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Audit: $352K Wasted In Mileage Reimbursement For LA Workers

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LOS ANGELES (CBSLA.com) — Employees of the city of Los Angeles wasted hundreds of thousands of dollars on mileage reimbursements, according to an audit released Tuesday.

City Controller Wendy Greuel called for officials to strengthen oversight of citywide mileage reimbursements after initial findings revealed more than $325,000 was wasted due to over-payments and lack of oversight.

From fiscal years 2009 through 2012, the City paid an average of $4,649,000 in mileage reimbursements to employees, according to the report.

The audit reviewed a sample of cases in city departments including the Department of Building and Safety; Los Angeles Housing Department; Public Works – Bureau of Contract Administration; Public Works – Bureau of Street Services; and the Department of Transportation.

Greuel’s investigation shows that a lack of management oversight across departments resulted in $110,000 in over payments and the city lost out on $215,000 in cost savings. Notably, several employees were paid for non-reimbursable commuting mileage, amounting to as much as $35,000 per year.

In one instance a Bureau of Street Services employee received $30,252 in mileage reimbursements between January 2009 and September 2011, but management could only locate four mileage statements to support $2,156 of this amount.

Across all departments sampled, mileage statements were often incomplete or inaccurate, and no documentation of insurance and valid driver’s licenses were found in over half of the instances investigated.

“At a time when Angelenos are watching every dollar and having to pay more out of their own pockets, a lot of people in Los Angeles already have concerns about both the use of city-owned cars as well as the potential for abuse when it comes to mileage reimbursements,” said Greuel. “Crucial changes must be made immediately to safeguard the public’s trust which is why I am recommending that the City adopt a rigid monitoring system.”

Currently, the city reimburses employees 55.5 cents-per-mile, who routinely use their personal vehicles to conduct official business, which is the rate set by the Internal Revenue Service.

“With precious taxpayer dollars on the line, department management must be held accountable. I am insisting that they have stronger checks and balances and they reevaluate the methodology for calculating reimbursement payments. City leadership cannot tolerate wasteful spending, especially at a time when Los Angeles is facing a $230 million budget deficit,” added Greuel.

She has proposed city employees use a city pool vehicle for transportation rather than getting paid mileage for using their own personal vehicle.

“Any misuse or waste of city dollars, for me, I think is something we have to address and ensure that we’re minding the store,” she said.

Click here to read the entire report (PDF).

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