Los Angeles shelled out nearly $461,000 for two in-ground aerial vehicle lifts that never showed up, according to a City Controller report that reads like a how-not-to manual for public purchasing. Staff not only recorded the pricey equipment as delivered, but they also okayed an advance payment that investigators say violated the city's own procurement rules.
The Controller’s fraud, waste, and abuse unit opened an investigation after a hotline tip and concluded the city paid $460,972 for vehicle-repair equipment that never arrived, Los Angeles Daily News reports. The vendor was identified as Makai Solutions, and General Services Department staff marked the lifts as received in the city’s financial system despite the lack of delivery.
How the City Lost Track of the Gear
“The city financial system allowed a hiring hall employee to mark items received while multiple employees shared a single login, making it nearly impossible to determine who made entries,” the report states, according to the Los Angeles Daily News. Investigators also found the General Services Department did not report the potential fraud, waste, or abuse for more than two years, and the superintendent who verbally authorized the advance payment is no longer with the city.
Legal Fallout and Vendor Sanctions
The City Attorney's office later obtained a default judgment ordering Makai to repay $460,972 plus interest and court costs. The report puts that total at about $542,260. Makai was also debarred from doing business with the city for three years. City officials say the money still has not been recovered, and General Services spokesperson Melody McCormick told reporters that “the legal process is still underway to reclaim the funds.”
Recommendations and What’s Next
The Controller’s report calls for periodic reviews, more accurate use of the financial system, and staff training on shared-login policies to close the gaps that allowed the loss to slip through. The Controller’s office has been publishing audits and fraud-unit findings to push for stronger purchasing controls across departments, and the Los Angeles City Controller site outlines its oversight role and recent work on similar issues.
The case adds to a string of audits spotlighting weak spots in municipal purchasing and increases pressure on City Hall to tighten procurement safeguards while it faces budget scrutiny. Officials say they will keep pursuing both recovery and internal reforms, and the outcome of the legal and administrative process will determine whether the city ultimately gets its money back.
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