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Parking Garage Exempt and Validated Transactions Review Results Summary (Period 4-1-18 to 9-30-18) 4-17-19M IAMI BEACH MEMORANDUM City of Miami Be ach, 1700 Convention Center Drive , Miami Beach , Florida 33139, www.miamibeachfl.gov Office of Inte rnal Audit Tel : 305-673-7020 TO : VIA: FROM : DATE : SUBJECT : PERIOD : Jimmy L. Morales , City Manager Mark D. Coolidge, Interim Internal Auditor Coral Vivolo, Auditor April 17, 2019 Parking Garage Exempt and Validated Transactions Review Results Summary April 1, 2018-September 30 , 2018 The Office of Internal Audit performed unannounced site visits on June 29th and August 3rd, 2018 to determine whether SP Plus Corporation (SP Plus) was following their provided Standard Operating Procedures, specifically as it relates to exempt and validated parking transactions. The City's Parking Department currently has ten (1 0) parking garages (an eleventh one is expected to be coming on line during the 2018/19 fiscal year) equipped with Skidata, an access and revenue parking management system . On April 18th, 2016 , the City entered into a management agreement with SP Plus to administer, manage , and operate the City's parking facilities which includes all the City owned garages. Among the services provided by SP Plus are the adequate staffing of the following two positions: • The central cashier assists/gu ides customers remotely from a centralized location using the Skidata video and audio capabilities. • Ambassadors or security guards are stationed at all garage locations to provide hands on assistance to customers when needed ; however, they must still always communicate with the central cashier. Each day there is a frequent but varying number of exempt and validated transactions that require the customer to contact the central cashier. An exempt transaction is one that requires the SP Plus central cashier to overwrite the normal exit process. Examples include instances whereby a customer loses their parking ticket, the equipment malfunctions, a customer pays their ticket but exceeds the allowed grace period to exit the garage, etc. Each exempt transaction requires the SP Plus central cashier to contact a City Parking Department supervisor to obtain a unique alpha code randomly generated by an in-house iPhone application called Parking Authorization Codes which links to a general reason for the request. These authorization codes serve as the internal control mechanism that allows the SP Plus central cashier to override the transaction and confirm that designated City supervisors properly approved the exempt transaction. Each exempt transaction is to be manually recorded by the central cashier on the "Central Cashier Command Log," and the supporting documentation is to be attached . Also, at the end of each day a "Parking Authorization Codes" report is generated by a City supervisor to account for all authorization codes granted for the day. Furthermore , there are transactions that require a central cashier validation such as when handicapped/disabled customers provide an appropriate permit; authorized contractors and City employees are working nearby on City business; etc. All validated transactions are also required to be logged into the "In Lane Validator Tracking Form." Customers are to provide supporting documentation (handicap permit and corresponding driver's license, contractor ID, employee ID, etc.) to obtain a parking validation. The Skidata system allows for the SP Plus central cashier to see live images of the Page 1 of 4 INTERNAL AUDIT MEMORANDUM PARKING GARAGE EXEMPT AND VALIDA TED TRANSACTIONS REVIEWS RESULTS SUMMARY April17, 2019 documentation provided by the customer and retains an image of said documentation. SP Plus audit personnel perform a daily review of all exempt and validated transactions to ensure that they were properly approved and documented. For exempt transactions, the auditor reconciles the "Central Cashier Command Log" to the City's "Parking Authorization Codes" report to verify that transactions were properly authorized. As it relates to validations, the auditor using the "In Lane Validator Tracking Form" logs in to Skidata to review the corresponding supporting documentation. On June 29, 2018 and August 3, 2018, Office of Internal Audit staff performed unannounced site visits to the SP Plus Audit Office located on the first floor of the 171h Street and Pennsylvania Garage. All exemptions recorded on June 17, 2018 and August 1, 2018 plus selected validated transactions recorded on June 28, 2018 and August 2, 2018 were reviewed to determine their authenticity and compliance with SP Plus's Standard Operating Procedures. All noted results were timely forwarded to Parking Department management for their review and any needed corrective action after each assessment was completed. A summary of the findings identified during each assessment are provided in the following paragraphs: 1) City Parking Department supervisors did not always provide the required unique alpha code from the Parking Authorization Codes application. Instead, they provided their radio number for twelve (12) or 16.22% of the 74 exempt transactions reviewed from June 17, 2018. When the radio number is used, the supervisor is required to sign the Central Cashier Exception & Authorization form by the end of their shift. However, testing determined that as of June 29, 2018, 61 exempt transactions from five (5) of the nine (9) City supervisors had not been signed for approval since May 12, 2018. As a result, there is a significant deficiency in the established internal controls since the radio numbers can be easily learned by SP Plus staff and Parking Department supervisors would most likely not remember whether prior days' transactions were valid. Parking Department's Response: As of August 2018, the Parking Department Supervisors were reminded that they are required to sign the SP Plus code log when their radio code is used to approve a transaction at the end of their shift. In addition, the logs are checked the next day to ensure there are no orphan records. We also continue to work with the Information Technology Department in adding new Parking