Report 2014-105 All Recommendation 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 #1 To: Los Angeles Department of Water and Power

To ensure that the Los Angeles Board of Water and Power Commissioners (board) can more effectively exercise oversight for the department's significant information technology projects, the board should establish a standing committee comprised of board members to oversee and critically evaluate the status of the department's various information technology projects. Given the limited tenure of board members and the potential for multiyear and high-cost information technology projects, the board president should consider appointing as many committee members as practicable in order to promote continuity of oversight.

Annual Follow-Up Agency Response From October 2020

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has implemented the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight, LADWP's board has been regularly briefed, in closed session, on these issues. The first follow-up audit of the billing system, as called for by the settlement, has been completed and submitted to the court, as has a consultant report commissioned by plaintiffs' class counsel on the adequacy of the refunds and credits. The second follow-up audit is scheduled to begin in the next quarter.

LADWP's focus on remediation of the customer billing system has meant that it continues to prioritize other pending major information technology (IT) projects by recognizing the importance of maintaining the day-to-day operations of the enterprise as it implements new systems. In that regard, this year's COVID-19 pandemic did require the reallocation of information technology resources to implement projects to adapt to the large remote workforce resulting from the pandemic.

LADWP staff continues to work with the board to review proposed IT projects, with a focus on assuring ongoing executive management review and board oversight. This has included update briefings on the LADWP's response to the pandemic, as well as the briefing the board received in open session earlier this year on the status of major IT projects. The board continues to provide oversight of these projects given that they are critical to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: Ongoing

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From November 2019

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has been implementing the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP is now in the midst of the several year process - through 2020 - of implementing the settlement agreement. The entire board of commissioners has been provided with regular updates as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track though 2019.

A new LADWP general manager was appointed July 2019. He has made an initial reorganization of the information technology services division, and has reconvened an IT executive steering committee and will adopt a holistic approach to technology project budgeting, staffing and prioritization.

LADWP staff continues to work with the entire board of commissioners to review these projects as they move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. The entire board of commissioners continues to provide oversight of these projects given their critical nature to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From October 2018

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has been implementing the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP is now in the midst of the several year process - through 2020 - of implementing the settlement agreement. The entire board of commissioners has been provided with regular updates as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track. LADWP staff continues to work with the entire board of commissioners to review these projects as they move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. The entire board of commissioners continues to provide oversight of these projects given their critical nature to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The department states that it is working with the board to review and prioritize major technology systems. Further, the focus of the review includes assuring appropriate and ongoing executive management review and board oversight of the technology systems projects. The current level of board involvement described is a positive step; we anticipate learning of the board creating a standing committee to exercise information technology project oversight.

Annual Follow-Up Agency Response From November 2017

As previously indicated in responses to the State Auditor, LADWP has been involved in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. In July of 2017, the Los Angeles Superior Court issued its order giving final approval to the settlement of several of those cases. The settlement calls for refunds and credits for all customer overpayments and for LADWP to meet a set of billing system and customer service performance metrics. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP has begun the several year process - through 2020 - of implementing the settlement agreement, with regular updates of the board of commissioners planned as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track. LADWP staff is working with the entire board of commissioners to review these projects as they begin to move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. It is expected that the entire board of commissioners will continue to provide oversight of these projects given their critical nature.

LADWP is pleased to provide this update to the State Auditor.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The department states that it is working with the board to review and prioritize major technology systems. Further, that the focus of the review includes assuring appropriate and ongoing executive management review and board oversight of the technology systems projects. The current level of board involvement described is a positive step; we anticipate learning of the board creating a standing committee to exercise information technology project oversight.

Annual Follow-Up Agency Response From November 2016

Since the State Auditor's report, LADWP has been involved in multiple lawsuits alleging damages resulting from the implementation of the customer billing system. In several cases, a tentative settlement has been reached, and a hearing on the court's preliminary approval of that settlement is now set for 11/18/2016. The settlement calls both for refunds of all customer overpayments, and for LADWP to meet a set of performance metrics for the billing system, and include provision for a project management office, focused on information technology, to provide additional oversight. A copy of the Department's most recent filing with the Court will be provided for context. To assure appropriate oversight, LADWP's entire board of commissioners has been regularly updated and briefed on the status of the litigation, settlement negotiations, and the projects being undertaken by LADWP staff to remediate the billing system. Because litigation is pending, and to protect the attorney-client privilege and LADWP's attorneys' work product, these briefings have occurred in closed session.

