Audit Report Public Works Public Parking Services Division

City Manager

Scott C. Barber

Internal Audit Manager

Cheryl L. Johannes

Audit Report

Public Works

Public Parking Services Division ~

Collection of Parking Citation Fees

August 2013

AU14-02

Office of the City Manager

Internal Audit Division

Riverside, California

REPORT SUMMARY

In accordance with the Internal Audit Work Plan for Fiscal Year 2013/2014, an assessment was

conducted to review the effectiveness, efficiency and internal controls for Public Works (PW) ~ Public

Parking Services Division.

Parking citations are issued to vehicle owners for violations of the California Vehicle Code (CVC) and

considered a deterrent to those who might otherwise ignore parking regulations. PW – Public Parking

Services Division is responsible for the administration and oversight of the Parking Citation program

through a contract with a third party administrator, Turbo Data Systems, Inc. (TDS). Based upon the

current processes, we have identified opportunities to strengthen internal controls and ensure a more

efficient and effective administration of the Parking Citations program.

Standard Operating Procedures/Financial Management Oversight Lack of documented

standard operating procedures and financial management oversight resulted in a significant retro

payment of $1.8 million to the state/county from cash/revenue for all state-mandated surcharges not

remitted during the period of FY2006 through FY2011. The past due remittances were accrued in FY2012

in Fund 570; cash was impacted in FY2013; there was no financial impact to the City’s General Fund.

Parking Services operating procedures did not include the monthly surcharge to the county; no one

person was designated or assigned the responsibility of ensuring the monthly surcharge payment was

issued. To ensure monthly remittances to the county/state occur timely the division has implemented a

new workflow process; management is monitoring the process. However, this new process has not

been formally documented in the division’s standard operating procedures (SOP). Over the past years

with turnover in the Parking Services division, there has been no full-time analyst responsible for

monitoring and providing financial oversight, ensuring all financial transactions meet regulatory

compliances. Developing standard operating procedures for the various Parking Services

responsibilities/assignments and providing a dedicated full-time analyst to record monthly financial

transactions and monitor financial-related transactions performed by TDS will improve the division’s

overall internal controls.

Collection Methods According to TDS reports, the City has over $6.5 million in outstanding parking

citations (uncollected from August 2008 through July 2013). Collection success diminishes over time.

According to the Commercial Collection Agency Association, the probability of collecting on a delinquent

invoice (i.e., citation) significantly decreases after the first six to twelve months. Parking Services has

not monitored the effectiveness of the various collection methods utilized by TDS for

delinquent/unpaid parking citations. It is unclear if TDS is providing the most effective collection

services on behalf of the City.

We recognize Parking Services has experienced staffing challenges over the past several years. Our

recommendations are intended to strengthen internal controls. We thank the staff of the Parking

Services Division and Turbo Data Systems for their assistance during the course of this review.

OBJECTIVES, SCOPE and METHODOLOGY

Objective

Our audit objective is to:

 Determine whether existing policies, procedures and internal controls related to parking

citations are sufficient;

 Determine whether processes comply with State and local mandates and vehicle codes;

 Identify potential cost savings or additional revenue generation opportunities; and

 Identify any weaknesses in the parking citations program.

Scope and Methodology

The review was conducted during July and August 2013 for records and transactions through June 30,

2013. To address the audit objectives and as part of our assessment of risk, we:

 Reviewed the California Vehicle Code (CVC) and Riverside Municipal Code (Chapter 10.52)

related to parking, vehicle disposition and procedures for public parking violations;

 Interviewed Parking Services management and staff to obtain an understanding of the parking

citations collection processes;

 Reviewed the contract/agreement between Parking Services and Turbo Systems Data(TDS

);

 Reviewed and analyzed financial transactions in IFAS for Fund 570 to determine compliance with

applicable policies/procedures, and regulatory agencies; and

 Reviewed and compared data provided by TDS to data recorded in the City’s financial system.

