The audit released by City Controller Wendy Greuel found parking officers issued repeated citations instead of calling for a boot or having cars impounded.
Greuel said the LADOT had a special unit with vehicles equipped with license plate recognition cameras to identify parking violators with five or more unpaid tickets, but disbanded it.
LADOT Interim General Manager Amir Sedadi said the unit was disbanded in order to fill about 50 vacancies in its crew of civilian traffic officers created by early retirements and furloughs.
"Scofflaws that haven't been impounded, haven't been paid up yet, are not lost revenues," said Sedadi, refuting the audit's findings. "Any potential revenues are simply deferred until they're impounded and/or monies are collected. We will catch them."
Greuel's report says owners of vehicles with more than five open citations owed a combined $86 million to the city.
The controller says she learned about the issue through a tip. If you see any instances of waste, fraud or abuse in the city of Los Angeles, let the controller know about it by calling (866) 428-1514 or visiting the city controller website by clicking here
City News Service and the Associated Press contributed to this report.