KILLEEN, Texas — In a recent examination, city auditor Matthew Grady looked into the developer fees collection process of the Development Services Department.
The audit looked over internal controls and determined the extent of uncollected developer fees for residential projects approved between fiscal year 2019 and 2022.
The review uncovered significant internal control weaknesses, including the absence of standard operating procedures, lack of formal training, and operational silos. These challenges, heighten by high leadership turnover, contributed to inconsistencies in project file documentation and allowed for the non-collection of fees.
Although the city auditor couldn't check the total uncollected fees due to documentation gaps, an estimated $30,000 in construction plan review fees was identified. Grady based this estimate on his analysis of land disturbance permit and construction plan review fees collected during the review period.
Despite prior alerts in FY 2020, there was no evidence of corrective action by the then-management. However, current management has initiated corrective measures, consolidating Planning and Engineering Divisions, transferring fee collections to Building Inspections, implementing online permitting software, and developing standard operating procedures.
To address ongoing concerns, the City Auditor recommends regular monitoring of internal controls by the Development Services director.
Additionally, an updated independent cost recovery study is advised to determine the current fee structure's cost recovery rate.