Report 2014-105 Recommendation 4 Responses

Report 2014-105: Los Angeles Department of Water and Power - Consequences Linked to Its Premature Launch of Its Customer Information System May Push Total Costs Beyond $200 Million (Release Date: March 2015)

Recommendation #4 To: Los Angeles Department of Water and Power

To ensure that the department can demonstrate compliance with the board's conflict-of-interest policy, the department should develop and implement a process by June 30, 2015, that results in a centralized listing of all employees participating in each stage of the contracting process (proposal development, bid evaluation, and contract award), and who are required to submit conflict-of-interest disclosure forms per the board's policy.

6-Month Agency Response

In the 60-day response, it was reported that LADWP had undertaken a thorough review of its Conflict of Interest (COI) policy established by the Board in August 2008. As a result of the review, the COI form was revised to include a designation of whether it is being used by someone involved in the contract development, contract selection, or contract award process. The revised form was posted to the LADWP intranet. Additionally, the new Supply Chain Services Standard Operating Procedures requires employees involved in the evaluation and award of contracts to complete a COI form at each stage of the procurement process. At present all COI documents for all contracts are kept at a central location before any item is submitted for the Board of Water and Power Commissioners approval.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

As explained in the letter dated May 11, 2015; the LADWP understands its duty and commitment to ensure that the integrity of decision-making by the organization is not compromised by the private interests of its employees. This is accomplished through the implementation of effective procedures for the identification, disclosure, and management of any conflict-of-interest situations.

To achieve this objective, the LADWP has undertaken a thorough review of its current Conflict of Interest (COI) Policy established by the Board in August 2008. Current improvements to the policy include modification to the COI form, as well as issuance of the new Supply Chain Services Standard Operating Procedures which requires employees involved in the evaluation and award of contracts to complete a COI form at each stage of the procurement process. Further improvements will include the development of a centralized database of all employees participating in each phase of the contracting process and a central repository for all COI forms.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2014-105

Agency responses received are posted verbatim.