Tuesday, January 08, 2008


LA Daily News Editorial

January 8, 2008 - One of the greatest problems with ineffective governance is that it tends to produce more of the same. A case in point is Assembly Bill 730.

The legislation is Assemblyman Kevin de Leon's noble but futile effort to deal with the LAUSD payroll fiasco - a classic case of ineffective government begetting more ineffective government.

To his credit, de Leon has been a persistent critic of the Los Angeles Unified School District's $95 million payroll system, which has not only failed to pay teachers correctly or on time, but has also racked up as much as $115 million in consulting fees to try to repair it.

But as a member of the state Assembly, de Leon, D-Los Angeles, is limited in what he can actually do about it. That much is made clear with AB 730.

Under the bill, any contractor that a court finds liable for breaching an information-technology contract worth more than $1 million - resulting in a judgment of more than $250,000 - would be barred from bidding on any new business with the state or local governments for five years.

Get past that clunky legal formulation, and it's clear that de Leon has one specific contractor in mind - Deloitte Consulting, which billed the LAUSD $95 million to roll out the payroll system, then sought a $9.4 million contract to fix it. De Leon is rightly fed up that after months and untold millions, the district still hasn't sued Deloitte for its pricey incompetence.

But even if AB 730 became California law immediately, it would do nothing to correct this problem.

That's because under the terms of the legislation, the penalty against failed contractors kicks in only after a lawsuit has been filed and a stiff judgment rendered. Yet in the LAUSD case, one of the key problems is that the LAUSD hasn't filed suit in the first place.

And absent litigation and judgment, AB 770 would have little effect over the LAUSD or Deloitte Consulting. De Leon is right to want to hold district and Deloitte officials accountable for this debacle, but you can't legislate competent leadership.

Nonetheless, De Leon's suggestion that firms that grievously violate public contracts shouldn't get new public contracts is on target. Instead of trying to retroactively target Deloitte, AB 730 might be more useful if it were broadened to cover all kinds of public contracting, in which repeat abuses of the public trust are far from uncommon.

Meanwhile, there seems to be no easy fix for the LAUSD's payroll mess or the leadership that made it possible - unfortunately.

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