Revenue Municipal Parking PermitsMtAMIBEAC:H
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division
TO:
FROM:
DATE:
AUDIT:
PERIOD:
Kathie G. Brooks, Interim City ~~··
James J. Sutter, Internal Audito7~"
January 7, 2013
Revenue Municipal Parking Permits
October 1, 2009 through September 30, 2012
INTERNAL AUDIT REPORT
This report is the result of a scheduled audit to verify that proper controls are in place to
reasonably ensure the integrity, reliability, and accuracy of records pertaining to the issuance of
revenue generating municipal parking permits while eliminating, reducing, or mitigating risks
associated with the same.
INTRODUCTION
The Parking Department is responsible for the administration; permit safeguarding and
issuance; enforcement; and overall oversight of different municipal parking permit programs
created within the City to offer discounted parking rates to City residents, and non-resident
employees of local businesses and at the same time, address their necessity to have access to
parking often adversely impacted by heavy concentration of vehicles.
Some of the most popular parking programs currently in place include residential permit parking
areas and corresponding permits; lot specific/facility specific municipal parking permits;
residential visitor parking hang tags; hotel hangtags; special realtor permits; and hybrid vehicles
incentive. Permit prices may vary for different geographical areas or zones within the City
depending of different factors including, but not limited to, availability and capacity of parking
spaces in the area, density and frequency of usage, among others. The following table
extracted from the cashiering system used by the Parking Department illustrates the number of
permit related transactions during our audit period and total revenues resulting from the same:
Permit application and related documentation can be submitted in person at the first floor of the
City Hall Garage, located at the corner of 181h Street and Meridian Avenue. For resident
We are committed to providing excellent public service and safely to all who live, work, and play in our vibrant, tropical, historic communily.
Internal Audit Report
Revenue Municipal Parking Permits
January 7, 2013
permits, the applicant has to provide the vehicle description and registration, as well as proof of
City residency. Meanwhile, municipal permits (lot specific permits) are available in a first come,
first serve available space basis.
Because permits issued for any specific lot cannot exceed 50% of the available spaces in the
corresponding lot, the Parking Department maintains waiting lists for those locations with high
demand for permits that have reached the maximum amount of permits allowable. Once
issued, permits not renewed by the specified date, which may vary depending on the permit,
zone, and period of time purchased, then the next person in the waiting list is provided with the
opportunity to purchase a new permit. Should the individual, who allowed the permit to expire
without prompt renewal, still desire to have a permit, then he or she would be placed on the
waiting list as a new entry. Additional information regarding fee requirements and restrictions
regarding all revenue generating parking permits can be found in the Parking Department's
portal on the City's web-site, as well as in Chapter 106 of the City Code.
OVERALL OPINION
One of the many responsibilities of the Parking Department is the administration, safeguarding,
and enforcement of revenue generating parking permits issued to residents and other
individuals through different programs. Results from our audit of the operation showed that
despite having proper documentation supporting all parking permit decal requests and not
having any shortages in permit decal inventory, the following opportunities, efficiencies, and
improvements were identified:
• No supporting documentation was provided by the Parking Department to substantiate
and establish authority with respect to seven (7) out of 16 existing restricted residential
zones and permit rates charged.
• Weaknesses in operational controls were observed with respect to the accountability,
enforcement, and record keeping of temporary parking permits issued.
• Revisions and updates may be required for Chapter 106, Article II, Division 1, Section
1 06-55(k) regarding current restricted residential zones.
• No policies and procedures have been documented and approved with respect to
Revenue Parking Permit Inventories and corresponding internal accountability.
• Inventory of un-assigned permits and cashier-assigned permits are kept in the same
closet which remains unlocked during the day and accessed by multiple individuals.
• Prices for municipal permits/lot specific permits issued for locations south of 23rd Street
do not consider the higher intrinsic value resulting from a ·higher parking hourly rate in
the zone, as well as a higher demand for parking.
Additional details regarding these areas in need of corrective action and/or improvements can
be found on the "Finding, Recommendations, and Responses" section on this report.
