L&I inspectors’ lax work put Philly workers and residents at risk, City Controller says

An audit by the City Controller’s Office found that inspectors in Philadelphia’s Department of Licenses and Inspections were not reviewing contractors’ licenses at construction sites, were performing inspections without documented certifications, and were failing to perform required inspections, putting workers and residents at risk.

The Controller’s Office conducted the audit for fiscal years 2023 and 2024 in part because of “ongoing concerns from Philadelphia residents regarding unsafe construction practices,” according to the report, released Thursday.

“We need to ensure that all construction activity here in Philadelphia is safe, lawful, and properly inspected,” City Controller Christy Brady said Thursday at a news conference announcing her office’s report.

When Brady was sworn in as city controller in December 2023, she said one of her office’s priorities would be to investigate L&I’s record of enforcing unlicensed properties and workers.

She said her office’s latest audit builds off last year’s investigation that found that L&I was failing to track dangerous buildings. She launched that audit in response to an Inquirer investigation that found that 50 Philadelphia homes each year are made unsafe during neighboring construction.

“At that time, I said that this was only the start of our efforts to ensure residents can feel confident that both existing and newly constructed buildings comply with all codes and are built by licensed contractors,” she said.

Brady said that Basil Merenda, the L&I commissioner who oversees inspections and compliance, and Mayor Cherelle L. Parker’s administration have begun addressing problems identified in the audit, the majority of which covers time before Parker took office.

“The department appreciates the audit’s intent to strengthen service delivery and accountability and is actively working to address areas identified for improvement,” L&I and the city said in a joint statement released Thursday.

“At the same time, it is important to recognize that the audit is one of several important influences that have helped shape the department’s transformation under the Parker Administration,” including internal reviews and a report published in 2023 by an L&I reform task force created as Parker prepared to take office.

In the Controller’s Office report, Brady said that “the corrective measures taken to date help validate the concerns raised by our audit.” In turn, the administration called the audit report “a constructive and independent validation of the administration’s decisive action to reform L&I,” including creating a separate division for inspections, modernizing inspections, and enhancing its investigations unit.

Brady said L&I, which is chronically understaffed, “needs to consider increasing the number of employees to ensure all construction activities are properly inspected, along with performing random, surprise visits to determine if unlicensed or misclassified workers are present on job sites.”

She and City Councilmember Michael Driscoll, who chairs Council’s Committee on Licenses and Inspections, said they will follow up with L&I in coming months to ensure the department continues to make improvements.

“I’m not here today to be pointing fingers and saying, you know, everything that’s wrong with L&I,” Driscoll said. “I’m here in support of that department to show them that we want to provide the resources necessary to improve that department that does the vital work of safety of the buildings here in the City of Philadelphia.”

The Controller’s Office said its findings are based on L&I’s written procedures, documented observations, and data provided by the department or through its eCLIPSE software system.

The office found that eight L&I employees who performed a total of 1,057 residential and commercial fire inspections did not have documentation on file showing they had the necessary fire inspector certifications.

And four employees who performed a total of 229 residential mechanical inspections did not have the necessary documented certifications.

Inspectors did not ask to see contractors’ licenses at any of the eight construction site visits that the Controller’s Office observed, which means the inspectors could not be sure that work was being done by qualified people, according to the audit report.

Inspectors at these visits also did not ask for documentation of workers’ employment status, so inspectors couldn’t know if workers were incorrectly classified as independent contractors.

Misclassification can keep workers from accessing workplace protections and benefiting from minimum wage and overtime requirements. The practice also allows contractors to skip paying taxes, which help pay for L&I enforcement efforts.

Among the construction sites visited were properties owned by the Children’s Hospital of Philadelphia, the University of Pennsylvania, and the Wistar Institute.

The Controller’s Office also reviewed 40 residential building permits to see whether L&I employees were performing all required inspections, from the first site visit through the final inspection.

The audit found that 34 were missing required photographs and/or notes. Thirteen permits required a total of 73 inspections, but 33 of these were not documented as having been performed, according to the Controller’s Office.

“This included inspections involving the foundation, interior framing, insulation, and wall boards,” Brady said Thursday.

L&I also is responsible for reviewing electrical inspections completed by third parties. But the Controller’s Office found that out of more than 6,000 of these inspections completed during fiscal year 2023, L&I audited only about 1%.

In response to the Controller’s Office’s audit findings, the Parker administration said it is improving documentation practices and inspection protocols, committing to expanding the capacity of L&I’s Audit and Investigation Unit, and developing new systems to track employee certifications and training.

“As reforms continue,” L&I and the city said in Thursday’s joint statement, “the department’s focus will remain on compliance, transparency, and equitable service delivery across all construction activities.”