Audit Report on the Development and Implementation of the Computer Assisted Mass Appraisal System by the Department of Finance

The Department of Finance (DOF) collects City revenues, calculates the value for all real property in the City, and maintains accurate property records. New York State and City real estate law is applied each year by DOF’s Property Division to estimate the value of every New York City residential and commercial property.

In 2007, DOF entered into a $4.3 million contract (covering the period February 2007 to January 2010) with Vision Appraisal Technology, Inc. to develop a new system, Computer Assisted Mass Appraisal (CAMA), to collect property-related information and perform valuation calculations. Since August 2010, CAMA has been used by DOF in its annual valuations. Once CAMA determines market value for the properties, the values are then transferred to Real Property Assessment Data (RPAD) to determine the assessed value for tax purposes. In 2010, DOF renewed the contract for an additional $734,204 to provide training, software license, and maintenance for CAMA from February 2010 to January 2012. The current audit focused on DOF’s implementation of CAMA and whether it will meet the initial business and system requirements, and overall goals. We are conducting a separate audit to determine specifically whether DOF, in using CAMA, properly calculated Tax Class 2 property values (Audit Report on the Valuation of Class 2 Properties by the New York City Department of Finance, FN11-130A).

Audit Findings and Conclusions

CAMA generally met the initial business and system requirements and the overall goals as stated in the system justification. DOF expected that the off-the-shelf CAMA package with modifications would be implemented in 2007; however, DOF encountered problems during system development and testing. As a result, the implementation was delayed until August 2010, which was three years behind schedule. DOF has also identified numerous changes necessary for system enhancement. The estimated amount for completion of these changes is $3.5 million with an additional $90,160 for annual maintenance.

We found that CAMA used inappropriate comparable properties to assess the valuation of condominiums and cooperatives, which may affect their current market value assessments.

Additionally, the result of our user satisfaction survey revealed that 80 percent of the regular users stated they would like to see changes made to CAMA. We found 33 percent of the respondents rarely or never used CAMA, but these inactive users were not disabled or deleted from the system. Finally, we found DOF does not have a formal business continuity plan to bring the system up in the event of emergency or system failure.

Audit Recommendations

DOF should:

• Monitor and ensure all future system developments are completed on schedule.

• Ensure all problems and concerns reported by the users on the Clear Quest (CQ) log are addressed in Phase II agreement.

• Ensure CAMA selects appropriate comparable properties for annual valuations.

• Review and modify its criteria when selecting comparable properties.

• Ensure that the user concerns identified in the report are addressed.

• Conduct periodic surveys to ensure that their concerns are addressed.

• Develop written policies and procedures for tracking system users and terminating inactive users. In addition, DOF should periodically review the status of inactive user accounts and terminate access when appropriate.

• Develop a formal business continuity plan for CAMA. Periodically update the plan to ensure that it functions as intended and is adequate to quickly resume computer operations without material loss of data.

Agency Response

In their response, DOF officials agreed with three recommendations and partially agreed with two recommendations dealing with the results of our user survey and the need to create formal plans for business continuity and disaster recovery. DOF disagreed with three recommendations dealing with problem resolution in the Phase II agreement, the need for periodic user surveys, and the need to create written policies and procedures.