Council Orders Audit of L.A. Film Agency

Amid concerns over possibly delinquent payments to the city by the Entertainment Industry Development Corp., the Los Angeles City Council directed the city controller Tuesday to launch an audit of the beleaguered agency’s performance in expediting city film permits.

Controller Laura Chick said Tuesday that she had already begun preparing plans to hire an outside firm to conduct a performance audit that will look at whether the agency is fulfilling its contract with the city and whether the city has exercised proper oversight. She decided to seek an independent review because she formerly served on the EIDC board.

“It is crystal clear that we need some very important questions answered about the city’s contractual relationship with the EIDC,” Chick said. “We must know if the dollars are meeting the target and if the city is the beneficiary of those dollars.”

In particular, Chick said, she has discovered from preliminary reviews that the EIDC may be delinquent in paying “hundreds of thousands of dollars” for city services such as providing firefighters on film location shoots.

EIDC officials blame the city for delays. The agency collects money for the city for firefighting and other services used by crews shooting movies, TV shows, commercials and the like. The services range from the posting of “No Parking” signs to the use of streets and parks as filming locations. But EIDC officials say city delays in reconciling differences between what services were paid for and what were actually used prevent them from making prompt payments to the city and refunds to filmmakers who have overpaid.

The council grilled City Administrative Officer William Fujioka on Tuesday about the alleged delinquencies, but he asked for more time to find out how much is owed to the city and whether the city is at fault for delayed payments.

Under the terms of a contract, the city allows the EIDC to retain all film permit application fees to pay for staff and other expenses, Chick said. The agency is also required to collect fees charged by city departments for services to crews shooting on location and to pass the money on to the departments, she said.

Fujioka said he had conducted two previous performance reviews of the EIDC contract but that this audit will be much broader.

Councilwoman Wendy Greuel, a former film industry executive, proposed that the council authorize funding of the audit to supplement a financial review being done by county investigators.

“This is an issue that is critically important about keeping production in Los Angeles, restoring the confidence in this organization and ensuring the way it’s structured and the way we are getting reimbursed is appropriate,” Greuel said.

Councilman Jack Weiss said the goal of the audit should be a reform plan that will allow the city to hold the EIDC accountable. He said he is still not convinced that council members are legally mandated to serve on the EIDC board. Many council members said they were surprised to learn they are automatically board members and that they have never attended board meetings.

One of the issues the district attorney’s office is examining is whether funds collected by the EIDC are public money and thus should not have been used to make political contributions to council members and county supervisors on its board. County prosecutors are also looking at large travel and dining bills charged to the account of EIDC head Cody Cluff.

“Whether it is a public or private entity, which is still being debated, none of that matters if the agency isn’t operating effectively and the funds are spent appropriately,” Greuel said.