Los Angeles Controller Ron Galperin has made a series of recommendations for how to strengthen city oversight of IT projects, contracts and equipment, as investigations into an alleged fraud of more than $3.5 million continue.
The alleged improper use of two IT commodity contractors by employees assigned to the Los Angeles Department of Building and Safety’s (LADBS) Technology Services Bureau was investigated by the agency for about six months beginning in November 2017. As a result of LADBS’ investigation “substantiating allegations” of creating fictitious invoices and falsifying the receipt of products and services, the Los Angeles city attorney and district attorney are conducting their own investigations.
In "Strengthening Oversight of the City’s Information Technology Contracts," released Tuesday, Galperin has made several key recommendations for how DBS and the city could more closely scrutinize IT, including:
• Require all city departments to notify the city IT Oversight Committee of all “large-scale IT projects” expected to exceed $1 million, so it can ensure compatible platforms are used; that there’s system and data integration; and that resources are used effectively.
• Mandate all departments report on IT contracts annually to the Los Angeles City Council.
“There are a variety of different reports that are already done, but it’s important to have that regular reporting. Especially because some of these contracts are for multiple years, some of them are for projects that can take years, and so there just needs to be a better accountability,” Galperin told Techwire.
• Require background checks for all LADBS staff with access to sensitive information and ensure outside business activities are reported to avoid conflicts of interest. Galperin called the former “just basic.” He also recommended enhancing the agency’s management and policies with an eye for accountability, clarifying general consulting, application development and programming services can’t be procured through IT commodity contracts.
• For its part, DBS issued a series of new procurement procedures in May 2018. Among them, it requires all requests for IT products and services clearly describe and justify what’s requested; requires requests to salvage any inventory be submitted to Resource Management and include a manager signature; and implements a more detailed process for verifying receipts and tracking new tangible and non-tangible products. Galperin acknowledged there has been “a significant improvement,” but indicated that his office continues to monitor the situation.
• In the report’s executive summary, Galperin called the IT process cumbersome and said the “circumvention of controls” that led to the alleged LADBS violations could have come from an attempt to hasten needed IT projects.
“There’s no question that the process needs to be streamlined when it comes to all forms of government contracting," Galperin said. "But again, how do you streamline in such a way to provide flexibility, but that does not at the same time lose the proper controls that you need to have and the proper accountability that you need to have in contracting.”