SAN DIEGO -- An audit made public Tuesday raises serious questions about how San Diego Water Department employees are being paid millions of dollars in so-called bonuses.

The 10News I-Team learned local taxpayers have paid $28 million in bonuses to water department employees over the last four years, and the new audit showed some of the payments may not have been deserved.

Last May, Robert Ferrier of the Metropolitan Wastewater Department defended paying bonuses to rank and file water department workers, when the I-Team reported that the program doled out $6.9 million in bonuses in 2008 alone.

"Do you believe it's saved the city money?" I-Team reporter Lauren Reynolds asked Ferrier

He replied, "Absolutely."

An audit ordered after the I-Team's story by San Diego City Councilmen Carl DeMaio and Kevin Faulconer showed otherwise.

In the bonus program, known as "Bid to Goal," the city does not receive real outside bids for water projects. A private company, HDR Engineering, sets a proposed price tag. If water department workers do it for less, the savings get split in half -- one half to workers in the form of bonuses and the other half to customers in a trust account to offset rate increases.

"It has saved millions of dollars over the years for ratepayers," said Ferrier.

The I-Team learned the audit released Tuesday showed millions of dollars worth of irregularities, including $10.7 million in savings that were overstate and 40 percent of goals incorrectly reported.

DeMaio said, "At a time when city residents are seeing their water and sewer bills skyrocket, this flawed employee bonus program should immediately be reformed."