Wednesday, October 06, 2010

Blueprint for Reform of City Collections Unveiled

On Monday, I received a “Blueprint for Reform of City Collections” from the Ad Hoc Commission on Revenue Efficiency (CORE). The detailed, 90 page report offers analysis and recommendations to help ensure money owed to the people of Los Angeles is collected and can be used to support police, fire, library, traffic and other key services.

It is unacceptable for bureaucracy and inefficiency to stand in the way of the people of Los Angeles collecting money that is owed to them. It is time to clear away the red tape.

I created CORE to evaluate and recommend improvements in revenue collections. In the course of four months, the Commission has assessed revenue, billing, and collections practices – with a focus on specific recommendations for reform.

Among the Blueprint’s Recommendations:

• Centralization: Create clearer and stronger authority for the Office of Finance; invest in the technology needed to centralize – not just collection – but billing as well.

• Accountability, Incentives & Budgeting: L.A.’s elected officials must hold departments and managers accountable for compliance with directives, guidelines, and Controller audits. Create incentives for departments to make revenue a priority.

• Inspector General: CORE recommends establishing an Inspector General for Revenue & Collections to independently report on, and aid in compliance and reform.

• Intensify consequences for delinquencies: Standardize and boost interest, penalties and fees; increase use of liens and public reporting.

• Ease of payment and collection: Expand and improve payment options.

Among the Blueprint’s Findings:

• 76.6% of the City’s $541.1 million in non-tax receivables are more than 120 days past due – with 42.5% more than 2 years past due.

• City departments are collecting just over half of what they bill.

• Less than half of City departments apply interest or penalties to past due accounts.

• Computer systems and software for accounts receivable are woefully outdated.

• The City has no real centralized billing and collection process