The Department of Administration General Services Division is authorized under §5A-4-5 to regulate the parking on state owned property around the Capitol grounds. The secretary of Administration is also authorized in the West Virginia Code §5A-4-3 to be responsible for the security of the Capitol grounds.
The DOA is responsible for the 199 parking meters located around the Capitol grounds.
The General Services Division is responsible for collecting the parking meter funds and collection
of the payment of parking violations, which are sometimes paid in cash. Security America, a
contract security firm, is responsible for writing citations while two supervisory employees of
General Services collect all revenues from meters and citations paid in collection boxes.
Issue Area 1: The Department of Administration Failed To Implement The Internal Controls Recommended By The Legislative Auditor's Office In 1982
Internal Controls Safeguarding Assets
One of the objectives of internal accounting controls is to provide management with a reasonable assurance that assets are safeguarded from unauthorized use or disposition. Internal controls are comprised of the accounting system which consist of procedures and records which are required to maintain accountability for assets and liabilities of an entity. According to the American Institute of Certified Public Accountants Auditing Standards, "An effective accounting system gives appropriate consideration to establishing methods and records that will:
The State Building Commission, which was supervised by the then Department of Finance
and Administration, did not establish a system of internal control as recommended during an audit
dated August 1982. The post audit conducted by the Legislative Auditor's Post Audit Division
noted that one parking guard was responsible for the collection of parking meter revenues. The
revenues were given to an employee in the DOA for recording and depositing into the State
Treasurer's Office. The audit recommended the State Building Commission establish
internal controls for parking meter receipts; however, this recommendation was never
implemented by the State Building Commission or the then, Department of Finance and
Administration. It was obviously, only discovered five administrations later, re: the
The failure to implement internal controls as recommended by the Legislative Auditor's Office in the 1982 audit directly resulted in the loss of parking meter funds found during a 1998 investigation. During the investigation it was found the parking guard was charged with the responsibility for collecting the parking meter revenues and parking meter fines solely by himself and delivering the collections and a blank deposit slip to the State Treasurer's Office who completed the deposit slip. The guard was the only employee who had the keys to the parking meters, the citation collection boxes and to the canister used to collect the parking meter revenues. The parking guard had the keys to the meters, the fine boxes and the canister. See Appendix A regarding current safeguards for parking meter keys. The employee delivered the canister to the cashier in the Treasurer's Office where the coins were counted and deposited. The parking guard did not verify the amount counted and deposited and no other employee from DOA verified the amount collected and deposited. The deposit slip was completed by the cashier in the Treasurer's Office and a copy was forwarded to an employee in the Department of Administration.
Red Flag For Management -Fluctuations In Monthly Deposits
During the last four years, the fluctuation in parking revenues deposited each month provide
management with a red flag that problems existed in the collection of the parking meter revenues.
However, no one raised any questions about the fluctuations in deposits or monitored the deposits.
We analyzed the deposits for parking meter collections beginning in July 1994 through October
1998 and found extreme fluctuations in deposits occurring month to month. One example of the
fluctuations occurred during the months of September, October and November 1994. The amount
deposited for this time period was $30 in October and no funds deposited for September or
November. The failure to implement managerial controls such as monitoring deposits and periodic
random rotation of staff to collect the parking revenues would have prevented the loss of the funds.
The fluctuations from month to month for the last four years are provided in Table One.
If the deposits were monitored by the individual who was recording the transactions and management had implemented a reconciliation process and segregation of duties, the irregularities which were occurring would have been detected at an earlier time. The fluctuations in deposits from month to month was a clear indication that something was occurring in the collection process of parking revenues. The individual who was performing this recording process should have noticed and alerted management that further inquiry was needed to justify these fluctuations.
|Table One - Deposit Fluctuations|
|Month||F. Y. 1995||F. Y. 1996||F. Y. 1997||F. Y. 1998||F. Y. 1999|
The State collected an average of $61,670 per year in parking meter revenues during the period of fiscal year 1994 through fiscal year 1998. This information is based on a review of past parking meter collections that were deposited into an account in the State Treasurer's Office and the Department of Administration's Office of the State Comptroller.