Our review was conducted in accordance with Generally Accepted Government Auditing Standards and

according to the Standards for the Professional Practice of Internal Auditing of the Institute of Internal

Auditors. Those standards require that the audit is planned and performed to afford a reasonable basis

for judgments and conclusions regarding the department, division, program, activity or function under

audit. An audit also includes assessments of applicable internal controls and compliance with

requirements of laws and regulations when necessary to satisfy the audit objectives. We believe our

audit provides a reasonable basis for our conclusions.

The City has contracted with Turbo Data Systems, Inc. (TDS) to provide a complete parking citation management

program.

BACKGROUND

Parking Services (within the Public Works Department) is a non-major enterprise fund (Fund 570),

responsible for operating and managing the City’s parking facilities including parking enforcement,

citation processing, preferential parking, and installation/management of parking meters and signs.

The Parking Services Division is funded for 15 full-time employees - one supervisor, 12 parking control

representatives (PCR), and two support staff. PCRs survey the various areas throughout the City and

issue citations (electronically), while the support staff assists with day-to-day operations. All citations

are issued for violations of applicable sections of the California Vehicle Code (CVC) and Riverside

Municipal Code (RMC). See Appendix A for Riverside’s parking citation fine (bail) schedule.

Parking Services also provides parking citation services on behalf of Public Work’s Street Sweeping

Division (a unit within non-major enterprise Fund 540 – Refuse).

The City of Riverside’s Police Department has two Senior Parking Control Representatives (civilian

employees), who issue citations electronically using the same “hand-held” devices as Parking Services.

All other Police Officers issue manual citations using ticket books provided by Parking Services Division.

On average, 85K public parking citations are issued annually, generating an annual net revenue stream

of approximately $2M for Fund 570 and $1M for Fund 540.

Parking Citations

Street Sweeping (CVC 10.52.030 (a)) and Public Parking

Fiscal Year

2009/10

2010/11

2011/12

2012/2013

Totals

Citations Issued:

Street Sweeping

38,062

42,053

38,464

37,868

156,447

Public Parking

50,001

47,056

45,471

40,170

182,698

Total

88,063

89,109

83,935

78,038

339,145

Base fines:

Street Sweeping

$ 1,434,342

$ 1,670,277

$ 1,577,029

$ 1,552,755

$ 6,234,403

Public Parking

3,396,354

3,104,310

3,009,404

2,634,599

12,144,667

Total

$ 4,830,696

$ 4,774,587

$ 4,586,433

$ 4,187,354

$ 18,379,070

Amount Collected:

Street Sweeping

$ 1,360,840

$ 1,597,922

$ 1,445,208

$ 1,089,285

$ 5,493,255

Public Parking

2,522,715

2,292,631

2,098,835

1,394,567

8,308,748

Total

$ 3,883,555

$ 3,890,553

$ 3,544,043

$ 2,483,852

$ 13,802,003

Amount Outstanding:

Street Sweeping

$ 340,042

$ 348,390

$ 427,421

$ 747,530

$ 1,863,383

Public Parking

1,029,250

827,057

971,900

1,408,685

4,236,892

Total

$ 1,369,292

$ 1,175,447

$ 1,399,321

$ 2,156,215

$ 6,100,275

$s collected and outstanding includes base fine + delinquent fees as well as state/county surcharge fees.

Source: TDS

Parking Services annual budget (570-415000) includes a utilization charge to PW-Street Sweeping (540-

413040) to recover a portion of the services provided.

Third-Party Administrator

The City of Riverside has contracted with Turbo Data Systems, Inc. (TDS) to provide a complete parking

citation management system/program. The current contract was approved as of December 1, 2010 with

a five-year term ending December 31, 2015. Under the terms of the contract, TDS provides the

following:

 TicketPro Handheld system

;

 Citation processing – electronic and handwritten (manual);

 Notification letters – reminder and final notices;

 Payment processing

– in-person, mail, telephone, and internet;

 Customer service call center – staffed with well-trained, professional,

and courteous representatives and Interactive Voice Response

available 24 hours a day/7 days a week;

 Collections – delinquent and out-of-state; and

 Administrative Review and Adjudication process.

