Although poor management in the Salt Lake business license office cost the city an undetermined amount of money, management changes will make the office - once the subject of a police investigation - more efficient, a city audit concludes.

The audit, conducted by city officials and outside auditors, was ordered by Mayor Palmer DePaulis following a three-month police probe into the office, which collects $2.5 million in license fees from 10,000 Salt Lake businesses."We feel the business license office operated fairly efficiently, but there is room for improvement," said Sheryl Gillilan, who participated in writing the audit report released Tuesday.

The office came under investigation by the Salt Lake Police Department's internal affairs division following complaints of criminal misconduct. The police investigation found no criminal wrongdoing but concluded the office was poorly managed.

The city audit makes several recommendations to improve the licensing process for collecting fees and techniques used to enforce city ordinances prohibiting businesses from operating without proper licenses.

Earlier this year, Tri-Arc Hotel, which owed the city $7,000 in licensing fees by Jan. 1, paid the money late but was not assessed the 50 percent penalty fee established by city ordinance.

"There are no consistent policies and procedures for licensing employees to follow, and the licensing program sometimes allows business licenses to be issued without payment of applicable penalty fees," the audit said.

The audit recommended that policies be drafted so that businesses consistently not receive licenses without paying late fees.

Delinquent businesses are not well identified because it is difficult to identify them in the city, the audit said. But enforcement authority has been removed from the licensing office and given to the Building and Housing Division, the division responsible for enforcing city codes.

Building and Housing employees spend a great deal of time in the field and are better able to identify the estimated 400 violators, the report said, adding that specific procedures be drafted to assist in the enforcement process.

City officials downplayed the financial impact of the problems seen in the business licensing office.

"We have lost some money and I don't know how much, because businesses have ignored the penalty deadlines," Gillilan said, adding that the audit's recommendations should prevent a further loss of revenue.

Salt Lake City is not alone in experiencing management difficulties in its business licensing office, said Patrick Sorensen, who also participated in writing the audit report.

"If the business licensing program is able to correct the problems identified in this report, the audit team believes the program will serve the city's needs and the business community in an effective and efficient manner," the report concludes.