Compliance Review: Los Angeles Fire Department IT Commodity Procurement
An effective and efficient information technology (IT) procurement process is critical for the City of Los Angeles (City) to leverage technology to conduct business and serve the public. City departments must have appropriate and effective fiscal controls to prevent IT commodity contract misuse (e.g., paying for commodities that are not operationally necessary).
The Office of the City Controller conducts periodic IT commodity procurement reviews to assess how well City departments, such as LAFD, are monitoring IT commodity purchases.
Fact #1: The LAFD is the City’s first responder for medical emergencies, fires and other natural disasters, responding to an average of 330,000 medical emergency calls annually. The LAFD transports more than 500 people every day to local hospitals.
Fact #2: LAFD’s Fiscal Year 2019 adopted budget is just over $674 million, with $662 million (98%) funded by the City’s General Fund.
Fact #3: Approximately 84% ($565 million) of LAFD’s Fiscal Year 2019 adopted budget is devoted to three programs, Fire Suppression, Fire Prevention, and Emergency Medical Services.
Fact #4: Between July 2017 and February 2019, LAFD purchased over $3.3 million in computer hardware and software, and $4 million in Motorola radio equipment. We estimate that LAFD has over 11,000 mobile radios that are installed in LAFD equipment and have a total estimated cost of more than $70 million. This estimate excludes the cost of handheld radios which are either checked out or assigned to LAFD employees.
Compliance Review Results
Based upon a sample of the LAFD’s IT commodity purchases, certain enhancements to its policies and procedures are necessary. Specifically:
Written procedures and segregation of duties are necessary:
LAFD does not have written procedures documenting its procurement process for IT purchases, nor do they have proper segregation of duties over its purchasing function. There were procurement transactions showing instances where the same individual processed purchase orders, verified that the items were received and accepted the commodities in the City’s Financial Management System. This same individual also physically distributed the commodities. Additionally, some purchases did not have the required signature approvals or written justifications for the expenditures.
Physical inventories need to be completed annually and enhancements to radio communication equipment inventory controls are needed:
During our Review, we identified computer equipment that was not entered into LAFD’s inventory system. LAFD also does not have a complete inventory listing or tracking system to account for the locations and status of its extensive inventory of mobile and hand-held radios. Management acknowledged that they have not conducted a physical inventory count for its computer equipment and radio equipment for several years.