JOSEPH M FERGUSON INSPECTOR GENERAL
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2018 JUN 21 AM 8: 2U
OFFiu; OF THE CITY CLERK
CITY OF CHICAGO OFFICE OF INSPECTOR GENERAL 740 NORTH SEDGWICK STREET, SUITE 200 CHICAGO, ILLINOIS 60654 TELEPHONE" (773) 478-7799 FAX (773) 478-3949
JUNE 21, 2018
TO THE MAYOR, MEMBERS OF THE CITY COUNCIL, CITY CLERK, CITY TREASURER, AND RESIDENTS OF THE CITY OF CHICAGO:
The City of Chicago Office of Inspector General (OIG) has completed an audit of the City's process for evaluating and setting user fees. User fees, which are a significant source of City revenue, include charges for water usage, inspections, permits, and licenses. Although the Mayor and City Council are ultimately responsible for approving user fees, the Office of Budget and Management (OBM)—a subdivision of the Mayor's Office—manages the City's process for evaluating and setting fees. The audit compared the process for evaluating and setting user fees to the City's Financial and Budgetary Policies and to national best practices embodied in the recommendations of the Government Finance Officers Association (GFOA).
OIG found that the City does not periodically review all fees to determine whether they are set at levels designed to support City policy goals, including covering the cost of providing the services related to the fees. Also, while OBM reviewed 91 unique fee proposals submitted during the 2013 through 2017 budget cycles, the City conducted a full-cost analysis for only 3 of the proposals. Accurate analysis of the full cost of delivering a City service provides crucial information for the Mayor and City Council to consider in determining whether to approve fees. Moreover, OIG's review of two of the City's three full-cost analyses discovered several inaccuracies, resulting in a potential $45.2 million overestimation of the cost of collecting residential refuse and a $1.0 million underestimation of the cost of the City's vehicle booting program.
OIG concluded that the City does no...
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