Report On The Public Safety Non-Uniformed Agencies Monitoring Of Their Employees Who Use An EZpass and Parking Permits While Driving CityOwned Or PersonallyOwned Vehicles On City Business

Audit Report In Brief

The Department of Parks and Recreation’s (Department) Capital Division implements and executes projects that are contained in the Department’s capital plan and that are funded from various sources and approved by the New York City Office of Management and Budget. Various units of the Department’s Capital Division staff of 460 employees are involved in the process of designing, constructing, and overseeing project work. Project designs are undertaken by either the Department’s in-house staff or consultants. Staff of the Capital Division’s Design and Construction Units include architects, landscape architects, and engineers. Capital Division staff determine work scopes, prepare cost estimates, gather survey information, and prepare or review plans and specifications. In addition, Division staff carry out construction management work or oversee the work of private construction managers, investigate environmental problems and subsurface conditions, and coordinate construction work with other City agencies, contractors, and community boards.

The Capital Division uses a DOS database application known as “Q&A” to track project information such as contract information, project schedules, and change orders.

In Fiscal Years 2010 and 2011, the Department had contracts with 25 architectural and engineering consultants and 12 consultants who provide construction management and resident engineering services. According to information contained in the Fiscal Year 2011 “Mayor’s Management Report,” the Department completed 150 capital projects in Fiscal Year 2010 and
165 capital projects in Fiscal Year 2011. The construction cost (exclusive of costs for design, construction management, and resident engineering services) of the 315 capital projects totaled
$496.3 million.

Audit Findings and Conclusions

The Department is not carrying out and overseeing capital construction projects in a timely and cost effective manner. We found that in Fiscal Years 2010 and 2011, 47 percent of projects were not completed within their originally scheduled timeframes. Furthermore, the cost for 10 percent of projects exceeded their original contract and contingency amounts.1 Moreover, 8 percent of the completed projects in Fiscal Years 2010 and 2011 were not completed on time and exceeded the original contract and contingency amounts. Additionally, the Department did not follow procedures to seek to recoup from consultants the cost of change orders that were necessitated by design errors or design omissions.

As a result, the Department expended almost $13 million in project costs—$2.2 million in additional staffing costs for construction management and almost $11 million in additional construction costs, which included $4 million in change orders that were necessitated by design errors or design omissions. Moreover, the City paid $887,717 to construction contractors for claims that pertained to some of the delayed projects.

Although the Department has performed an analysis of delay causes and prepared delay analyses for specific projects, it has not implemented effective measures for dealing with the problems systematically. Our review corroborated the Department’s assessment of the reasons for project delays, which included problems with obtaining permits, work scope revisions, and coordinating contractor work schedules. Although the Department has taken some steps to mitigate these problems (e.g., coordinating permit requirements with various agencies), we did not find evidence that the Department is taking significant measures to deal with the causes of delays.

Moreover, the Department does not have a reliable process to ensure that specific projects are selected and targeted for completion on an annual basis. Although the Department selects as a goal a number of projects to be completed in a given fiscal year, it does not identify those projects or categorize specific projects as priorities. Therefore, projects that were already delayed and are not selected to be completed in a following fiscal year can continue to be delayed for an indeterminate period. Accordingly, it is our opinion that problems with completing capital construction projects in a timely and cost effective manner can be partly attributed to the Department’s failure to prioritize project work and allocate appropriate resources to those projects.

We also identified problems with some of the information about project status recorded in the Q&A system and the manner in which statistics about project information are provided for the Mayor’s Management Report (MMR).

Audit Recommendations

This report makes a total of 13 recommendations, including that the Department:

Department Response

In their response, Department officials stated, “ . . . We recognize and agree with the Report’s Recommendations that certain improvements are needed with respect to mitigating the causes of project delays or revising MMR indicators on project completions.” In addition, the response stated that “Unfortunately, the Report does not recognize where Parks’ oversight has largely achieved positive results.” We consider the Department to have agreed with five recommendations, disagreed with three recommendations, partially agreed with one recommendation, and already implemented four recommendations.

1 The Department’s Construction Manual, Section 13, Project Cost Increases, stipulates the contingency amount to be the greater of 10 percent of the contract amount or $200,000 for contingency funding which includes both overruns and change orders. Any cost overruns above this threshold amount must be approved by the Mayor’s Office of Contract Services and the Office of Management and Budget.