PURPOSE
The purpose of this audit is to verify that proper controls are iri place to maintain integrity,
reliability and accuracy of the revenue generating municipal parking permit operations and
related documentation; verify that proper controls exist to prevent, eliminate, or mitigate any
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January 7, 2013
misuse of the permits; verify that permits are issued in accordance to City policy; as well as
verify accountability and the overall process to identify efficiencies, if any.
SCOPE
1. Confirm that there are updated and documented policies and procedures consistently
followed to ensure accurate recording and processing of revenue generating parking
permits.
2. Confirm that revenue generating parking permits and related transactions are properly
accounted for, economically and efficiently processed, reviewed, approved, adequately
documented, and correctly recorded in accordance with administrative policies and
procedures.
3. Confirm the adequacy of internal controls with respect to limiting access to permits
(issued and/or un-issued) to ensure accountability, while preventing unauthorized uses
of the same.
FINDINGS, RECOMMENDATIONS, AND MANAGEMENT RESPONSES
1. Finding -No supporting documentation was provided by the Parking Department to
substantiate and establish authority with respect to certain existing residential
zones and permit rates charged.
No supporting documentation was readily available and provided for review regarding the
following observations:
a) Chapter 106, Article II, Division 2, Section 106-78(c) requires, once procedures
established in Section 1 06-78(a) and 1 06-78(b) are followed, that the city commission
must, by resolution, approve or disapprove the creation of the residential parking permit
area. However, no resolutions were provided and/or readily available with respect to
residential zones 6 (Indian Creek), 7 (Meridian Ave), 8 (Bonita Drive), 10 (Sunset
Harbor), 15 (Altos del Mar), 16 (19 1h Street/Michigan), and 17 (Bayshore).
b) Additional research was conducted with respect to residential zone 8 (Bonita Drive) after
observing that the zone had not been included in a permit rates by zone log/fee
schedule provided by the Parking Department despite being referenced on Chapter 106,
Article II, Division 1, Section 1 06-55(k). Personnel from the Parking Department stated
that the zone had been deemed inactive, since no permits were being purchased for this
zone. As a result, the fee schedule did not include the zone. Nonetheless, no support
regarding commission action to dissolve the residential zone was available to support it
and no resolution, as reflected on the above finding, was provided and/or available to
document its creation despite being reference on the City Code.
c) Following the Commission's approval, by resolution, of a residential zone, Chapter 106,
Article II, Division 2, Section 1 06-79( c) of the City Code states that "Permit fees, if any,
shall be approved by resolution of the City Commission. The city manager or his
designee shall calculate the permit fees based on the actual cost of manufacture and
installation of pertinent signs, applications, permits, and administrative costs in
connection with the issuance of permits and present recommended fees to the city
commission for approval". No resolutions were provided by the Parking Department
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and/or readily available for review supporting and establishing current rates charged for
residential parking permits.
d) Chapter 106, Article II, Division 1, Section 1 06-55(d) for Special realtor permits states
that "parking placard permits are available to realtors licensed in the city at a rate of
$5.00 per permit placard, per month, plus applicable sales tax". Current rates charged
(1 0 daily scratch tags for $5.35) differ from such stipulations. Other provisions and/or
restrictions regarding realtor permits were provided in the same section.
e) No supporting documentation reflecting commission approval, either through ordinance
or resolution, was provided by the Parking Department and/or readily available for
review in reference to a Finance and Citywide Projects Committee recommendation for
City Commission approval from their March 09, 2005 meeting regarding the Shane
Watersports Center. The Committee recommendation included a number of provisions,
including parking permits to be provided to the center under certain covenants and/or
conditions. As a result, the Parking Department has been selling hang tags to the center
at purchase price. As many as 300 hangtags have been provided at times per Shane
Center representative's request to be used in a public surfaced parking lot located on
65 1h Street and Indian Creek. However, no support was found and has been provided by
the Parking Department or is readily available with respect to final conditions,
agreements, and/or Commission approval providing authority to issue these permits.
Same lack of supporting documentation exists with respect to establishing authority for
on-street permits issued to temples and/or religious facilities.
