The City of Chicago Office of Inspector General (OIG) has completed a second follow-up to its July 2019 audit of the Chicago Department of Transportation’s (CDOT) billing process for commercial driveway permit annual fees. Based on the Department’s responses, OIG concludes that CDOT has partially implemented corrective actions related to the audit findings.
The purpose of the 2019 audit was to determine whether CDOT accurately and completely billed commercial property owners for driveways that use the public way. Our audit found that the Department either did not bill, or inaccurately billed, an estimated 6,713 permitholders, resulting in an annual revenue loss between $1.1 and $1.5 million. In addition, CDOT had no confidence that its driveway permit system contains records of all relevant driveways. Finally, OIG found that the City did not actively pursue payment for past-due driveway permit fees.
Based on the results of the audit, OIG recommended several steps to correct data problems hampering CDOT’s billing operations and to prevent such problems in the future. We also recommended that CDOT collaborate with other departments to include driveway permit fees in the City’s standardized debt collection process. In its response to the audit, CDOT described corrective actions it would take.
In February 2020, OIG inquired about the status of corrective actions taken by CDOT in response to the audit and learned CDOT had created procedures to correct inaccurate driveway records and prevent future inaccuracies, developed and initiated a process to migrate data to the new Infor Public Sector (IPS) system, and documented standardized driveway permitting and billing procedures to share with relevant employees. However, no corrective actions had been fully implemented at that time.
In March 2021, OIG inquired again about corrective actions taken by CDOT in response to the audit. Based on CDOT’s follow-up response, OIG concludes that CDOT has still only partially implemented corrective actions. While the Department has completed the migration to the new data management system described in the first follow-up and created internal controls to prevent future inaccuracies, many of the underlying issues found in the audit have not been addressed. Specifically, CDOT has not made necessary corrections to ensure all existing records are complete and accurate, nor begun to identify and record undocumented driveways. Additionally, CDOT has not begun to credit or reimburse incorrectly billed accounts. Finally, despite creating procedures for debt collection, CDOT has not begun to implement them nor integrated its procedures with the Departments of Law and Finance. It has, however, integrated its new system with the operations of the Department of Business Affairs and Consumer Protection, enabling the placement of holds on business licenses of permittees with delinquent accounts.
Until corrective actions are fully implemented, the City will continue to experience revenue loss. Once fully implemented, OIG believes the corrective actions reported by CDOT may reasonably be expected to curtail future revenue loss. We urge the Department to fully verify the accuracy of its driveway billing permit data, credit or reimburse corrected accounts, pursue outstanding debt, and monitor permits at risk for non-billing or inaccurate billing.