Off Street Parking – Operational Audit of the City’s Administration of Imperial Parking’s Agreement to Provide Cashiers, Attendants and Supervisors/'v\IA/\/\1 BE
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
AUDIT:
PERIOD:
/ ..
Jorge M. Gonzalez, City Manager
Kathie G. Brooks, Budget and Pr~. m.aQQ.e-lmprovement Director
James J. Sutter, Internal Audito~~r
May 10, 2010 ~
Off Street Parking -Operational Audit of the City's Administration of Imperial Parking's
Agreement to Provide Cashiers, Attendants and Supervisors
Contract year starting on August 11, 2008 through August 10, 2009.
In conjunction with our regularly scheduled audit of the professional service agreement with Imperial
Parking to provide to provide cashiers, attendants, and supervisors to the City's parking system; we
reviewed the City's Off-Street Parking Division's operation as it relates to this service agreement.
INTRODUCTION
On January 3rd, 2008, pursuant to Resolution No. 2007-26731, the City Commission directed the
administration not to exercise a renewal option with Standard Parking Corporation, the then current
Contractor. Instead the administration was directed to initiate a competitive process to select a
Contractor that could provide the best possible services, at the lowest possible price to the City.
Consequently Request for Proposals (RFP) No. 11-07/08 was issued, and subsequently on April16,
2009, Resolution No. 2008-26810 was approved, by the Mayor and Commission, authorizing the
administration to enter into contract negotiations with the recommended number one ranked
proposer, Imperial Parking (U.S.), Inc (lmpark). On June 25t 11 , 2008 the Mayor and Commission,
through Resolution No. 2008-26839, approved and authorized to execute an agreement with
Imperial Parking (U.S.), Inc, pursuant to Request for Proposal (RFP) No. 11-07/08, to provide
parking cashiers, attendants, and supervisors for the City of Miami Beach parking system, hereafter
referred to as the Contractor. The term of the agreement is three (3) years, commencing on August
11th, 2008 and ending on August 1 ot 11 , 2011, with two (2) one-year renewal options at the City's sole
discretion.
At the May 13, 2009 Commission meeting, the Mayor and City Commission authorized the
administration to issue a subsequent Request for Proposal (RFP) to provide parking cashiers,
attendants, and supervisors for the City of Miami Beach parking system, based on concerns
regarding performance and cost. On May 13t11 , 2009, the Mayor and City Commission approved
issuance of Request For Proposal (RFP) No. 41-08/09. On September 10, 2009 the City Manager
presented his recommendation of another company to award the contract after considering the
Evaluation Committee recommendation, by conducting his own independent review of the proposals
and due diligence with the RFP. The new contract was presented at the January 13, 2010
Commission meeting with an anticipated start date of March 9, 2010.
Among other duties, Imperial Parking's employees are responsible for collecting and reconciling
revenue generated by the parking facilities on a daily basis, completing and providing to the City all
related supporting documentation and reports, as well as maintaining and/or enhancing an excellent
experience for parking users by providing excellent customer service and guidance throughout the
We c11e commilted to providing excellent public service and safety to all who live, work, and pia)' in our vibrant, l!opicol, historic communi!)'.
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May 10,2010
customer's visit to the facility.
The Off-Street Parking Division of the City's Parking Department is responsible for monitoring the
quality of the services provided by the Contractor's employees, managing the requests for personnel
to the Contractor, and ensuring that appropriate policies and procedures are in place and adhered to
in order to protect City assets and best interest, and promote excellence with respect to the services
provided.
Invoices are submitted by Imperial Parking to the Parking Department based on the hours worked by
each employee, in each position classification, and in each parking facility. Contractor hourly billing
rates are $13.88 per hour for parking attendants/cashiers, and $16.77 per hour for supervisors.
These rates consider Contractor's employee wages and overhead. Hours to be worked by
employees in each position are determined by the Off-Street Parking Division management on a
weekly basis considering the optimal and most efficient level of employees required to operate the
parking facilities. Invoiced hours are then compared to hours requested accordingly. Any
exceptions, if any, are then communicated to the Contractor for correction prior to processing
payment.