Authorization Codes as they are needed. The Parking Department updates their Standard Operating Procedures at the end of each Fiscal Year. 2) Questioned SP Plus staff stated that the system was periodically inoperable due to internet connectivity deficiencies. For example, the system was knowingly off-line from approximately 12:45am until 5:00am and from 6:57am until 7:08am on June 28, 2018. In these cases, the gates are opened at all affected garages by SP Plus staff upon receiving approval from the Parking Department supervisor. At that time, customers can exit the corresponding garage(s) at no charge as there is no other means to determine the amounts owed. Although the City typically maintains emails and other documentation detailing those times when the system was down or off-line, this documentation is not knowingly forwarded to the SP Plus auditors to confirm that garage users were properly not charged. Going forward, the Parking Department should create a Standard Operating Procedure documenting this process and timely notify the SP Plus auditors. Parking Department's Response: SP Plus is notified and is aware of equipment down time when it occurs. Skidata logs the times when the equipment goes off-line, and a report can be produced on demand. In addition, SP Plus has Standard Operating Procedures in regard to off-line events. Page 2 of 4 INTERNAL AUDIT MEMORANDUM PARKING GARAGE EXEMPT AND VALIDA TED TRANSACTIONS REVIEWS RESULTS SUMMARY April17. 2019 3) Pictures of documents stored in the Skidata system have poor clarity and it is not possible for the SP Plus auditors to sufficiently review the documentation, but these transactions are still routinely approved. Central cashiers can see the clear image live in its entirety as it is presented; however, the record stored in the Skidata system is not clear to read. Furthermore, there was one instance noted where only a blank image was stored and approved. In this case, SP Plus personnel stated that it may have been caused by a glitch in the system. In addition, when customers have a handicap permit on their license plate, there is no means to capture the license plate in the system, as a result an exemption is created. Regarding the quality of the stored images, questioned Parking Department staff stated that they are working with Skidata to resolve this deficiency. Parking Department's Response: The Parking Department worked diligently with Skidata and this issue has been resolved. 4) There were instances where customers paid for their parking ticket; however, they did not timely exit the garage for unknown reasons resulting in additional monies due when it exceeded the 10 to 15 minute allowed grace period (the actual length of the period is not standardized as it depends on the garage). In some of the cases reviewed, the additional time ranged as high as 30 minutes whereby an exemption was created, and the customers were not charged for the additional time. Although the City's Parking Department are to approve these types of exemptions before they are granted, their Standard Operating Procedures do not specifically address this issue. Subsequent inquiries to the Parking Department Assistant Director on July 9, 2018 found that another but similar issue occurs when the patron pays the maximum daily rate and then exceeds the allowed grace period but still exits the garage on the same day. Although none of these cases were noted during testing, it was agreed that the patron should not be charged additional monies and an exemption should be created. Parking Department's Response: After further review the City Parking Supervisors and SP Plus are only allowed to validate up to 25 minutes at all locations under the following parameters: Up to 15 minutes courtesy • Use this criterion if a customer upon exiting one of our garage facilities has a valid reason for a delay exiting the garage. • The total times should not exceed the following: a. Parking Fees Not Satisfied Upon Exit-Total time between the time in and time out shall not exceed 25 minutes at locations but G8 between 6:30 am and 7:30 am where it shall not exceed 30 minutes. b. Parking Fees Paid at a POF -Total time between the time the ticket was paid, and the exit time shall not exceed 30 minutes. (This used for customers that prepaid far in advance of their exit and/or within the paid timeframe.) OverGrace_FiatRateEngaged • Use this criterion when a Flat Rate period is active in the revenue control equipment and customer delayed in exiting, paid upon entering and not at exit time, and due to heavy exiting garage traffic. Page 3 of 4 INTERNAL AUDIT MEMORANDUM PARKING GARAGE EXEMPT AND VALIDATED TRANSACTIONS REVIEWS RESULTS SUMMARY April 17, 2019 _____ Page 4 of 4 User Error • Use this criterion when a customer’s action causes the equipment to malfunction forcing the cashier to reset and/or open the gate remotely. 5) There were instances noted whereby employees/contractors provided their identification card to get their parking validated; however, SP Plus central cashiers and their auditors do not have the means to verify whether the identification card provided is valid or if they were working on City business in the area; however, a validation is still granted. Also, there was an additional instance observed during testing whereby a prospective candidate of SP Plus parked in one of the facilities for an interview; however, at the time of exit no exemption was created. Instead, the individual was treated as a contractor and the ticket was validated. In this case, the transaction should have been treated as an exemption and a unique alpha code from a City Parking Supervisor should have been requested. Parking Department’s Response: As soon as the Parking Department was notified of these incidents only the Contractors providing service to the Parking Facilities are validated (i.e. Janitorial, Security, and SP Plus employees). Currently if any of the employees mentioned that they lost their ticket, they have to pay for parking. This is an SP Plus audit function. F:\OBPI\$AUD\INTERNAL AUDIT FILES\DOC17-18\REPORTS - FINAL\Parking Garage Monitoring - Annual Summary FY 2017-18.docx cc: Saul Frances, Parking Department Director