Summary of Parking Reviews FY12MIAMI BEACH MEMORANDUM
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www .miamibeachfl.gov
DEPARTMENT, Internal Audit
Tel : 305-673 -7020, Fax : 305 -673 -7519
TO : Jimmy L. Morales , City Manager
VIA: John Woodruff, Budget and Performance Improvement Director @
James J. Sutter, Internal Audit ~
October 24, 2013
FROM :
DATE :
SUBJECT : SUMMARY OF OBSERVATIONS FOR PARKING REVIEWS PERFORMED DURING
FY2011/2012
As part of our Annual Audit Plan , Internal Audit performs a variety of operational reviews tailored to
ensure compliance to policies and procedures, quality of customer service , identifying potential
operational efficiencies , and ensuring that revenues and City assets are properly recorded and
safeguarded with respect to the Coin Room , Attended Lots, and Meter Enforcement operations of
the Parking Department.
OVERALL OPINION
During fiscal year 2012 , a total of four (4) Coin Room , four (4) Attended Lots, and twenty four (24)
Meter Operations and Enforcement rev iews were conducted at different unannounced dates and
times. Although observations documented throughout all of Internal Audit's reviews of the Coin
Room and Attended Lot operations did not provide us with reason to believe that any exception
noted significantly affects the ove rall financial position of the City, there were opportunities noted to
maintain and /or improve operational efficiencies , improve safeguards and controls for City assets ,
closer adherence to documented policies and procedures, and customer serv ice .
Furthe rmore , the enforcement capture ratio of 7.39%, calculated from our Meter Operation and
Enforcement reviews , continued to be lower than industry benchmarks , as reflected on the J .L.
Donoghue Evaluation of Park ing System Revenue Contro l, which is a decrease from the prior fiscal
year when it was averaged at 12 .18%. Insufficient enforcement results in not maximizing available
parking spaces .
Additional details have been provided later on this memorandum , under the corresponding
operation rev iew performed , for further details and reference.
COIN ROOM OPERATION REVIEW FINDINGS:
Coin Room operation reviews are performed quarterly in order to ver ify that contro ls , policies and
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Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011/2012 October 24. 2013
procedures, and revenue accountability are consistently applied to the daily meter revenue
collections. For this purpose , unannounced site visits were made on November 23 , 2011 , March
29 , 2012 , August 23, 2012, and on September 27 , 2012 to review the Coin Room 's daily operations
at the first floor of the City Hall 's new garage location . The following summarizes our findings and
obseNations:
a) Variances obseNed between the amounts of revenues counted in the Coin Room and amounts
reflected by the different systems and equipment used as compensating controls are continuing
without conclusive explanations and expeditious permanent corrective action. Although
sufficient investment has taken place on new technology to help identify discrepancies and
exceptions, not researching , explaining , documenting variances obseNed, and analyzing
variance trends diminishes the effectiveness of such controls. As a result we find internal
controls that are effective in design, but ineffective in operation and practice.
b) Smart programmable key activity reports were not compared to Coin Room collection
schedules , Parkeon reports , Digital reports, and hand-held computer reports. The daily
comparison between information provided by the different software system reports is a critical
control in mitigating risks and identifying anomalies and/or discrepancies in the coin room
operations, as well as meter collections in the field .
c) Meter collections were scheduled during weekends, which resulted in additional costs to the
City as a result of incurred overtime (paid at time and a half). The weekend collections were
scheduled as a result from customer complaints regarding inoperability of meters during
weekends . Although certain system reports suggested that the inoperability of some multi-
space meter stations, primarily in the City 's south zones , could have resulted from the multi-
space meter getting full, no conclusive explanation and correlation was researched and
documented as definitive.
In addition, the reliability of these reports suggesting the machines were getting full has been in
question considering that they are affected by other factors including ; whether or not multi-
space meter machines are able to synchronize with the seNer and whether the meter station
properly resets after being collected , and thus resetting the amounts shown as stored in the
machine. Furthermore, preventive measures such as lowering the collection threshold on
Friday 's collection to $170 from $300 for all multi-space meter stations used during weekdays is
already in place to avoid meter stations from fill ing .
d) Meter technicians have been provided w ith a replacement currency canister on multiple
occasions to collect and replace the canister on multi-space meters under maintenance by the
same technician. Considering that technicians have been fully trained in all aspects and
functions of the meter stations used in the City 's Parking System , in addition to having access to
the same , allowing them to have access to the revenue vaults of the meters represent a control
weakness and poor segregation of duties that should be addresses promptly.
e) Ineffective communication between the On-Street Division (meter maintenance) and the coin
room has been increasing in recent times resulting in un-necessary operational inefficiencies.