TDS deposits daily payments received on behalf of the city to City Treasury. Revenue is recorded in 570-

353200. On a monthly basis, Public Works creates a journal entry to record the transfer of revenue

related to Street Sweeping

citations to 540-353250 (net of State/county surcharges and citation

processing fees) from 570-353200.

TDS also provides monthly analytical/statistical reports on demand. TDS is responsible for maintaining

the networked parking citation database, performing daily backups, and transferring the backup data

off-site for disaster recovery. TDS has established a collection service program with the Department of

Motor Vehicles (DMV), Innovative Collection Services (ICS) and the Franchise Tax Board (Intercept

Program) for collections of delinquent/outstanding parking citations.

Collections

Per CVC Section 40202, citations are to be paid within 21 days of issuance. On the 14

day, the City of

Riverside provides an extension period of up to 21 days before the delinquent fee will be applied. Below

is a chart that describes the overall timeline of a parking citation. The city is in compliance with CVC

Section 40202.

TicketPro hand-held ticket writers are electronic devices (Parking Services - 15 units; Police Department - 5 units) that record

and print a parking citation at the scene.

Parking Citations paid in person at the City of Riverside Downtown City Hall Building are logged into TDS.

Per CVC/RMC Section 10.52.030(A) standing/stopping/parking a vehicle on the street during designated Street Sweeping days

and times is a municipal parking violation and results in an issuance of a citation.

City of Riverside

Parking Citation Notification & Collection Timeline

Timeline

Processing Procedure

Day 1

Citation Issued and information uploaded electronically

(1 business day) or manually (2 business days) into TDS

database for managing and processing parking citations.

Day 15 – 21

First Notice Letter via postal mail. (Notice of Delinquent

parking citation.)

Day 29 – 35

Delinquent fee applied.

Day 36 – 42

Second Notice Letter via postal mail. (Notice letter is

mailed after 7 days in delinquent status)

Day 57 – 63

Citation forwarded to DMV. A DMV hold will be placed

on vehicle registration and $3 DMV hold fee will be

assessed. Motorists are required to pay their

outstanding parking citation before they can renew their

registration. A hold period can be up to 2 years.

Year 2 +

Citation forwarded to ICS for collection.

 First special collection notice mailed

 Second special collection notice mailed

(Note: Delinquent citations can be forwarded to ICS

earlier than Year 2, depending on when the hold is

released by DMV)

If citations are not collected by ICS, they are forwarded

to the FTB Intercept Program for 3 years. FTB will apply

the outstanding citation fine to the taxpayers State

income tax.

Notices mailed and outstanding citations forwarded to the DMV/FTB are performed by TDS.

Source: Parking Services Division

After a five year period, any delinquent and unpaid parking citations are removed from the “current” (or

“active”) TDS outstanding parking citations file; however, the information continues to remain in the

database to refer to and post a payment, closing the delinquent account.

As noted above, TDS uses various methods for collecting outstanding parking citations not paid within

approximately two months of issuance.

Unpaid parking citations are submitted by TDS to the California Department of Motor Vehicles (DMV) to

place a “hold” on the vehicle registration for a two year period; registration cannot be renewed until the

outstanding parking citations are paid.

DMV Registry Holds

Collection Notices (ICS)

FTB Intercept Program

Collection notices are mailed by TDS’s collection agency (ICS) to debtor to notify them of the delinquent

and unpaid parking citation.

The FTB Intercept Program allows the State of California to intercept State tax refunds and/or lottery

winnings and levy the outstanding fine against these funds. Parking Services has participated in this

program since November 2008 and continues to do so annually, re-applying in October.

