Controller Greuel Reveals Missing Parking Lot Records Could Cost the City Millions

City Controller Wendy Greuel issues an important report.

City Controller Wendy Greuel today revealed that Los Angeles’ Office of Finance could not demonstrate that it has an accurate inventory of parking lots in the City, creating uncertainty about whether the City is retrieving all of the Parking Occupancy Tax it is owed.

“One of my greatest concerns for the City is the uncollected debt owed to the City, including parking lot operators who owe the City millions of dollars” said Greuel. “The City needs to have processes in place to ensure, with a high degree of certainty, that uncollected money isn’t being left on the table at a time when the city needs it most.”

As of August 2011, the Office of Finance’s tax database system had approximately 1,900 registered parking lots in the City; however, that figure could not be verified and may not represent all of the parking lots that are subject to collecting the tax. Greuel’s auditors determined that the inventory was unreliable because neither the Office of Finance nor the contractor tasked with identifying unregistered parking lots has conducted a citywide survey to identify all commercial lots. In response to this conclusion, the Office of Finance compared the State’s Franchise Tax Board records to its own records and found 68 parking related Franchise Tax Board records within the City’s taxable radius. Comparing this information to its own database, the Office of Finance discovered four parking lots that were not registered within the City’s records system.

Additional factors impacting the accuracy of parking lots records may be attributed to the fact that parking lots can have multiple addresses. This contributes to inaccuracy and confusion in the City’s records system since parking lots may register different addresses in different years for the same lot. This is compounded by the fact that the Office has insufficient resources with just two to four contractors assigned to observe parking lot activities for the entire City. By contrast, the City of Chicago has six full-time auditors working on parking collections, and San Francisco has several employees performing oversight activities on a near-fulltime basis.

“Unfortunately, the City’s car culture is not going away any time soon,” said Greuel. “The Parking Occupancy Tax is a vital source of revenue for the City, worth approximately $85 million annually. I urge the Office of Finance to heed my recommendations and immediately put controls in place to ensure that all of the parking lots in the City are accounted for and all the parking taxes are being collected and deposited directly into the City’s bank accounts.”

Greuel’s report reveals that without a complete inventory, there is no assurance that Finance is using its resources effectively to maximize revenues owed to the City. Greuel’s audit recommends creating a formal audit plan for all parking occupancy tax audits and creating a system that can register all possible addresses for a single lot. It also recommends that the City investigate the feasibility of implementing practices used by other cities to insure the maximum amount of the parking occupancy tax can be collected in the most efficient manner. 

Controller Greuel has conducted more than 60 audits and uncovered more than $130 million that the City has lost to waste, fraud, and abuse over the last three years.

For more information, log on to the Website of Los Angeles Controller Wendy Greuel:http://controller.lacity.org/index.htm

Skraeling August 10, 2012 at 06:22 PM
Her concern is newly found. This charlatan does not deserve a promotion. This is what term limits have brought us.....ambitious mediocre political puppets, moving up the food chain.....
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