Due to the ever-changing locations of multi-space meter stations and the different technologies
and models used on the field, a lack of communication regarding machine numbers and/or
models (DG , Strada, etc.) being newly installed, and or relocated to different zones, often result
in either machines not collected when needed, wrong keys issued for collection, among other
minor operational challenges , which increase travel time , delays collection , etc.
f) Procedures regarding the expectations and involvement or lack thereof by meter technicians in
the collection process and with meter collectors should be documented, approved and
distributed to all related personnel to be uniformly and consistently followed by all relevant
personnel. Proper controls and operational efficiencies should be considered at all times when
creating , documenting and implementing them .
g) Internal Audit obseNed how the newly installed air conditioning unit was significantly obstructing
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Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011 /2012 October 24, 2013
the light on the currency counting tables. Considering that currency is being counted on these
tables, which could fall to the floor, as they are being extracted from the bill hoppers and/or
counted, the department should consider relocating and/or adding additional lighting fixtures for
proper illumination and clarity. In addition, the area surrounding these tables should be
maintained clear of boxes and/or any objects to prevent any falling currency(s) from being
undetected .
Recommendations:
The Parking Department should address the above observations in order to improve internal
controls while safeguarding City assets. More detailed and specific recommendations were
provided on the memorandums describing the results of our reviews, which were issued to the
Parking Department separately.
Management Response(s):
a) Variances are identified and researched in order to identify root cause(s) and/or causes that are
highly probable . These causes vary and are addressed accordingly on a case by case basis .
The Parking Department concurs , the pursuit of conclusive explanations and expeditious
permanent corrective action is ideal. This additional workload would require additional
resources to implement. To this end , the Parking Department is pursuing a comprehensive
reconciliation process with Digital Payment Technologies (OPT), the manufacturer of the Luke II
units with the assistance of the City Information Technology (IT) Department.
b) Agreed. Additional resources will need to be allocated to perform these tasks.
c) Additional resources , via overtime , are allocated on Fridays, Saturdays , and Sundays ,
contingent upon the level of activity in the City. The overtime cost to provide this higher service
level is returned many times over when only one multi-space pay station remains inoperable
through the course of a day or even worse, a weekend . Additionally , the City's image is
tarnished if it is found to have inoperable equipment or worse yet, a citation is issued for
overtime parking when equipment failure is the culprit. Internal Audit's own research of meter
operability is 99%+. The additional expense for this high level of meter operability is a cost of
doing business. This investment is returned many times over.
d) As a matter of process, meter technicians are no longer issued replacement currency canisters .
OPT's Luke II model has an expanded capacity note canister; therefore, replacement canisters
are no longer needed. Meter technicians are only issued currency canister in the case of an
emergency when specifically directed by the Operations Manager or Assistant Parking Director.
e) Agreed, there is always room for improved communications . Monthly meetings are held with
coin room staff, meter maintenance staff, and Administration to address issues as they arise.
f) Meter technicians should and do not have involvement in the collection process unless
specifically directed by the Operations Manager in the case of an emergency.
h) The lighting and obstruction issues referenced in the finding have been addressed accordingly.
