9/23/25 Item #4.B
City Council
City Auditor's Office
Audit Report of the City's
Building Permitting Process
1852
THE MISSION CIT
David Noce, Audit Manager
Item No. 4.B (·25-960)
September 23, 2025
1 Audit Project Selection
• The starting point of internal auditing is to conduct a risk assessment that is the basis for determining internal audit activities. The risk assessment process involves identifying and measuring risks associated with the audit universe (a list of specific departments functions, processes, programs, etc. that can be subject to an audit, i.e. auditable units).
Risk is defined as "the possibility of an event or condition occurring that will have ar impact on the ability of an organization to achieve its objectives.
During the annual risk assessment for 2024, the building permitting process was rate s high risk based on inherent risks and specific information gathered, including • Customer complaints for slow processing
• Departmental vacancies and turnover due to failed recruitment in a competitive field • New system implementation
• Volatile revenue
• Increased compliance risk associated with changing building code City of
Santa Clara
2 2
POST MEETING MATERIAL
1 9/23/25 Item #4.B
Audit Scope and Objectives
• Our audit covered interviews and document assessments related to the City's building permitting process for FY 2022 and FY 2023. We focused on Permit Services, which encompasses processes from application receipt to permit issuance, while excluding Building Services consisting of inspections and permit finalization. • The objectives of this audit were to:
• Determine whether the internal controls for the building permitting processes are adequately designed and operating effectively to ensure compliance with the City Code and other regulations.
• Determine whether adequate mechanisms are in place to ensure that the building permitting process is efficient and provides timely customer service.
Determine whether the internal controls over billing and collections of permitting fees and fines are adequately designed and operating effectively to ensure financial accountability.
City of
Santa Clara
Audit Methodology
To achieve the audit objectives, Audit staff and Baker Tilly performed the following procedures:
• Analyzed the relevant laws, t
Construction) and California Building Standards Commission in Part 1 of Title 24 of the California Code of Regulations.
• Gathered information to understand the environment under audit including evaluating P&P, permitting applications and fees, annual budget information, and performance monitoring documentation.
• Conducted interviews with key process owners and management including the Director of Community Development, the Building Official, the Assistant Building Official, Staff Analysts, Permit Center Supervisor, and the Accounting Division. • Assessed risks and identified controls in place based on process walkthroughs and review of supporting documentation.
City of
Santa Clara
The CH
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9/23/25 Item #4.B
Audit Methodology
To achieve the audit objectives, Audit staff and Baker Tilly performed the following procedures (Cont.):
• Performed testing of key controls for application processing, plan reviews, and permit fee billing and payments.
• Randomly selected 45 applications using a stratified sampling method to ensure all review types were represented in our sample.
• Selection was made from permit applications that were received in FY2022 and FY2023 and for which permits had been issued as of September 11, 2023.
City of
Santa Clara
Audit Report Findings Summary
Finding 1: Policies and Procedures
Although the Building Division (BD) has some written procedures, they are informal and fragmentary. Comprehensive policies and procedures (P&P) have not been formally established for the building permitting process, which is essential to guide the BD staff in decision-making and to communicate management's expectations.
Recommendation:
Management should establish and implement comprehensive P&P for the BD's critical processes, including Application Processing, Plan Review, Permitting Fee Billing and Collection, Permit Issuance, and Performance Monitoring.
City of
Santa Clara
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9/23/25 Item #4.B
Audit Report Findings Summary
Finding 2: Timeliness of Permitting Process
processes before and after plan review can be improved.
Recommendation:
lanagement should proactively monitor the permitting process efficiency by leveragin dditional performance metrics throughout the year, maximizing the use of the City permitting system reporting function.
City of
Santa Clara
7 Audit Report Findings Summary
Finding 3: Permit Fees
Baker Tilly tested permit fee calculations for 45 applications (for which the total job value was $334M and fees totaled over $3M) selected from all applications the City received in -Y2022 and FY2023 and noted that building permit fees were not always calculated accurately in accordance with the applicable Municipal Fee Schedules.
Recommendation:
Management should implement the following mechanisms to ensure the accuracy of building permit fees charged to applicants: Comprehensive Manuals and Training for Permit Technicians; Adequate Testing of Fee Calculations; Timely Secondary Review of Invoices; and Refresher Training for Permit Technicians.
City of
Santa Clara 8
Time Conserat Share Posed
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9/23/25 Item #4.B
Audit Report Findings Summary
Finding 4: Performance Monitoring and Process Improvement improvements to the building permitting process.
Recommendation:
The BD management should establish formal mechanisms for periodically monitoring , building permitting processes. The BD management should also implement a systematic approach for collecting and analyzing customer feedback.
City of
Santa Clara
9 Additional
Questions?
City of
Santa Clara
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9/23/25 Item #4.B
City Council
September 23, 2025
Item #4.B RTC 25-960
Audit of the City's Building
Permitting Process
1852
THE MISSION CIM
Afshan Hamid
Community Development Director
1 City of
Santa Clara
The Canterof What's Гоге
Primary Objective
1. Assess whether internal controls in the permitting process are effectively designed and implemented to ensure compliance with City Code and relevant regulations.
2. Evaluate whether the permit process is efficient and responsive, with mechanisms in place to ensure timely customer service.