OVERALL OPINION
Although the Parking Department performed their responsibilities to supervise the management of
the City's parking facilities satisfactorily during the first contract year, Internal Audit identified
operational, procedural, and compliance areas in need of immediate corrections. These areas were
as follows:
• Surface lots are being attended regularly without any guidance or criteria and in
contradiction to Chapter 106 of the City Code (Ordinance No. 2008-3613).
• There are parking fee rates offered at attended surface lots that are not stipulated on the
City's Code of Ordinances and have not been approved by the Mayor and Commission.
• Control weaknesses exist with respect to the implementation, accountability, and
enforcement of hourly rates offered at three (3) of the City's attended surface lots.
• Improvements are needed in the review of invoices and time cards by the City.
• No specific contract performance evaluation measures have been established and
implemented by the Parking Department to monitor the performance of the agreement.
• Revisions to definitions in Section II D.1. (Page 16 of 44) of the Request for Proposals
(RFP) should be considered in the future if the requirement on this section persist for future
contracts.
Additional details regarding the above mentioned areas in need of improvement and/or corrections
have been provided on the Findings, Recommendations, and Management Responses section of
this report.
PURPOSE
The purpose of this audit is to review the Parking Department operations as it relates to the
administration of the professional services agreement between the City of Miami Beach and Imperial
Parking to provide cashiers, attendants, and supervisors for the City's parking system, as well as to
Page 2 of 8
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May 10, 2010
evaluate controls over the City parking facilities and attended lots as to the administration of the
contract.
SCOPE
1. Verify that sufficient controls exist to reasonably assure the reliability, accuracy, and
accountability of all revenues collected.
2. Verify that sufficient controls exist to reasonably assure the reliability, accuracy, and
accountability of all revenues collected.
3. Verify reasonable reliability and accuracy of invoices to the City from the Contractor.
4. Confirm that policies and procedures are complete, known, and consistently followed by all
personnel for the administration of the Contractor agreement.
FINDINGS, RECOMMENDATIONS, AND MANAGEMENT RESPONSES
1. Finding -Surface lots are being attended regularly without any guidance or criteria and in
contradiction to Chapter 106 of the City Code.
As stated on the City's official web site, "the City of Miami Beach operates and maintains sixty-
four (64) surface parking lots. A majority of our parking lots are equipped with central pay
stations. These stations accept cash, credit cards, debit cards, and parking meter cards". The
corresponding parking rates and fees applicable to on-street parking, as well as off-street
surface lots and facilities are stipulated on Chapter 166, Sec. 166-55 of the City's Code.
Nonetheless, no provisions currently in the Code allows for attending any surface lots in the
City unless it is attended for a special event. This exception is documented on Chapter 166,
Article II, Division I, Section No. 106-55(L), of the City's Code. According to this chapter, "the
City Manager may establish a special event flat parking rate at all attended garages and
surface lots of $15.00 for special event parking at municipal parking facilities directly servicing
a special event. The City Manager may exercise this option for the amount of days of the
special event including the day before and the day after the event. In addition, the
transportation and parking committee shall consider and make a recommendation upon the
application of the proposed flat parking rate for each special event prior to implementation, but
such recommendation shall not be binding upon the City Manager. A special event must
have, at a minimum, three of the following conditions anticipated in order for the City Manager
to exercise this option:
a) A special event is defined as an event on public property sanctioned and permitted by
the City's Office of Arts, Culture, and entertainment and/or an event on private property
deemed to anticipate the demand for City services set forth in subsections b and d
below.
b) A special event with an anticipated demand for parking that will saturate all parking
within 1, 500 feet of the event, as determined by the parking director.
c) A special event with an anticipated demand for parking that will require supplemental
park and ride shuttle service, maps, brochures, and other informational materials
and/or ancillary transportation/parking services.
d) A special event with an anticipated demand for City services, including police, fire, and
parking, that requires the declaration of a parking emergency by the Mayor and
Commission through the passage of an enabling resolution".
Page 3 of 8
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May 10,2010
While there may be instances where this practice may generate additional revenues for the
City, there are no established guidelines or documentation supporting this. Further, it requires
additional hours to be worked by the Contractor and incurs additional costs to the City under
the agreement with the Contractor.