Parking Services has not monitored the effectiveness of the various collection methods utilized by TDS.

TDS does not provide a standard report indicating which collection method is most successful.

According to the TDS database, the city has as of July 2013 over 60K outstanding/unpaid parking

citations, at a gross value of over $6.5M.

Unpaid Delinquent Parking Citations

Time Period: August 1, 2008 through July 31, 2013

Violation Code

Number of

Citations

Original Fine

Delinquent

Total

Street Sweeping

10.52.030(A)

24,414

$ 922,392

$ 1,154,635

$ 2,077,027

Public Parking

Various

37,296

3,026,616

1,390,167

4,416,783

Total

61,710

$ 3,949,008

$ 2,544,802

$ 6,493,810

Source: TDS Citation System Report

Scofflaw

Scofflaw is defined as chronic violators with several unpaid delinquent parking citations. Per CVC

22651(i), vehicles with five or more delinquent and unpaid parking citations can be impounded (towed)

and not be released until satisfactory evidence is provided that all parking penalties have been cleared.

PCR’s are notified by the TicketPro hand-held ticket writer if the vehicle they are citing is a Scofflaw and

eligible to be impounded (towed). Currently, only four (out of 12) PCR’s are authorized to contact the

Riverside Police Department Dispatch’s office and request a tow for a Scofflaw vehicle. All other PCR’s

must contact RPD remain with the vehicle until an officer arrives and authorizes the vehicle to be

impounded (towed). Per the Police Department’s records, there were 74 vehicles (Scofflaws) that were

in violation of CVC 22651 (i) and impounded (towed) during July 1, 2012 through June 30, 2013.

Per TDS’s Multiple Citation Detail Report (5+) as of July 2, 2013, the city had 367 licensed vehicles with

five or more delinquent parking citations, totaling $271,207 in outstanding fines/penalties. CVC Section

22651.7 allows for the immobilization (booting) of any vehicle having been issued five or more parking

citations that are delinquent/unpaid. All of the city’s Scofflaw vehicles are currently listed with the DMV,

ICS or FTB for collection. The city has chosen to not seek out and immobilize Scofflaw vehicles at this

time (limited benefit based on cost).

Total outstanding amounts are gross, and include applicable state/county surcharges.

State/County Mandated Surcharges

The State requires the City to impose parking citation surcharges on each parking citation collected by

the City. The surcharges were imposed by the State for construction, maintenance, and rehabilitation of

court facilities. Per CVC Section 40200.4(a) the city is required to deposit with the county treasurer all

sums due the county (surcharges) as the result of processing a parking violation not later than 45

calendar days after the last day of the month in which the parking penalty was received. The county is

responsible for remitting the state’s share of the surcharges to the State Treasurer. Appendix B provides

a summary of all current State mandated surcharges.

In addition, per CVC Section 40225, when a vehicle registration, failure to display a license plate or

equipment violation is entered on the notice of parking violation, 50% of the penalty collected shall be

paid to the county for remittance to the State Treasurer; the remaining 50% is retained by the city.

City Parking Violation Fines/Bails

The city’s parking citation base fines (Appendix A) were adjusted in June 2009 (Resolution 21837

amending the bail schedule with an additional $13.00 to include the state-mandated surcharges totaling

$9.50 and a citation processing fee of $3.50.

In October 2010, Senate Bill 857 added a $3.00 surcharge on all parking citations to fund court

operations. The City Council adopted Resolution 22103

and amended the bail schedule to account for

this increase. City parking violation fines/bails have not increased since.

Processing of Monthly County/State Parking Citation Surcharges

In September 2012, the County of Riverside Auditor-Controller’s Office notified the city of past

due parking citation surcharges and requested payment for several years of surcharges owed to

the state/county (from FY2006 through FY2011). Upon investigation it was obvious that Parking

Services Division had not been consistent in remitting the state-mandated surcharges to the

county. According to the county, the city owed a total of $1.8 million (no interest/ penalties

were assessed). The Accounting Division accrued the $1.8 million due the state/county in fiscal

year 2011/12; remittance was made in October 2012 (FY2012-13) from Fund 570 cash/revenue.

