1. Audit of Building Permit Processes IoOffice of the CityAuditor
C I"CY r
DENTON Accountability • Transparency • Integrity • Quality
ABSTRACT
In general, the City has established
effective controls related to the
I management of building permit
L_ -
__ application reviews and fee payment;
BiJ1L01NG PERMIT however, additional oversight of non-
annexation agreement property
applications and refund requests is
needed.
Finally, additional quality controls over
AUDIT OF BUILDING the building inspection process would
PERMIT PROCESSES provide further assurance that
permitted work was completed
appropriately.
Audit Team
City Auditor
Madison Rorschach, CIA, CGAP
Audit Staff
Amber Jackson, MBA, CFE
215 E. McKinney St., Denton, TX 76201 • (940) 349-7228
Audit of Building Permit Processes July 2021
Table of Contents
Auditat a Glance .........................................................................................................3
Introduction ...................................................................................................................4
Management Responsibility .......................................................................................4
Audit Objectives, Scope, and Methodology ...........................................................4
Findings & Analysis........................................................................................................6
Permits Reviewed Appropriately Except For Some NAA Properties ......................7
Permit Fees Processed Appropriately; Refunds Not Formally Approved ............ 10
Additional Monitoring of Inspections Would Further Ensure Quality.................... 12
Lack of Formal Inspector Development Plan May Hinder Effectiveness ............ 15
Standard Operating Procedures Should be Finalized........................................... 17
Appendix A: Management Response Summary..................................................... 19
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Audit of Building Permit Processes July 2021
Audit at a Glance
Why we did this Audit: What we Found:
Permitted building construction In order to construct, enlarge, or alter a building, an
must be appropriately reviewed applicant must receive permission - granted by a
and inspected to ensure all building permit - from the applicable jurisdiction. This
improvements comply with life and audit generally evaluated all parts of the City's
safety codes. In addition, the building permit process, including application & plan
Division processes about $23 million review, fee payment, & inspections. Our findings for
in fee payments annually for City each section are summarized below:
departments. This audit project was Application & Plan Review. Submitted permit
included on the City's fiscal year applications generally appear to be processed,
2020-21 Audit Plan as approved by reviewed, & issued per the City's procedures and
the City Council. rules. In addition, permits are generally approved &
What we Recommend: then issued in a timely manner. That being said,
neither the City nor the County previously had a
Recommendation 2 process to ensure properties with non-annexation
Formalize a training & review agreements were permitted by the City of Denton,
process for non-annexation resulting in several of these building improvements
agreement properties. being permitted through the County.
Recommendation 3 Fee Payment. The City has established adequate
Develop a process to ensure refund cash handling controls to ensure payments are
review & approvals are adequately processed appropriately; however, there is currently
documented. no process to document refund review and
Recommendations 5, 6, & 7 approvals.
Improve building inspection quality Inspections. Building inspection results are generally
review & monitoring processes well documented; however, there is currently no
including re-inspection fee process to review completed inspections to ensure
guidance. they meet quality standards. Furthermore, current
Recommendations 8 & 9 inspection scheduling practices may impact quality
Periodically evaluate staffing as there is no limit on the number of inspections that
knowledge gaps & use this analysis can be scheduled & all scheduled inspections must
to inform the building inspector be completed by the next day. In addition, there is
progression plan &job descriptions. an opportunity to provide greater consistency in the
Recommendations 1 , 4, & 10 `Nay inspectors assess re-inspection fees.
Finalize & implement developed Finally, many of the City's building inspectors do not
standard operating procedures. meet minimum licensing expectations as described
Recommendation 11 by their job descriptions - potentially leading to
Develop a formal process for staff knowledge gaps that could impact City building
to disclose potential conflicts of inspections. In addition, the building inspector
interest before being assigned progression plan does not clearly align with job
permits. description expectations.
Audit report translations may be requested by emailing InternalAudit@CityofDenton.com.
