An audit conducted by the City of Long Beach found that the city is owed more than $2 million in delinquent license revenue from local Long Beach businesses.
According to city auditor Laura Doud, the February 2013 audit found that between $2.4 million and $2.6 million in business license fees are owed to the city with the average bill over a year old.
The City of Long Beach collects approximately $12 million in business license revenueannually with the average license costing $383, the report said.
"We want to be clear that our intent is to ensure the City collects the revenue it is owed from businesses that are not meeting their obligation," Doud said in the report. "It is unfair to the businesses that pay their fees to allow others to avoid paying."
The audit covered the period of May 1, 2010 through April 30, 2012 and placed some of the blame for uncollected revenue on the city's outdated software system that monitors revenue due to the city. The city said it plans update the software this year.
According to the report, auditors also found that the city lacked sufficient policies, procedures and documentation to effectively collect fees owed for business licenses. The audit found that 87 percent of accounts handled by the Business Relations Bureau were more than 180 days old with few attempts at collection.
"Without comprehensive policies and procedures for the collection process, we found no consistency in the collection efforts performed by the Bureau," the report states. "It does not appear adequate oversight is in place."
Among its recommendations, the audit said the city should improve oversight of the collection of business license revenue, increase its efforts to collect from out of town businesses and develop a method to effectively track unlicensed businesses.
- Full Report: Read the full audit on the city auditor's website (listed under "audit reports")