Permit Fee Waivers
Report No. 97-03 -- Report Summary
Harriet M. Richardson, Senior Management Auditor
Tony McDowell, Management Auditor Intern
TABLE OF
CONTENTS
 Introduction
Objective and Scope
General Conclusion and Findings
Major
Findings
- Finding Fee waivers
were infrequent and represented an insignificant amount of the total fees collected by
DDES during 1996.
- Finding Fee waivers
were granted in accordance with King County and DDES policies and procedures. However,
some fee waivers may have violated the requirements of the Uniform Building Code (UBC).
- Finding Incomplete
files made it difficult in some cases to determine the amount of a fee waiver and the
reason for granting the waiver.
INTRODUCTION
The management audit of permit fee waivers in the Department of
Development and Environmental Services (DDES) was requested by the Metropolitan King
County Council and included in the 1996 Auditor's Office work program. The King County
Code and Administrative Policies and Procedures provide authority for granting fee
waivers, cite specific circumstances under which waivers may be granted, and limit
authority for granting waivers to specific individuals.
Top of Page | Homepage
OBJECTIVE AND SCOPE
The audit objectives were to determine if permit fee waivers were
properly authorized, if waivers were granted without going through appropriate channels,
and how much revenue King County lost by granting waivers. The audit was limited to a
review of fee waivers granted by DDES between January 1995 and September 1996 for land use
(excluding grading) and building permits. The audit included a review of a random sample
of 150 permits to determine if fee waivers were granted without proper approval.
Top of Page | Homepage
GENERAL CONCLUSION
AND FINDINGS AND FINDINGS
The audit found few problems associated with granting fee waivers.
Specifically, the audit found that:
- fee waivers were granted on only 0.16% of the total permits issued
and represented only 0.27% of the total permit fees;
- fee waivers were generally granted in accordance with established
policies and procedures although some waivers of permit investigation fees for
construction without a permit may have violated the requirements of the Uniform Building
Code (UBC); and
- incomplete files made it difficult in some cases to determine the
amount of a fee waiver and the reason for granting the waiver.
Top of Page | Homepage
MAJOR FINDINGS AND RECOMMENDATIONS
Finding 1. Fee waivers were infrequent
and represented an insignificant amount of the total fees collected by DDES during 1996.
Audit staff conducted a review of all of the fee waivers granted
from January 1995 through August 1996 by both the Land Use Services Division and the
Building Services Division. The review was limited due to a lack of records in the Land
Use Services Division prior to 1996. Based on the available data, however, audit staff
reviewed 69 fee waiver applications during the time period covered by the audit, of which
44 (64%) were granted. Approved fee waivers represented only 0.16% of the 27,698 permits
issued from January 1995 through August 1996. Exhibit A documents the amount of the fee
waivers and provides a breakdown by division.
Exhibit A shows that the fee waivers for 1996 amounted to $41,290,
which was only 0.27% of the $15,227,214 collected in fees by DDES during the year. It
should be noted that $11,571 (57%) of the total fees waived by Land Use Services in 1996
were waived as part of the interlocal agreement between King County and the Sammamish
Plateau Water and Sewer District for the ongoing East Lake Sammamish Wetland Mitigation
Banking Pilot Project. Excluding this amount would reduce the fee waiver amounts shown in
Exhibit A for 1996 to $8,764 or 0.17% of the fees collected for Land Use Services, and
$29,719 or 0.20% of the total fees collected for the department during 1996.
Audit staff also selected a random sample of 150 permits issued
between January 1995 and September 1996 to determine if fees were waived without going
through the proper authorization channels (i.e., unofficial waivers). The sample was
selected such that a representative number of permits was drawn from each of the four
permit categories described in Appendix 2. Audit staff examined files on record at DDES as
well as the documentation available via the Sierra PERMITS system for each permit in the
sample. The review of these permit files did not identify any unofficial fee waivers.
Audit recommendation: None.
Top of Page | Homepage
Finding 2. Fee waivers were granted in
accordance with King County and DDES policies and procedures. However, some fee waivers
may have violated the requirements of the Uniform Building Code (UBC).