Audit of Building Permit Processes July 2021
Introduction
The Internal Audit Department is responsible for providing: (a) an independent
appraisal' of City operations to ensure policies and procedures are in place and
complied with, inclusive of purchasing and contracting; (b) information that is
accurate and reliable; (c) assurance that assets are properly recorded and
safeguarded; (d) assurance that risks are identified and minimized; and (e)
assurance that resources are used economically and efficiently and that the
City's objectives are being achieved.
The Internal Audit Department has completed a performance audit of the
building permit process. We conducted this performance audit in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based
on our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit objectives.
Management Responsibility
City management is responsible for ensuring that resources are managed
properly and used in compliance with laws and regulations; programs are
achieving their objectives; and services are being provided efficiently,
effectively, and economically.
Audit Objectives, Scope, and Methodology
The Internal Audit Department has completed an audit of the City's building
permit processes including application & plan review, fee payment, and
inspections. This report is intended to provide assurance that the City has
established adequate processes and procedures to ensure building permits are
managed efficiently, effectively, and in accordance with rules and regulations.
Audit fieldwork was conducted during April, May, and June 2021 . The scope of
review varied depending on the procedure being performed. The following list
summarizes major procedures performed during this time:
➢ Reviewed documentation to develop criteria including documented
policies and procedures;
➢ Developed process narratives to identify current control activities in the
building permit application intake, inspection, and payment
The City of Denton's Internal Audit Department is considered structurally independent as
defined by generally accepted government auditing standard 3.56.
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Audit of Building Permit Processes July 2021
management processes that were certified by Development Services
Building Safety staff;
➢ Interviewed City of Denton Development Services Building Safety and
Planning staff and Denton County Development Services staff;
➢ Inspected a statistical sample of 95 permits and 76 processed refunds2
including supporting documentation to ensure they were reviewed,
managed, and approved in accordance with rules and documented
policies and procedures;
➢ Reviewed a randomly selected judgement sample of 20 Building Safety
Daily Deposit Reports to verify that collected payments were
appropriately processed, reconciled, and accurately reported to the
Accounting Division;
➢ Reviewed a randomly selected judgement sample of 30 properties with
established non-annexation agreements for potential property
improvements within the Denton Central Appraisal District's database and
within the City's permitting software to determine whether the property
contained non-annexation agreement or extraterritorial jurisdiction
restrictions;
Conducted inspection walkthroughs with a Building Inspector; and
➢ Verified applicable staff completed cash handling training and defensive
driver safety course training as required per City policies 403.01 and
409.05.
2 These samples provide with 95% confidence that the true population is±1 Oho of the sample
estimate.
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Audit of Building Permit Processes July 2021
Findings & Analysis
In order to construct, enlarge, or alter a building, an applicant must receive
permission - granted by a building permit - from the applicable jurisdiction. In
the City of Denton, the Department of Development Services' Building Safety
Division is responsible for issuing building permits after reviewing submitted permit
applications and plans to ensure they are complete and comply with the City's
building rules, regulations and adopted safety codes.
Once the permit application or building plans are approved, the applicant3 is
assessed permit fees based on the type of building permit sought. These
assessed fees must be paid before the permit is issued and applicants are not
allowed to begin construction before receiving a permit.
During construction, the applicant is required to request inspections from the
Building Safety Division periodically in order to ensure the building is built per the
approved plans and in compliance with the City's adopted building codes.
This audit generally evaluated all parts of the City's building permit process,
including application & plan review, fee payment, and inspections. An overview
of this process is illustrated in Figure 1 .
Figure 1: Building Permit Process Overview
Fee
•Applicant applies for Processing -Construction site
permit periodically inspected for
-Plans reviewed for -Fees assessed based upon compliance
compliance permit type -Re-inspection fees
•Permit approved -Applicant pays fees charged and paid as
-Permit issued applicable
-Permit finaled
Application & Inspections
Plan Review
0/
3 A building permit applicant may be the property owner, authorized agent, or licensed
contractor.
