YOUR GRANDFATHER'S LAPD AUDIT: DEPARTMENT'S FINANCES 'STUCK IN THE 1950S'.

Byline: KERRY CAVANAUGH

Staff Writer

The Los Angeles Police Department is losing millions of dollars to waste and inefficiency because of an antiquated fiscal management system that needs a complete overhaul, according to an audit released Monday.

With a $1.1 billion annual budget and 13,382 employees, the LAPD is the largest city department and accounts for nearly 20 percent of the city's total budget.

But too often, fines are not collected, sworn officers are doing administrative work and there is little accountability over money management. In just one example, $7.7 million in false-alarm fees have not been collected over the past three years.

"This audit reveals that many of the department's business functions are stuck back in the 1950s," said Controller Laura Chick, whose office conducted the audit. "Policing is not only exceedingly important in the city of Los Angeles, it's exceedingly expensive. The only way to do it properly is to do it smart."

The audit recommends a reorganization of the Fiscal Operations Division, the 90-person unit responsible for payroll, budget, financial audits and cost tracking.

To start, the department needs a chief financial officer to oversee the money and report directly to the police chief. And the LAPD should have more trained financial civilians on staff and a stronger, more independent audit team.

Chief William Bratton said he welcomed the audit and agreed with most of its recommendations.

"The system has been pretty much operated the same way for many decades," he said Monday at a news conference with Chick. "We will use the findings as a guide to better justify requests and make operations more efficient. As the department with the largest budget, we owe that to the other departments and the taxpayers."

Bratton and Chick said the LAPD is chronically understaffed, and modernizing its Fiscal Operations Division had taken a back seat to crime fighting.

However, the LAPD has an added responsibility to ensure that public-safety dollars are well spent, according to the audit, especially as city residents began paying higher trash fees last year to hire 1,000 more officers.

Mayor Antonio Villaraigosa said he would ask the Police Commission to work with Bratton on an implementation plan for the Fiscal Operations Division overhaul.

Councilman Bernard Parks, who heads the City Council's Budget and Finance Committee and is a former LAPD chief, said the department could benefit from new technology in financial management, but it's up to the department to prioritize spending.

"There are no lumps of money that are sitting around unused," he said. "It's going to be a very tight budget this year."

The audit found that the department is not raising and collecting the money it should. The millions uncollected from false burglar alarms is the most egregious example cited in the audit.

Enacted in 2003 to recoup the cost of police time spent responding to false alarms, the fines cost property owners $115 for the first call and escalate by $50 for each subsequent call.

The department has billed alarm owners $26.8 million but has only collected $16.5 million. Some of the fines have been waived, but the LAPD hasn't gone after one-third of the outstanding bills.

"Failure to enforce collection ... may lead recipients to conclude collection efforts are a bluff," according to the audit.

The Police Commission is responsible for collecting false-alarm fees. The audit recommends that the city transfer that responsibility to the Fiscal Operations Division or hire an outside firm to bill and collect the fees.

kerry.cavanaugh(at)dailynews.com

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