A report released Tuesday by Los Angeles City Controller Ron Galperin says the city needs to better protect against fraud in information technology contracts in the wake of an investigation that determined a handful of Department of Building and Safety employees created fake invoices, falsified receipts from IT contractors and paid contractors for work that was never delivered.
“The city should adopt policies to prevent fraud and mismanagement from impacting our information technology contracts,” Galperin said. “The dishonesty of a few employees does not define how well the city serves residents, but these incidents make clear that we need to improve our internal operations and restore public trust.”
The fraud amounted to more than $3.5 million, most of which has been retrieved, and the criminal cases are still ongoing, Galperin’s office said.
Galperin’s report noted that the LADBS over three years made close to $38 million in purchases, with many of them lacking written justification. The report also said that employees racked up millions of dollars in overtime costs without proper supervision, that LADBS needs stronger internal policies to prevent waste and fraud, and that the city needs stronger oversight of all IT contracts.
The full report can be found at lacontroller.org/audits-and-reports/itcontracts/.