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Audit of Building Permit Processes July 2021
Permits Reviewed Appropriately Except For Some NAA Properties
The first step of the building permit process is application and plan review.
During this subprocess, permit applications are submitted by applicants using
the City's online permitting system. Permit Technicians then review these
applications to determine if the application is complete and if plan review is
needed.4
If plan review is needed, the applicant must upload their plans into the City's
web-based document workflow solution where they are reviewed by a Plans
Examiner and routed to other departments necessary for the permit type.
Review comments are then provided to the applicant and updated plans are
resubmitted until the plans are approved. This subprocess is illustrated in Figure 2:
Figure 2: Permit Application & Plan Review Process
-Applicant submits application.
•Permit Tech ensure application is complete &grants access to document workflow solution.
•• • • •Permit Tech assesses permit fees.
-Applicant uploads plans to document solution.
•Plans Examiner routes plans to all applicable departments for review and comment.
• -Applicant updates plans in response to comments.
•Plans Examiner approves plans if all comments have been adequately addressed.
What We Found
• Based on review of a statistical sample of 95 permits within the City's
permitting system, all permits appeared to be handled, managed, and
issued in accordance with current procedures and rules.
o This included fee assessment, plan review and approval, inspection
documentation, and the issuance and finalization of permits.
• The permit application review process appears timely and consistent with
department and applicant expectations.
o Based on review of the statistical sample of 95 permits, it took about 16
days on average for a permit application to be approved and about
15 days for a permit to be issued from an approved application. On
4 Some "over-the-counter" permit types can be reviewed and approved by Permit Technicians
without the involvement of a Plans Examiner.
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Audit of Building Permit Processes July 2021
average, about 90 percent of permit applications are approved within
one month and about 90 percent of permits are issued less than a
month later. Figure 3 summarizes the time it took to approve and issue
permits overall.
Figure 3: Permit Approval and Issuance Timeliness
100% m Application to Approval ■Approval to Issuance
E 80%
0
IL 60%
0
c 40%
0
U
N 20%
0-7 7- 15 15-30 >30
Days
o While this indicates that the application review process is generally
timely, about ten percent of permit approvals and ten percent of
permit issuances take more than one month. Based on discussion with
staff, Building Safety had developed a process to periodically identify
pending permit applications with no recent status updates; however,
this was discontinued due to reduction in staff and workload
constraints during the COVID-19 Pandemic. Reinstating this process
would further ensure all permits are approved and issued within a
timely manner.
o Based on a customer service survey administered to Licensed
Contractors by Development Services staff, over 98 percent of
respondents believed the City of Denton's Building Safety team was
doing great or doing okay with potentially some improvements
needed.5
• The City has previously handled building permit applications for properties
under non-annexation agreements inconsistently.
o In general, the City does not process building permits for properties
located outside its city limits; however, the City originally executed 265
non-annexation agreements - or NAAs -with property owners just
outside of the City in 2010. These agreements require these property
5 Improvements noted by respondents included the permitting process being difficult to
complete online and making the process easier to navigate for TRAKiT and ProjectDox. These
applications are currently in the process of being upgraded.
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Audit of Building Permit Processes July 2021
owners to have any building improvements permitted through the City
of Denton instead of Denton County.
o Based on a review of data received from Denton County, there
appeared to have been 82 permits issued by the County for properties
with City of Denton NAAs since they were established.
o Based on discussions with City of Denton and Denton County staff,
there was no process to verify in which jurisdiction a property should be
permitted until about three months ago. Currently, Denton County
requires property owners to complete an extraterritorial jurisdiction6
verification form before processing their permit application. In addition,
the City has recently flagged non-annexation agreement properties in
its permitting system to ensure they are not inappropriately denied and
sent to the County.
Why It Matters
While most permits are approved and issued in a timely manner, a notable
portion take more than one month to approve or issue. Reinstituting the
Department's previous practice of periodically identifying pending permit
applications will provide further assurance that these outstanding permits are
not due to City inaction and should expedite permit issuance.
