Audit validates Wagner’s previous recommendations for improving process

Today, Allegheny County Controller Chelsa Wagner released an audit of the County’s Office of Property Assessments (OPA)’s administration of property tax exemptions and abatements. Wagner renewed her call for greater accountability, increased transparency through technological innovation, and oversight of all tax relief and tax forgiveness programs.

Last year, Wagner released a ‘Taxpayer Alert’ that shined a light on the vast number of tax-exempt properties within Allegheny County and changes in the legal environment that empowered Allegheny County to take action on unwarranted exemptions [Download a PDF copy of that report]. The Controller’s most recent audit reviewed the administration and handling of tax exemptions as well as property tax relief programs for individual homeowners, including the popular Homestead Exclusion.

“OPA does not provide proper accountability or review for tax exemptions for charitable and non-profit organizations to assure taxpayers that exemptions are warranted. Exemptions are a privilege, not a right,” Wagner said. “OPA should provide at least the same level of scrutiny for charitable tax exemptions as it does for better-administered property tax relief programs for individual homeowners.”

The primary findings of this report are that:

• OPA provides inadequate oversight for tax exemptions granted to non-profit and charitable organizations;
• OPA is reactive rather than proactive in ensuring accountability, transparency, and efficiency for tax exemptions; and
• OPA needs to improve the internal control structure of the property tax relief programs.

In the report released today, Wagner reiterated her recommendation from June on the importance for OPA to improve holistically the system by which the County administers and reviews tax exemptions for non-profit and charitable organizations. Controller Wagner called for OPA to conduct a parcel-by-parcel review and require organizations seeking tax-exempt status to submit a standardized affidavit showing they meet state law requirements for charitable exemptions and to post all of this information online.

“The deficiencies within the charitable exemption process jeopardize fairness for everyone,” Wagner said, “In a time where taxpayer assessments and tax burdens have increased, adequate exemption review is essential as every property unfairly off the tax rolls shifts an even greater burden to other County taxpayers.”

In the course of the audit, OPA was unable to provide the details of their process to complete the three year review of exempt properties, as mandated in Administrative Code Section 5-210.12. Additionally, the Administration also claimed that such a review was included in the latest reassessment, but this review did not result in changes to the exempt status of any organization or parcel.

“It is disconcerting that the Administration claimed they conducted a review resulting in no action, but did not detail the process,” Controller Wagner cautioned, “It is time to get serious about improving accountability and transparency in the Office of Property Assessment.”

The Controller called on OPA to reinstitute the ability to search online property listings by Owner Name. In recent years, the County removed this functionality, even though it helps communities and residents better identify problem property owners. Wagner said OPA could easily resolve privacy concerns and institute this change immediately.
Furthermore, Wagner’s audit report recommended that OPA bring their technology up-to-speed to improve transparency and create a sufficient audit trail. Auditors found less than adequate record keeping for exemptions. OPA should develop and implement the use of an electronic database for maintaining documentation for all parcels that have been approved for an abatement, exemption, and exclusion to ensure all are properly substantiated.