Because LADWP has been focused on the remediation of the customer billing system, it has placed other pending major technology system changes on a slower track. In addition, the lengthy search for a Chief Information Technology Officer for LADWP has only now completed with Louis Carr, Jr., taking that role, effective this month.

If the court approves the settlement, LADWP will implement the settlement over the next several years. In addition, as CITO Carr becomes familiar with LADWP's operations, LADWP management will turns its attention, and that of Commissioners, to the need for developing appropriate oversight and management policies for technology system changes, including the appropriate level of Commissioner oversight.

LADWP is pleased to be able to update the State Auditor's office at its request.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The Board of Water and Power Commissioners at their May 11, 2015 meeting approved a motion to allow the Commission to create the sub-committee comprised of Board members to oversee and evaluate the status of the Department's various technology projects. However, the Board has presently determined to continue their consideration of information technology projects at the board level and not delegate that responsibility to a smaller committee.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

The board has not created a subcommittee, but has the authority to do so. Due to the significant shortcomings in communication and oversight on the Customer Information System Project, we still believe a subcommittee would be in the best interest of the department and its stakeholders.

6-Month Agency Response

As per this recommendation and as was reported in the 60-day response, The Board of Water and Power Commissioners in their May 11, 2015 meeting approved a motion to allow the Commission to create the sub-committee comprised of Board members to oversee and evaluate the status of the Department's various technology projects.

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

This recommendation's status is partially implemented because the board has the authority to create a subcommittee but has not yet done so.

60-Day Agency Response

At its meeting on May 19, 2015 and per LADWPs letter to the State of California Auditor, dated 5/11/2015, the Board of Water and Power Commissioners approved a motion to allow the Commission to create the sub-committee if needed.

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

Recommendation #2 To: Los Angeles Department of Water and Power

To ensure that the board can more effectively exercise oversight for the department's significant information technology projects, the board should develop reporting standards for the department's management to follow when discussing the status of information technology projects with the standing committee or the board. Such reporting standards should, at a minimum, specify the frequency with which the department's management makes such reports and require the following disclosures about each information technology project:
o The amount of project growth, in terms of both budget and scope of work, from initial project estimates through current projections.
o The results from system testing and a listing of the critical defects that exist and must be fixed prior to system use.
o The concerns the quality assurance contractor has raised and how the department is addressing them.

Annual Follow-Up Agency Response From October 2020

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has implemented the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight, LADWP's board has been regularly briefed, in closed session, on these issues. The first follow-up audit of the billing system, as called for by the settlement, has been completed and submitted to the court, as has a consultant report commissioned by plaintiffs' class counsel on the adequacy of the refunds and credits. The second follow-up audit is scheduled to begin in the next quarter.

LADWP's focus on remediation of the customer billing system has meant that it continues to prioritize other pending major information technology (IT) projects by recognizing the importance of maintaining the day-to-day operations of the enterprise as it implements new systems. In that regard, this year's COVID-19 pandemic did require the reallocation of information technology resources to implement projects to adapt to the large remote workforce resulting from the pandemic.

LADWP staff continues to work with the board to review proposed IT projects, with a focus on assuring ongoing executive management review and board oversight. This has included update briefings on the LADWP's response to the pandemic, as well as the briefing the board received in open session earlier this year on the status of major IT projects. The board continues to provide oversight of these projects given that they are critical to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: Ongoing

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From November 2019

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has been implementing the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP is now in the midst of the several year process - through 2020 - of implementing the settlement agreement. The entire board of commissioners has been provided with regular updates as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track though 2019.

A new LADWP general manager was appointed July 2019. He has made an initial reorganization of the information technology services division, and has reconvened an IT executive steering committee and will adopt a holistic approach to technology project budgeting, staffing and prioritization.

LADWP staff continues to work with the entire board of commissioners to review these projects as they move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. The entire board of commissioners continues to provide oversight of these projects given their critical nature to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From October 2018

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has been implementing the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP is now in the midst of the several year process - through 2020 - of implementing the settlement agreement. The entire board of commissioners has been provided with regular updates as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track. LADWP staff continues to work with the entire board of commissioners to review these projects as they move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. The entire board of commissioners continues to provide oversight of these projects given their critical nature to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The board oversight that the department describes is a positive step. However, the recommendation is specific to creating reporting standards and the department has not described any such standards.