In addition, without an adequate process, several building improvements on
properties with NAAs have been permitted through the County instead of the
City. This may have resulted in these building improvements not being built to
the City's building codes.
Recommendations:
1. Reinstitute the Department's prior process to periodically identify pending
permit applications to ensure applications are managed and updated timely
and appropriately.
Building Safety Comments: Process has been reinstated and applications are
now being updated appropriately.
2. Coordinate with City Planning to formalize a training program and review
process for non-annexation agreement properties.
Building Safety Comments: Staff is developing a review process and will
implement a training program for these types of permits.
6 Extraterritorial jurisdiction is the legal ability of a government to exercise authority beyond its
normal boundaries.
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Audit of Building Permit Processes July 2021
Permit Fees Processed Appropriately; Refunds Not Formally
Approved
Permit fees are assessed and charged to applicants based on the type of
permit they have requested. The Building Safety Division is responsible for
assessing and processing payments for all permitting fees, even those services
completed outside of the Development Services Department.
Refunds are typically issued due to applicant overpayment or changes in
approved plans that result in a reduction of assessed permit fees. In general,
refunds should be properly approved and documented to ensure they are
issued appropriately.
What We Found
• The Division has established a Daily Cash Processing Standard Operating
Procedure Manual which details deposit and reconciliation procedures and
cash handling controls.
o Permit fees can be paid via check, money order, or credit card and
must be paid in-person, online or over-the-phone. No cash is accepted
for payment.
o Building Safety maintains a safe within the Development Services'
office that is secured to the building; however, there is currently no
process to update the code to the safe periodically or upon employee
turnover.
o All Building Safety staff who handle cash have completed the City's
cash handling training.
• Each day, received payments are verified by two permit technicians and
deposits are secured in the Division's safe until being transferred to the City's
Customer Service Division. In addition, the Customer Support & Permit
Administrator reconciles processed payments each day. Permit Technicians
are also required to retain receipts from each transaction in the City's
permitting system.
o Based on a random judgement sample of 20 daily deposit
reconciliation reports between fiscal year 2018-19 and 2019-20 totaling
about $1 ,367,000, the payment management and reconciliation
process appeared to be effective and all payments were accurately
posted and reported.
• Based on review of building permit fees charged to applicants during review
of the statistical sample of 95 permits, fees appeared to be generally
charged to applicants appropriately dependent on the permit type.
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Audit of Building Permit Processes July 2021
o Based on the permit type, the City's permitting system limits which fee
types Division can charge to an application. Once the fee types are
charged, the permitting system automatically calculates the fee
amount to be assessed based on information provided by the
applicant including square feet and valuation.
o In addition, Building Safety staff generally verify that entered
information is complete in order to ensure that fees are accurately
assessed.
• According to Division staff, refunds are generally requested by a Permit
Technician or Plans Examiner and processed by the Customer Support &
Permit Administrator; however, a process has not been developed to formally
document supervisor approval and support documentation.?
o Based on a statistical sample of 76 issued applicant refunds between
fiscal year 2018-19 and 2019-20 totaling around $78,000, refunds
generally appeared to be issued for a reasonable purpose. Results of
this sample are summarized in Table 1 :
Table 1: Refund Sample Results
Criteria Results (out of 76)
Reasonable Purpose 76 100%
Attached Receipt 76 100%
Documented Formal Review & Approval 33 43%
Support Documentation$ 50 66%
Why It Matters
Refunds processed for permitting fees can result in large sums of money being
refunded to applicants. While all refunds reviewed appeared to be for a
reasonable purpose, ensuring each refund is properly reviewed and approved
by a supervisor prior to being processed will provide further assurance that the
refund is issued appropriately. Additionally, development of a formal process or
standard operating procedure will ensure each refund is handled consistently
and there is proper oversight and segregation of duties in the refund process.