3. Determine if billing and collections of permit fees and fines are properly managed to uphold financial accountability
2 POST MEETING MATERIAL
1 9/23/25 Item #4.B
City of
Santa Clara
Thu: Conter of Whistly Fossible
Overview: Permit Review Partners
• CDD: Planning and Housing & Community Services
• Fire Department (Community Risk Reduction Division)
• Public Works (Traffic Division, Stormwater, Solid Waste) • Silicon Valley Power
• Water & Sewer
- Environmental FOG
• Parks & Recreation
• Santa Clara Unified School District
• Santa Clara County Environmental Health
3 City of
Santa Clara
Thed Conter of t/lots Possible
• Staff collaborated transparently-documentation, identifying Audit Response gaps, contributing to frontline insights &
Commitment • Prior to release of audit, staff began addressing concerns, examining internal systems, resource allocation, and
capacity
• Improvements in department have progressed
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2 9/23/25 Item #4.B
City of
Santa Clara
The Center of Wist's Possible
Audit Findings
1. Develop Policy and Procedures Manual
2. Timeliness of Permitting Process
3. Permit Fees Reviewed for Consistency
4. Performance Monitoring and Process
Improvement
5 Building Division Progress Overtime & Findings City of Santa Clara
hacinter nitre Possi
2021 2022 2023 2024 2025
Conduct Outreach Plan Check Dashboard Standing Hours
Accela Civic Platform Permitting
• Laungned Augus: 2021 • Rece ved grant to Excane presence dial! Ctu meline: fer 15:3 weeks ~
• All develocmen: review Center
workflows are
streamlined and -the • scorted ine est santa Reporting & Website Improvements svstem Monitoring
30 process
Staffing Cuerine Counter • (finding 4)
Small Businesses
• nta -terra staff g Internal Coordination Pre-Approved ADU • "argeted Into assessment for damie Program
Dermit Teens are an Major Pipeline Projects
ubmittal Handouts fo
Reviewers arious project
• Cos antee minise test
Solar App+
vutria- / 1 •ec-use
a grap ala
6 6
3 9/23/25 Item #4.B
Building Division Progress Roadmap City of
Santa Clara
The Center of Whits Purg ibic
2025/26 26/27 Multi-year
Plan Review Timelines Future Workplan Accela Portal (POP) • Coordinating with internal •ntegrate permissier • integration and deces stakehoiders • SWIE
• All development review
workflows are
streamtined Dedicated One Stop Shop
• Plan Review Timelines
have ceen reduced 20%
Comprehensive Policies
& Procedures
• Desailes for ail
vorigroves
• 30% гомото
• Cangleten Vov 2025
Staffing
7 City of
Santa Clara
• • Comprehensive formal policies and procedures-FY 2025- 2026
Strategic Goals
• Actively monitor permitting process w/metrics — FY 2025- 2028
• Adequate testing of fee calculations- FY 2025-2026
• Customer feedback-2025-2027
• Dedicated One Stop Shop-2025-2028
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4 9/23/25 Item #4.B
Technology & Innovation Group Progress & Findings 1 & 2 City of Santa Clara
Thee Center of Whats Posgible
2018 2021 2022 2023 2024
Purchased Launched in August! Customer survey Research and planning Procurement • lusaved eroral grodut: semas pesen imp progee: and
accea ave Pacform * -stomer-ar war a91
ermuire ss2m espicitians orire
improve the permitting SolarAPP+ Revisions
SESAMITS
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Wedsil-
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somxil Fins ar docimierts Simple Permits arasess s.3oar 20, gue-te •au cned aconwted paldig Accela Knowledge Base
• Aceovmane suzarmurter
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9 Technology & Innovation Group 3 year Roadmap City of
canta Clara
*sle
2025 2021 2027 2028
Phase 1 - Improve POP Phase 2 - Improve POP Call Center SaaS Planning for EPS • Migrate to tre new te:d-sawerer • Bep • ma = anang aod • Refresned Permicang
Accela SMS ior crine cal cente solare cag-g na cn: an assessmont er Onane Porta excectec
danar-r(asain sas0
aro-jumme: 2025 applicators
• Launch guided, Al-Driven Solutions RFI Al Pilot Projects Expanded Al Projects nteractye permit tros
ior customers • Anaivze marker sfferings •Develop prio: prajects imciemen: acahonal- and insignis nd targeted REps acis and integratio
• O giral Fee cavment an weaste
Inspections Tech RFP Inspections Pre-Application Permit 5- Year Technolog! Discovery Tool Roadmal
• Proec: managemen: • Rollaut new nspections
supcor: RFP, inssectiors tech ano stres mine • Sime fyng permit • Develoc a CDD roadmao sechnology REP orocess requsrements tor acolican=s for tecnnocg) Research Al use cases Call Center SaaS RFP
• Internal discussions and • Ai-covered cail center Centralized Knowledg email cenia al aynicrarian :ool or Permit tenter Management Platforr Contract Renewal 311 & Accela Integration
• Imolement a unined nub ier
an ouseacayeyciodase
• Integrate V SartaClara process documentar en
with cermitting system
10 son:pd ars dare
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9/23/25 Item #4.B
City of
Santa Clara
The Confer of Whats Pestle
NEAR TERM
DELIVERABLES
The CDD Technology Project Manager and the
CDD Web Content Team are responsible for 41
near-term deliverables on behalf of several
2 project drivers ranging from findings in the Baker
Tilly Audit, to City Council Priorities, ongoing
operations and existing projects.
Circle Dept. Inituatives Operations / Ongoug Baker Tisy Audit 11 11
Raftelis Organizational Assessment
Launched in February 2025
Interviews conducted March/April 2025
Follow up interviews conducted September 2025
Comprehensive review of operations and functions with staffing capacity
Development Process Map Fall 2025
Building Permitting
City of
Santa Clara
Process
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9/23/25 Item #4.B
Questions and Feedback
Building Permitting City of
Santa Clara
Process The Center of Whats Possible
13 13
City Council
September 23, 2025
Item #4.B RTC 25-960
Audit of the City's Building
Permitting Process
1852
THE MISSION CIN
Afshan Hamid
Community Development Director
14 14
7