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 [ LOS ANGELES ](https://www.citywatchla.com/index.php?option=com_content&view=category&id=312)

#  Fraud, Waste, and Abuse: LA City Controller on the Case

**BCK FILE**--The City Controller’s Fraud Waste and Abuse (FWA) Unit is tasked with investigating allegations of the misuse of resources by city employees, contractors and others.

Written by Beth Cone Kramer.

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April 15 2021

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**BCK FILE**--The City Controller’s Fraud Waste and Abuse (FWA) Unit is tasked with investigating allegations of the misuse of resources by city employees, contractors and others.

City Controller Ron Galperin released the office’s 2020 report this week, which showed 460 new complaints, a 15% decrease from the previous year’s 543 cases.

Two-thirds of the reported complaints were reported anonymously, with 96% submitted either via the Controller’s web intake form or the 24-hour hotline. Complaints cover a range of allegations, from stealing City assets and payroll fraud to contract bid rigging, kickbacks, and gross mismanagement.

Our efforts to increase transparency and accountability are working. We have uncovered misdeeds by employees and organizations and discovered unnecessary bureaucratic hurdles that frustrate the public and cost the city revenue. My objective is to ensure that everyone who works for and with the City is held to the highest standards so that we can eradicate fraud, waste, and abuse of vital public resources.

\--Controller Galperin

Following an initial review of incoming complaints, the FWA Unit either launches an investigation, refers the case to the appropriate City department, or sends the case to the appropriate law enforcement or external government agency.

 Of 460 complaints received by FWA Unit in 2020

- 161 actionable cases (resulting in an investigation or referral to department/agency)
- 45 cases involved Department of Water and Power
- 15 involved Los Angeles Police Department
- 12 involved the Bureau of Sanitation
- 11 involved the Los Angeles Fire Department

494 Total Cases Closed

- 19% alleged waste of City resources
- 17% alleged time theft
- 17% alleged contractor fraud
- 25 complaints substantiated

**Discoveries/Case Highlights**

Overbilling by Community-Based Organization — $33,000

A community-based organization funded by the Economic and Workforce Development Department overbilled the City for close to $33,000 and lacked support for costs billed to the program.

Outcome: The City is seeking to suspend the agency’s contract and recover the dispersed grant amount in total ($294,000), unless acceptable support documentation can be provided.

Violations of Benefit Regulations — $63,000

An employee at the Bureau of Sanitation violated benefit regulations by covering an unqualified dependent.

Outcome: This discovery prompted the employee’s resignation, as well as repayment of close to $63,000 of City-paid health and dental benefits.

Inappropriate Overtime Benefits — $209,000

Also at the Bureau of Sanitation, multiple exempt employees inappropriately received overtime payments totalling $209,000, over a three-year period.

Outcome: The investigation resulted in repayment agreements.

Inefficient Permitting Process

The FWA Unit established the Los Angeles Fire Department’s inefficient permitting process resulted in numerous pending permits and long customer wait times, resulting in hundreds of thousands of lost revenue for the City.

Employee Violations

An FWA investigation concluded a Department of Water and Power employee had unreported outside employment and had used City property for personal use, resulting in disciplinary action by the employee’s department.

Read the full report at[ http://www.lacontroller.org/fwa-2020](https://lacontroller.org/audits-and-reports/fwa-2020/).

City employees, contractors and anyone with information can submit a confidential complaint through Galperin’s 24-hour fraud, waste and abuse telephone hotline at 866-428-1514 or online at[ lacontroller.org/fraud\_hotline](http://www.lacontroller.org/fraud_hotline).

*(Beth Cone Kramer is a writer and a contributor to CityWatch)*

*-cw*

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