Audit Report on the Financial and Operating Practices of the Fifth Avenue Business Improvement District

AUDIT REPORT IN BRIEF

This audit determined whether the Fifth Avenue Business Improvement District (BID) has provided the services called for in its District Plan; evaluated the adequacy of the Fifth Avenue BID’s internal controls over its funds and operations; and assessed the Fifth Avenue BID’s compliance with key terms in its contract with the Department of Small Business Services. The scope of the audit was Fiscal Years 2005 and 2006.

The Fifth Avenue BID was established in 1993 and provides services for the area of Fifth Avenue beginning at the north side of 46th Street, extending north to the south side of East 61st Street; excluding Rockefeller Center, but including 57th Street from Madison Avenue to Avenue of the Americas. As required by the BID legislation, the majority of the Fifth Avenue BID Board of Directors consists of property owners and commercial and residential tenants within the district. In Fiscal Year 2005, the Fifth Avenue BID reported revenues of $2,138,666 and expenditures of $2,178,438. Most of the expenditures related to salaried employees who provided enhanced sanitation and security services.

Audit Findings and Conclusions

The Fifth Avenue BID has generally provided the supplemental services as required in its District Plan. The Fifth Avenue BID complied with key terms of its DSBS contract: it maintained complete and accurate financial records, submitted annual reports to DSBS, and had its annual financial statements certified by an independent certified public accountant.

The Fifth Avenue BID has adequate controls over its funds and operations. It maintained adequate segregation of duties, and the transactions we reviewed appeared to be ordinary, reasonable, and adequately supported.

Our interviews with the Fifth Avenue Board members revealed that communication between the BID and themselves is excellent. However, communication between the BID and its members needs improvement. Our satisfaction survey showed that only 54 percent of the respondents felt that the Fifth Avenue BID publicized its annual meeting, 37 percent of respondents did not know when the annual meetings were held, and 16 percent did not even know that the BID existed.


Audit Recommendations

Based on our findings, we make one recommendation: The Fifth Avenue BID should enhance its efforts to promote the BID among its members, increase awareness of its programs, and notify members about coming events and meetings.

Agency Response

Fifth Avenue BID officials generally agreed with the audit’s findings and recommendation.