Greuel Finds Erratic Billing Practices at Building & Safety Department

Today, Los Angeles City Controller Wendy Greuel announced she will be launching a comprehensive investigation of the City’s Building & Safety Department’s billing practices after she uncovered scores of  incidents in which some customers are overcharged and others undercharged, during a review of the Department’s management controls.

Greuel’s latest audit uncovered several inconsistent billing practices including arbitrarily charging for permit fees when not required for projects valued under $500 and for charging an extra miscellaneous fee for projects requiring multiple permits. This review is the latest in a series of actions taken by Controller Greuel to investigate allegations of wrongdoing at the Department of Building & Safety and falls on the heels of Greuel’s efforts to strengthen her Fraud, Waste and Abuse unit.

“People who do business with the City expect more and deserve better,” said Greuel.  “As I reviewed the Department’s management controls it became clear that there are several issues with how the Department of Building and Safety is collecting its fees. At a time when everyone is struggling to get by, these careless mistakes and overbillings are unacceptable.”

While Building and Safety appears to be overbilling some customers, others appear to have been undercharged. Notably, the City does not always verify the reasonableness of estimated construction costs provided by customers in their permit applications. Since these estimates are the basis for calculating permit fees, misstatements in valuations result in inaccurate billing, potentially shortchanging the City on its share of permit fees.

Greuel’s audit also found that the Department does not always conduct required follow up inspections to determine whether cited safety or building code violations have been corrected.  For more than 7,900 outstanding “Orders to Comply” as of Dec. 31, 2011 over 2,700 were not inspected for a year or more.

Additionally, Greuel found the Department often fails to issue Final Certificates of Occupancy in a timely manner. In an effort to streamline City government, Greuel’s audit also recommends that the City’s Code Enforcement activities be consolidated into one department.

Controller Greuel has conducted more than 60 audits and uncovered more than $150 million that the City has lost to wasteful spending, fraudulent activity, and abuse of city resources.

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

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