ATTENDED LOTS OPERATION REVIEW FINDINGS:
Attended lot operation reviews are performed quarterly to evaluate operations and compliance with
documented policies and procedures established by the City 's Parking Department. These reviews
are completed on two phases : Un-announced secret observations and lots walk through . Visits on
February 1, 17 , 18 , of 2012 and on September 15 and 30, of the same year, to different attended
lots were conducted during FY 2012. The following summarizes the results from our observations
and walk through during our visits:
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Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011/2012 October 24, 2013
a) Facility operating costs experienced are higher due to the delegation of traffic responsibilities to
security guards employed at higher rates , under a different contractor and service agreement.
b) Operational inefficiencies and lack of communication was observed between employees of the
different contractors while performing the daily parking lot operations . Employees of the
different contractors don't report to, or have the same chain of command , which resulted in
miscommunications and at times conflicting schedules for breaks among other things. Timely
monitoring of lot violations , space availability , and prompt enforcement of violations were also
affected.
c) Lack of updated , documented, and approved standard operating procedures, as well as ,
adequate training by the Parking Department with respect to the day to day surface parking lot
operations often created confusion to contractor employees, in addition to diminishing the
effe9tiveness of the attendants to manage and regulate lot operations. This often resulted in
poor enforcement of City policies and Ordinances and contradicting instructions from Parking
Personnel.
d) An option to either pay the multi-space parking meter or pay the flat special event rate continued
to be offered at some of the City 's attended lots . Providing this option has proven to be
inefficient. Continuing to offer this option creates weaknesses in operational controls and
enforcement that could result in revenue misappropriations and/or under collections of
revenues.
e) Enforcement procedures were not consistently followed and/or exercised by enforcement
personnel. Expired city employee parking decals , expired city-wide parking decals, and home-
made signs suggesting that the vehicle belonged to City Employees or Contractor employees
were not properly enforce in accordance to ordinances , rules and policies of the Parking
Department.
f) Lack of enforcement of the attended lots were experienced throughout the four reviews
performed during the fiscal year , partly because of a lack of communication between the
attendants, the attendant's supervisors and parking enforcement.
Recommendations:
The Parking Department should address the above observations in order to improve internal
controls , operational efficiencies, compliance , and customer service while safeguarding City assets.
As in the previous section, detailed and specific recommendations were provided on the
memorandums describing the results of our reviews, which were issued to the Parking Department
separately.
Management Response(s):
a) Traffic control services are assigned to the security guard contractor as this task is consistent
with guard duties .
b) There is always room for improved communications . Staff has been tasked with improving
communications with multiple contractors as well as at all levels within our organization.
c) The Off-Street Division in conjunction with the contractor is developing standard operating
procedures and will provide training with regard to surface parking lot operations.
d) The option to either pay the multi-space parking meter or pay the flat special event rate
continues to be offered at some of the City 's attended lots . This option is provided as a
customer service enhancement. By discontinuing this option, users seeking short term parking
would unnecessarily pay a flat rate for a short term stay. Maintaining customer convenience
and audit controls is a delicate balance . Appropriate controls are in place; however, we
welcome input from Internal Audit to enhance these controls while maintaining this higher
service level.
e) Parking enforcement is directed to consistently enforce all parking regulations . Performance
issues will be addressed accordingly.
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Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011 /2012 October 24, 2013
f) See response to b) above .
METER OPERATION AND ENFORCEMENT REVIEW FINDINGS:
Meter Operation and Enforcement reviews are preformed throughout the year in order to confirm
that the number of citations issued and observed divided by the number of violations observed is at
least 25%, as recommended by the J.L . Donoghue Evaluation of Parking System Revenue Control
dated June 28 1h , 2000. This ratio is also known as the Enforcement Capture Ratio. Internal Audit
also ver if ies whether meters are in good working condition , ensures that there are no hazards to
customers and/or their vehicles when using the parking spaces. In addition, we verify that meters
are not vandalized or painted with graffiti. Exhibit 1, later attached reflects results from our reviews .
In addition we have summarized results from the twenty-four (24) reviews performed during fiscal
year 2012 with respect to the Meter Enforcement Capture Ratio as follows :
a) Using the results from our reviews we estimate that approximately one (1) out of every five (5)
metered spaces occupied in the City is in violation , and approximately one (1) out of fourteen
(14) of those in violat ion and eligible for citation was captured during fiscal year 2012. To better
illustrate this relationship for the past fiscal year the following chart was created using the
results from our reviews:
RELATIONSHIP AMONG METERED SPACES OCCUPIED WITHOUT VIOLATIONS,
METERED SPACES OCCUPIED WITH VIOLATIONS NOT CITED, AND METERED
SPACES OCCUPIED WITH VIOLATIONS CITED
#OF METERED SPACES OCCUPIED
WITH NO VIOLATIONS
•# OF METERED SPACES OCCUPIED
WITH VIOLATIONS NOT CITED
D# OF METERED SPACES OCCUPIED
WITH VIOLATIONS CITED
Note: To ta l number of occup ie d meter ed sp aces tested was 2,351 .
