Annual Auditor’s Report on Philadelphia City Agencies FY2010 – Butkovitz Identifies Potential Loss o

Audit Date: December 5, 2012
Audit Categories
  • Financial
Controller: Alan Butkovitz
Audit Tags
  • Departmental,
  • Grants,
  • Internal Controls,
  • Revenue,
  • Treasurer

Executive Summary

For Immediate Release:
December 5, 2012

Contact: Harvey Rice

Butkovitz Identifies Potential Loss of Revenue in Numerous Departments
City Controller’s annual audit finds widespread deficiencies
among city departments

Annual Auditor’s Report on Philadelphia City Agencies FY2010

PHILADELPHIA – City Controller Alan Butkovitz today released the FY2010 Annual Auditor’s Report on City Agencies that identified numerous departments that are potentially losing the City revenues due to inadequate oversight and performance.

In some instances, the Controller found a potential loss of revenues from insufficient collections, which included the following departments:
-Licenses and Inspections – ineffective controls over the billing process for emergency demolitions and clean and seal abatements,
-Fire Department – follow-up on unbilled emergency medical services was not performed,
-Office of Innovation and Technology – inadequate monitoring procedures over cable franchise fees, and
-Records Department – electronically transferred monies were not verified, increasing the risk for deposit errors to go undetected.

“Corrective action needs to be taken immediately by these departments to ensure the City collects all that it is owed,” said Butkovitz. “Allowing the current conditions to exist will only put the City at risk of losing additional revenues.”

The Controller also found Water Department employees who erroneously earned emergency duty pay which resulted in the unnecessary expenditure of rate payer money, and the Procurement Department unable to provide supporting records to ensure it received all revenues from the sale of scrap metal.

“It’s important that all supporting documentation is maintained properly and the department conducts an independent verification for all deliveries,” said Butkovitz. “Following these established procedures protects taxpayers’ dollars against fraud, waste and abuse.”

Additional findings within specific departments included:
-Improper water billings by the Revenue Department for sheriff sale properties placing an unfair and unlawful burden on property owners. Penalties accrued on delinquent balances incurred prior to the sheriff sale and were erroneously transferred to the new property owners,
-Incomplete documentation for the sale of real estate by Public Property by failing to acquire appraisals, which could result in substantial noncompliance with existing laws and regulations, and
-Inadequate safeguards for permit receipts by the Licenses and Inspections Department. Licenses and Inspections did not restrictively endorse checks when received and checks were routinely stored in unsecured areas.

“We provide recommendations to address every finding in our audits,” said Butkovitz. “If implemented by the department, these recommendations will improve the overall operations of these agencies.”

Additionally, widespread deficiencies involving internal controls over expenditure activities consisted of nearly 42 percent of all city agencies not holding their employees accountable for work time, which included a lack of written policies for lateness. About 40 percent of all city agencies did not require an independent review of payroll preparation and data entry, which increases the risk for undetected errors.

“Every city department manager has the responsibility to ensure that all controls are in place and operating effectively so as to safeguard the financial resources that have been entrusted to them.”

The Controller’s annual examination of financial affairs of all city agencies is pursuant to the requirements of the Philadelphia Home Rule Charter.