Los Angeles Controller: City Should Take a New Look at Managing Risk

The city of Los Angeles spent millions of dollars settling lawsuits that could have been avoided if effective risk management programs had been in place, according to an audit.

City Controller Laura Chick said the city spent $35 million on liability claims, settlements and court judgments in 2006 and faulted what she called the city’s “lack of oversight, coordination and political will” to manage risk.

“The city of Los Angeles is overdue to implement bold change and reject the traditional, outdated and ineffective ways we have tried to manage risk,” Chick wrote in the introduction to her report.

The review was prompted by the case of firefighter Tennie Pierce, who sued the city over alleged discrimination and harassment.

Mayor Antonio Villaraigosa vetoed a proposed $2.7 million settlement in the case, but the city ultimately paid slightly more than that amount when legal fees were included.

Chick said lawsuits like Pierce’s could be easily avoided if the city takes a “proactive rather than reactive” approach to organizational risk.