In contrast , the overall Meter Compliance Ratio (the number of occupied metered spaces with
no violations , added to the amount of occupied metered spaces with violations cited , divided by
total number of occupied metered spaces) resulted in approximately 80.82%. This means that
approximately out of every one hundred (1 00) occupied metered spaces in the City ,
approximately eighty-one (81) were not in violation and/or the violation was cited. This
represents a slight decrease from last year when this ratio was approximately 83.76%, but still
slightly better than two years prior (FY 201 0) when it was approximately 79.38%.
An overall Enforcement Capture Ratio of 7.39% was observed to be less than desired industry
benchmark of 25%, as per the J .L. Donoghue Evaluation of Parking System Revenue Controls.
It also represents a slight decrease over the 12 .18% and 8.56% observed in the previous two
fiscal years . The following charts helps to illustrate the overall capture ratio result ing from our
reviews :
Page 5 of 8
Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011/2012 October 24. 2013
14%
12%
10%
8%
6%
4%
2%
0%
OVERALL ENFORCEMENT CAPTURE RATIO
(#OF CITED VIOLATIONS DIVIDED BY THE TOTAL VIOLATIONS OBSERVED)
7.39%
IJ % OF VIOLATIONS OBSERVED WITH
NO CITATION
•% OF VIOLATIONS OBSERVED WITH
CITATION (CAPTURE RATIO)
OVERALL QUARTERLY ENFORCEMENT CAPTURE RATIO
(FISCAL YEAR 2012)
1st Qtr. FY2012 2nd Qtr. FY2012 3rd Qtr. FY2012 4th Qtr. FY2012
Actual obseNation results from our reviews are reflected on Exhibit 1 provided along with this
report for further deta ils .
b) Other obseNations during our reviews included the following:
• Poorly written and/or incomplete Daily Activity Reports continued to be prepared by the
enforcement officers.
• Errors regarding vehicle assignments to the officers on the Enforcement Division Daily
Schedule, prepared by the shift supeNisors, continued to be experienced.
• Contradicting information with respect to actual obseNations and officer's assignment
description and/or locations was entered on the Enforcement Division Daily Activity
reports.
• Commercial and/or passenger loading zones regulations continued without proper
enforcement.
• Poor monitoring and violation enforcement of valet parking operators .
• Misleading signage regarding the number of parking spaces and hours restricted were
used to reseNe parking spaces rented by valet parking operators .
Page 6 of 8
Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011/2012 October 24, 2013
• No Standard Operating Procedures regarding enforcement operations have been
documented and approved by the Parking Department to be consistently , objectively ,
uniformly applied, and followed by all enforcement personnel. This and not providing
proper training to enforcement personnel contributed to inconsistent enforcement and
adversely impacted the overall effectiveness of the division.
Recommendations:
The Parking Department should address the above observations in order to improve internal
controls, operational efficiencies, compliance , and customer service while safeguarding City assets.
As in the previous section , detailed and specific recommendations were provided on the
memorandums describing the results of our reviews, which were issued to the Parking Department
separately.
Management Response(s):
The Parking Department has drafted procedures and these drafts are currently under review .
Additionally, the method of enforcement will transition to LPR (License Plate Recognition). This
technology will address many of the issues cited above through increased officer accountability .
(Summary completed by Fidel Miranda, Auditor)
CC: Patricia Walker, Chief Financial Officer
Saul Francis , Parking Department Director
Rocio Alba, Assistant Parking Director
F :\OBPI\$AUD\INTERNAL AUDIT FILES\DOC11-12 \REPORTS-FINAL\SUMMARY OF PARK ING REVIEWS FY2012 .docx
Page 7 of 8
Internal Audit Memorandum
Summary of Parking Reviews Performed FY 2011/2012
081'1 · IRNAL AUDIT
MIT R OI'IRATION AHO I!NPOIICIMIN T IU MAllY
Prom Oct 2011 to kpt 2011
0
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