First performance audit from Vancouver’s Auditor General (Mike Macdonell) looks at building permit fees: Praise but also recommendations for improvements

This morning, January 25, 2023, the City of Vancouver’s Auditor General, Mike Macdonell, released the new office’s (est. 4-Nov-2020) first performance audit report (PDF download here, 35 pages), this time on the topic of building permit fees. The report found some positives and negatives, and made recommendations. Also, for anyone interested on the machinery of how permits happen and the workings of the various offices and departments involved, this report is a valuable resource. Plus, the newly elected City Council under Mayor Ken Sim has promised to speed up the permitting process, so this report would be a good read for anyone who wants to understand what’s involved.

A performance audit is “an independent, objective and systematic assessment of how well government is managing its activities, responsibilities and resources.” What is a building permit fee? From the report: “Local governments regulated the construction and renovation of structures to ensure the safety of occupants and achieve policy objectives. The issuance of building permits is an important early step in this regulatory process. Intended to be a fully cost recovered service, building permit applicants are required to pay fees in accordance with a fee schedule. The City’s effectiveness in its cost recovery objective is the subject of a separate audit to be released later this year.”

This new office was created by an initiative by former Councillor Colleen Hardwick with strong support from others on Council. The Auditor General’s first annual report will be available in early 2023, so watch for that.

The Auditor General is responsible for “assisting Council in holding itself and City administrators accountable for the quality of stewardship over public funds, and for achievement of value for money in City operations.”

This report covers “building permit fees.” From the report, in 2021, the City reviewed and issued 969 permits for new buildings and collected approximately $12.4 million in building permit fees from applicants. The vast majority of these were issued by two branches within the Development, Buildings and Licensing department (DBL): the Housing Review Branch (HRB) and the Building Review Branch (BRB). Anyone who has applied for a building permit will probably have run across these offices.

From the media release from the Office:

The audit determined that the City developed and implemented straightforward processes to consistently and accurately assess building permit fees for new buildings. The audit also found that, for projects that were reviewed, the value of the proposed work used as a basis to calculate fees was reasonable. Fees were charged accurately, in accordance with the City’s Schedule of Fees.

However, in some cases processes were applied inconsistently, resulting in under-collected permit revenue. Additionally, the method used to determine housing construction estimates as the basis for calculating fees was not authorized by the Vancouver Building By-law. The audit also identified deficiencies in the administration of building permit fees:

• The City lacked written procedures and guidance for staff on the building permit fee assessment process; and,
• The City did not provide detailed guidance to applicants to ensure that project cost estimates submitted in building permit applications were complete, reasonable, and supportable.

Below is a screen shot of the Auditor General’s recommendations in the report:

Soon after the release, the City’s General Manager of Development, Building and Licensing, Andrea Law, released a statement thanking the Auditor General for his report and recommendations, and “I look forward to working with the Auditor General to implement the City’s response and next steps as outlined.”

Actually, one report from the new Auditor General’s office precedes this one: The “Whistleblower Study” (PDF, 7 pages) issued in April 2022. It is a good read and deserves more attention. It still requires follow-up and action.

From CityHallWatch‘s perspective, this Auditor General’s Office serves a precious function in protecting the public interest. Governments at all levels need to have checks and balances. Independent reviews such as these serve a valuable role. We urge readers to express their support for the Auditor General’s work at every opportunity.

LINKS

Website of Office of the Auditor General: https://vancouver.ca/your-government/auditor-general.aspx

The above website is well organized, with abundant information, including sections and links on annual audit plans, annual reports, audit reports, presentations, and news releases.