Follow-Up on BACP Taxicab Medallion Auction and Safety Inspections

The City of Chicago Office of Inspector General (OIG) has completed a follow-up to its March 2015 audit of the Department of Business Affairs and Consumer Protection’s (BACP) administration of taxicab regulations in 2013. OIG concludes that BACP has implemented corrective actions related to three of the original four audit findings. Corrective action on the remaining finding remains premature because BACP has yet to take final action on medallion sales from the 2013 auction even though the bidding closed over 2 years ago. OIG is unable to verify full compliance with all applicable rules and regulations of the auction process until all sales are finalized.

The purpose of the March 2015 audit was to determine if BACP had an auction process that satisfied MCC § 9-112-480, inspected all taxicabs at least as often as required by MCC § 9-112-050, and accurately tracked whether taxicabs found to have safety violations were brought in for inspection in a timely manner. Our audit found that BACP,

  • designed and implemented an auction process that should result in maximum revenue; however, OIG could not fully verify this because BACP had yet to finalize the 2013 medallion auction;
  • inspected 99.5% of taxicabs in 2013 at least as often as required by the Municipal Code;
  • did not employ inspection quality assurance best practices and did not conduct all brake tests in accordance with the standards of its Public Vehicle Safety Inspection Guide; and
  • did not reliably track evidence of compliance with the two-day inspection reporting requirement following issuance of a Notification of Inspection.

Based upon the results of our audit, OIG recommended that BACP,

  • take action to ensure that it can account for all required taxicab inspections either by completing the inspections or taking enforcement action against all noncompliant vehicles;
  • implement procedures to provide reasonable assurance that it is completing inspections accurately;
  • repair or replace the broken brake machine at the Public Vehicle Facility (PV Facility) in order to complete inspections according to its Public Vehicle Safety Inspection Guide or revise the Guide to specify brake test procedures in the absence of the machine; and
  • develop a process to ensure that all Notifications of Inspection are submitted to the PV Facility and entered in a timely manner, and that the issue date of the Notification is recorded to ensure that taxicabs do not exceed the two-day inspection deadline.

In September 2015, OIG inquired with BACP regarding the status of the corrective actions the Department had committed to taking in response to OIG’s recommendations, as well as any other actions to address the concerns raised in the audit.

Based on BACP’s follow-up response, OIG concludes that BACP has implemented all the corrective actions that it had committed to in response to the original audit, including making revisions to its Public Vehicle Inspection Guide to specify the visual and manual brake test procedures used in place of the brake machine.

It should be noted that, on August 17, 2016, BACP notified OIG that it closed the 2013 medallion auction. The Department explained that the winning bidder, after receiving extensions from BACP to secure financing, failed to complete the transaction and that therefore no sales were made and the bidder forfeited its deposit.