Annual Follow-Up Agency Response From November 2017

As previously indicated in responses to the State Auditor, LADWP has been involved in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. In July of 2017, the Los Angeles Superior Court issued its order giving final approval to the settlement of several of those cases. The settlement calls for refunds and credits for all customer overpayments and for LADWP to meet a set of billing system and customer service performance metrics. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP has begun the several year process - through 2020 - of implementing the settlement agreement, with regular updates of the board of commissioners planned as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track. LADWP staff is working with the entire board of commissioners to review these projects as they begin to move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. It is expected that the entire board of commissioners will continue to provide oversight of these projects given their critical nature.

LADWP is pleased to provide this update to the State Auditor.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The board oversight the department describes is a positive step. However, the recommendation is specific to creating reporting standards and the department has not described any such standards.

Annual Follow-Up Agency Response From November 2016

See Response to Recommendation 1.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Discussion on the status of technology projects is now included in the monthly reports by LADWP's Chief Operating Officer to the Board of Water and Power Commissioners. Depending upon the size of the project, the report may include the scope of work, budget, and schedule from initial project estimates through current projections including the status of the project as to testing, defect, and enhancement resolutions.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although the department asserts that its monthly board reports include the concerns the quality assurance contractor raised and how it is addressing them, our recommendation is to the board to develop reporting standards for the department's management to follow. The department has not substantiated that the board has developed these reporting standards.

6-Month Agency Response

As per this recommendation LADWP's Chief Administrative Officer will prepare and present reports on a quarterly basis, or more frequently if needed, on the status of the Information Technology projects to the Board of Water and Power Commissioners, which will cover the scope of work, budget, and schedule from initial project estimates through current projections including the status of the project as to testing, defect, and enhancement resolutions.

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

The department did not substantiate its claim of full implementation. It did not support that the Chief Administrative Officer's reports were agendized and that the reports' contents address our recommendation.

60-Day Agency Response

As explained in the letter dated May 11, 2015; staff is reviewing possible metrics to create a reporting "dashboard" that could be used for major conversions to measure such things as original and updated estimates of the budget and scope of projects, results of system testing and listing of defects, and issues raised by a quality assurance contractor. These recommended metrics will be brought to the Board at a later date.

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

Recommendation #3 To: Los Angeles Department of Water and Power

To ensure that the board can more effectively exercise oversight for the department's significant information technology projects, the board should develop a process for the board to designate certain information technology projects as having a potentially significant effect on business operations or customer relations, and require that department managers first obtain the board's approval before launching such critical new systems.

Annual Follow-Up Agency Response From October 2020

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has implemented the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight, LADWP's board has been regularly briefed, in closed session, on these issues. The first follow-up audit of the billing system, as called for by the settlement, has been completed and submitted to the court, as has a consultant report commissioned by plaintiffs' class counsel on the adequacy of the refunds and credits. The second follow-up audit is scheduled to begin in the next quarter.

LADWP's focus on remediation of the customer billing system has meant that it continues to prioritize other pending major information technology (IT) projects by recognizing the importance of maintaining the day-to-day operations of the enterprise as it implements new systems. In that regard, this year's COVID-19 pandemic did require the reallocation of information technology resources to implement projects to adapt to the large remote workforce resulting from the pandemic.

LADWP staff continues to work with the board to review proposed IT projects, with a focus on assuring ongoing executive management review and board oversight. This has included update briefings on the LADWP's response to the pandemic, as well as the briefing the board received in open session earlier this year on the status of major IT projects. The board continues to provide oversight of these projects given that they are critical to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: Ongoing

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From November 2019

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has been implementing the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP is now in the midst of the several year process - through 2020 - of implementing the settlement agreement. The entire board of commissioners has been provided with regular updates as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track though 2019.

A new LADWP general manager was appointed July 2019. He has made an initial reorganization of the information technology services division, and has reconvened an IT executive steering committee and will adopt a holistic approach to technology project budgeting, staffing and prioritization.

