Friday, October 26, 2001
Controller’s Audit Reveals Police Association Mishandling of City Money
From Staff and Wire Service Reports
A recent city audit found financial record-keeping problems in the association that handles the Los Angeles Police Department’s retirement and health benefits, and internal audits conducted by the organization itself may reveal more, city officials said yesterday.
An audit of the Los Angeles Police Relief Association released yesterday by City Controller Laura Chick found poor record keeping in the organization that handles more than $5 million each month in city funds and member contributions.
“What we’ve seen so far is that this organization is not a well-run business organization, and, therefore, one has to assume there are problems in how that money is being handled,” Chick said.
LAPRA’s annual revenue for the last two years totaled about $72 million, with 90 percent the association’s annual revenue coming from the city.
The audit, performed for the City Controller’s office by Thompson, Cobb, Bazilio & Associates, found “organizational structure deficiencies” that hurt LAPRA’s distribution of benefits and the organization does not have written policies and procedures for keeping track of the association’s business transactions.
“The best way to hide what you’re doing is to not keep good records,” Chick said.
The audit also found that LAPRA’s member database was incomplete and inaccurate, allowing the association to overcharge the city by more than $1.3 million since 1994 for members no longer entitled to receive benefits.
Monthly subsidy and member contribution payments made by the city are determined by how many eligible members LAPRA has on its database.
LAPRA’s database lists members who were retired or had been terminated by the LAPD as active members, members for whom coverage had been cancelled but were still listed as being covered, and some members appearing in the association’s database were not listed in city databases.
City Attorney Rocky Delgadillo said his office has filed a subpoena in Los Angeles Superior Court seeking two internal LAPRA reports.
Conducted by PricewaterhouseCoopers, the two audits released in 1999 and June of this year deal with allegations of embezzlement by a former LAPRA employee and allegations of mismanagement within the association.
The City Controller’s office subpoenaed the documents in August, Chick said, but the association did not respond.
Delgadillo said the information contained in the internal audits would reveal help the city figure out exactly how city funds are being spent by the organization.
“The other side will contend that these documents involve issues of privacy and privilege,” Delgadillo said. “But the bottom line is that this is the public’s money — $5 million a month — and the public has a right to know how its money is being spent.”
The city’s audit was ordered after Ramona Voge, LAPRA’s former executive director, charged that the association mishandled the $70 million health and retirement fund.
Voge, fired Jan. 10, has filed a wrongful termination suit. She alleged LAPRA has overcharged the city and provided LAPRA directors with health benefits not offered to regular members.
Capt. Charles Beck, LAPRA president, said that many of the concerns raised by the audit were incorrect or have already been addressed.
“The audit does not note that LAPRA brought the amount in question to the city’s attention when it was discovered” by LAPRA employees, Beck said of the $1.3 million overcharge.
“Further, LAPRA has repaid the entire amount to the city prior to the date this audit was published,” he said.
Beck said the association is trying to make improvements to its database but is held up by problems with the city’s pension database, “which has many flaws.”
Beck also said he is willing to share the results of the audits Chick requested if she will promise not to release any private information in the two reports.
“I’m kind of at a loss to understand why the city attorney doesn’t understand our desire to protect our members’ privacy,” Beck said.
The audits contain medical and personnel information on LAPRA members that is protected by state law. Aside from that information, Beck said, there should be no problem releasing the reports.
“There’s nothing in those audits that I don’t want the city to see or I don’t want anyone to see,” he said. “These are not secret documents by any means.”
Copyright 2001, Metropolitan News Company