Letter Report On The Department Of Transportation’s Administration Of The Collection Of Cash Revenue From Parking Meters

Executive Summary

This audit was conducted to determine whether the Department of Transportation (DOT) had adequate controls in place over the collection of cash revenue from City parking meters.  The scope of this audit was from July 1, 2016 to September 1, 2018.

DOT administers on-street multi-space parking meters provided by Parkeon, a DOT contractor.  Parkeon also provides DOT access to its proprietary reporting software, which communicates wirelessly to the meters.  These parking meters are all configured as pay-and-display, are solar-powered, and accept coins (quarters and dollar coins), credit cards, and NYC Parking Cards (City-issued prepaid cards).  This audit focused on the collection, counting, and tracking of cash revenue from the parking meters, an operation administered by DOT.

DOT reported approximately $214 million in parking meter revenues in Fiscal Year 2017 and $228 million in Fiscal Year 2018.  These figures include cash revenue collected by DOT and electronic payments collected by DOF.  The percentage of cash revenue in relation to total parking meter revenues is decreasing—from 27 percent in Fiscal Year 2017 to 23 percent in Fiscal Year 2018.

Audit Findings and Conclusions

The audit found that, overall, DOT properly administered the cash revenue collection from the City’s parking meters.  Specifically, the audit found that DOT has adequate controls over the collection, counting, and depositing of its cash revenue.  The audit also found, however, a 3 percent discrepancy between the total revenue that DOT’s Counting House software reported for our test period and the total of the corresponding meter receipts.  DOT was able to generate reports at a request that adequately explained the largest discrepancies, providing reasonable assurance that the revenue was properly accounted for.  However, the audit found reporting discrepancies in 2,621 of the 3,604 meters (74 percent) sampled, which the audit attributes to deficiencies in Parkeon’s meter reporting software.

According to the information provided by DOT, the justification for these discrepancies was the result of mechanical issues with the parking meters that result, in part, in unplanned meter resets when meters that contain money are repaired.  However, based on the documentation provided by DOT, auditors were only able to identify 63 of the 2,621 sampled meters (2 percent) with discrepancies to have been positively identified by DOT as having incurred mechanical issues in the preceding 45 days.  Therefore, the audit could not conclude with reasonable assurance that all such discrepancies can be attributed exclusively to mechanical issues.  Additionally, meter resets should not result in a complete loss of prior revenue data in Parkeon’s reporting software, and such failure to maintain what should be archived data also speaks to deficiencies with the software or with its use.

The audit also found that, in 6 out of 33 instances sampled, the Drivers and Collectors Cable Signature Sheet forms were incomplete.  On this form, collectors are required record the custody and use of the cables on which parking meter keys are attached.  However, on further review auditors did not identify any discrepancies regarding DOT’s collection from the specific meters associated with the irregularities in the six forms.  The audit further found that DOT has sufficient compensating controls in place to mitigate its failure to consistently complete this type of form.

Audit Recommendations

To address these issues, the audit recommended that DOT should:

· Ensure that all necessary forms are adequately completed and signed as required; and

· Require Parkeon to optimize the parking meters’ software to ensure a greater level of reliability of the financial reporting.

Agency Response

In its response, DOT partially agreed with the first recommendation, stating that it has already strengthened controls to prevent such deficiencies from occurring.  DOT disagreed with the second recommendation, stating that reporting discrepancies are caused by mechanical failures, not Parkeon’s software.