Comptroller's Audits Fault City's Property Valuation The Bloomberg administration failed to warn homeowners about major changes in the way the city assessed the value of co-ops and condominiums, contributing to outrage over a sharp, unexpected spike in some people's property taxes last year, according to a pair of audits released on Thursday by Comptroller John C. Liu. Mr. Liu also concluded that the agency in charge of those assessments, the Finance Department, had relied too much on a flawed new computer system that, in some cases, compared a building's market value to the value of disparate properties, like a parking garage or a building on the other side of a borough. The audit findings added to a controversy that was especially pointed in Queens last year, when homeowners learned that the assessed values of their units had risen by as much as 147 percent, leading to an increase in their property taxes. At first, the Finance Department defended its figures, arguing that co-ops in Queens had been undervalued in past years. Later, however, the department acknowledged a problem, citing a computer error and saying that the wrong data had been given to assessors for use in calculating property values. "While real estate taxes are an important source of revenue for the city, homeowners should not have to endure the stress from wild swings in their property taxes year to year," said Mr. Liu, who is to hold a press conference on Friday to discuss the audits. The audits note that for many years the city used one methodology, called net income capitalization, to determine property valuations. For the 2008-9 fiscal year, the city switched to another method, called gross income multiplier. Then, without advance notice to homeowners, it reverted to the original methodology for the 2011-12 fiscal year. As a result, Mr. Liu found, 30 percent of large co-op buildings saw their property values increase by more than 50 percent. The department "should not wait for property owners to challenge assessments in the New York City Tax Commission and the New York State courts to explain the reasoning behind changes that impact the tax roll," one of the audits said. Mr. Liu also found that the cost of a software system used to help calculate property values had nearly doubled, to $7.8 million from $4.3 million, and that its implementation was three years behind schedule. Finance Department officials contested some of Mr. Liu's findings, saying that the comptroller's office had taken a "simplistic" approach and "cherry-picked" the data. They defended the department's assessments, noting that only 3 percent of the Queens co-op owners who appealed their tax bills to the Tax Commission had received offers of reduced assessment. "The Finance Department works each year to assess more than one million properties, transparently and accurately," said Owen A. Stone, a department spokesman. We continue to work with New Yorkers throughout that process.