Tania Dall / Eyewitness News
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NEW ORLEANS -- The New Orleans inspector general has released a new report slamming the Orleans Parish Sewerage & Water Board.

The problem: how the agency is billing customers and the millions of dollars being lost.

'People don't have an incentive to pay,' said New Orleans Inspector General Ed Quartrevaux.

Water flows constantly out of faucets across New Orleans; in kitchens, bathrooms, restaurants, you name it, even when customers aren't paying for it. That is the findings of a newly released report by the New Orleans Office of Inspector General.

'What we see is from 2010 to 2011, the amount of what was billed that didn't get collected rose to $8.5 million, said Quartrevaux.

His office says the city is losing millions of dollars every year in uncollected sanitation fees by the Sewerage & Water Board. The inspector general's report says in 2010, $3.1 million was unpaid by customers. In 2011 that amount nearly tripled to $8.5 million.

The report also says about 36 percent of sanitation customers sampled had delinquent sanitation fees, and the late fees applied to those accounts were under-billed by 81 percent.

During a news conference on Tuesday, Sewerage & Water Board Executive Director Marcia St. Martin stressed that city law doesn't allow for water service to be stopped on delinquent accounts. St. Martin also says it spells out a 15 percent monthly penalty that can only be changed by city mandate.

'I think the inspector general recommended that something be put in place to interrupt water services. That's going to require some regulatory changes and some ordinances changes, if that's the will of community and that's the will of the administration and that's the will of the council,' said St. Martin.

The inspector general's report also shows that the Sewerage & Water Board couldn't reproduce or locate billing records for the first six months of its audit period.

St. Martin says that's simply not true.

'We said we have those records in a format that wasn't easily accessible or convenient for his team to use but those records are available,' said St. Martin.

Quatrevaux warns delinquent accounts could quickly spiral out of control hurting the city.

'My fear is its going to grow. If people believe they can get away without paying their sanitation fee then that's going to feed that movement,' said Quatrevaux.

The inspector general's audit also revealed an inoperative camera in the Sewerage and Water Board's collections office along with an unlocked payment box. To take a look at the full report, click here.

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