COUNTY BUDGET TO END WITH SURPLUS : FISCAL YEAR WILL WRAP UP WITH $6.9 MILLION TO SPARE, AUDIT FINDS.

Byline: Paul Hefner Daily News Sacramento Bureau

Los Angeles County will finish the fiscal year in the black although more than a dozen departments are ignoring efforts to control overtime, an audit released Thursday showed.

The county's health, municipal courts and social services departments are all spending less than expected, State Auditor Kurt Sjoberg found. The audit predicted that the savings will leave an extra $6.9 million in the county's general fund when the fiscal year ends June 30.

``We do propose, every year, a balanced budget. We do end the year with a surplus,'' said county Chief Administrative Officer David Jannsen. ``And by some people's measure, that's doing a damn good job.''

Auditors expect the savings to outweigh the county's mounting bill for employee overtime. The county spent $106.8 million on overtime as of Dec. 31, using up more than 75 percent of its overtime budget in half the year, the audit found.

To try to keep spending in check, administrators asked county departments to start submitting quarterly overtime requests to Jannsen's office.

But the procedure has been widely ignored. Fourteen of the county's 38 departments failed to submit requests 50 days after the deadline, the audit found.

Jannsen acknowledged that some departments were not submitting their requests on time, but noted that their budgets were in good shape.

``While we certainly need to do a better job in that area, we're really controlling the bottom line,'' he said. ``Frankly, I like to believe we have departments that have an ability to manage and don't need to be second-guessed.''

The audit noted that the county's $213 million projected budget shortfall for the coming year is smaller than the previous year's. But several question marks remain.

It is too soon to say how state and federal welfare reform will affect the county's budget. In addition, Proposition 218 will require the county to seek voter approval for taxes that pay for library and fire services.

The county may have trouble extending some cost-cutting measures. The county has imposed hiring freezes, laid off more than 2,000 health-services workers and held the line on employee salaries since 1992 to keep itself solvent, the audit noted.

With 53 of the 54 employee bargaining groups scheduled to conduct contract talks by June, extending the salary freeze could prove difficult, the audit warned.

Jannsen agreed.

``The fact is, right now we haven't identified any money for raises,'' he said. ``It is one of the tough issues.''

The state audit is required by law. Jannsen did not take issue with it but noted it made no mention of the shift of property tax revenues from counties to the state in recent years.

``They just kind of brush over or ignore the fact the county lost $487 million in net county (revenues) as a result of the property-tax transfer,'' he said. ``It's very frustrating.''