Thursday, October 14, 2010
Greuel Says City Attorney Program Was Mismanaged
By STEVEN M. ELLIS, Staff Writer
The Los Angeles City Attorney’s Office’s Workers’ Compensation Program was mismanaged and wasted millions of taxpayer dollars during Rocky Delgadillo’s tenure as city attorney, City Controller Wendy Greuel said yesterday.
In a letter to Mayor Antonio Villaraigosa and current City Attorney Carmen Trutanich, Greuel said her audit of the program revealed that the office’s failure to collect from third parties responsible for employee injuries may have cost the city more than $3 million each year. She also said the audit found that the office took too long to settle cases and diverted attorneys to other projects, weakening its ability to effectively represent the city in workers’ compensation cases.
“I was disappointed to find that the City Attorney’s Office management of the Workers’ Compensation Program was plagued by poor oversight, a lack of budgetary accountability and had the potential for millions lost to the City each year,” she commented.
Delgadillo took issue with the controller, maintaining that he, while in office, repeatedly sought her support while she served on the City Council to “fix the City’s broken workers’ compensation system,” but that help was not forthcoming.
Before being succeeded by Trutanich in July 2009 due to term limits, Delgadillo sued Greuel’s predecessor, Laura Chick, to prevent the audit. Chick contended that the City Charter authorized her to conduct performance audits of elected city officials, but Los Angeles Superior Court Judge Mark Mooney rebuffed that argument last December.
Greuel, who succeeded Chick in July 2009, has appealed that decision. However, while the case remained pending before the Superior Court, she and Trutanich agreed on an audit after they both took office.
The results released yesterday indicated that the City Attorney’s Office was only recovering six percent of the claims that outside adjusters identified for collection from third parties. According to industry standards, Greuel said, the office should have collected at least $5.2 million in 2008-2009 based on the $129 million paid out in claims, not the $2 million or less actually received.
“With the City facing a multi-million dollar budget deficit, we simply can’t afford to lose that much money each year,” she commented.
The audit also showed that the office took an average of 5.8 years to settle a case—nearly 500 percent longer than best practices, Greuel said—and used two fewer attorneys and less senior attorneys than they were authorized in the budget. The controller commented that the diversion of personnel to other non-workers’ compensation duties, despite Delgadillo’s request for more attorneys and investigators, weakened the program’s ability to effectively represent the City in workers’ compensation cases.
Delgadillo, however, said he had actually made improvements in reducing costs and beginning to automate cases while in office, and he defended his tenure by asserting that the program was chronically under-resourced and subject to a “fractured management system.”
Responsibility for managing the nearly 8,400 workers’ compensation claims against the city each year lies with three separate departments within the city: the Personnel Department, the City Administrative Officer and the City’s Attorney’s Office.
Delgadillo commented that he had previously called for the system to be united within the City Attorney’s Office—a move Trutanich has endorsed—and he added:
“Now that they have found the error of their ways, I hope they can unite and give [Trutanich] the support he needs, and that the mayor and the City Council will back him up.”
Trutanich said yesterday that his office has already implemented “comprehensive reforms” following the collaborative effort with Gruel. They include restructuring the office’s organization and the Workers’ Compensation Division “to increase accountability and efficiency,” he said, and assigning more attorneys as part of a newly-implemented attorney rotation protocol that Trutanich predicted would reduce a backlog of cases and generate cost savings.
Greuel’s audit found that a backlog of some 4,000 workers’ compensation cases remain open. Her letter to Villaraigosa and Trutanich also stated that “there is much work to be done within the City Attorney’s Office before evaluating whether consolidation has merit.”
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