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Friday, November 17, 2017 by Jo Clifton

Audit: City lacks system to track fee waivers

Some city departments are doing a good job of tracking fees they waive, while others fail to track those fees or do so inconsistently, according to a report that Office of the City Auditor staff presented at the City Council Audit and Finance Committee meeting on Wednesday.

As a result, auditors could only estimate that the city waived at least $16 million in fees in Fiscal Year 2015-16.

In addition, auditors noted that city staff is “not using the city permitting system for properly recording the fee waivers and there is lack of consistency on how waivers are captured in the system.”

After conducting a survey of 26 city departments that charge fees, auditors found that 13 of those departments waive certain fees. “However, information we received from other sources indicates that more than 13 departments may grant fee waivers,” according to the audit.

Nine departments were able to provide audit staff with fee waiver data, two departments offered partial fee waiver data and two departments told auditors that they simply do not track fee waivers.

One of those departments, Neighborhood Housing and Community Development, could not give the auditors information on how much money was being spent for fee waivers for SMART housing. However, auditors estimated that the city had waived at least $3 million in fees in FY 2015-16 for that program.

In response to questions from Mayor Steve Adler, City Auditor Corrie Stokes explained that although the housing department administers the fee waiver program for SMART housing, other departments actually waive the fees.

Auditors noted that in 2002 and 2015, city audits recommended that someone at the city keep track of the SMART housing waivers, but that has yet to happen.

Interim Assistant City Manager Joe Pantalion said five different departments waive fees for the program. The audit states that of those five departments, only three have a process for identifying fees waived for SMART housing, but it does not identify any of the departments.

Rosie Truelove, director of the housing department, told the Austin Monitor that the five departments are Development Services, Austin Water Utility, Parks and Recreation, Austin Energy and Planning and Zoning. Truelove has been with the department only for a little over a year.

Pantalion pointed out that in its response to the audit, city management stated that the Budget Office will develop a system for tracking waived fees within the city’s existing financial system and informing the departments of that process. That task is supposed to be completed by the end of April 2018.

In addition, management agreed with the auditors’ conclusion that the departments should coordinate with the Budget Office and the city departments that waive fees to track and report on fees waived for affordable housing programs. But management proposed to implement that recommendation on Nov. 15, 2018 exactly one year from the date of the meeting.

Council Member Ellen Troxclair, who chairs the committee, questioned Interim Chief Financial Officer Greg Canally about city management’s ability to address the problems raised by the current audit in light of management’s failure to remedy those same problems as pointed out by 2002 and 2015 audits.

Canally assured her that Interim City Manager Elaine Hart “has made clear that we need to get this worked on and that the resources will be put in place to address these, and I think part of that effort will be looking back” to see what happened when recommendations from the 2015 audit were not implemented.

Troxclair turned to Stokes and asked if the auditors can do a follow-up audit next year to make sure that the recommendations have been implemented, and Stokes replied, “Sure.”

Although it was not a focus of Wednesday’s questioning, auditors also reported in their audit that the city waived an estimated $1.28 million for special events in FY 2015-16. The Austin Center for Events is working on an automated system for tracking special event permits and associated fee waivers and expects the system to “go live in 2018.” Auditors noted that the process used by the Austin Center for Events to track fee waivers from multiple departments may help the city to get a consistent idea about the costs related to co-sponsored special events.

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Photo by John Flynn.

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Office of the City Auditor: This city department is created by the city's charter in order to establish and ensure "accountability transparency, and a culture of continuous improvement in city operations."

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