LOS ANGELES – A county child welfare unit responsible for managing private funding never distributed $70,000 worth of donated toys and mismanaged more than $30,000 in other donations and free event tickets, according to an audit released Tuesday.
In a letter to the Board of Supervisors dated Monday, Auditor-Controller John Naimo said the Department of Children and Family Services — which requested the audit — should consider disbanding the Children’s Trust Fund Unit.
“We identified significant issues involving every aspect of CTFU’s operations, including unaccounted for donations and funding,” the letter states. “Many of these issues were caused by a lack of management oversight, staff negligence, and complete disregard for internal controls.”
Supervisor Sheila Kuehl previewed a motion suggesting that the county think twice before eliminating the trust fund.
“Over the years, generous donations have been made to the unit, intended to directly benefit our children in need,” Kuehl said.
Though she agreed the findings were “egregious,” the supervisor said restructuring the unit and instituting more controls might better serve foster children.
The Children’s Trust Fund unit was set up to solicit donations and host events to raise money for clothes, toys, summer camp and other items for kids in DCFS’ care.
But the county spends at least $380,000 more every year to staff the CTFU than the group generates in fundraising, according to the audit.
Some problems suggest impropriety rather than simple mismanagement, including a crowded 2013 celebrity basketball game — One Child at a Time — that booked only $200 in revenue.
“It should also be noted that CTFU employees created and marketed a One Child website separate from DCFS’ website that instructed donors to send donations to a private post office box with checks made payable to `One Child at a Time.’ We did not identify a county business need for any of these practices,” the letter says.
Tens of thousands of dollars worth of toys sat unused in a warehouse, while requests from legitimate nonprofits were denied. And about $122,000 in toys went to organizations that didn’t qualify as tax-exempt.
Other in-kind donations could not be tracked down.
“We identified unaccounted-for sports memorabilia and jewelry valued at $8,400, that could not be located, and there was no documentation available indicating that the items were included in a raffle or auction,” according to the letter.
DCFS Acting Director Brandon Nichols said the department took “swift action when informed of the developing findings by the auditor-controller,” including instituting new controls.
The lead manager of the trust fund resigned shortly after the audit process began and a new manager hired in June 2015 reports to the senior deputy director of DCFS. Another staffer who appeared to bear responsibility for the problems was transferred to another division and does not handle cash or any fiscal duties.
The Los Angeles County Fire Department took over inventory management for the Spark of Love toy drive in 2015.
Naimo suggested that partnering with outside nonprofits would be a better way to raise funds to help children in the foster care system.
Nichols said DCFS is evaluating the costs and benefits of operating the CTFU and exploring potential partnerships.
The board will consider Kuehl’s proposal to look at restructuring the trust fund next week.