Speaking at last Thursday’s Pacific Palisades Community Council meeting, Los Angeles City Controller and mayoral candidate Wendy Greuel gave an overview of budget issues and recent audits she has conducted. ”” Greuel, who serves as the city’s chief auditor and accountant, is responsible for ensuring that taxpayer money is spent wisely. ”” One way Greuel exercises fiscal responsibility is by implementing performance-based budgeting, which is changing the way the city prepares its budget. She proposed that the city phase-in performance-based budgeting last October, and would like to use this budgeting strategy in all of the city’s departments, but due to staff limitations only two departments, the Planning Department and the Bureau of Street Services, were chosen. ”” Using performance-based budgeting, city departments look at the services they need to provide and then calculate the cost, as opposed to the traditional line-item approach, in which additions or deletions are made to the prior year’s budget. ’Performance-based budgeting is really looking at how the city does business,’ Greuel said. More than just the numbers, performance-based budgeting is also about how the city uses its scarce resources effectively and holding departments accountable for their performance, she said. Greuel, who has been the city controller since July 2009, has completed over 50 audits and shared some of her recent findings. Her most recent audit of the Los Angeles Department of Animal Services revealed safety and welfare concerns for animals being sheltered by the Department, as well as missed opportunities to collect much-needed revenue due to mismanagement. ’We found some disturbing news,’ Greuel said. In four of the six shelters audited, the Department failed to maintain a physical inventory of the animals. Other findings revealed that over the last two years Los Angeles Animal Services (LAAS) neglected to collect over $1.3 million in potential dog-license revenue. The LAAS only sent bills to pet owners who paid their license fee the previous year. Those who failed to pay the most recent year’s bill were dropped from any future billings.” ’It is as though your dog never existed,’ Greuel said. Greuel also highlighted the January audit of the City’s Street Furniture contract with CBS Decaux, which uses bus benches and other street furniture for advertising purposes. According to Greuel, the way the contract was written means the city will never, ever receive the full potential of the revenue possible. The city originally entered into the 20-year contract in 2001 with the anticipation of receiving up to $150 million in revenue over that period. The city could have received at least $53 million in revenue in the first 10 years, according to the contract, yet the city only realized $29.9 million. Greuel’s audit revealed the $23.1 million lost consisted of about $8.2 million in revenue due to the methodology used to calculate annual fees paid to the city, combined with $14.9 million for delays in approving site permits due to an unrealistic rollout schedule. With a cumbersome approval process in place, the city would not be able to meet the agreed-upon schedule right from the start, according to the audit. Greuel has urged the Bureau of Street Services and the City Attorney’s office to revisit the terms of the contract, which required a six-year review by both parties that has yet to happen and would have potentially brought to light the loss of revenue to the city, she said. In another audit, this time of the Housing Authority of the City of Los Angeles, Greuel had to get permission to audit the agency because it is state-chartered and receives substantial funding from the federal Department of Housing and Urban Development. Allegations of misuse of public funds prompted the audit. ’I don’t have the authority to audit the Housing Authority,’ said Greuel, who explained that after being granted permission, she discovered hundreds of dollars in unnecessary travel was being spent, sometimes with no receipts.”’ ”” Greuel believes that any money the Housing Authority has should be spent on housing for those who need it most. Upcoming audits on fuel costs and job training money within the city will be forthcoming. On being the city controller, Greuel joked to her audience, ‘You don’t always make friends.’ She told the council about running into a woman in an elevator on a Friday night who complimented her on a job well done. Greuel was happy with the praise until the woman asked, ‘But does anybody like you?’ Greuel said her eight-year-old son likes her. The position of controller is one where she stands up and presents her findings, which is often not what people want to hear, but they need to hear it. ’I tell them to embrace the change. Embrace the recommendation,’ Greuel said. ’Ultimately I have the facts.’ The industry standard is six auditors for every million dollars of your budget. The City of Los Angeles has a $7- billion budget, which means Greuel should have 42 auditors. She makes do with 14 auditors. With so few auditors, Greuel looks for areas in which she can be a catalyst for change, she said. In talking about the 2012-2013 budget she admits there are some challenges but there is also some good news, such as tourism is increasing and jobs are coming back to the city. ’If we can create jobs in Los Angeles, create revenue, we need to encourage that,’ said Greuel, who is an announced candidate in the 2013 mayoral race. ‘We need to make sure that our departments are proving the kinds of services that are necessary.’
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