KCC Chapter 27.02 and DDES Administrative Policies and Procedures
for Waiver and/or Refund of Fees provide guidelines for granting fee waivers (see Appendix
3). Audit staff's review of the fee waivers granted between January 1995 and September
1996 did not identify any waivers that were in violation of these policies.
There is concern, however, about the ambiguous nature of the
guideline in the DDES policy and procedure (see Guideline 8 in Appendix 3) which grants
the director broad power to waive fees. Nine (17%) of the 53 fee waivers reviewed for
Building Services Division involved waivers of the investigation fee for construction
without a permit. Some of these waivers were granted to applicants who were assessed this
fee due to their contractor's failure to obtain the necessary permit or because the
applicant was unaware of the permit requirement. If the applicant came in voluntarily once
he or she became aware of the contractor's oversight, DDES granted a fee waiver for the
investigation fee. Audit staff's concern is that by granting such waivers, DDES risks
applicant abuse of the fee waiver provision. DDES also risks being in violation of the
Uniform Building Code (UBC) and King County Ordinance 11699 which state that an
investigation fee "shall be collected" in addition to the permit fee anytime
work commences without a permit. The UBC and the ordinance state that the investigation
fee "shall be equal to the amount" of the permit fee.
The audit recommended DDES should clarify the language of
its policies to more clearly reflect the director's policy in regard to the waiver of the
investigation fee for construction without a permit.
The audit further recommended DDES should ensure that fee
waiver policies do not violate the guidelines set forth in the UBC and adopted by
Washington State and King County.
Previous Finding | Top of Page | Homepage
Finding 3. Incomplete files made it
difficult in some cases to determine the amount of a fee waiver and the reason for
granting the waiver.
DDES policy requires files to be maintained in a manner that ensures
ease in locating particular waiver decisions. The policy further requires all fee waivers
to be documented in the project files and on the Sierra PERMITS system. The documentation
is required to include the name, signature, reasoning, and authority of the individual
waiving the fee to establish an audit trail and to ensure that anyone, by examining the
documentation, can determine why a change in fees was made. Audit staff found DDES records
to be incomplete for several of the permits examined. Two common problems were:
- Information on the official fee waiver forms was incomplete (see
Appendix 1 for copy of form). Details provided in the applicant's Statement of
Justification and the Staff Recommendation were in some cases vague, making it impossible
to determine if the waiver was appropriate without further investigation. DDES staff also
failed to indicate the amount of the waiver or the permit number on several of the waiver
forms.
- Information concerning fee waivers on the Sierra PERMITS system was
also incomplete. DDES policy requires that all fee waivers be documented on the comments
screen of Sierra. Audit staff found that fee waivers were not always documented on the
comments screen, and that often when they were, no mention was made of their justification
or the amount waived. A typical entry on the comments screen included only the date of the
waiver and the initials of the division manager granting the waiver. Attempts to verify
the fee waiver amounts via Sierra were also hampered by a lack of documentation on the fee
summary screen.
It should be noted that because audit staff also reviewed the
project files for projects with fee waivers, we were able to determine the appropriateness
and amount of all fee waivers reviewed. However, audit staff does not believe that having
to review the project files, the fee waiver files, and the electronic file on the Sierra
PERMITS system to determine the appropriateness of a fee waiver meets the intent of the
DDES policy.
The audit recommended DDES should improve its record
keeping for fee waivers to allow easier access to information. DDES should maintain a more
detailed record in both its hard copy files and on the Sierra PERMITS system. In
particular:
- Information detailing the exact reason for each fee waiver should be
included on the comments screen of the Sierra PERMITS system. The fee summary screen on
Sierra should also indicate the exact amount of each waiver.
- Prior to signing fee waiver forms, division managers should ensure
that each form is completely filled out, including the permit number, amount of the
waiver, and the reason for granting the waiver.
Updated:
06/24/02
Auditor's Home | Audit Reports | Contact Us | Links to Audit Related Sites
King County | News | Services | Comments | Search
|
