Letter: Parking audit badly flawed
Parking audit badly flawed
The March 7 Aspen Times reports the city “actually” lost $230,000 on the parking scam. The article, based on a memo and report released at 4 p.m. on a Friday when little attention is paid, is incorrect; a reading of the article and the report on which it is based confirms that the “actual” loss is unknown.
The report commissioned by the city acknowledges that $692,000 in fraudulent transactions occurred. The report then applies “models” based on “assumptions” to claim that the actual loss is in the neighborhood of only $230,000. A typical “assumption” is that fraudulent parkers would not have parked if they actually had to pay. Maybe. But if fraudulent parkers hadn’t occupied the spaces, maybe paying parkers would have.
Who knows? I only know that the “models” and “estimates” used in the report leave many questions of accuracy.
Was the report designed to minimize the loss and save face for city management? Notably, the report is not rendered to the City Council as required by the city charter. It appears that city management ran the relationship with this “independent” auditor. Otherwise, the report would have been rendered directly to the City Council without city-management intervention.
The cover memo from the city finance director acknowledges that 12 lapses in cash management are revealed in the report. One in particular bears on the Parking Department:
“Ability to divert parking credit card proceeds: The contract with Global Payments, the City’s credit card processor, is currently signed solely by the Controller. This one individual can establish and change the bank account to which City revenue streams are deposited, which would allow the controller to divert revenues from the City to their personal bank account.”
It was suggested to the City Council months ago that it should investigate whether the city received all the proceeds it should have from the good credit- and debit-card transactions. This report fails to do so.
When a parker uses a valid card in one of Aspen’s machines, the money doesn’t go directly to the city. There is at least one intermediary that could skim funds. Only a proper audit would detect skimming.
The money goes first to the credit-card collection company or the Canadian parking company and only later to the city of Aspen. The above instance of lax cash control confirms it would be possible for some of the city’s money never to reach the city. (If this was not a realistic possibility, the auditors wouldn’t have mentioned it.) It was specifically suggested to the City Council in the past that the auditors should trace the cash proceeds from their initial deposit in the credit-card collection account to ensure that they ultimately got to the city’s account. This would detect any skimming. The report does not indicate this was done.
I wish I could say that the results of audit work commissioned by the city of Aspen had settled the questions of how much the city lost on the scam and whether the city receives (even today) all the money it should from the parking system. Sadly, the audit work missed the mark on both counts.
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