Audit finds major gaps in city revenue tracking as officials can’t explain losses yet

BALTIMORE (WBFF) — City leaders faced sharp questions at City Hall after auditors disclosed major breakdowns in how the city tracks and collects money it is owed — and officials could not immediately say how much revenue has been lost.

The issue surfaced during the city’s Board of Estimates meeting on Wednesday, where city auditors released findings from an audit of the Finance Department.

Council President Zeke Cohen pressed officials on the financial impact, asking, “How much money has the city not received because of our inability to manage these processes?”

Finance director Michael Mockstein responded, “We will come back to you with a full accounting on that.”

Cohen said, “I think its unacceptable not to have that answer today.”

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The audit found what it described as gaping holes in the city’s accounting practices, including “untimely collection efforts,” “loan receivables which were never recorded,” invoices canceled without approval, and tens of thousands of dollars in unpaid balances the city failed to collect.

In one example raised during the meeting, an auditor said, “There is no investigation by the city, so it just wasn’t for the vendor to pay.”

If a resident doesn’t pay BGE, I know BGE will collect. We should be similarly ruthless,” Cohen said. “At the very minimum, we should collect on our bills.”

The audit covers fiscal years 2023 and 2024, and city officials said most of the unpaid bills involve utilities, permits and leases.

The city’s finance director attributed the failures to staffing issues, saying, “We simply didn’t have the staff. We had significant shortages in revenue collection and accounting.”

The findings drew outrage from council members and critics.

“Another reason to support the inspector general” Kim Klacik wrote on social media.

As the city navigates a tight budget season, Cohen warned of the potential impact on residents, saying, “It is extremely disturbing that there may be monies not coming in to pay for city services.”