7 There is a payment authorization process for refunds that is required by the Accounts Payable
Division. Under this process, Department Directors must approve payments greater than $5,000;
these documents were considered evidence of approval as part of the refund sample if found.
Still, refunds should be approved by supervisors with direct knowledge of the fee process in order
to ensure adequate review.
8 Support documentation includes calculation documentation, email attachments, and support
attached timely upon issuance of the refund.
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Audit of Building Permit Processes July 2021
Finally, while controls over cash handling appear to be generally effective,
periodically updating the code to the safe will further safeguard City assets.
Recommendations:
3. Develop a formal refund request process for permitting fees to document
supervisor approval. Consider requiring escalating approval authority based
on certain dollar thresholds.
Building Safety Comments: Policy for refund requests is currently in process.
4. Develop a process to periodically update the code to the safe, including
upon employee turnover.
Building Safety Comments: Staff is developing an improved security process.
Additional Monitoring of Inspections Would Further Ensure Quality
Once a building permit is issued, the applicant is notified of the issued permit
and begins construction work according to their approved plans. The City of
Denton requires applicants to schedule building inspections throughout
construction to ensure the work is done in accordance with the approved plans
and in compliance with the City's adopted building codes.
What We Found
• Building inspectors complete inspections and document results and
applicable notes within each permit record in the City's permitting system.
Inspections can result in either a pass, fail, or approved with conditions as
determined by the assigned inspector.
o Inspection results and notes can be seen by contractors online in the
City's permitting system.
o For failed or approved with conditions inspections, building inspectors
are instructed to document detailed, useful notes that allow the
contractor and next building inspector to understand the identified
deficiencies to facilitate correction and re-inspection.
o Inspectors are not required to provide notes for inspections that result
in a pass.
o There is currently no process to review completed inspections to ensure
they were conducted in accordance with the Division's quality
standards.
• Building inspectors may charge a re-inspection fee upon a failed inspection.
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Audit of Building Permit Processes July 2021
o Based on a random judgement sample of 20 re-inspection fees
charged to applicants between fiscal year 2018-19 and 2019-20, 41
percent of failed inspections were charged a re-inspection fee on
average; however, there appeared to be significant variation in the
ratio of failed inspections to assessed re-inspection fees as illustrated in
Figure 4.
Figure 4: Re-Inspection Fee Assessment
20
N
io
15
U
N
Q 10 Failed Inspection
c
0 5 Re-Inspection Fee
Z LL9L Charged
0
19
Sample Instance
o Allowing building inspectors flexibility when charging re-inspection fees
may be appropriate, but without any formal guidance or approval
process there is a risk that applicants will be inequitably or
inappropriately charged for re-inspections. Developing formal
guidelines around when re-inspection fees should be charged will
encourage greater consistency during the fee assessment process.
• Current building inspection scheduling procedures may impact inspection
quality.
o Applicants are responsible for scheduling inspections as required by
their permit type.9 These inspections are scheduled and assigned to
building inspectors and other relevant inspectors, such as right-of-way
inspectors and fire inspectors, daily.
o There is not currently a maximum number of inspections that can be
scheduled each day. Instead all inspections requests assigned to
building inspectors must be completed by the end of the next business
day.
o Currently, building inspectors are only required to track the amount of
time each inspection takes to complete in the City's permitting system
during cost of service fee studies.
9 Inspections can be scheduled for a day until 6:00 AM on that day. Any inspection requests
received after 6:00 AM are scheduled for the next business day.
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Why It Matters
Building inspections are required to ensure applicants are completing
construction per the approved plans. While current inspection result
documentation practices help ensure identified deficiencies are corrected,
there is currently no quality control or review process to ensure that all
deficiencies were identified, potentially leading to life and safety concerns.
In addition, current inspection scheduling practices do not limit the number of
inspections that are scheduled each day and require all inspections assigned to
building inspectors to be completed on that day. This may lead to building
inspectors having to rush through their inspections - potentially impacting
quality.
