City Controller Laura Chick Cites $3 Million Loss
tells City to "get the money back"

May 29, 2003

Pointing to an over $3 million dollar loss on a City contract for computers, City Controller Laura Chick has vowed many more audits on city contracts.

"Who's minding the store? My audit showed that the City wrote a great contract. However, the contract is not worth the paper it is printed on if we don't enforce its provisions. Oversight to make sure we are getting what we paid for is so important," said Chick.

The Controller's audit reviewed the $84 million contract with En Pointe Technologies. En Pointe provides a variety of computer hardware and equipment to the City, and overbilled the City by some $3 million over the past few years.

Yet no one noticed.

"We got the goods we contracted for, but we were overcharged. We were overcharged because, after the contract was implemented, the City walked away from it and neglected to ensure its terms were enforced," said Chick.

Chick's audit found:

	Overbillings by En Pointe could cost the City as much as $2.9 million since 1997.
	En Pointe did not pass onto the City $500,000 in manufacturers rebates.
	City did not take advantage of prompt payment discounts, losing over $250,000.

"First and foremost, the City needs to get back the millions it is owed. We always should collect what's legitimately owed us. It sure would help, especially in these tough budgetary times. We need those millions of precious dollars and we need them now," said Chick.

"This goes way beyond one contract," she continued. "You can bet that I'll be looking at more and more contracts asking the same question: Are we getting our money's worth? We have seen in prior audits, that failures in monitoring contracts is a Citywide problem. It is a problem I am shining a light on and one which the City must eliminate."

Mayor James Hahn applauded the efforts of the City Controller, who has the authority to monitor the performance of city departments.

Hahn was quoted as saying, "Every dollar saved is money that can go toward funding our highest priorities, such as putting more police officers on the street."

Chick said she plans to release more than half a dozen additional audits of City contracts in the next few months.

"I know we will be uncovering millions of dollars of waste as we go forward on this contract-monitoring campaign," she said.

Elected City Controller in 2001, Chick has worked diligently with the mandate of the new City Charter to save taxpayer dollars, improve city services, eliminate waste and open up the City's books to greater public scrutiny.

The complete En Pointe audit, as well as all of the Controller's audits and reports, can be accessed on her web site at www.lacity.org/ctr.