There was no financial impact to the General Fund. The CAFR for Fund 570 and Fund 540 was

misstated for the years the surcharge was not remitted to the state/county.

Internal Audit has restated Fund 570 net revenue for FY2010 through FY2013 for this report

(see below).

Repealed Resolution 17542

Repealed Resolution 22035

Restated actual net revenue; FY14 budgeted $

Monthly TDS produces a report, Allocation of Parking Penalties, which provides detailed

surcharge amounts for parking violations collected that month and due to the county. TDS

notify Parking Services staff monthly when the report is available on the TDS online dashboard.

Based on investigation by Public Works management, it appears that this email notification and

TDS report was consistently overlooked, resulting in the $1.8M past-due payment to the county

in FY12.

Parking Services Division recently established a new workflow process to ensure state-

mandated surcharges are remitted to the County Treasurer monthly as required by CVC Section

40200.4(a). While it appears that management is monitoring the process to ensure surcharge

payments are sent to the County in a timely manner, the new process has not been formally

documented in Parking Services’ standard operating procedures.

CONCLUSION

Our review provides an independent assessment of the activities and practices that would benefit from

improved financial oversight and lead to a more effective administration of the Parking Citations

program.

During our review, we met with Pubic Works management to discuss the review and our assessments. A

draft report was provided to the PW - Parking Services Division management; a meeting to discuss our

assessment of the efficient and effectiveness of the collection efforts over parking citations and content

of the draft report was conducted in September 2013. Comments and concerns during the discussion

were evaluated prior to finalizing the report. Management’s responses are included with the following

finding/recommendations.

1,902

1,865

1,910

1,611

2,168

1,000

1,400

1,800

2,200

2,600

2010 2011 2012 2013 2014

Fiscal Year

Net Parking Citations Revenue

FY 2010 - FY 2014

Amounts in $000

Actual

FINDINGS & RECOMMENDATIONS

Finding 1: Lack of documented standard operating procedures and financial management

oversight resulted in a significant retro payment of $1.8 million to the state/county from

cash/revenue.

Monthly TDS produces a report, Allocation of Parking Penalties, which provides detailed surcharge

amounts for parking violations collected that month and due to the county/state. TDS notify Parking

Services staff monthly when the report is available on the TDS online dashboard. Processing this

surcharge due to county/state has not been documented in Parking Services standard operating

procedures; no one person was designated or assigned the responsibility of ensuring the monthly

surcharge payment was made to the county/state.

As noted in a prior audit of Parking Services (AU08-02), standard operating procedures (SOP) have not

been documented, identifying relevant tasks to be performed daily/monthly, etc. SOPs make it easy

when there is a change in staffing to know what policies and procedures are in place to handle

repetitive situations/tasks; clear roles/responsibilities and expectations are established for the

employee.

In addition, management acknowledges that over the years with turnover in the Parking Services

division, there has been no full-time analyst responsible for monitoring and providing financial

oversight, ensuring all financial transactions meet regulatory compliances.

Adequate operating procedures are a foundation for strong internal controls.

Recommendation(s):

1a. Develop standard operating procedures for the various Parking Services

responsibilities/assignments. The operating procedures initially should be those that an employee

will be responsible for performing independently. Ensure adequate management review is

established in the procedures. Update the procedures as processes change.

1b. Ensure desk procedures include providing fiscal year-end outstanding citation balances for Fund

570 and Fund 540 to Finance/Accounting. Accounting will record an Accounts Receivable and Bad

Debt to ensure the financial condition of the Public Parking Fund is represented more accurately in

the CAFR. (Refer to attached memo sent to the Finance Director, who has agreed to this annual year-

end transaction.)