The State had 199 meters available for parking for the last five fiscal years around the Capitol Complex. The location and number of meters at each location are as follows: California Avenue, 49 meters, Cultural Center Lot, 73 meters, Greenbrier Street, 40 meters and Veterans Memorial Lot, 37 meters. Based on the assumption that the 199 meters at the Capitol Complex were occupied for eight hours per day, twenty days a month for ten months (Metered spots are reserved for Legislators during 2 month session) of each year, the collection should have been close to $125,600 annually. Table Two shows the assumptions and conclusion.
|Table Two - Annual Projection of Parking Meter Revenues|
|Approximate Meters Available For Public Parking||199|
|Number of Days Meters Available For Public Use ( 20 days per month for 10 months)||200|
|Maximum Revenue Per Day ( 8 Hours)||$626.50|
|Potential Revenue Per Year||$125,300|
|Table Three - Projected Maximum Revenues Compared to Actual Revenues|
|Actual Revenues||$ 60,784||$ 80,576||$ 72,852||$ 58,744||$ 35,390||$308,346|
|Shortfall||$ 64,516||$ 44,724||$ 52,448||$ 66,556||$ 89,910||$318,154|
The Legislative Auditor's Office was informed that the Department of Administration has implemented new collection procedures and is studying the cost-benefit of internal controls to protect the loss of parking meter fines and funds. The DOA has taken action for collections by assigning two long-time supervisory employees for the collection of meter revenues and meter violations paid at the meter fine boxes twice a week. The lock has been replaced with two new locks in which the DOA has one key and the Treasurer's Office has the other key. The two employees deliver the collections to the Treasurer's Office where the money is counted and verified by the Treasurer's employee and the DOA employees. The recording for cash receipts is performed by the parking revenue clerk in DOA's Accounting Section. General Services is responsible for the reconciliation of the meter collections.
The Department of Administration has procedures for collecting the parking meter revenues and parking meter violation revenues and the recording and reconciliation of the transactions. However these procedures have not been written and approved by the Secretary of Administration. The new procedures are a start for deterring the thief of parking meter revenues. But, the same canister secured by duct tape is still in use for collecting the coins, and the lack of policy requiring the rotation of the individuals collecting the parking meter revenues allows for the same risk for the current two employees to practice the same procedures that led to loss of parking meter funds.
Revising and Controlling the Parking Tickets
The same guard was responsible for the collection of parking meter fines deposited into
four fine boxes located on the Capitol grounds. It was found that the guard did not request ticket
books according to the procedures and did not always turn in the carbon copy of the tickets issued
for overtime parking violations. Therefore, with the same controls for collecting parking
meter revenues were in effect when the collection of parking fines were made this raises
the question whether individuals who paid their fines in cash were not properly credited
for their violation payment. The Department of Administration currently has $33,556 of
unpaid parking fines on its books as of August 31, 1998.
The Department of Administration and the State Treasurer's Office have implemented some internal controls to safeguard the collection of parking meter revenues and parking meter fines. The DOA needs to improve the procedures to ensure adequate internal controls are in place to safeguard the parking meter revenues and fines. The procedures and policies regarding parking meter collections, issuance of parking tickets and the recording of these transactions need to include safeguards that will alert management immediately to any major fluctuations so they may be investigated by someone independent of the collection and recording of transaction process.
The locks for meters and collection boxes should be changed and strict controls
implemented to secure the keys. The keys shouldn't be removed until signed for by the individuals
deemed collectors and should be returned upon completion of collections with a deposit signed by
the Treasurer's Office.
Written procedures for the collection of all meter revenues and citation revenues should be documented and signed by the Secretary of Administration. These procedures should outline 1.) who is responsible for the collection 2.) the actual procedure of the collection 3.) procedures for auditing the collections for fluctuations and how the fluctuation was resolved 4.) who has responsibility of keys for collection boxes and meters; and 5.) the frequency of collection.
In addition, there should be written procedures for the issuing of parking violations. The tickets are the only means for determining the amount of revenues which should be collected from parking citations. The employees delegated to collect coins should not collect the parking violation fines and should be rotated periodically. This will reduce the risk of collusion.
