The City of Chicago Office of Inspector General (OIG) has completed an audit of the Chicago Department of Transportation (CDOT) which finds that the Department either did not bill, or inaccurately billed, an estimated 6,713 permitholders, resulting in an annual revenue loss between $1.1 million and $1.5 million. CDOT also has no confidence that it is recording all relevant driveways in its current system, thereby forgoing an unknown amount of additional revenue. In addition, the City does not actively pursue payment for driveway permit fees that are past due, resulting in at least 11,561 active permits with $3.8 million in overdue fees.
OIG’s audit found that the most common reason CDOT did not bill for annual driveway permit renewals was that the identity of the property owner was either unknown or disputed, and CDOT had not researched and resolved the ownership question. The Department of Finance stated that it does not include driveway permit fees in the City’s standardized debt collection processes because CDOT’s property ownership data is unreliable. This has created a self-perpetuating cycle; the errors in CDOT’s ownership records prevent the Department from using existing City processes to correct its records.
OIG issued several recommendations for CDOT to correct the data problems currently hampering its billing operations and to prevent such problems in the future, including: removing or consolidating redundant and unnecessary database fields; identifying and recording missing driveway records; collaborating with the Department of Innovation and Technology (DoIT) to upgrade its system and include features to prevent future data problems; documenting standardized procedures for driveway permitting, billing, and monitoring; and developing monitoring tools, such as automated reports and/or notifications, to detect permits at risk for inaccurate billing or non-billing. OIG also recommended that CDOT collaborate with the Department of Finance, the Department of Law, and other departments as necessary to include driveway permit fees in the City’s standardized debt collection or verification processes.
In response, CDOT agreed with our recommendations. CDOT stated that it would collaborate with DoIT to migrate driveway data to a new system and would evaluate its corrective and preventative measures for driveway data during that migration process. Regarding the pursuit of payment for past-due driveway permit fees, CDOT stated it would collaborate with the Finance and Law Departments to determine the most effective method for collecting past due fees.
“CDOT has repeatedly stated, over the course of years, its intention to modernize program software, but the upgrades have yet to happen. The consequence in the context of the driveway permit program is that the City has lost and, without fix, is certain to continue to lose out on millions of dollars of otherwise reliable, predictable revenue,” said Inspector General Joe Ferguson. “This years-long delay in cleaning up data and migrating the system is a product of limited resources and non-aligned priorities. The difficulty of identifying who owns the properties, despite interagency data and resources, means millions in lost revenue from commercial properties utilizing public resources in the form of sidewalks and curb space. This interdepartmental scenario is not unusual. A core infrastructure service department (here, CDOT) is called upon to perform a function outside its core mission expertise and responsibilities (billing), while supporting departments (here, principally Finance and DoIT) lack the encompassing authority or resources to address the resulting deficits in the non-core activity of the infrastructure department, notwithstanding their respective greater expertise to drive a relatively easy fix to the benefit of all. Where we encounter these multi-departmental scenarios, the outcome is, too often, and somewhat understandably, interdepartmental finger pointing, with the bottom line being everyone—taxpayers included—losing. The cause, however, is a lingering legacy of the historical siloing of City departments wrought by our political machine and patronage history. This audit presents the new Administration with an opportunity to eradicate an operational artifact of the past and introduce an enterprise fix driven by best outcomes for the City, operationally and fiscally.”
The full report can be found online.
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The mission of the independent and non-partisan City of Chicago Office of Inspector General (OIG) is to promote economy, effectiveness, efficiency, and integrity by identifying corruption, waste, and mismanagement in City government. OIG is a watchdog for the taxpayers of the City and has jurisdiction to conduct investigations and audits into most aspects of City government. If you see corruption, fraud, or waste of any kind, we need to hear from you. For more information, visit our website at: www.igchicago.org.