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. 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. Based on the Department’s responses, OIG concludes that CDOT has partially implemented corrective actions related to the audit findings.
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. 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. Other reasons included missing addresses, and unwarranted waivers, and CDOT had no confidence that its driveway permit system contained records of all relevant driveways. Finally, OIG found that the City did not actively pursue payment for past-due driveway permit fees, which resulted in at least 11,561 active permits with $3.8 million in overdue fees. The Department of Finance also stated it does not include driveway permit fees in the City’s standardized debt collection processes because CDOT’s property ownership data is unreliable.
OIG recommended several steps to correct data problems hampering CDOT’s billing operations and to prevent such problems in the future, which included correcting inaccurate and/or missing information in the database, identifying and recording undocumented driveways, creating monitoring tools, and developing procedures to collect past due driveway permit fees. 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 to improve its process. In February 2020, CDOT informed OIG that it 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 system, and documented standardized driveway permitting and billing procedures to share with relevant employees. However, none of the recommendations had been fully implemented at that time.
OIG concludes that CDOT has still only partially implemented corrective actions. The Department completed the migration to the new data management system, created internal controls to prevent future inaccuracies, and created procedures for debt collection. However, 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 nor integrated its procedures with the Departments of Law and Finance.
“For a third year running, we note that without fully implementing corrective actions for its billing process, CDOT’s operational errors may cost the City millions in revenue. As stated in our 2019 audit as well as our first follow-up report in 2020, this can be remedied by ensuring existing records are complete and accurate, having clear and defined procedures for identifying undocumented driveways, and collaborating with City departments to fix lingering issues,” said Inspector General Joe Ferguson. “Sometimes, partial fixes yield partial benefits. Unfortunately, that is not the case here in that fixing a part of the problem does not correlate to inroads to the adverse effects. That requires a fix to the whole–which requires work, but is not particularly complicated–and is likely to yield immediate benefits to the City’s fiscal health. In our recent follow-up reports, OIG has strived to hold departments accountable and encouraged them to resolve data issues that would immediately improve the provision of services and efficiency of taxpayer dollars. We fully understand that at times, some recommendations may not fully align with department operations or capacities, and therefore are respectfully declined. But it is becoming increasingly routine for departments to agree with OIG audits and then not make good on the implementation of recommendations they publicly committed to, and in the process miss easy opportunities to provide confidence in government operations and effectiveness. We continue to encourage CDOT to fully implement the necessary changes to improve its billing process.”
The full report can be found online at OIG’s website: bit.ly/CDOTDrivewaysFollowUp.
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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.