Millions of dollars of equipment 'lost' in Harris County

By Robert Arnold - Investigative Reporter

HOUSTON - Local 2 Investigates uncovered shoddy record keeping, lax procedures and questionable oversight has contributed to millions of dollars worth of equipment being written off as "lost" by government departments all over Harris County.

By law, each county department is required to complete an annual inventory of the equipment purchased by taxpayers.

"It really caught me by surprise," Harris County Sheriff Adrian Garcia said.

Records obtained by Local 2 Investigates show shortly after Garcia took office in 2009, the sheriff's office had to write off approximately $4.8 million worth of equipment as lost. Records filed with the county's purchasing department show computers, radios, refrigerators, ice machines, a night vision scope, even a jukebox and an entire boat were all written off as lost.

"No matter what explanation we had, the reality is there was no record," said Garcia.

Garcia inherited this problem from his predecessor and said it took his staff more than a year just to determine what equipment the sheriff's office still had in inventory. Even though annual inventories are required by law, county records show that until Garcia took office there had only been one inventory conducted in the previous 14 years.

"There are 65 buildings in this department and we had to go building-to-building, room-to-room to get an accurate inventory," said Michael Rucker, inventory control manager for the sheriff's office.

"(The system) just allowed for things to disappear with no real accountability?" asked Local 2 Investigator Robert Arnold.

"Absolutely. There was no system in place," said Rucker.

The sheriff's office was not the only county department with a long list items reported as lost. County records show 22 departments, including the sheriff's office, reported a total of nearly $6 million worth of lost property. The original records provided to Local 2 by the county purchasing office reported a total of $14,969,372.23 worth of lost items. However, after Local 2 began questioning each county department, some items were located, but many county department heads struggled to answer why those items had been reported as lost in the first place. Specific paperwork has to be filed with the county purchasing office to have an item listed as lost and then deleted from inventory rolls.

One example was $72,560 worth of cameras used by the Harris County Toll Road listed in county records as lost. When Local 2 asked how these cameras disappeared, toll road officials discovered the cameras were actually still in use in buildings throughout the department. Toll road officials said it was "a mistake" the cameras were filed as lost.

"I don't think we really took inventory seriously until Constable (Kenneth) Berry took over, to be honest with you," said Precinct 1 Chief Deputy J.C. Mosier. "It was just really bad record keeping."

Precinct 1 officials were able to account for $91,942.88 of the more than $217,000 items reported as lost after Local 2 began asking questions. Mosier said many of the items listed as lost where computers that were outdated and had been chopped up to be used for spare parts. Again, Mosier did not know why paperwork was filed with the purchasing office to write off all the items as lost.

"Can't answer that. I don't know," said Mosier.

Some items listed as lost had no explanation. For example, minutes from a Harris County Commissioners Court meeting on June 8, 1993, showed a $200,000 electron microscope was donated by a private company to the Harris County Institute of Forensic Sciences. County records show in March 2011, the institute filed paperwork to have the equipment listed as lost. When asked, officials at the institute said when Dr. Luis Sanchez took over the office in 2002 that microscope was not in the building, but it kept appearing on the institute's inventory roll year after year. Official at the institute said no one on staff could remember the microscope. No one in county government could account for this piece of equipment.

Local 2 also discovered that it has only been in the last two years that nearly every county department has been complying with the law that requires an annual inventory. No one in county government could explain whose job it is to enforce this law.

"When departments just flagrantly do not do what is required of them, who enforces that?" asked Arnold.

"I can't speak to that," said Harris County Purchasing Agent Kelly Johnson.

All county departments are required to send annual inventory reports to the purchasing office and file an affidavit stating those reports are accurate.

"I really don't know how accurate their inventories are," said Johnson.

"Doesn't that bother you to say, as the county purchasing agent, 'I really don't know how accurate these inventories are?'" asked Arnold

"Well, it is troublesome," said Johnson.

"So they're really aren't any checks and balances to this system?" asked Arnold.

"Well, there isn't from my office," said Johnson.

Johnson said each department has "its own way" of conducting inventories -- there is not a standardized inventory procedure across county departments.

"Some departments are probably doing a better job than others," said Johnson.

"Frankly, your report is going to spur us to figure this out," Harris County Judge, Ed Emmett said.

Emmett said since many department heads are elected officials, answerable only to voters, no one is sure who's in charge of making sure inventories are done, or double-checking to make sure inventories are accurate. However, Emmett said he now wants commissioners court notified whenever a department isn't following the rules.

"Everybody is now going to pay much closer attention to it," said Emmett. "Commissioners court wasn't notified, that can't happen again."

Local 2 also checked with the Harris County Auditor's Office, since it, too, receives annual inventory reports from the purchasing office. Officials with the auditor's office said while some periodic audits are done on department inventories, many times the auditor's office doesn't step in until an elected official leaves office and a "close out" audit is done.

Steve Garner with the auditor's office sent Local 2 a written statement, "The County's movable assets are selectively tested during close out audits and other periodic audits. However, in light of the inventory and documentation discrepancies you identified the County Auditor's Office plans to perform an audit of the County's procedures and processes for accounting and inventorying of movable assets to identify opportunities for improving controls. The Auditor's Office plans to also audit movable assets in selected departments to evaluate compliance with the County's procedures and the accuracy of the department's inventory listing."

"Could you get away with this in the private sector?" asked Arnold.

"Absolutely not," said Ben Streusand of Americans for Prosperity, a conservative watchdog group that monitors government spending.

"It really is an unbelievable list of equipment that apparently has been lost," said Streusand. "I'm not sure 'lost' is the correct term."

County officials chalked up many of the items on the list of lost items to nothing more than bad record keeping, claiming many of the items were older and obsolete. However, the county has procedures in place to sell older equipment at auction, for scrap or to be used as spare parts.

"Just because something is old it should not go lost, is that correct?" asked Arnold.

"Well, that's true," said Johnson.

"So just because is old doesn't mean it's of no use to the taxpayers, is that accurate?" asked Arnold.

"That's accurate," said Johnson.

If you have a news tip or question for KPRC Local 2 Investigates, drop them an e-mail or call their tipline at (713) 223-TIPS (8477). Copyright 2012 by All rights reserved. This material may not be published, broadcast, rewritten or redistributed.