L.A. Controller Announces Progress Tackling City Fraud, Waste and Abuse

LOS ANGELES — L.A. Controller Ron Galperin today released a report on his office’s efforts to reduce fraud, waste and abuse involving City resources in 2020. The Controller’s Fraud Waste and Abuse (FWA) Unit is responsible for investigating allegations of the misuse of resources by employees, contractors and others, such as stealing City assets, payroll fraud, contract bid rigging, kickbacks and gross mismanagement. Last year, the FWA Unit received 460 new complaints, a decrease of 15 percent from the 543 cases received in the previous year.

“Our efforts to increase transparency and accountability are working,” said Controller Galperin. “We have uncovered misdeeds by employees and organizations, and discovered unnecessary bureaucratic hurdles that frustrate the public and cost the City revenue. My objective is to ensure that everyone who works for and with the City is held to the highest standards so that we can eradicate fraud, waste and abuse of vital public resources.”

Ninety-six percent of all complaints came through the Controller’s web intake form and 24-hour telephone hotline, and nearly two-thirds were submitted anonymously. When the FWA Unit receives a complaint, it does an initial review and then launches an investigation, refers the case to a City department, or sends it to the appropriate law enforcement or outside government agency.

Galperin’s FWA Unit during 2020

  • 460 complaints received
  • 161 actionable cases (resulted in an investigation or referral to department/agency)
    • 45 involved the Dept. of Water and Power
    • 15 involved the Los Angeles Police Dept.
    • 12 involved the Bureau of Sanitation
    • 11 involved the Los Angeles Fire Dept.
  • 494 total cases closed
    • 19% alleged waste of City resources
    • 17% alleged time theft
    • 17% alleged contractor fraud
  • 25 complaints substantiated

Case highlights

  • Discovered that a community based organization funded through the Economic and Workforce Development Dept. overbilled the City for nearly $33,000 and lacked support for costs billed to the program. This department is seeking to suspend the agency’s contract and recover the full grant amount disbursed ($294,000), if acceptable support documentation cannot be provided.
  • Found that a Bureau of Sanitation employee violated benefit regulations by covering an unqualified dependent, prompting the employee’s resignation and repayment of nearly $63,000 of City-paid health and dental benefits.
  • Uncovered that multiple exempt Sanitation employees had inappropriately received overtime payments totaling $209,000 over a three-year period, resulting in repayment agreements.
  • Established that the Los Angeles Fire Dept. had an inefficient permitting process that resulted in numerous pending permits, long customer wait times and hundreds of thousands of dollars of lost City revenue.
  • Investigated a Dept. of Water and Power employee for unreported outside employment and using City property for personal use, leading to disciplinary action by the employee’s department.

Read the full report at https://www.lacontroller.org/fwa-2020.

City employees, contractors and anyone with information can submit a confidential complaint through Galperin’s 24-hour fraud, waste and abuse telephone hotline at 866-428-1514 or online at lacontroller.org/fraud_hotline.

Follow L.A. Controller Ron Galperin at @LAController on Twitter, Facebook and Instagram.