130-2000 LTC
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fl.u&
L.T.C. No.130-2000
LETTER TO COMMISSION
July 6, 2000
SUBJECT:
Mayor Neisen O. Kasdin and
Members of the City Commission
Lawren;~rL~>> ~
CityM~
Anchor Shops Garage/Quick Park Operational Review
TO:
FROM:
Attached for your information is the Internal Audit Report for Anchor Shops Garage/Quick Park
Operation covering the period of December 1, 1998 through February 29, 2000.
If you have any questions or comments, please feel free to call upon me.
LAL:ptw
Attachment
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CITY OF MIAMI BEACH
INTERNAL AUDIT REPORT
DATE:
June 21, 2000
TO:
Lawrence A. Levy, City Manager
VIA:
FROM:
Mayra Diaz Buttacavoli, Assistant City Manager ..;> ~ _~ ~
~"oLV" ,(~~
James J. Sutter, Internal Auditor -#
ANCHOR SHOPS GARAGE/QUIK~/RK OPERATIONAL REVIEW
DECEMBER 1, 1998 THROUGH FEBRUARY 29, 2000
SUBJ:
PERIOD:
At the request of your office we examined the revenue processing operations ofQuik Park at the Anchor
Shops Garage.
INTRODUCTION
The Anchor Shops Garage is operated by Quik Park of Florida, Inc. on behalf of the Miami Beach
Redevelopment Agency (Agency) under the terms of a management agreement. The Loews Hotel
utilizes the garage for self-parking for their guests' motor vehicles and for valet parking. Once it is
completed, the Crowne Plaza Hotel will also utilize the garage in the same manner. In addition,
members of the public park in the garage as well, both on a daily, transient basis and as monthly access
cardholders. The garage is open for business 24 hours a day, seven days a week.
All cash receipts of the garage are deposited by Quik Park into a bank account designated by the
Agency. Annual operating expenses are detailed in an annual budget and approved by the Agency.
Quik Park is reimbursed on a monthly basis upon presentation of a statement of income, expenses and
disbursements. In addition, in consideration of the services performed, the Agency pays Quik Park an
annual management fee of $40,000, payable in equal, monthly installments of$3,333.33.
SUMMARY OF FINDINGS
For the most part, Quik Park was found to be processing revenues promptly and accurately, in
compliance with the management agreement as well as generally agreed upon parking facility standards.
However, a number of opportunities for improvements to operations were noted and are discussed
below.
Page 1 of 7 Pages
INTERNAL AUDIT DEPARTMENT
ANCHOR GARAGE/QUlK PARK
OPERA T10NAL REVIEW
JUNE 21, 2000
REVENl JE COLLECTIONS. VALET USAGE AND TICKET COUNTS
Cashier shift report packages and supporting tickets for three consecutive days in December, 1999 were
reviewed in detail. They were found to be well organized and labeled, which facilitated the audit work.
For the most part, reports were noted to be clearly prepared, listing cash collected, valet income and
tickets issued as well as deposits prepared. The reports were substantiated by the supporting tickets and
system reports. However, we noted the following items in need of improvement:
. There are no formally documented corporate policies and procedures governing the operation
of the Anchor Shops Garage.
. Quik Park employees who perform the primary audit of revenue reports and tickets do not use
checklists to guide their review; as a result, important steps may be omitted,
. A control procedure that is being performed by Quik Park, the surprise booth cash counts during
various shifts, is not being documented. This leaves no audit trail, or evidence that the
procedures were actually performed.
. Monthly reports of active card holders are not being sent to the Agency at this time, thereby
making it difficult to determine if the Agency is receiving all monthly card holder revenue due,
FACILITY REVENlJE CONTROL FACTORS
In addition to reviewing a sample ofrevenue report packages, a tour of the garage was made in order to
determine the presence or absence of various revenue control factors. In general, the facility appeared
to be reasonably well maintained and functioning smoothly now that the use of a daily facility check list
(as suggested by the City's Parking Department) has been instituted, However, a number of
opportunities for improved control over revenues remain, as follows:
. There are no signs listing rates in force that are visible upon exiting the garage. (The Regional
Manager advised that such signs have been ordered and will be installed so as to be visible to
exiting patrons.)
. There appears to be a potential breach in the perimeter security of the garage where it seems
possible that a vehicle could exit over the grass onto Collins Avenue without paying.
. The lane gate anus, which are not SmartGates, are not equipped with foam rubber padding in
order to minimize damage to vehicles and injury to pedestrians in the event of a malfunction.