Recommendation( s)
The Parking Department should actively maintain, document, and continuously monitor and
update a file with authoritative support and documentation with respect to parking programs
and rates, as approved by the Mayor and City Commission. In addition, adequate research
should be completed to ensure proper support and authority to current parking programs
and rates exists and is documented. Corrective actions should consider possible system
fee rates reconfiguration and programming, as well as City Commission approvals whenever
necessary and applicable. Furthermore, authoritative documentation, including Mayor and
Commission approvals, should be sought by the Parking Department to address these
findings, ensure compliance to the City Code, and prevent and/or avoid any impact as a
result. ·
Management's Response(s)
a. The Parking Department will pursue an amendment to the City Code and include the
aforementioned residential parking zones that are were not referenced in the Code. This
shall take place during the next amendment to Section 1 06 of the City Code.
b. Please refer to 1 (a) above. Also, Zone 8/Bonita Drive is currently inactive due to lack of
utilization.
c. Please refer to 1 (a) above.
d. Please refer to 1 (a) above. Also, the amendment to the City Code will include a
transition from permit placards to scratch-off hangtags.
e. The Office of Real Estate, Housing, and Community Development will pursue an
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amendment to the MB Watersports Agreement to include the referenced hang-tag
parking program. In regards to the House of Worship Parking Program, the Parking
Department will pursue an amendment to Section 106 of the City Code to include said
program.
2. Finding -Weaknesses in operational controls were observed with respect to the
accountability, enforcement, and record keeping of temporary parking permits
issued.
Temporary permits are physically created by using a cardboard with the city logo and
identifying the location and expiration date for the permit being created. A non-sequential
number, with respect to the overall inventory of temporary permits issued at a given time,
but sequentially with respect to the number of permits issued by the same cashier/customer
service representative, is assigned to the permits before being distributed. These permits
are printed in an ongoing basis to various permit holders and are not required to be
returned. However, no inventory or controls are established in order to monitor the number
of temporary permits printed at any given time.
As a control, a holographic sticker with the Miami Beach Parking Department logo is affixed
to the cardboard in order to validate the permit and differentiate it from any other ordinary
printed cardboard. The sticker is affixed in an attempt to make it easier for the enforcement
officer to distinguish between a valid permit issued by the Parking Department and any other
ordinarily printed cardboard. However existing stickers can be cut and pasted to other
cardboards easily, therefore making it harder to prevent or mitigate illegal reproduction or
misuses of the permits. As a result, effective enforcement can be difficult. In addition, no
inventory controls are currently in place with respect to the accountability of stickers
purchased, issued, and on-hand.
Recommendation(s)
Although it is foreseen that these operational weaknesses could be addressed with the
implementation of a new pay-by-plate permitting system currently being procured, the
Parking Department should consider in the mean time to maintain easily accessible records
regarding inventory of temporary permits in use and corresponding expiration dates. At the
same time, implementing an inventory reconciliation of the number of holographic stickers
used compared to the number of temporary permits issued should help to strengthen
internal controls. Sequentially numbering the stickers could make it easier to accomplish
this objective.
Management's Response(s)
The Parking Department and Finance Department will pursue enhanced internal controls for
temporary permits until the pay by license plate permitting system is in place.
3. Finding -Revisions and updates may be required for Chapter 106, Article II, Division 1,
Section 1 06-55(k) regarding current restricted residential zones.
Residential zones reflected under Chapter 106, Article II, Division 1, Section 1 06-55(k)
include zones 1 through 8. As referenced on findings one (1) and two (2) above on this
report, this listing does not accurately reflect current active residential zones and therefore
should be updated.
Recommendation(s)
Revisions to reflect current restricted residential zones should be presented to the Mayor
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and City Commission for approval. Alternatively and considering that other section
requirements in chapter 106 of the code already provide stipulations for the documentation
and creation of residential zones, the Parking Department could consider recommending the
deletion of this section from the code for approval of the Mayor and Commission, since this
section serve for illustrative purposes only and no restrictions, covenants or provisions are
included in the same.
Management's Response(s)
The Parking Department will recommend the deletion of Section 1 06-55(k) since currently its
reference in the City Code is strictly for illustrative purposes.
4. Finding -No policies and procedures have been documented and approved with respect to
Revenue Parking Permit Inventories and corresponding internal accountability.
