Comptroller Stringer Audit: Weak Oversight at Parks Department Cost City Nearly $5 Million and Contributed to Years-Long Project Delays

(New York, NY) — Today, New York City Comptroller Scott M. Stringer released an audit finding that weak oversight and deficient controls at the Department of Parks and Recreation (Parks) caused nearly 40 percent of privately managed construction projects to be completed late, increasing fees paid to construction management firms at the taxpayer’s expense. The audit found that Parks’ failure to properly monitor private Construction Managers (CMs) hired to oversee capital and construction projects in the City’s parks and green spaces led to project-mismanagement – costing the City an extra $5 million in management fees, as delayed Parks projects sat unfinished for over 1,000 days.

“As a parent and a New Yorker, I know how important parks are to our communities – I also know that when it comes to our budget, every penny counts. The Department of Parks and Recreation cannot shell out millions to private contractors without keeping careful watch of results – the bill is coming out of the taxpayer’s pocket and it’s hurting our families who rely on these greenspaces,” said New York City Comptroller Scott M. Stringer. “It’s time for common sense solutions and oversight that will save money for taxpayers, and get our parks improved faster.”

The Parks department contracts with private construction managers to oversee and ensure capital construction projects are completed on-time and on-budget. The audit reviewed 69 privately-managed capital projects in Park’s Capital and Forestry Divisions that were underway during Fiscal Years 2014 and 2015, including the Battery Park Carousel, the Battery Park bikeway, street-greening projects and other projects across the five boroughs.

The Comptroller’s audit found that nearly 40 percent of these projects were completed late, some as long as three years, due to poor management and the failure of Parks to hold CMs accountable to project deadlines. As CMs are paid on an hourly-rate basis, the delays increased Parks’ spending on managerial costs by 35%, to cover the additional – and avoidable – hours billed by the private CMs.

Key findings from the audit include:

• 39 percent of projects were completed late, including 9 projects that were delayed by over a year – and at least one by over three years;
• Project delays increased management costs by 35 percent, from $13.9 million to $18.8 million;

In one project, at the Battery Park Carousel, costs tripled from $446,000 to nearly $1.4 million for CM services as construction delays stretched over 1,050 days. The audit found that 76 percent of the delay period was due to failed oversight by Parks such as delays in obtaining building permits, incomplete designs, and redesigns of the ride’s ornamental figurines and lighting structures.

At another, the Battery Park Bikeway Project, costs jumped by 185% from an initial management budget of $440,000 to $1.25 million, caused by delays totaling 635 days. At least 61 percent of those delays were preventable and caused by oversight failures at Parks, such as poor coordination between Parks and other agencies, which in at least one example held up the project for 58 days.

Oversight Failures and Solutions

The audit showed that delays were caused by a variety of failures in all stages of the construction and management process under CMs’ and Parks’ oversight, including:

• Lack of attendance by necessary stakeholders at pre-construction meetings arranged by Parks and inadequate communication with those not in attendance, which led to failures to timely complete pre-construction requirements, such as obtaining permits and moving or protecting gas and water lines, pushing projects back by weeks including one egregious case of a Queens Greenstreets project delayed by nearly 300 days;
• Incomplete and inaccurate records maintained by Parks, resulting in an inability to successfully  track and assess the performance of CMs and CM-managed projects;
• Missing hard-copy records of essential documents, including project-delay analyses that CMs are required to prepare, hindering reporting of management issues; and
• A substantial portion of delays occurred in the last phase of construction, as poor Parks oversight of CMs delayed the timely “close-out” of substantially completed projects. In particular, Parks failed to monitor CMs and ensure final tasks – or “punch-list tasks” – were completed within the contractual timeline, for example:
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  • While the close-out period for the Battery Park Bikeway project was scheduled for 45 days, the project was not completed for 11 months as necessary final touches on construction work, such as putting proper fasteners and bolts on water fountains, and required administrative items, such as the submission of as-built drawings, were left incomplete for months.
  • Likewise, the close-out period for the Battery Park Carousel was delayed by 15 months, from a scheduled 45 day period, in part because a permanent door at the carousel’s the main entrance was not installed more than a year after the contractors were supposed to install it.

As part of the audit, the Comptroller’s Office made 25 recommendations including:

• Prepare written policies and procedures for parks personnel to establish standards for oversight of CMs;
• Issue a construction supervision manual for the CMs that specifies the duties, responsibilities, and performance standards that apply to CMs;
• Develop written standard operating procedures (SOPs) with checklists to ensure that all necessary approvals, permits, surveys, design documents, and coordination with regulatory agencies and other entities are in place prior to directing a contractor to start construction; and
• Require CMs to ensure that contractors complete close-outs within prescribed timeframes.

To read the full audit report, click here.

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