Audit Report on the Department of Citywide Administrative Services’ Monitoring of Lease Agreements with Dircksen & Talleyrand, Inc, for Land Use Associated with the River Café

Our audit objective was to determine whether the Department of Citywide Administrative Services (DCAS) effectively monitors the key provisions of its lease agreements with Dircksen & Talleyrand, Inc. (Lessee) for the use of land associated with the River Café. DCAS, as part of its role to oversee the City’s commercial real estate portfolio, including leases of City-owned property for private use, is monitoring the four agreements associated with the River Café. During Calendar Year 2010, DCAS collected $104,106 from the Lessee with regard to the four agreements.

Audit Findings and Conclusions

Overall, we found that DCAS is adequately monitoring the key provisions of the lease agreements. We found that the payments under all four agreements are current and up to date, and DCAS is adequately monitoring the inspections and repairs needed at the River Café site. However, we found minor calculation errors and a failure by DCAS to collect a portion of a security deposit.

Audit Recommendations

The audit made three recommendations. DCAS should:

• Continue to ensure that periodic inspections of the River Café site are conducted and ensure that all necessary repairs are performed on a timely basis.
• Determine how much money was overpaid by Dircksen & Talleyrand and credit them for the appropriate amount.
• Collect the additional $575 that is due for the security deposit for the long-term lease agreement.

Agency Response

In their response, DCAS officials stated that they agreed with and have implemented all three of the audit’s recommendations.