LAUSD Superintendent Ramon Cortines requested a city audit after a district contractor was indicted in April 2010 for allegedly moving business from the district's New School Construction Program (NCP) to a company the contractor co-owned.
The audit was requested to identify any further potential conflicts of interest within the system of construction-contract selection.
Overall, the audit found that record-keeping had been relatively weak from 2002 to 2006. With improved documentation and tracking, the audit found that from 2006 to the present, the district had improved the integrity of its selection process.
The audit also recommended two improvements to improve oversight and strengthen policy, including a filing requirement and training in conflict-of-interest policies.
From 2002 to 2006, a contractor or a regional director was part of a panel that selected already employed by their employer, a potential conflict of interest, the audit found.
Eighty contractor appointments were made without hiring panel input during the same time period, the audit found.
Four instances were found in which someone on a hiring panel during the time period was in a position to receive "direct financial benefit" as a result of selecting a contractor from a firm they had invested in.
"While we found some potential conflicts of interest during an earlier era at the district, it appears that the LAUSD under its current leadership has made significant progress in reforming the process for awarding construction projects," said City Controller Wendy Greuel. "The district still has room for improvement, but they appear to be on the right path."
"I would like to thank City Controller Wendy Greuel for the commendable job she and her staff did on conducting this comprehensive audit of our facilities department," said LAUSD Superintendent Ramon Cortines. "We are very pleased the results of the audit are generally quite positive. In their review the auditors found consistent compliance with our district's policies and procedures for retaining contract professionals in place for the past three years, and appropriate and needed controls were in place to avoid potential conflicts of interest."