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L.A. City Hall Only Collects 53% of Bills Owed, Audit Finds

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Photo by okarol via LAist Featured Photos on Flickr

Photo by okarol via LAist Featured Photos on Flickr
Although governments shouldn't strictly run themselves like a corporation, this is one area where they should. A follow-up audit performed by City Controller Wendy Greuel has demonstrated the city's lack of ability to collect on bills owed. Since a similar audit three years ago, the city has slightly improved, but not by much. “In three years since the previous audit was released, the City has gone from a 52% collections rate to a 53% collections rate - that’s not acceptable,” said Greuel. “Collecting more money wouldn’t close the entire budget deficit, but it would help save the City money and protect critical services for Angelenos.”

The audit surveyed $553.4 million worth of bills from the 2008-09 fiscal year (today is July 1st, meaning the first day of the 2010-11 fiscal year). Of that, only $293 million was collected, meaning the city's under-collection was $260.4 million. The worst offenders were unpaid parking citations and Emergency Management Services (EMS) billing accounts, where the City is only collecting 53% and 38% of the money it is owed, respectively.

“I don’t know of any business that would stand for such a low collection rate, particularly a business the size of the City of Los Angeles. It’s simply not sustainable, and the City cannot and should not allow this to continue.” ragged Greuel. “The Mayor and the City Council now have two audits and a consultants report to guide them to centralizing the billing process, which will save the City millions of dollars each year.”

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The original 2007 audit recommended the city centralize its billing process. That still hasn't been done.