Butkovitz Finds Licenses & Inspections Overcharged Owners for Property Clean-Up

Audit Date: July 16, 2014
Audit Categories
  • Financial
Controller: Alan Butkovitz
Audit Tags
  • Departmental,
  • Grants,
  • Internal Controls,
  • Revenue,
  • Treasurer

Executive Summary

For Immediate Release
July 16, 2014

Contact: Brian Dries

Butkovitz Finds Licenses & Inspections Overcharged Owners
for Property Clean-Up
City Controller’s annual audit found every sampled L&I invoice
for abatement work included overcharges

Annual Auditor’s Report on Philadelphia City Agencies FY2012

PHILADELPHIA – City Controller Alan Butkovitz today released the Annual Auditor’s Report on Philadelphia City Agencies for FY2012 that found Licenses & Inspections (L&I) overbilled property owners a total of 34 percent from a review of sampled invoices for clean and seal work.

Of the four bills randomly selected by the Controller’s auditors, all four were overstated due to an error in the billing system that incorrectly added an additional half-hour for each employee and truck assigned to a clean and seal job. This work is performed by L&I when an owner fails to correct code violations and the property needs to be cleaned and secured.

“It raises a serious concern when the City is over billing property owners,” said Butkovitz. “If the City expects owners of these properties to pay the full amount on time, it needs to bill for the correct amount.”


Total Billed

Accurate Bill


2135 E. Clearfield St.




1236 W. Hilton St.




3233 N. Woodstock St.




5401 Kingsessing Ave.








L&I indicated to auditors that it issued 1,492 clean and seal bills in FY2012, which totaled almost $1.4 million in charges. The overbillings have existed since FY2010 when the Controller’s Office found that all five of the sampled bills included overcharges.

“It only took a small random sampling of bills to realize there was still a systemic problem with L&I’s billing system,” said Butkovitz. “The abatement billing system needs to be corrected to ensure that only authorized costs are included in the billings to property owners.”

In FY2010 and FY2011, L&I sent 1,336 bills totaling almost $860,000 and 1,235 bills totaling $1.1 million, respectively.

According to Controller Butkovitz, L&I has indicated in its agency response that the billing system error has been corrected but the Controller’s Office will continue to monitor and make appropriate recommendations.

Along with the overbillings by L&I, other findings in the Controller’s audit included:
• Nearly 55 percent of all city agencies still lacked written policies that defined lateness. Many agencies were lax in requiring their employees to properly submit leave requests for paid time off, leaving themselves exposed to higher risks for employee abuse of city time.
• The duties of entering payroll and the supervisory and executive level reviews of payroll entries still were not segregated for 50 percent of city agencies, exposing the agencies to a high level of risk for undetected errors and providing opportunities for a person to perpetrate irregularities on payroll entries.
• A number of agencies took corrective action on some of the prior year conditions, including the Mayor’s Office of Community Empowerment and Opportunity, Police Department, Prisons, Fleet Management, and the Youth Commission.