A 2013 audit of Riverhead Town’s building department found that the file for Atlantis Marine World was missing and that the department miscalculated the building fees on 42 percent of the files sampled, while a chart used to calculate some fees itself had an error in it.
But a follow-up audit of the building department released this year got much better results, according to Jack Orben, the head of town’s Independent Audit Committee, which did the audits.
“What we found was a dramatic improvement,” he said at Thursday’s Town Board meeting, where the audit was discussed.
For one thing, the Atlantis Marine World file, which was the file for the addition of the Hyatt hotel, has been located, and the practice of “lending” out files has been discontinued. Now, if someone outside the department needs to access a file, the staff will assist that person or make copies.
Mr. Orben said the original 2013 audit took place at a time when Jeff Murphree had just taken over as the town’s building and planning administrator in 2012, and just after Leroy Barnes had retired as chief building inspector, and that post was being handled by a part-time employee.
In the past, prior to Mr. Murphree’s hiring, “there was a practice of lending files,” said Charlene Kagel, a professional accountant who is an adviser to the all-volunteer audit committee.
The audit also found that on commercial site plan fees, the Town Code allows the fee to be determined either by a standard “Marshall & Swift valuation” for determining construction costs, or by using the applicant’s own estimate of the project costs, with the town using the higher number of the two, thus resulting in more fees.
Mr. Orben said the audit committee would like to see a formula that’s more “black and white” and doesn’t afford as much discretion.
Chief building inspector Brad Hammond, who was hired in 2013, said the developer’s estimates often are higher than the town’s.
The audit recommended implementing a method to ensure that the town’s commercial fee calculations are reviewed and approved by supervisory staff, and that the applicant’s estimates come with supporting documentation, such as bids or price quotes, for the cost estimates.
The audit did find that of 14 files examined, six had “minor errors in fee calculation,” and that seven of the 14 files had “at least one instance of non-compliance with department policy and procedures regarding required documentation for permit files.”
Ms. Kagel said the fee miscalculation was the same in most of instances cited, and resulted in an additional $12 fee being paid.
The audit committee recommended putting a checklist inside each application folder to show what requirements were met in each application, and they also recommended that a department supervisor review files on a test basis, rather than only when a complaint is made.
Ms. Kagel said a new software program the town is implementing for building and planning permit files will reduce the instances of calculation errors.
“A lot of the findings we have in this report are automatically resolved once the new software is in place,” Ms. Kagel told the Town Board.
The computer software the town had been using also didn’t have the type of security found in most software, so that someone would actually be able to delete some files, she said. The new software has security levels to prevent this, she said.
The committee, created in 2012, has audited several town departments over the past few years, but the building department is the only one so far that has had a follow-up audit.
“I’m happy you did this,” Supervisor Sean Walter said of the audit. “I think this is a good indication to the department heads that have been audited before, that you will be coming back, and there could be repercussions.”
Photo: Riverhead’s Independent Audit Committee members discuss a building department audit with Town Board members Thursday.