Butkovitz Cites Water Dept. For Erroneous Billing

City Controller Alan Butkovitz reports his  audit of the Revenue Dept. finds new owners of sheriff sale properties were billed for previous owners’ delinquent balances.

New owners of 669 Sheriff Sale properties in Fiscal Year 2009 were billed for interest and penalty charges from the previous owners’ delinquent balances.  This error occurred in 20% of the total Sheriff’s Sales that took place in FY09. The billing error is a result of continued programming flaws that exists in the Water Revenue Bureau’s new “Basis 2” water-billing system.

The Controller’s prior reports of the new water-billing system found a number of deficiencies that resulted in property owners’ being incorrectly billed. “If property owners are unaware of the inaccurate billings, they may be paying for the charges improperly imposed, which is unfair,” said Butkovitz. “Furthermore, the detailed water receivables are misstated in the City’s books and records.”

Subsequent to receiving a misstated water bill, the City has placed the responsibility on new property owners to notify the City’s Water Revenue Bureau to have the interest and penalty amounts removed from their accounts. The incorrect billings for the 669 Sheriff Sale properties resulted in approximately $2.5 million in account adjustments that had to be made by the Water Revenue Bureau. “New owners of Sheriff’s Sales should not be placed with the burden of having to correct their water bills,” said Butkovitz.  “If the City wants to improve, and more importantly increase, Sheriff Sales, it needs to immediately correct this billing mistake.”

Basis 2 is the City’s fifth attempt to fix its faulty customer-billing system. Since January 2007, the City spent $49 million on the five customer-billing systems.

Additional findings from the Dept. of Revenue audit include the following: Numerous personal computers deemed as surplus, and no longer in use, were still maintained on the premises because the hard drives still contained sensitive taxpayer informationwhich had not been erased – increasing the risk of theft. The custodian of the Water Revenue Bureau petty-cash fund improperly paid parking tickets for violations incurred by department employees.  The Finance Office refused to reimburse the Water Revenue Bureau because it should have been paid by the employee. There is now a shortage of $359 in the fund.

   Send article as PDF