Report 97019 Summary - February 1998

Los Angeles County: Although the County Closed 1996-97 With a Surplus, 1997-98 Still Presents a Few Fiscal Pressures

Results in Brief

Los Angeles County (county), one of the original 27 counties in the State, is responsible for providing public welfare, health, and public safety services to about 9.4 million residents. The California Government Code, Section 29088, stipulates that the county must approve a balanced budget by August 30 each year, but it can extend the deadline to October 2.

The first Bureau of State Audits report, issued in March 1996, described the county's fiscal crisis and how it planned to balance its budget for fiscal year 1995-96. Our November 1996 report focused on the outcome of the budgetary process for the 1995-96 fiscal year and the county's plans for balancing its fiscal year 1996-97 budget. Our second report also suggested ways the Los Angeles County Sheriff's Department could reduce costs. In March 1997, we reported on the status of the fiscal issues described in our previous reports and reviewed the status of the county's budget for fiscal year 1996-97.

In this fourth audit, we reviewed what the county accomplished in previous years to balance its budget and to address the major issues of its 1997-98 fiscal year budget. The county actually ended its 1996-97 fiscal year with a surplus, but it continues to struggle with long-term budgetary problems that remain unsolved. Specifically, we noted the following conditions:

Recommendations

To achieve balanced budgets both currently and in the future, the county should take the following steps:

Agency Comments

In general, the county agrees with the recommendations that we make in this report. Moreover, it plans to prepare a more realistic overtime budget for fiscal year 1998-99 and it believes filling long-standing staff vacancies will enable it to reduce overtime.