Page 2 of 7 Pages
INTERNAL AUDIT DEPARTMENT
ANCHOR GARAGE/QUIK PARK
OPERA TlONAL REVIEW
JUNE 21,2000
. Cashiers' report preparation at shift's end, and the making up of the daily deposits, are performed
in the window-walled garage office in full view of patrons or anyone else who may be in the
facility at the time.
. The accuracy of the overnight physical inventory counts are not periodically tested.
PURPOSE
The purpose ofthis audit was to evalua the revenue control systems at the Anchor Shops Garage and to
determine whether Quik Park is processing revenues in compliance with the management agreement.
SCOPE
1. Confirm that Quik Park has detailed and formally documented policies and procedures to cover
the operation of the garage,
2. Confirm that the staff members ofQuik Park are following corporate policies and procedures.
3. Confirm that Quik Park is in compliance with the management agreement.
4. Confirm that revenue is being processed in an effective, efficient and controlled manner so as
to ensure that the Agency is receiving all that is due.
5. Confirm that revenue control factors present at the garage are sufficient.
FINDINGS. RECOMMENDATION AND MANAGEMENT RESPONSES
REVENUE COLLECTIONS. VALET USAGE AND TICKET COUNTS
1, Finding: Lack of policies and procedures
There are no formally documented corporate policies and procedures governing the operation
of the Anchor Shops Garage.
Recommendation( s)
Corporate policies and procedures should be formally documented as soon as practicable. In this
way, there will be an authoritative reference describing proper operations for current staff as well
Page 3 of 7 Pages
INTERNAL AUDIT DEPARTMENT
ANCHOR GARAGE/QUlK PARK
OPERA T/ONAL REVIEW
JUNE 21, 2000
as a valuable training resource for new employees.
Management Response
The Regional Manager stated that the parking garage policies and procedures provided by City
Parking Director Jackie Gonzalez will be reviewed and modified to fit Quik Park's operations
at the Anchor Garage. This project will be completed by the end of August, 2000.
2. Finding: Needfor check lists to guide audit reviews
The Quik Park employees who perform the primary audit of shift revenue reports and tickets and
the Daily Reports do not use checklists to guide their review. As a result, important steps may
sometimes be omitted. As an example, in one shift package, it was noted that the cashier's
manual cash total did not agree to the system report total; however, this was not investigated or
explained or acted upon until the City's internal auditor questioned it. The use of a checklist
which includes a step requiring verification that the cashier's total agrees to the system total
would have avoided this situation.
Recommendation(s)
It is recommended that the staff performing the audit of shift packages utilize checklists
incorporating all the steps that are required to ensure the accuracy of the reports.
Management Re~onse
The Manager concurred with the recommendation, and will adapt the checklists that have been
provided by the City's Parking Department to Quik Park requirements by the end of June, 2000.
3. Findinl1:: Need for documentation of procedures performed
A control procedure that is being performed by Quik Park, the surprise cash counts of the monies
in the cashier's booth, is not being documented. As a result, there is no evidence that the
procedure is actually being performed, nor is there documentation of the fact that no exceptions
were noted.
Recornmendation(s)
The performance of all control procedures, such as the surprise booth cash counts, should be
adequately documented so that there is evidence that there are no problems with revenue
accountability during the various shifts.
Mana~ement Response
The Manager agreed to ensure that all control procedures are being adequately documented by
the end of June, 2000.
Page 4 of 7 Pages
INTERNAL AUDIT DEPARTMENT
ANCHOR GARAGE/QUIK PARK
OPERA T10NAL REVIEW
JUNE 21,2000
4. Finding: Need to verifY monthly access card revenue
It was noted that although monthly revenues collected for access card holders are reported to
the Agency on a regular basis, as a part of the manually prepared Daily Report, there is no
independent confIrmation of these amounts, such as a system report. Upon discussion with the
Regional Manager, it was determined that the system report of active card holders would provide
a way to verify the accuracy and completeness ofthe monthly revenues received.
Reconunendation(~
As discussed above, it is reconunended that Quik Park ensure that the monthly system report of
active card holders be sent to the Agency with each monthly management report.
Management Re!!ponse
The Manager advised that the monthly system report of active card holders has been provided
to the Agency since March of this year.
FACILITY REVENUE CONTROL FACTORS
5, Finding: Need for display of rates in force at exits
There are no signs at the exit lanes that display the rates in force so that exiting patrons can
readily see them and determine if the fee they are being charged is correct.
Recommendation(s):
It is reconunended that parking rate signs be installed where they are visible to exiting patrons.
This would help to avoid possible overcharges with the extra amount being kept by the cashier.