Finally, building permit fees should be assessed and charged to applicants
appropriately based on permit type. While most permit fees are calculated
based on the submitted plans or application, re-inspection fees are generally
subject to building inspectors' professional judgement, leaving them vulnerable
to being charged inequitably or inappropriately. There may be operational
reasons to allow flexibility when charging re-inspection fees; however, standard
guidance and training should be distributed to building inspectors to provide
assurance that they are not being charged inequitably or inappropriately and
to facilitate greater consistency across the building inspections function.
Recommendations:
5. Develop a formal inspection review process to provide assurance that
inspections are being completed effectively and in accordance with the
Division's quality standards.
Building Safety Comments: Staff is documenting the quality control measures
to establish a documented formal policy and checklist.
6. Establish a process to provide assurance that variable daily inspection
workload does not impact the quality of inspections.
Building Safety Comments: New software will be up and running by the end of
July, the update includes time tracking for inspections.
7. Develop re-inspection fee assessment guidelines or a review process. Ensure
building inspectors receive consistent training on re-inspection fee
assessment.
Building Safety Comments: Policy will be documented and quarterly training
provided to ensure consistent application of the policy.
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Audit of Building Permit Processes July 2021
Lack of Formal Inspector Development Plan May Hinder Effectiveness
The City has established three levels of building inspectors - Building Inspector I,
Building Inspector II, and Building Inspector III - who all report to the Assistant
Building Official & Building Inspector Supervisor. These individuals should have
the combined relevant knowledge, skills, licenses, and certifications to
effectively perform building inspections for the City of Denton.
What We Found
• Based on comparison of the Building Inspector job description requirements
and minimum qualifications to current staff licensing and certifications, not all
staff meet certification and licensing expectations as detailed in Table 2 on
the next page. In addition, the Division has not established a clear
development program or incentives to encourage staff to meet these
expectations.
o The Building Inspector I job description requires staff to obtain a Texas
State Plumbing Inspector license and Residential Energy Code
Inspector/Plans Examiner certification within 18 months of employment;
however, about 20 percent of relevant inspection staff (i.e. Building
Inspector Is, Ils, Ills, and supervisors) do not have a Plumbing Inspector
license and 40 percent do not have a Residential Energy Code
Inspector certification.
o Similarly, the Building Inspector II and III job descriptions list certain
model code certifications as minimum qualifications for these higher-
level positions; however, not all staff at these levels have acquired
these certifications. While the Building Inspector II and III job
descriptions do provide the hiring manager with flexibility, including
these certifications as minimum qualifications in the job description
would imply that acquiring these licenses is expected.
o The Division has developed a building inspector progression plan;
however, it is informal and does not clearly match up to minimum
licensing or experience qualifications stated in the job descriptions.
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Audit of Building Permit Processes July 2021
Table 2: Building Inspector License & Certifications'0
Building Building Building Building All
Certification/License Inspector Inspector Inspector Inspection Relevant
1 II III Supervisor Positions
Texas State Plumbing Inspector 100% 50% 100% 100% 82%
Residential Energy Inspector/ Oho Oho 100% 100% 44%
Plans Examiner
Commercial Energy Inspector N/A 0% 100% 100% 50%
Commercial Building Inspector N/A 0% 0% 100% 13%
o It is possible that the current job descriptions do not reflect the actual
certification and licensing expectations or requirements of the building
inspections function. If so, job descriptions should be updated to
ensure that they reflect the actual duties, responsibilities, and
knowledge, skill, and ability expectations of the position.
• Based on Building Safety Division Licenses and Certification data, the Building
Safety Division does not include a Med Gas Inspector.
o While this certification appears to be a gap in the Division's skill set
based on its own analysis, it is not entirely clear if this gap needs to be
filled as it is not required by a Building Inspector job description or
included in the building inspector progression plan.