1c. Assign a full-time analyst to perform monthly financial transactions required of Parking Services

and monitor monthly transactions performed by TDS.

Management’s Response

Response 1a:

Since August 2012, Public Works management has taken several steps to incorporate checks

and balances to ensure payments to the county are consistent and timely.

 Setup automatic notification reminder at the beginning of each month - Public Parking

Services Supervisor and both Senior Office Specialist.

 Send the monthly “allocation of parking penalties” report - TDS has been instructed to

send the report to Administrative Services Manager for review and initiate notification

to process payment procedure.

 Allocation of Parking Penalties report is distributed to Public Parking Services

Supervisor and both Senior Office Specialist with the understanding that the Senior

Office Specialists alternate each month to prepare payment documents and forward to

Accounts Payable within 5 working days.

 Hard copy of the documentation is kept in a binder/folder for reference.

 Integrated a consistent approval routing - Parking Services Supervisor, Administrative

Services Manager.

 During the budget preparation process for FY 13/14, Public Works worked closely with

Finance and City Manager’s Office staff to create an expenditure budget line item to

provide a mechanism to monitor and analyze future payments to the County.

 These new procedures as well as additional procedures for further management

review will be incorporated into a written standard operating procedure as

recommended.

Response 1b:

Public Works and Finance staff has started implementing this recommendation for fiscal year

ending June 30, 2013 based on citation and collection data. This will continue going forward

and will be incorporated into written desk procedures.

Response 1c:

While a full-time analyst position would certainly be beneficial, reconciling transactions and

monitoring those performed by TDS may not by themselves warrant a full time position.

Additionally, current budget restraints do not allow for such a position to be filled. This

recommendation will be considered in future years as part of the department budget. In the

interim, existing analysts within Public Works will monitor the monthly transaction reports

submitted by TDS.

Finding 2: Monitoring the effectiveness of the various collection methods may reveal

ineffective TDS processes.

Parking Services has not monitored the effectiveness of the various collection methods utilized by TDS.

TDS does not provide a standard monthly/quarterly or annual report indicating which collection

method is/has been most successful. Review of the various collection methods may assist in

determining if TDS should continue to utilize current collection sources that provide little to no

financial benefit/results or seek other innovative means of collecting outstanding fines. Analyzing and

possibly eliminating the collection methods that have little to no financial results may provide the city

with a negotiation tool when the contract with TDS comes up for renewal.

Recommendation(s):

2a. Request TDS provide (at least annually at fiscal year-end) the total number of outstanding

parking citations and related total outstanding fine (base + delinquent) for each of their collection

methods:

With TDS (current/not delinquent)

With the DMV (holds)

With ICS

In the FTB Intercept Program

2b. Request TDS provide a summary report at end of the city’s fiscal year (or quarterly) that indicates

each source of revenue (TDS, DMV, ICS, and FTB) and total gross amount for funds collected during

that timeframe to monitor the effectiveness of the various collection sources.

Management’s Response

Response 2a:

This recommendation will be implemented quarterly and incorporated into the written desk

procedures that will be prepared.

Response 2b:

This recommendation will be implemented quarterly and incorporated into the written desk

procedures that will be prepared.

Processing of monthly County/State Parking Citation Surcharges:

“The CAFR for Fund 570 and Fund 540 was misstated for the years the surcharge was not

remitted to the State/County.”

Comment:

Public Works staff will address any adjustments as needed as recommended by Finance.

