Butkovitz's report drew a pointed response from the Nutter administration.
L&I Commissioner Carlton Williams said in an interview that while he concurred with some of the findings dealing with incomplete records, he rejected the controller's comments about safety.
"We have inspectors working around the clock," Williams said, adding that allegations that demolitions were not any safer now were "discouraging."
L&I turned in a 40-page rebuttal package, and the mayor's office issued a statement expressing "profound disappointment" with the controller's report and suggesting that the auditors misunderstood the L&I data.
Butkovitz's report said almost half of the 442 demolition sites the city said it inspected in the week after the collapse did not have documentation to prove that an inspection had taken place.
When auditors conducted a visual check of some of the demolition sites - listed as having been inspected and a note from the city that said no new construction had begun - they found new construction on at least 10 of those sites. One such site was the expansion of the Convention Center.
"So what is that big building doing there?" Butkovitz asked during a news conference while pointing to a photo of construction at the Convention Center.
Williams said there were some demolition projects that were never "closed out" in the system, a clerical error that he hopes will improve with the new database system that is to be implemented in 2015.
"That's one of the things we concurred needs to be improved," he said.
One of the new requirements for L&I since the June 5 collapse is to inspect a demolition site at least six times once the project begins. Auditors found that 15 of the 18 demolitions that were completed during their review did not have all six inspections.
Overall, auditors found many demolitions lacked the required documentation, including photographs and detailed description of work done during inspections.
"Administrative staff failed to properly maintain and update inspection records," Butkovitz said.
In his written response, included in the report, Williams said that since the audit was completed, the department had made several changes that "address all of the concerns identified in the report."
In an interview, Williams said some of what the audit office found, or did not find, was a result of the department's "antiquated" data system established in 1999.