branch enforce the District’s restriction on purchasing Top 30 items from sources other than District warehouses by: (a) reviewing P-Card transactions to identify Top 30 purchase violations as part of the P-Card Unit’s audit function; (b) developing and communicating formal, written policies and procedures regarding District non-stock purchasing processes; and, (c) implementing internal management controls to monitor, track, and document staff compliance with and enforcement of these polices and procedures.
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R2Page 1731: Direct Inventory Management staff to analyze and quarterly report to warehouse management all warehouse items that have turnover rates of less than one in a year or less than two for two consecutive years.
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R3Page 1741: Direct staff to prepare an annual report for management presenting year-to-year gross dollar and commodity unit discrepancies, rather than net discrepancies as is currently reported between inventory records and actual inventory found in the warehouses, as part of the annual Business Service’s Division Service Efforts and Accomplishments. 2007-2008 Los Angeles County Civil Grand Jury Final Report - 167 -
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R4Page 1631: The Internal Services Department should review the composition of the County fleet annually to identify the number of vehicles considered to be luxury or over $30,000, and provide the report to the Board of Supervisors.
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R5Page 158District Annual Budget $5.1 Billion $1.5 Billion $600 Million $6 to $7 Billion $2.0 Billion $2.2 Billion $7 Billion*
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R6Page 158Confirmation of Warehouse Facility Yes Yes Yes Yes No Response Yes Yes * General Fund PART II. Overview of District Warehouse Operations and Funding 7 How many discrete physical warehouse facilities does the District operate? Five Responses: 2= “10 or more” 1= “1” 2= “4”
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R10Page 158What is the amount and dollar value of each of the following types of products within LAUSD’s warehouses? a. Like products, which are functionally alike but differ in non-functional attributes; b. Obsolete products, which still have functionality but have lost their consumer demand; c. Perishable products, which should not be used after a certain specified date and/or naturally reach an unusable condition; and, d. Lost products, which have gone missing from one inventory cycle to the next due to shrinkage, damage, theft or misplacement.
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R11Page 158How much did these products cost LAUSD, and is there any remaining value of obsolete products?
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R12Page 158Have policies and procedures been established to limit individual purchases of like products at different prices, dispose of obsolete products or products that have perished, and to minimize the inappropriate loss of warehouse inventory, and are such procedures being followed?
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R13Page 158What management systems, reporting processes and internal controls have been established to monitor the level of like, obsolete, perishable and lost products? The scope of the audit covered the questions outline above regarding the District’s warehouse function, including its General Stores, Foods, Maintenance and Salvage Warehouses and Beaudry Street facility, a total of five facilities. Organizationally, these 2007-2008 Los Angeles County Civil Grand Jury Final Report - 160 - facilities are located in the District’s Materiel Management Branch that also contains Stock Purchasing (items in the warehouse), Inventory Management Services, Truck Operations, or delivery services, including a mail unit and a Reprographics unit, and a Marketing division. The Materiel Management Branch is part of the District’s Business Services Division. During the course of this audit, a reorganization took place in which the separate Procurement Services Branch of Business Services, responsible for non- stock purchasing and contracting, was merged with the Stock Purchasing unit, thus becoming part of the Materiel Management Branch. The approved operating budget for the Materiel Management Branch for Fiscal Year 2007-2008 contains $41.2 million in expenditures and 380 full-time equivalent positions, including the Reprographics and Mail units which were not part of this audit scope. Budgeted Fiscal Year 2007-2008 expenditures for the Procurement Services Group, a separate unit at the time the budget was adopted, is $6.4 million. With the merger of the Procurement Services Group into the Materiel Management Branch, the total Fiscal Year 2007-2008 budget would be approximately $47.6 million. The Materiel Management Branch and Procurement Services Group serve all of the District’s schools and offices, all cafeterias and food preparation facilities and the Maintenance and Operations division. Though part of the District’s operations, the disposition of used and old textbooks was not within the purview of the scope of this audit. Tables I.1 and I.2 present Fiscal Year 2006-2007 data on the District’s warehouse inventory and District-wide expenditures by procurement method.