LADWP staff continues to work with the entire board of commissioners to review these projects as they move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. The entire board of commissioners continues to provide oversight of these projects given their critical nature to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From October 2018

As indicated in prior responses to the State Auditor, LADWP was sued in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. Following final approval of the settlement of several of those cases in 2017, LADWP has been implementing the settlement, including refunding and crediting customer overpayments and changing LADWP'S information systems and operations to meet billing system and customer service performance metrics established by the settlement. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP is now in the midst of the several year process - through 2020 - of implementing the settlement agreement. The entire board of commissioners has been provided with regular updates as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track. LADWP staff continues to work with the entire board of commissioners to review these projects as they move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. The entire board of commissioners continues to provide oversight of these projects given their critical nature to LADWP's operations.

LADWP is pleased to provide this update to the State Auditor.

Estimated Completion Date: 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The board and the department working together to review technology projects is a positive step. However, the recommendation is for the board to develop a process to allow it to designate which of the projects are of such significance that its approval is needed before launching the system. The department's response does not reflect that the board has developed a process to make the recommended designation.

Annual Follow-Up Agency Response From November 2017

As previously indicated in responses to the State Auditor, LADWP has been involved in multiple lawsuits from customers alleging damages resulting from the implementation of the customer billing system. In July of 2017, the Los Angeles Superior Court issued its order giving final approval to the settlement of several of those cases. The settlement calls for refunds and credits for all customer overpayments and for LADWP to meet a set of billing system and customer service performance metrics. To assure proper oversight of the litigation and remediation efforts, LADWP's entire board of commissioners has been regularly briefed, in closed session, on these issues. With the settlement now final, LADWP has begun the several year process - through 2020 - of implementing the settlement agreement, with regular updates of the board of commissioners planned as the implementation proceeds.

LADWP's focus on remediation of the customer billing system has meant that it continues to place other pending major technology systems projects on a slower track. LADWP staff is working with the entire board of commissioners to review these projects as they begin to move forward, with a particular focus on assuring appropriate and ongoing executive management review and board oversight of these projects. It is expected that the entire board of commissioners will continue to provide oversight of these projects given their critical nature.

LADWP is pleased to provide this update to the State Auditor.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The board and the department working together to review technology projects is a positive step. However, the recommendation is for the board to develop a process to allow it to designate which of the projects are of such significance that its approval is needed before launching the system. The department's response does not reflect that the board has developed a process to make the recommended designation.

Annual Follow-Up Agency Response From November 2016

See Response to Recommendation 1.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The Board has to approve all expenditures over $150,000, so they are aware of all information technology projects that could have a potentially significant effect on business operations or customer relations. There are no information technology projects below this expenditure level that would have a significant effect on our business or our customers. Combined with the monthly reports described in Item #2 above, this expenditure approval process provides the Board with the ability to approve launching any such critical new systems.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although the department has outlined ways in which the board may be aware of significant information technology projects, our recommendation is to the board to develop a process for the department to follow and to obtain the board's explicit approval before launching critical new systems.

6-Month Agency Response

As per this recommendation in a letter dated July 23, 2015 LADWP's Chief Administrative Officer instructed LADWP's Chief Information Officer as to "All information technology projects which may have potentially significant effect on business operations or customer relations will require Board of Water and Power Commissioners approval before launching such critical new systems into production. This item will be covered under the Management Report of the Board agenda."

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

The department did not address all aspects of the recommendation. The department has not supported that the board developed a process to designate certain information technology projects as having a potentially significant effect on business operations or customer relations.

60-Day Agency Response

-As part of its current procurement and administrative process, the LADWP submits to its Board proposed contracts where expenditures exceed $150,000 per year.

-All jobs that include business operations or customer relations are approved by the Department management and the Board of Water and Power Commissioners before initiation.

-Additionally prior to implementation of any system, related to business operations or customer relations into production a briefing to the Board of Water and Power Commissioners will be made to obtain their approval.

The first two paragraphs are already in place the third paragraph will be in place before the next reporting date.

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

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

Recommendation #5 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 central depository of the conflict-of-interest certifications submitted by each employee.

6-Month Agency Response

As per this recommendation and the 60-day response a few documents were updated to better reflect and document requirements of Conflict of Interest (COI) policy established by the Board in August 2008. Here is the list of all documents updated:

1-Individual Conflict of Interest Certification Updated 9/21/2015

2-Standard Operating Procedure (SOP) No. 5b, Invitation for Bids (IFB) updated 9/29/2015

3-Standard Operating Procedure (SOP) No. 4, Request for Proposals (RFP) updated 9/29/2015

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.