Audit raps sheriff fund management

L.A. County Auditor-Controller Wendy Watanabe at the Hall of Administration. Photo/Los Angeles Times

A new Los Angeles County audit has revealed that the Sheriff’s Department did not meet even the most basic—and required—accounting practices in its management of numerous special funds, which have accumulated $160 million with no written plans on how the money should be spent.

Some of the money has flowed into these Sheriff’s Department funds from various fees imposed on the public, including a slice of court fines and assessments on vehicle registrations, according to Auditor-Controller Wendy Watanabe.

In a review of three recent fiscal years, the Auditor-Controller’s office found that the department used only 57% of the $370 million that had built up in eight special funds, each of which is legally restricted to purposes ranging from drug investigations to vehicle theft programs to automated finger-printing systems. The California controller’s office requires that specific spending plans must exist for these growing pots of money.

“Excessive revenue indicates that the counties should reduce fees or establish reserve accounts,” auditors said.

The Sheriff’s Department did not dispute the findings, saying it would evaluate the special funds and determine “appropriate expenditure requirements and spending plans.”

But during a public briefing on the audit for Board of Supervisor staff members on Wednesday, Sheriff’s budget official Glen Dragovich downplayed the significance of the rising fund balances. “There’s a plan,” he said, “but it’s just not written down.” He said the department has taken a conservative approach to spending “because we want to make sure we have money for future years.”

The audit is certain to raise new concerns about the department’s top-level management. It comes at a time when the agency already is confronting problems across its operations, including, most significantly, the recent indictments of 18 members of the force for alleged brutality, corruption and obstruction of justice. On January 7, Sheriff Lee Baca announced he would not seek re-election to a fifth term.

Beyond criticisms centering on the $160 million in unspent funds, auditors took the department to task for a variety of other violations of county fiscal policies involving management and oversight of special revenue and trust funds.  Although there was no evidence of malfeasance, the department’s failure to comply with rigorous accounting measures increases the odds that public monies could be placed at risk, the audit suggested.

Among other things, the Sheriff’s Department breached government rules by transferring $1.6 million in unclaimed funds to its own operating budget rather than providing the money to the Treasurer and Tax Collector. That office is responsible for publishing a newspaper notification of the unclaimed funds. If no one comes forward—county inmates, for example, who’d surrendered their property at the time of booking—then the money should be placed in the county’s general fund.

“Transferring unclaimed funds to a department’s revenue,” the audit stated, “may result in the use of funds that were not authorized by the Board of Supervisors as part of a publicly accessible appropriations process.”

The Sheriff’s Department management said it was unaware of the requirements for unclaimed funds.

To read the full audit, click here.