Recommendation(s)
The City's Parking Department should review its current policies with respect to attending
surface lots throughout the City in order to ensure compliance with City Ordinances. Should
the Parking Department decide to continue attending the City's surface lots during any time,
other than special events, then criteria and parameters for whether attend the lot or not, and at
what rate, should be established and brought before the City Mayor and Commission for
approval, approval with modifications, or rejection. If approved, then it should be consistently
applied and followed throughout the City.
Management's Response(s)
The Parking Department operates and manages surface parking lots either through metered
parking, permit parking, and/or attended parking operations. All facilities identified as attended
parking operations comply with the requirements of the Code which is to comply with three of
the four established criteria. Currently, all locations with few exceptions that were identified in
the finding above have reverted to back to either metered operations and/or permit parking as
the demand for parking no longer warrants an attended parking operation. Incidentally,
parking demand or variable thereof is a component of three of the four criteria established in
the CityCode.
Internal Audit Observation:
Although we do recognize and have been able to confirm a significant reduction of City
surface lots being attended subsequent to our audit, the surface lots identified prior to and
during our audit as attended were operated without meeting three of the conditions stipulated
on the City Code simultaneously.
2. Finding-There are parking fee rates offered at attended surface lots that are not stipulated on
the City's Code of Ordinances and have not been approved by the Mayor and
Commission.
Parking rates, fees, and penalties are promulgated on Chapter 106, Sec. 106-55 of the City of
Miami Beach Code to be applied throughout the City, including off-street attended facilities.
Currently, there are three different parking rates offered at different attended surface lots in the
City that are not included in Chapter 106 of the City's code and therefore have not been
approved by the Mayor and Commission. These rates are:
• A two ($2.00) dollars rate for up to three hours for City of Miami Beach Residents Only
• A four ($4.00) dollars rate for any patron parking for up to four (4) hours
• A ten ($10.00) dollars flat rate for patrons parking for the day.
Recommendation(s)
Parking rates and fees not stipulated on Chapter 106, Sec. 166-55 of the City's Code should
not be offered at any of the City's Parking Facilities without prior approval by the Mayor and
Commission. Any approved changes and/or additions to current parking rates, fees, and
penalties should be incorporated as a revision/amendment to the current ordinance
(Ordinance No. 2008-3613).
Page 4 of 8
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May 10, 2010
Furthermore, considering the weaknesses in controls mentioned in finding number four (4)
below, Internal Audit recommends avoiding the implementation of any fee structure applicable
to attended surface lots that would provide for payment for hour increments, unless proper
equipment and controls are installed and implemented on the facility.
Management's Response(s)
Agreed, all attended parking operations are now compliant with the established parking rates
and fees established in the City Code.
3. Finding -Control weaknesses exist with respect to the implementation, accountability, and
enforcement of hourly rates offered at three (3) of the City's attended surface lots.
Currently there are a total of three (3) attended surface lots in the City offering different fee
rate options for patrons parking in those facilities. These lots are located on 1 ih Street and
Washington Avenue (World Symphony lot), on 22nd Street and Collins Avenue (Library lot),
and on 461h Street and Collins Avenue. As outlined in finding number 3, two of the rates
offered are a $2.00 dollars for three hours of staying, offered to City residents only, and a
$4.00 dollars for up to four hours, offered to any individual parking for four (4) hours or less.
Although not properly documented, articulated procedures by both the City's Parking
Department and the Service Provider require for the seller to write on the ticket the time of
customer entrance on the bottom portion of the ticket provided to the customer to be displayed
on the vehicle's dash board, and also on the top portion of the sold ticket that remains on the
seller's ticket book. If the customer decides to stay longer than the hours established, then the
seller would have to pursue collection of the remaining amount to complete the flat rate for the
entire day (The seller would have to collect $11.00 for four (4) dollar tickets and $13.00, for
two (2) dollar tickets sold).
Unlike the garages, surface lots are not equipped with appropriate equipment to track the
hours of stay for individual vehicles. Also, they are not equipped with barricades at the exit to
control the vehicles exiting. Providing these hourly rates is not only an operational challenge,
as the employees would have to be constantly walking the lot and keeping accurate time
counts for multiple vehicles to ensure compliance, while more Parking Enforcement oversight
and presence would be required in the lot (considering that enforcement only walks the lot if
asked by the attendants), but also creates control weaknesses for the collection,
accountability, and audit trails of revenues collected.