Why It Matters
Building inspectors are assigned inspections based on their knowledge, skills,
licensing, and certifications. For this reason, job descriptions should include
adequate information about what is required to effectively perform. If some or
many employees are not meeting these expectations, the Division may be
unable to adequately distribute its workload.
In addition, without a clear career progression plan, employees may not be
motivated to meet expected educational achievements or fill gaps in the
Division's knowledge base. This lack of knowledge could negatively impact the
effectiveness and quality of inspections the Division can perform. Similarly,
knowledge gaps may lead to the Division requiring applicants to obtain third-
party inspectors, who may have conflicts of interest that impact inspection
quality.
10 These certifications and licenses do not reflect all certifications and licenses within the
department. These four identified are the certifications and licensed noted within the job
descriptions as conditions of employment and/or minimum qualifications per each job position.
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Audit of Building Permit Processes July 2021
Recommendations:
8. Formalize the building inspector progression plan to clearly delineate the
expectations and requirements for promotion within the Building Inspector
roles. Include expected timelines and required licenses/certifications to
expand the offered inspection services by the City.
Building Safety Comments: Draft progression plan has been completed, but
not yet formally approved.
9. Develop a process to periodically review staffing capacities to evaluate and
identify potential license and certification gaps. This evaluation should be
used to update the building inspector career progression plan and building
inspector job descriptions.
Building Safety Comments: Staff will develop an updated policy.
Standard Operating Procedures Should be Finalized
Best practices generally suggest that organizations develop and maintain
policies and procedures to help retain institutional knowledge, navigate
emergency situations, and facilitate consistency.
What We Found
• The Building Safety Division has begun developing standard operating
procedures for each step of the building permit process, including
applications, plan review, inspections, and fee processing; however, the
majority of these have not been formally approved or implemented.
o Additionally, based on discussions with staff, there are still numerous
processes for which a standard operating procedure has not been
developed, including residential and commercial plan reviews.
o The Division is currently in the process of updating its permitting
software. While this update will likely improve the permitting process,
any developed standard operating procedures will need to be revised
to reflect updated processes.
• Currently, the Division relies on Building Safety staff to verbally inform
management of a potential conflict of interest" when one arises. A formal
Conflict of interests within the building permit process could arise when an employee applies
for a permit, a friend/family member of an employee applies for a permit, or a business an
employee is financially involved with applies for a permit.
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Audit of Building Permit Processes July 2021
documented procedure detailing staff expectations and requirements for
conflict of interest disclosures has not been developed.
Why It Matters
The Building Safety Division manages all incoming permit applications through
permit issuance and finalization, which includes numerous services related to
permits, plan reviews, and inspections. Detailed procedures would provide
assurance that these functions were carried out consistently and appropriately
throughout the permitting process.
For this reason, the Division's draft standard operating procedures should be
reviewed and finalized by a supervisor for accuracy prior to formal
implementation. All standard operating procedures should be periodically
reviewed and updated as needed.
Furthermore, the Building Safety Division is particularly vulnerable to conflicts of
interest as it involves verifying that new developments meet life and safety
standards. For that reason, requiring employees to disclose potential conflicts of
interest prior to receiving projects will help ensure that plan reviews and
inspections are completed appropriately.
Recommendations:
10.Review and finalize departmental standard operating procedures to ensure
each step of the building permit process is documented and reflects actual
processes. These should incorporate references and images as necessary to
provide clarity, including a periodic review process.
Building Safety Comments: Currently in-process. Process developed will be
reviewed on an annual basis and with code changes.
11.Develop a formal conflict of interest procedure detailing employee
responsibility, expectations, and process to report potential conflict of
interests within the permitting process. Consider development of an annual
conflict of interest ethics statement.
Building Safety Comments: Staff will develop a policy.
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Audit of Building Permit Processes July 2021
Appendix A: Management Response Summary
The following summarizes the recommendations issued throughout this report.
