Controller: L&I Overcharged Owners for Property Cleanup

The report found that Licenses & Inspections overbilled property owners a total of 34 percent

Some Philadelphia homeowners have been overcharged for fixing up their properties, according to a new report from the City Controller.

On Wednesday, City Controller Alan Butkovitz released the annual auditor’s report on Philadelphia city agencies for fiscal year 2012. The report found that Licenses & Inspections overbilled property owners a total of 34 percent based on a review of sampled invoices for clean and seal work.

Officials say that four bills, randomly selected by Butkovitz’s auditors, were overstated due to an error in the billing system. According to Butkovitz, the billing system incorrectly added an additional half-hour for each employee and truck assigned to a clean and seal job. L&I officials perform clean and seal jobs whenever 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 overbilling 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.”

The auditors sampled the following properties:

Credit: Philadelphia Controller's Office

According to officials, L&I indicated to auditors that it issued 1492 clean and seal bills in 2012 which totaled almost $1.4 million in charges. Butkovitz says the overbillings have existed since 2010 when the Controller’s Office found that all five of the sample 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.”

According to officials, L&I sent 1336 bills totaling almost $860,000 in 2010 and 1,235 bills totaling $1.1 million in 2011.

Butkovitz claims that L&I has indicated in its agency response that the billing system error has been corrected. However, Butkovitz says his office will continue to monitor and make the appropriate recommendations.

You can view the full auditor’s report on the City Controller website.

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