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$7 million in LA taxpayer-purchased fuel missing; Greuel says city leaders were 'asleep at the switch'

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More than $7 million in Los Angeles taxpayer-purchased gasoline and other fuel has gone missing in recent years, despite a $12 million fuel tracking system, according to a new audit from City Controller Wendy Greuel, who is also running for mayor.

Greuel said during a morning news conference that some of the missing gasoline may have been used for personal vehicles. At dozens of city fueling sites, millions of gallons of fuel were pumped without any record of where it went, the audit showed.

The mayoral candidate said that current Mayor Antonio Villaraigosa, City Council members and city department heads were "asleep at the switch."

The unexplained transactions happened despite the $12 million fuel tracking system put in place more than a decade ago.

"In the private sector, it would be unthinkable to take millions in supplies or resources or ignore a multimillion dollar system that was designed to prevent theft," said Gruel. 

Greuel said the review of five city departments — the Convention Center, Housing Department, Recreation and Parks and the fire and police departments — showed they don't effectively use the system to monitor employees.

"The best case scenario of this audit is that department managers did a poor job in keeping records of the fuel," said Greuel. "Worst case scenario is that there's theft of the city's resources."

Every year the city spends close to $29 million buying about 14 million gallons of gasoline, natural gas and diesel fuel to power vehicles including garbage trucks, helicopters and police cruisers. There are tracking systems, but they can be bypassed, either manually or with so-called "master cards" assigned to each of the city's 141 fuel sites.

The tools to bypass the tracking system are supposed to be used only when normal systems fail, but auditors found they were used to dispense millions of gallons of fuel over a 22-month period beginning in 2009.

Greuel acknowledged that some of the unaccounted for transactions might have been necessary for public safety workers responding to emergencies, but she said that "should be the exception, not the rule."

The audit recommended restricting access to keypad entry gas transactions. Those are the kind that allowed drivers to override the fuel tracking system. Greuel also recommended that department heads conduct regular inventories of fuel cards to limit abuse and logs to record gas from above-ground tanks, which is not recorded.

Greuel said she turned the audit over to the city attorney's office for further investigation and called on city leaders to hold a hearing on how to fix the problems.

She called the findings "indicative of failures that have been plaguing city government. Taxpayers expect more and deserve better."