Random audits should be conducted by the Department of Administration to oversee the collection and assure all monies are being deposited once collected, noting the date any below average amounts are collected. This date can then be cross-referenced to parking citations written on that date. There should be an inverse relationship between parking meter revenues and citation revenues.
The lack of internal controls over collection of paid citations from fine boxes leaves the Department of Administration without accurate records of individuals who may have paid in cash. The DOA should consider voiding all uncollected parking violations issued during the time period of the recent embezzlement.
All ticket books should be pre-numbered and accounted for by recording who receives the
ticket book and require the employee to sign a receipt for the book. All books should be audited
regularly to detect unaccounted for books of tickets. It is also recommended that Administration
require the inventory of books be secured and distributed each month to prepare reconciliations
with yellow copies (carbon copies of the tickets) returned.
The Department of Administration should continue to pursue collecting the recent embezzlement loss from the Board of Risk and Insurance Management. The DOA should report to the Joint Committee of Government Operations at the January interims the status of this action and any improvements made to the parking meter controls.
Issue Area 2: Many Parking Meters Are In Desperate Need To Be Replaced With State of the Art Equipment
Equipment In Poor Condition
The employees charged in the recent embezzlement used a portable collection canister with one padlock that secured the top for the meter revenues. The neck of the canister did not have a baffle to prevent the coins from being poured out of the canister. The canister used for collections was also held together with duct tape. The condition of the canister does not provide a secure collection device. In addition, during the collection of parking meter revenues by the Commission on Special Investigations it was found that 12 of the 199 meters were either inoperable or the the coin cup in the meter had been replaced with a styrofoam cup.
One major weakness in the parking meters are the coin cups that collect the parking meter revenues. The cups are open containers which allows the individual collecting the coins access to the money. The individual collecting the revenues has the option of pouring the coins into the canister or into their pocket or other device in which to take the revenues for personal use. This tempts anyone to deposit the coins into a bag or any other vessel instead of the canister. This availability of cash during the collection process in conjunction with the antiquated canister increases the risk and temptation for an individual to steal the parking meter funds.
Reduction of Meters
The meters on Greenbrier Street have temporarily been converted to permit only parking until the new parking building is completed and will temporarily reduce meter revenue. In addition to this, the parking lots by the Cultural Center with metered parking will be reduced permanently by 73 due to the bus turn-around being constructed. The Director of General Services has expressed his desire to out source the revenue collection services to a bonded company due to the danger imposed on his employees and is waiting for approval from the Secretary of the Department of Administration to out source.
New Meters and Handheld Ticket Writers and Support Software
The Capitol Complex currently has 150 parking meters in operation around the Capitol grounds. According to preliminary plans, DOA will have 126 meters available for public parking after the construction of a bus turn around area by the Cultural Center. The Legislative Auditor's Office contact two vendors that manufactured and installed parking meters.
The proposal from Duncan Industries has not yet been returned, but it is possible to
calculate a conservative figure. This figure will be higher than the actual cost due to credit received
from the trade in of the existing meters. The meters for a new closed vault digital system would
cost no more than $20,790 ( Approximately 126 new meters @ $165 per new meters).
The General Services Division has received a proposal for a ticketing and tracking system. This system removes the need for ticket copies. The ticket is recorded within the "Handheld System" and is then plugged into the computer to transfer the data. This proposal is all inclusive which includes training for the new system, all hardware and software. The proposal totaled $29,469.00. The cost for 126 meters and the hand held ticket writers and software system has an approximate total cost of $50,259.
Centrally Located Multi Space Parking Meter System
Another system to be considered is one in which a single unit maintains multiple spots. This reduces maintenance, allows credit cards, has internal audit functions and gives change. This is a lot like a parking lot attendant in a machine. The Greenbrier and California parking spaces will have at least two collection points and then one at the parking lot. The cost of this proposal could range from $40,000 to $60,000 depending on the vendor selected. This would require considerably more installation costs for the electric and networking of the machines. The Department of Administration has received no formal proposals.
|Table Four - New Parking Meters System Options|
|Closed Vault Meters W/O Trade ins||$51,000||Duncan Industries Proposal|
|Multi Space Unit (Average)||$41,500||Average of three vendors price quotes|
|The cost is based on 126 meters.|
The Department of Administration should consider replacing the old meters with a state
of the art system which would provide locked vault type collection points and an audit trail for
collections. This type of system would reduce the risk and temptation for an employee to steal
parking meter funds during the collection process.