Although the current Supervisor/Financial Analyst in charge of the accountability and
safeguarding of the revenue generating municipal parking permits have implemented
processes and supporting documentation for permit inventory accountability and
reconciliation, no policies and procedures with respect to required documentation, record
retention requirements and departmental operational procedures have been documented
and approved to ensure continuity and to be consistently .followed. The same was
observed for responsibilities and processes involving parking permit issuance, inventories,
controls, and reconciliations.
Recommendation( s)
Policies and procedures considering internal controls should be documented and approved
to be consistently applied and followed by all related personnel.
Management's Response(s)
The Parking Department concurs. Policies and procedures will be developed and
implemented.
5. Finding -Inventory of un-assigned permits and cashier-assigned permits are kept in the
same closet which remains unlocked during the day and accessed by multiple
individuals.
Permits that have not been assigned to customer service representatives/cashiers to be
sold are being stored in a locking key closet where permits that have already been assigned
to each individual customer service representative/cashier to be sold are stored as well. As
a result, the closet remains open during hours of operation and access to the same is
available to all customer service personnel/cashiers when in the area. In addition, since
assigned permits are stored in the same closet, every time a customer service
representative/cashier takes a lunch break and/or starts or ends a shift, he or she stores
his/her assigned permits in the closet. Therefore, it could be very difficult to affix any
responsibility to any one person should any of the un-assigned, un-issued permits be
misappropriated.
Recommendation( s)
A separate locked box or an alternative location should be considered to store the un-
issued, un-assigned permits. They should not be accessible to the customer service
representatives/cashiers. Therefore mitigating risks of misappropriation, as well as
improving the probability of detection and identification of perpetrator(s) in the event
misappropriation occurs.
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Management's Response(s)
Agreed. Currently, a supervisor opens the safe at the start of the first shift to issue the
assigned permits to each cashier and immediately locks the safe. The safe remains closed
until the cashiers on the second shift need to access their permits. The safe is only opened
again when cashiers are ready to return their assigned permits at the end of their shift or if
additional permits are needed throughout the day. In each case the supervisor opens the
safe and either receives the cashiers' permits or assigns and logs the additional permits
needed.
6. Finding -Prices for municipal permits/Jot specific permits issued for locations south of 23rd
Street do not consider the higher intrinsic value resulting from a higher parking
hourly rate in the zone, as well as a higher demand for parking.
Lot specific municipal permits are available in a first come, first serve, available parking
space basis. This permits allow the permit holder, whether a resident or not, to park in a
specific permit location/surface lot at discounted rates. Municipal permits for specific
surfaced parking lots are currently sold at $70.00 plus tax regardless of location in the City.
However, with a recent increase in metered parking hourly rate for metered parking spaces
south of 23rd Street, the intrinsic value of municipal parking permits for metered surfaced lots
south of 23rd Street is higher. In addition, it indirectly provides a higher discount to permit
holders parking south of 23rd street than the discount provided to permit holders north of the
same.
Recommendation(s)
In an effort to equitably provide discounts to municipal permit holders, and at the same time,
account for the additional intrinsic value of a higher parking rate and demand for those
municipal permits allowing to park south of 23rd Street, a proportional increase to the rates
charged for municipal permits allowing to park south of 23rd Street should be considered and
proposed to the city commission for approval.
Management's Response(s)
The Parking Department will research and provide recommendations for the municipal
parking permit rate. This will be addressed as a component of the Parking Department's
budget process.
EXIT CONFERENCE
An exit meeting was held on December 11, 2012 to discuss the audit report and to solicit
management responses noted above. Attendees were Saul Frances, Parking Director; Sasha
Gonzalez, Financial Analyst; James Sutter, Internal Auditor and Fidel Miranda, Auditor.
Management responses were received thereafter. All were in agreement with the contents of
this report.
Audit performed by Fidel Miranda, Auditor and Mark Coolidge, Senior Auditor
F:\OBPII$AUD\INTERNAL AUDIT FILESIDOC11-12\REPORTS-FINALIREVENUE MUNICIPAL PARKING PERMITS.doc
cc: Patricia Walker, Chief Financial Officer
Saul Frances, Parking Director
Anna Parekh, Office of Real Estate, Housing & Community Development Director
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