Department of Licenses and Inspections Special Investigation of L & I Operations


Audit Date: September 16, 2015

Audit Categories

  • Investigation
Controller: Alan Butkovitz

Audit Tags

  • Licenses and Inspections,
  • Permits and Fees,
  • Taxes

Description


Controller Issues Latest Investigation of Licenses & Inspections


Executive Summary


Background

The Office of the Controller (City Controller’s Office) has conducted several investigations and audits of the Department of Licenses and Inspections (L+I) since the tragic June 2013 deadly building collapse at 22nd and Market Streets. These reviews were performed to assess L+I’s ability to meet public safety measures with regard to demolition and construction standards, imminently dangerous and unsafe building structures, and overall internal controls and management performance.

Recent efforts by the City Controller’s Office to conduct a performance audit of the L+I’s building inspection processes, for both construction and demolition, to determine if they were properly controlled to minimize the danger of substandard building practices to the public were met with huge resistance by L+I management. What started as an audit evolved into a special investigation, fueled by various sources that provided anecdotal information that we attempted to validate. The investigation centered on determining whether: 1) all L+I inspectors are certified in the Pennsylvania Department of Labor and Industry Uniform Construction Code (UCC); 2) newly hired inspectors receive performance evaluations; 3) overtime is properly substantiated and documented; 4) only certified individuals can make UCC related permit and inspection entries within the department’s database of inspection activities (HANSEN); 5) an adequate audit trail of inspection activities exists within HANSEN; and 6) inspectors are systematically rotated between L+I Districts.

What the Controller’s Office Found

After reviewing payroll documentation received as part of a subpoena issued to L+I and conducting inquiries with staff, we found that L+I:
• Continues to jeopardize public safety by employing inspector trainees who fail to obtain the required UCC certifications and allowing those trainees to conduct inspections.
• Is not in compliance with Civil Service Regulation 23.031, which requires newly hired employees to receive a two and five-month probationary performance report.
• Does not adequately monitor overtime worked by its inspectors, resulting in a 235 percent cost overage in fiscal year 2015.
• Staff and/or management can easily manipulate data within the HANSEN System. Specifically, HANSEN allows uncertified inspectors the ability to update inspection records. Additionally, the system allows comments to be overwritten, significantly curtailing audit trail capabilities.
• Does not have a formalized and institutionalized policy of systematically rotating its inspectors between the five inspection districts.

What the Controller’s Office Recommends

The City Controller’s Office has developed a number of recommendations to address the above findings. These include: 1) revising the job specifications or the probationary period for the construction codes specialist trainee position; 2) requiring the preparation of probationary employee performance reports; 3) monitoring overtime more effectively; 4) limiting data entry for inspection activity within the permit and inspection database to UCC certified inspectors only; 5) maintaining a proper audit trail of all activity within the permit and inspection database; 6) developing and implementing a formalized policy for inspector rotations.