Issue Area 3: The Legislature Should Consider Transferring Control of the Parking Meters and the Revenue Received from the Parking Meters to the new Capitol Security Agency
West Virginia Code §5A-4-3 requires the Department of Administration to be responsible for appointing and maintaining a security force on the Capitol grounds. The Legislature passed a bill in the July Special Session of 1998 creating the State Facilities Protection Division (§15-2d-1 et seq.).
The Department of Administration is authorized to employ security officers who are required to take an oath in accordance with §6-1-6 of the West Virginia Code and who have the same powers, duties and responsibilities of a deputy sheriff. Code §5A-4-3 states:
According to Secretary Markus, the current security officers have not taken an oath pursuant to this statute (See Appendix A). The Legislature passed Senate Bill 1, effective from passage on July 14, 1998 creating a new Capitol Security Agency. Code §5-2D-1, states...
The Legislature finds and declares that citizens, state employees and visitors who park,
attend functions or work at the capitol complex should be safe and secure. The Legislature
further finds that it is in the public interest to provide for the safety and security of individuals
who visit and work at the capitol complex and that this can best be accomplished through a
single division within the department of military affairs and public safety.
In addition, Code §5-2D-3, Duties of division states the State Facilities Protection Division has the duty to:
(1) Gather information from a broad base of employees and visitors as to their security needs and develop a comprehensive plan to maintain and improve security at the capitol complex;
(2) Establish qualifications and training requirements for persons providing security at the capitol complex, including law-enforcement officers, who shall have powers of arrest, all powers and authority of law-enforcement officials set forth in section three, article fourteen, chapter eight of this code and the duty to enforce all applicable provisions of this code within the capitol complex;
(3) Employ personnel or contract for services; and
(4) Purchase necessary equipment to maintain security a the capitol complex.
Current Security and Parking Guards
The state currently employs one parking guard which is located at the entrance of the Governor's driveway and a supervisor of parking guards who is located at the parking guard building at the Piedmont entrance. The security company under contract by the state currently is responsible for issuance of parking meter tickets. The procedures in place for ticket writing dictates a Capitol Security employee to write the tickets. The employee must first sign a ticket book out, and when completed, sign it back in. The ticket copies are submitted to Administration's accounting department. All ticket books are maintained at the Piedmont Street Guard House. Exhausted ticket books are submitted twice a week. The ticket books must be picked up from inventory maintained by General Services. The supervisor of Capitol Security delegates this task. When the books are received they are numbered and stored in a non locking file cabinet. It was noted that during the period of time when parking meter revenues were diverted, there were employees writing tickets from books which were not recorded in the guard house ledger and are currently in use for issuing parking violations. According to the parking guard supervisor, there have been more tickets issued to the Security America Captain by the Director of General Services that have not been recorded in the ledger.
Transfer Funding and Control of Parking Meters To New Capitol Security
The passage of Senate Bill 1 creates conflict between the Department of Administration
and the Department of Military Affairs and Public Safety. Both Departments are charged with
hiring security for the Capitol grounds. The state has created a new agency delegated the function
of securing the Capitol grounds. Transferring the duties of parking guards and ticket writing to
this newly created agency would increase the security to the Capitol grounds and provide a
funding source for the security agency. The Capitol grounds are surrounded on three sides by
parking meters. The Oklahoma Federal Building bombing incident occurred by a van being
parked in front of the building at a meter. The security of the Capitol's buildings and surrounding
grounds should incorporate the parking around the building. The duties of providing this security
was assigned to the Capitol security agency. Since securing the grounds includes parking around
the building, the revenues generated by these slots should be transferred to the Capitol Security
agency to off set the cost. The revenues from the meters are currently being deposited into the
State Building Commission's account without being obligated for any specific area.
The Legislature should consider transferring the control of parking meters and the collection of revenues to the newly created Capitol Security Office. The funds collected from parking meters and parking fines should also be transferred to offset the cost to implement the enforcement need to perform these functions.