A city of Fresno internal audit has revealed that a “lack of standard monitoring procedures” led to a potential loss of nearly $250,000 in parking revenue.

The audit, dated Feb. 15 and received by GV Wire via a source with access to the report, listed five areas in which the city lacks proper oversight of its parking program.

“Parking Services does not have effective procedures for monitoring parking usage in City owned facilities.” — internal audit

“Parking Services does not have effective procedures for monitoring parking usage in City owned facilities. As a result, Parking Services cannot ensure that entities which contract with the City for parking are only using the spaces for which they pay,” wrote auditor Kriti Agrawal.

The city’s parking unit is part of the development department —called DARM — under director Jennifer Clark. Her superior is city manager Wilma Quan-Schecter.

Quan-Schecter ordered the audit believing it would be a valuable tool for the city’s new parking services manager, Thomas Gaffery. He started last June after serving as parking director for Fresno State and CSU San Bernardino.

“Our new Parking Services Manager has already identified and implemented improvements in internal controls and is applying the audit recommendations to maximize our ability to operate more efficiently and monitor and collect parking revenues due to the City,” Quan-Schecter said.

City Misses Parking Revenues from County, Others

The audit said the city should have collected an additional $74,775 from the county and $98,025 from Club One Casino from its various parking agreements to use city lots during the 21-month period of July 2016 through March 2018.

A county spokesman said Wednesday that a corrected invoice has been sought from the city, but that the county believes it only owes about $28,000 more.

“We are currently working with the City to reconcile parking costs. Per our agreement with the City, the $45 rate per space remained in place through January 31, 2018,” said Jordan Scott, the public information officer for Fresno County. “A discrepancy was noted and of course the County is prepared to pay what is owed based on the agreed upon rate, which is estimated at just over $28,000.”

The city’s contract with the county allows for use of a maximum of 600 parking spaces. The audit determined the county had 757 outstanding permits.

Wilma Quan-Schecter is Fresno's first female city manager.

“Our new Parking Services Manager has already identified and implemented improvements in internal controls and is applying the audit recommendations to maximize our ability to operate more efficiently and monitor and collect parking revenues due to the City.” — City Manager Wilma Quan-Schecter

The audit stated that neither SP Plus, the vendor that operates the city-owned parking lots, nor the city regularly reviewed reports determining the county’s usage.

For a 17-month period (July 2016-Dec. 2017), the county did not pay the city for spaces at the Convention Center as the two entities were in negotiations for a parking deal.

The county eventually paid the $185,325 owed, but the auditor was unable to “determine how Fresno County calculated the one-time payment amount and could not locate supporting documentation for the calculation.”

The county responded that it paid at a rate of $45 per space, even though the listed fee was $60 per space — a difference of $65,025.

The audit also found that the county subtracted an additional $9,750 after the city sold a lot it used (the Box Car Lot). The auditor said that payment still should have been made.

Club One Usage Exceeds Contract

Additionally, Club One Casino pays $6,000 a month for 100 parking spaces and $1 a space per day beyond that. The audit determined over the 21-month period it exceeded that amount by 98,025 spaces.

We have expressed our willingness to work with the city to review the methodology and resolve any outstanding amount due.  We’ve also told them we’re available to work with SP+ and the Parking Division to ensure accuracy and compliance in the parking reports going forward.” — Club One President Kyle Kirkland

“Parking Services did not charge Club One Casino for the additional validations, nor has it requested the daily validation reports from SP Plus to ensure that no more than 100 validations are being collected,” the auditor wrote.

Club One President Kyle Kirkland said Wednesday that casino management had yet to review the audit in details.

“But,” said Kirkland, “we have expressed our willingness to work with the city to review the methodology and resolve any outstanding amount due.  We’ve also told them we’re available to work with SP+ and the Parking Division to ensure accuracy and compliance in the parking reports going forward.”

The city also lost $67,350 by undercharging the SBA Project according to the report.

In response to the audit, an entity identified as “management” responded that it agreed with the auditor’s assessment and recommendations. It will establish internal controls by the end of March, the response said.

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Lack of Oversight

The auditor also noted that the parking department did not follow standard accounting practices leading to lack of proper financial oversight.

The audit also recommended that parking services have defined rules for dismissing parking citations.

The report said that the city did not properly enter payments received from SP Plus into its internal computer system, which led to accounting problems. The audit found nine instances “in which the supporting documentation did not include sufficient detail to identify the source of the payments.”

The internal audit said that the collection of coins from meters, $1.37 million in the 2018 fiscal year, was “exposed to an unacceptable level of risk.”

Other Findings

The audit also recommended that parking services have defined rules for dismissing parking citations. The review showed that parking employees “used their discretion to determine if there was sufficient evidence for dismissal. However, the division did not have documented policies or procedures to follow when making a determination.”

The audit recommended that such decisions should at least be signed off by a parking manager or director.

The report also said that collection of coins from meters, $1.37 million in the 2018 fiscal year, was “exposed to an unacceptable level of risk.”

That is based on the manner of collection methods and the counting of the money. The audit did not suggest any money was lost or stolen by employees.

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