Executive Summary
Why the Controller’s Office Conducted the Audit
The Office of the City Controller (Controller’s Office) conducted a performance audit of the Department of Licenses and Inspections (L&I). The primary focus of the audit was to determine whether L&I has established procedures to ensure that construction work complies with mandatory standards and is only performed by construction workers whose employment status was properly documented.
What the Controller’s Office Found
The inspection deficiencies identified weaken L&I’s ability to ensure safe and lawful construction activity in the city and reflect practices that put both workers and residents at risk.
Some of the most significant findings include:
- L&I inspectors did not request the contractors’ licenses during any of the eight site visits we observed, nor did they request documentation supporting the employment status of workers on the construction sites. By failing to review licenses, construction activity may be performed by unqualified individuals. Furthermore, when documentation supporting the employment status of construction workers is not reviewed, the workers may incorrectly be classified as independent contractors, which could prevent them from receiving workplace benefits and allow contractors to evade federal, state, and local taxes.
- Eight employees who collectively performed 575 residential fire inspections and 482 commercial fire inspections, did not have the required Uniform Construction Code (UCC) fire inspector certifications necessary to perform the work. Similarly, four employees who performed 229 residential mechanical inspections did not have the required UCC mechanical and energy inspector certifications.
- Of the 6,241 third-party electrical inspections completed during fiscal year 2023, L&I only performed 82 electrical audits, covering only 1.3% of the total third-party inspections. Additionally, of the 20 electrical inspection audits selected for testing, 14 audits were performed by a supervisor who was not properly certified to perform or review electrical work, and 13 audits did not contain the required Electrical Inspection Audit Report, a form necessary to ensure that the results of the audits are properly documented and effectively communicated to management.
- Of the 40 residential building permits selected for testing, 34 permits did not contain the required comment details and/or photographs required by L&I’s written inspection procedures. Additionally, for 13 permits requiring a total of 73 inspections, we determined that 33 of the inspections were not performed.
What the Controller’s Office Recommends
The Controller’s Office has developed several recommendations to address the findings noted above. These
recommendations can be found in the body of the report.
Click “Download Full Report” above.