The auditors found that staff and the Department were receptive and willing to
make improvements to controls where needed. Management has provided
their response to each recommendation.
Reinstitute the Department's prior process Expected
to periodically identify pending permit Completion:
1 applications to ensure applications are Concur June 2021
managed and updated timely and
appropriately.
Building Safety Comments: Process has been reinstated and Responsibility:
applications are now being updated appropriately. Emily
Loiselle/Glenda
Gailliard
Coordinate with City Planning to formalize Expected
2 a training program and review process for Concur Completion:
non-annexation agreement properties. July 2021
Building Safety Comments: Staff is developing a review Responsibility:
process and will implement a training program for these types Amber Rodgers
of permits.
Develop a formal refund request process Expected
for permitting fees to document supervisor Completion:
3 approval. Consider requiring escalating Concur August 2021
approval authority based on certain dollar
thresholds.
Building Safety Comments: Policy for refund requests is Responsibility:
currently in process. Glenda
Gailliard/Emily
Loiselle/Charlie
Rosendahl
Develop a process to periodically update Expected
4 the code to the safe, including upon Concur Completion:
employee turnover. July 2021
Building Safety Comments: Staff is developing an improved Responsibility:
security process. Glenda Gailliard
Develop a formal inspection review Expected
5 process to provide assurance that Concur Completion:
inspections are being completed August 2021
Audit Project #: 022 Page 1 19
Audit of Building Permit Processes July 2021
effectively and in accordance with the
Division's quality standards.
Building Safety Comments: Staff is documenting the quality Responsibility:
control measures to establish a documented formal policy Billy Ewton
and checklist.
Establish a process to provide assurance Expected
6 that variable daily inspection workload Concur Completion:
does not impact the quality of inspections. September 2021
Building Safety Comments: New software will be up and Responsibility:
running by the end of July, the update includes time tracking Billy
for inspections. Ewton/Charlie
Rosendahl
Develop re-inspection fee assessment Expected
guidelines or a review process. Ensure Completion:
building inspectors receive consistent Concur July 2021
training on re-inspection fee assessment.
Building Safety Comments: Policy will be documented and Responsibility:
quarterly training provided to ensure consistent application of Billy Ewton
the policy.
Formalize the building inspector Expected
progression plan to clearly delineate the Completion:
expectations and requirements for August 2021
8 promotion within the Building Inspector Concur
roles. Include expected timelines and
required licenses/certifications to expand
the offered inspection services by the City.
Building Safety Comments: Draft progression plan has been Responsibility:
completed, but not yet formally approved. Emily
Loiselle/Charlie
Rosendahl/Scott
McDonald
Develop a process to periodically review Expected
staffing capacities to evaluate and identify Completion:
potential license and certification gaps. September 2021
9 This evaluation should be used to update Concur
the building inspector career progression
plan and building inspector job
descriptions.
Building Safety Comments: Staff will develop an updated Responsibility:
policy. Amber
Rodgers/Billy
Audit Project #: 022 Page 1 20
Audit of Building Permit Processes July 2021
Ewton/Emily
Loiselle
Review and finalize departmental Expected
standard operating procedures to ensure Completion:
each step of the building permit process is April 2022
10 documented and reflects actual Concur
processes. These should incorporate
references and images as necessary to
provide clarity, including a periodic review
process.
Building Safety Comments: Currently in-process. Process Responsibility:
developed will be reviewed on an annual basis and with Amber
code changes. Rodgers/Billy
Ewton/Charlie
Rosendahl/Emily
Loiselle/Glenda
Gailliard
Develop a formal conflict of interest Expected
procedure detailing employee Completion:
responsibility, expectations, and process to September 2021
11 report potential conflict of interests within Concur
the permitting process. Consider
development of an annual conflict of
interest ethics statement.
Building Safety Comments: Staff will develop a policy. Responsibility:
Amber
Rodgers/Billy
Ewton/Glenda
Gailliard
Audit Project #: 022 Page 121