Patrons who pay the two (2) dollars for three hours, or the four (4) dollars for up to four hours
could end up parking for the entire day without additional charges, considering that the sellers
and attendants can not maintain control of all vehicles entering and exiting at different times
without compromising the service level in the lot.
Offering these rates provides a wide opportunity to misappropriate revenues collected in the
lot without any trails left behind. A seller collecting the difference of eleven (11) dollars, for
four (4) dollar tickets, and/or thirteen (13) dollars, for two (2) dollar tickets, from those patrons
staying for longer than the established hours could easily misappropriate the moneys without
being noticed. This also provides an incentive for the sellers to sell more of these discounted
tickets, as oppose to the flat rate for the entire day.
Another opportunity for misappropriations is available when responsible patrons, who initially
purchased these discounted tickets for limited time, return to pay, in order to extend their
Page 5 of 8
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May 10, 2010
hours for parking. Attendants and/sellers could take the moneys and not issue a new ticket.
Once again, no trails would be left behind. Even increasing Parking Enforcement's patrol,
currently performed only at the request of the sellers and attendants at the lot, would not
significantly reduce the risk and exposure or even prevent events like the ones described from
happening.
These are just some of the possible scenarios and risks that the City could experience with
respect to offering the aforementioned rates on attended surface lots.
Recommendation ( s)
Considering the nature of the operations on the City's attended surface lots, current economic
conditions, and the weaknesses in the collection, accountability, and operational controls,
Internal Audit recommends to cease offering these rates (the two (2) dollars for three hours,
the four (4) dollars for up to four hours, and any other rates other than the $15.00 dollars flat
rate already established for special events) at all attended surface lots in the City immediately.
Any rates offered at attended surface lots should be a one time flat rate per visit and should
be reviewed and approved by the City Mayor and Commission prior to its implementation.
Recommendations from the transportation and parking committee could be considered prior to
the implementation of any new parking rate other than the $15.00 dollars flat rate already
established during special events.
Management's Response(s)
Agreed, please see Management Response to Finding No. 3.
4. Finding -Improvement needed in the review of invoices and time cards by the City.
Section 3.2 of the agreement specifies that "the City shall verify time cards and summary
sheet calculations and that any discrepancies shall be duly noted and deducted from
contractor's invoice". However, inquiries to City's Parking Department personnel showed that
although a few time sheets are being randomly selected for review by the Operations
Manager, not all invoices or timesheets submitted by the contractor were being properly
reviewed. Tests performed on twenty seven (27) sampled time sheets from one of the six
randomly sampled invoices confirmed that corrections to time sheets and/or irregularities due
to time tracking equipment limitations were processed without proper approval, initials, name,
and signature of a supervisor from Imperial Parking and the City.
Some of the Limitations observed on the Contractor's time tracking equipment included the
following:
• The time tracking clock and timesheets can only accommodate one hundred (1 00)
employees at a time. Employing more than one hundred (1 00) employees requires a
duplication of timesheets, which unable the system to differentiate between hours
worked by either of the employees.
• Every Saturday at 3:00am the time tracking equipment resets to a new working
week/payroll period. Consequently, hours worked by employees starting prior to the
equipment re-set, but working past the reset hour, will have their end of shift time
stamped on top of already recorded time stamps on their time sheet for hours worked
at the beginning of the week. As a result it is almost impossible to identify the times
stamped on the timesheet.
All these limitations on the time tracking equipment could impact the reliability and accuracy of
Page 6 of 8
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May 10, 2010
timesheets, and as a result, the hours billed to the City.
Recommendation(s):
The Parking Department should consider in their review of all invoices provided by the
contractor to randomly sample a representative number of timesheets in order to avert any
errors or irregularities that may occur. This review should be performed by suitable personnel
in order to maintain appropriate segregation of duties. All irregularities must be noted to the
contractor upon discovery and corrected prior to processing payment. All changes to time
sheets not reflecting a reason and proper approval should be questioned and substantiated in
order to maintain a reasonable level of controls and audit trails. Time tracking devices should
be upgraded to meet the demands and nature of the day to day operations. The
system/equipment should be able to accommodate more than one hundred (1 00) employees.