Appendix A

Appendix B

Parking Citations

State and County Surcharges

Government Code Section

Total Surcharge

County

GC §

76000(b)

Courthouse Construction Fund – GC § 76100

GC § 76000 (b) - $2.50 parking penalty to the local Courthouse Construction Fund

established pursuant to GC § 76100 less $1 to the general fund of the county per GC § 76000

(c)

$ 1.50

GC § 76000 (c) - $1 of the $2.50 from GC § 76000 (b) – to the general fund of the county

$ 1.00

Subtotal – Courthouse Construction Fund and County General Fund

$ 2.50

Criminal Just Facilities Construction Fund – GC § 76101

GC § 76000 (b) - $2.50 parking penalty to the local Criminal Justice Facilities Construction

Fund established pursuant to GC § 76101 less $1 to the general fund of the county per GC §

76000 (c)

$ 1.50

GC § 76000 (c) - $1 of the $2.50 from GC § 76000 (b) – to the general fund of the county

$ 1.00

Subtotal - Criminal Just Facilities Construction Fund and County General Fund

$ 2.50

Total – County GC § 76000 (b)

$ 5.00

State

GC §

70372

(b)

State Court Facilities Construction Fund – GC § 70371

GC § 70372 (b) - $4.50 State Court Construction Parking Penalty

Note: Per GC § 70372 (f) (2), 1/3 of $4.50 (or $1.50) to the State Court Facilities Fund.

$ 1.50

GC § 70372 (b) - $4.50 State Court Construction Parking Penalty

Note: Per GC § 70372 (f) (2), 2/3 of $4.50 (or $3.00) to the Immediate and Critical Needs

Construction Fund.

$ 3.00

Total – State GC § 70372 (b)

$ 4.50

State

GC §

76000.3

State Trial Court Trust Fund – GC § 76000.3

Effective December 7, 2010, the City is required to assess a $3.00 parking citation surcharge.

This surcharge is used to fund the State Trial Court Trust Fund and was scheduled to be

sunset on July, 1, 2013 per GC § 76000.3

(1)

. Surcharge is now permanent.

Total – GC 76000.3

$ 3.00

Total – State and County Surcharges

$ 12.50

(1) A sunset provision provides that the law shall cease to have effect after a specific date, unless further legislative action is taken to

extend the law. The legislature removed the sunset provision with Senate Bill 1021 and signed by the Governor/filed with Secretary

of State on June 27, 2012.

Source: TDS Report (Allocation of Parking Penalties) and http://leginfo.legislature.ca.gov/faces/codes.xhtml

Management Letter to Finance Director

August 16, 2013

We are completing our performance audit of Public Works – Public Parking Services. During our review

we noted the following, which we bring to your attention.

Accounting for Outstanding Receivables – Parking Citations

Currently, the city records parking citation revenues using the “cash basis” of accounting; revenues are

recorded as payments are received. Standard accounting practices indicate that amounts due should

generally be recorded as Accounts Receivable when payment obligations are incurred and the

associated revenue recognized at that time. Due to the high volume of parking citations, recording AR

daily/weekly/monthly is not realistic.

However, to ensure the financial condition of the Public Parking Fund is represented as accurately as

possible in the financial reports (CAFR), we recommend Finance record parking citations issued and

uncollected as Accounts Receivable(AR) at fiscal year-end in Fund 570 (as well as for Fund 540 – Street

Sweeping Citations), per data from TBS, as provided by Public Works/Parking Services. However, the

city would also need to estimate a bad debt percentage.

The following data reflects the total outstanding AR as of June 30, 2013:

FY2009 FY2010 FY2011 FY2012 FY2013

Outstanding Accounts

Receivable

Fund 540 – St Sweeping

$ 340,042

$ 348,390

$ 427,421

$ 747,530

$ 1,863,383

Fund 570- Public Parking

1,029,250

827,057

971,900

1,408,685

4,236,892

Total

$ 1,369,292

$ 1,175,447

$ 1,399,321

$ 2,156,215

$ 6,100,275

Note: above totals include base parking fine + delinquent fees as of June 30, 2013.

According to PW/TDS reports, approximately 90-95% of street sweeping parking citations are collected;

approx. 70% of public parking citations are collected. This information is useful when establishing an

allowance (bad debt expense) for uncollectible citation fines.