Management Re!!ponse:
The Manager advised that signs displaying rates in force will shortly be installed at the exit lanes
in conjunction with the institution of the new, lower summer rates beginning June 1,2000.
These exit signs will be a permanent addition, and will be updated any time the rates are
changed.
6, Finding: Potential breach in perimeter security
There appears to be a potential breach in the perimeter security of the garage where it seems
possible that a vehicle could exit over the grass onto Collins Avenue without paying. This is at
the rear of the garage.
Reconunendation( s ):
It is reconunended that measures be taken to close this potential breach in order to eliminate the
Page 5 of 7 Pages
INTERNAL AUDIT DEPARTMENT
ANCHOR GARAGE/QUlK PARK
OPERA T10NAL REVIEW
JUNE 21,2000
possibility of vehicles exiting without paying,
Management Resl'onse:
The Manager advised that the Agency is soliciting bids for the installation of an electronic gate
at the rear alley in order to control illegal entries by both vehicles and homeless individuals
seeking shelter in the garage. With regard to the Collins Avenue matter, the Manager stated that
this area is the responsibility of the Agency. The Redevelopment Coordinator indicated that the
Agency is considering the installation ofbollards around the grassy area near Collins Avenue
to prevent vehicles from exiting without paying.
7. Finding: Potential damage from gate arms
It was noted that the lane gate arms are not equipped with non-contact sensing, which would
allow them to reverse immediately when the presence of an object is detected. Nor are they
equipped with foam rubber padding in order to minimize damage to vehicles and injury to
pedestrians in the event of a malfunction. The Regional Manager agreed to investigate the
addition of foam rubber padding to the bottom of the gate arms.
Recommendation(s ):
Installation of the so-called SmartGates with non-contact sensing is recommended; however,
in the interim, the installation of foam rubber padding is advised, and, as noted above, will be
investigated by the Regional Manager.
Management ReflPonse:
The Manager related that Quik Park is proposing that the Agency consider the placement of foam
rubber advertising wraps on the gate arms. The Agency however decided against the
advertising, and advised that plain foam has been installed on the gate arms.
8. Finding: Lack of privacy during daily revenue processing
Cashiers prepare their shift report packages and the supervisors make up the daily revenue
deposits in the garage office which has window walls. As a result, although the door is locked
and no one is admitted until the preparations are completed, the activities are fully visible to
patrons or anyone else who may be in the garage at the time.
Recommendation(s ):
It is suggested that Quik Park provide for the installation and use of blinds or shades in the
garage office so that the preparation of both shift report packages and the daily revenue deposits
may be accomplished in privacy, out of the view of patrons and others.
Page 6 of 7 Pages
INTERNAL AUDIT DEPARTMENT
ANCHOR GARAGE/QUlK PARK
OPERA TIONAL REVIEW
JUNE 21, 2000
Management Re/lPonse:
The Manager did not see any problem with preparing the reports and deposits in full view of the
patrons outside the office as long as the door is locked. However, the Agency will ensure that
blinds are installed and drawn (and the door locked) whenever shift report and revenue packages
are being prepared.
9. Finding: Absence of periodic testing of overnight inventory counts
The accuracy of the overnight physical inventory counts are not periodically tested. The
accuracy of these counts is important in the reconciliation of tickets as well as the calculation of
the correct fees for lost ticket transactions..
Recommendation(s):
It is recommended that the accuracy of the overnight physical inventory counts be periodically
tested, perhaps on a quarterly basis, in order to ensure correct ticket reconciliations and correct
lost ticket fees.
Management Re/lPonse:
The Manager agreed to begin quarterly testing of the overnight physical inventory counts at the
end of the second quarter of this year (June 30, 2000.)
EXIT CONFERENCE: The above management responses were first discussed at an exit conference
held at City Hall on May 17, 2000, and attended by Harvey Figueroa, Regional Manager, Dawn Lee,
Accountant, representing Quik Park, and James J. Sutter, Internal Auditor, and Eileen Nelson, Senior
Auditor from the City of Miami Beach. An additional meeting was held on June 20, 2000, when the
report and the Quik Park responses were discussed by Christina Cuervo, Assistant City Manager, Jackie
Gonzalez, Parking Director, Kent Bonde, Redevelopment Coordinator, RDA and the auditors.
JJS:EN:en
(Audit performed by Eileen Nelson, Senior Auditor)
(qpoprev)99/00
cc: Christina M. Cuervo, Assistant City Manager
Patricia Walker, Finance Director
Jackie Gonzalez, Parking Director
Kent Bonde, Redevelopment Coordinator, RDA
Harvey Figueroa, Regional Manager, Quik Park
Page 7 of 7 Pages