Chicago’s Department of Streets and Sanitation is spending millions of dollars to provide free garbage collection to multiunit residential buildings no longer eligible for the perk and to nonprofits whose garbage freebie was never authorized, the city’s inspector general concluded Monday.

In 2000, the City Council formalized a policy that requires city crews to pick up garbage at single family homes and all multiunit buildings that include four-or-fewer units.

All other buildings were required to hire private scavenger services. But larger buildings receiving free garbage collection before that date were “grandfathered” in until the buildings were sold.

In his latest audit, Inspector General Joe Ferguson set out to determine whether buildings benefiting from the free garbage collection perk were still authorized to receive it.

What he found was alarming at a time when one influential alderman has suggested a garbage collection fee to help solve the city’s pension crisis.

Ferguson concluded that Chicago taxpayers are providing the freebie to 1,393 nonprofit properties, at an annual cost of $3.3 million, even though the City Council never authorized the perk.

“This is ultimately a provision of free service at taxpayer expense provided without legal authority,” the inspector general wrote.

Ferguson further disclosed that the so-called “grandfather list” of 1,839 multiunit buildings still receiving the garbage freebie at annual cost of $3.27 million was not updated for the six-year period ending in 2013.

“This list is inaccurate and, over time, may have resulted in millions of wasted city dollars in the provision of city garbage services to multiunit dwellings that, by law, should have been using private commercial garbage collection services,” Ferguson wrote in the audit released Monday.

Late last year, apparently spurred by the inspector general’s audit, Streets and San joined forces with the Law Department to “review and update” the grandfather list for buildings that may have been sold since the “grandfather clause” was authorized 2000, thereby ending the garbage collection freebie, the audit states.

In a random sample of 116 properties, 46 percent [53 properties] had changed ownership and “were therefore ineligible,” the audit states.

The inspector general applauded the Emanuel administration for its proactive “efforts to curb waste that has run into the millions extending back many years.” But he argued that those efforts are “time- and resource-intensive and may be impractical” going forward.

“As long as this obscure program that appears to benefit a select few at general taxpayer expense continues in operation, our audit recommends that [Streets and San] implement a more efficient process,” Ferguson wrote, noting that City Hall is working to develop a self-certification and audit process.

As for the garbage collection freebie provided to 1,393 non-profits, the inspector general recommended that the perk either be discontinued or authorized by the City Council using a needs-based standard similar to the revised policy in place for free water.

Emanuel campaigned on a promise to turn off the free water spigot to hospitals, churches, universities and other nonprofits to usher in an era of shared sacrifice needed to confront the city’s structural deficit.

To address aldermanic concerns about struggling parish churches, the mayor subsequently agreed to soften the blow — by offering a 60 percent water discount in 2012, 40 percent in 2013 and 20 percent in 2014 and beyond.

Last year, the mayor agreed to yet another compromise—by restoring free water to churches and nonprofits with assets under $1 million, despite warnings that the “cold-hearted” compromise would destroy a safety net of social services.

The free water issue was a huge political headache for Chicago aldermen — one they’re not eager to revisit eight months before the election.

Asked Monday whether he agrees with Ferguson’s finding, Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, said, “I really don’t have an opinion as to how I think we ought to proceed. The audit is just out. I want to understand what the repercussions would be.”