Also, it should be able to record hours worked involving different payroll periods without
incidents.
Management's Response(s)
The Parking Department reconciles the Contractor's invoice for hours by selecting random
samples of contract employee time cards. In order to reconcile and confirm each and every
contract employee time card additional resources (budgeted positions) would be necessary.
Due to budgetary constraints, the Parking Department is not requesting any additional
positions at this time; however, we will be mindful of this recommendation at the appropriate
time.
In regards to the time recordation issues, the Contractor has reassigned the appropriate
number of contract employees to other city facilities for time recordation purposes in order to
ensure that no more than 100 employees utilize each time clock. Additionally, the Contractor
has been directed to take corrective action regarding the "3:00 AM overlap issue" with their
time clocks.
5. Finding-No specific contract performance evaluation measures have been established and
implemented by the Parking Department to monitor the performance of the agreement.
Other than Section II, D of Request for Proposal (RFP) No. 11-07/08 which requires the
Contractor to maintain a daily attendance record of 90%, no other performance standard or
measure has been implemented by the City's Parking Department in order to document and
provide historical data and behavioral trends on the performance of the services rendered
under this agreement. No documentation could be found regarding the policies, procedures,
or evaluation methods used to determine the Contractors compliance with other performance
areas such as customer service, mystery shopping, reporting of maintenance problems, etc.
Recommendation(s)
Considering that an annual performance evaluation is a requirement for the current service
agreement. Adequate performance measures and/or guidance should be implemented as a
framework, source for information, and substantiation of the Contractor's performance
evaluation.
Management's Response(s)
Agreed, the Parking Department has developed a performance evaluation and checklist of
items, including all requirements identified in the RFP (Request for Proposals) and all
negotiated points identified in the their Proposal that are reflected in the Professional Services
Agreement.
Page 7 of 8
Internal Audit Report
Off Street Parking-Operational Audit of the City's Administration of Imperial Parking's Agreement
to Provide Cashiers, Attendants and Supervisors
May10,2010
6. Finding-Revisions to definitions in Section II D. 1. of the Request for Proposals (RFP) should
be considered for future contracts.
Absenteeism/attendance is defined in the above referenced section of the RFP as "the
number of cashiers, attendants, and/or supervisors scheduled in any facility at the start of any
shiff'. However, current staffing requests by the Off-Street Parking Division do not establish
beginning and ending time or scheduled shifts. Instead, they require total hours to be provided
for each position at each facility and ensure that an individual is placed for that position in that
facility regardless of starting or ending time. As a result, defining absenteeism/attendance
using the "start of any shiff' does not correlate to current practices.
Also, it is the City's intent to maintain a high quality of services at all times during hours of
operations at all City facilities. Consequently, defining absenteeism/attendance, a
performance factor, using "at the start of any shiff' does not take in consideration employees
that may show up at the start of their shift, but leave earlier than anticipated.
Recommendation(s):
Internal Audit recommends revising the current definition of absenteeism/attendance in future
RFP/Contracts as follows:
• Absenteeism/attendance shall be defined as the number of hours requested for
cashiers, attendants, and/or supervisors scheduled daily in any facility.
Management's Response(s)
Agreed, the City has developed new language to be included in future competitive bidding
processes for this service.
EXIT CONFERENCE
An exit meeting was held on January 20, 2010 to discuss the audit report and to solicit
management responses noted above. Attendees were Charles Adams, Parking Assistant
Director, Miguel Beingolea, Off-Street Parking Operations Manager, Recio Rodriguez,
Financial Analyst Ill, James Sutter, Internal Auditor and Fidel Miranda, Auditor.
Management responses were received thereafter and incorporated into this report.
Audit performed by Fidel Miranda, Auditor
F:lobpi\$AUD\INTERNAL AUDIT FILES\DOCOS-09\REPORTS-FINALIOFF-STREET PRKG-OPERATIONAL AUDIT OF ADMIN OF
IMPERIAL CONTR.doc
cc: Jorge Gomez, Assistant City Manager
Saul Frances, Parking Department Director
Charles Adams, Assistant Parking Director
Page 8 of 8