$517,000 PAID IN LATE PHONE FEES, CITY FINDS.

Byline: Rick Orlov Daily News Staff Writer

The city of Los Angeles was forced to pay $517,000 in late fees for telephone bills last year because the telecommunications department has inadequate controls, according to a city audit released Tuesday.

City Controller Rick Tuttle said the Information Technology Agency also has failed to develop a system to prevent improper use of city telephones.

Agency officials said steps are under way to correct the problems.

Deputy Controller Tim Lynch said last year's late fees were the highest in recent years, with fees for other years amounting to less than $200,000.

``We think we may have caught this before it really got out of hand in the future,'' Lynch said.

The audit also found the city is being charged for lines that do not have a specific purpose, Lynch said.

The audit was prompted by complaints from Mayor Richard Riordan about the overcharges, saying it reflects the lack of accountability of city officials.

The Information Technology Agency has been responsible for all telecommunication functions in the city since the summer of 1995, including taking care of the city's annual telephone bill of $18 million.

Telephone usage has a major impact on the city budget, because just a 1 percent cut in costs can save $220,000 a year.