tv [untitled] May 12, 2012 11:30pm-12:00am PDT
actively working with the city attorney to address the issue. because the current audit will be subject to the same bed of the follow-up process, we have closed recommendations for this earlier audit. as a result, some of those issues are carrying forward in our current audit. we are working with the right organizations to move forward. and hopefully resolve some issues as we move forward. for puc and dpw's recommendations, there were related to increasing communication of policies and procedures to contractors. for field follow ups, our office, we use a risc based
approach to collect specific recommendations -- risk based approach to collect specific recommendations. we looked at the most prevalent or most high-risk of those particular recommendations. we gather evidence to determine if the department's implementation adequately resolve the problem underlying the recommendation. and then we issue a reporting on our findings. our field follow ups go to the same follow-up process as are other reports and memorandums for recommendations determined to be only partially implemented. we will follow up at six months again, one year, and two years. we have in process of the public utilities commission, we're following up on an audit related to the parsons of water system improvement program. we selected 18 of the 26 recommendations for testing and
expects to issue a follow-up memo in this quarter. at the office of citizen complaints, we are conducting a second field follow-up of the audits of the department. the original report had 45 recommendations directed at the occ, the police commission, the police department. in the previous follow-up, evaluation was issued in 2009. we tested eight recommendations and found four to be fully implemented. in our current follow-up evaluation, we are testing to of those recommendations. we find that they are partially implemented. we will issue the memorandum in this quarter. we are also following up on a 2008 audit that cost multiple to -- across multiple departments regarding payment control. it included 12 recommendations across several departments. we are in the process of
determining which recommendations we will include in the field fallout. we also -- follow up. we are working on our adult probation follow up work. case management included 31 recommendations. we are in the process of working with the department to select a sample of those recommendations. our field follow ups that we have completed, this is what this slide presents. it is that the mta, portsmouth plaza, and then the indirect late submission for central subway. as you can see for portsmouth, there were 18 total recommendations, eight tested, -- six fully implemented, and two partially implemented. for central subway, we looked at 6, and they're all fully implemented.
as it relates for the airport commission, we issued our audit report of the contractor in july of 2011. this audit have several findings with significant financial implications for the airport. of the 23 recommendations, 16 are open, one is contested, and six are closed. the over all the risk of opening contested recommendations is high. the airport and boys, but has not yet collected 366,000 -- the airport invoiced, but has not collected $366,000 in penalties. although the airport is in the process of implementing recommendations to ensure that fox rent-a-car complies with the terms of its agreement, in some instances, the airport has not indicated to us how it intends to monitor compliance. the airport is in the process of implementing all 16 open
recommendations. the contested recommendation was based on a finding that fox had been closing for some hours each day while the terms of the lease agreement required fox to remain open 24 hours a day. the department acknowledges that fox did closed between 1:00 p.m. at 4:00 a.m., contrary to the terms of the agreement. but did not intend to collect the penalties in the terms of the agreement. our response is, though the airport states that fox is closure did not create an economic impact, it does not negate the fact that fox violated the terms of the contract. please contact violations are subject to penalties. in this case, those penalties amount to $219,000. there is a representative from the airport to discuss these
issues. >supervisor farrell: we have the airport controller? >> good afternoon. thank you for giving the chance for us to explain what is going on. today, i also have staff from the airport deputy director of revenue development and management as well. the airport has already implemented 15 items. the only open item is item number 4. we will explain to you in detail. on the contested item, number
eight, we have our business rationale choosing not to -- not opening from the hours 1:00 a.m. to 4:00 a.m.. i would like to have cheryl to come up here and maybe to give the committee more information on these two open items. item #4 and item number eight. >> thank you. >> good afternoon. i will start with the contested item, which is that fox is not open between 1 and 4:00 for a period of time. this audit spanned a couple of operating permits. and then they became a lessee of hours. there is a little nuance there, and i will tell you why i think it is a spirited they did violate --
like it is the nuance. they did violate their permits, and they have since corrected it. they are opened 24 hours a day. we have tenants come to us and asked for reduced hours. we do not want to force you to lose money or be inefficient, but you have to show us why it makes sense for you to open at 7:00 instead of 6:00. fox did not do this. they were closed without our permission. we declined to pass on these fees to them because the majority of their business does come through the reservation system. have they shown a lack of sales, we will have allowed them to be closed. in 2009, we restarted all leases and our rental car center and we allowed a fox. they were a new entrant. traditionally, we have had just the big names in our center.
we want to allow a new entrant in so we squeezed and made room for them. they are now in the rental car center, during three% of the business. we consider this a success -- doing 3% of the business. we consider this a success. in light of this, as our new smaller business in trend, -- and and, we passed on $261,000 in fines and fees as a result of this audit. we want to get their attention, but not to hit them harder than that. we think their bottom line is probably in the $800,000 to $1 million range. we fell as the $261,000 in fees made the impression we wanted. they have turned the page.
they change their operations. we are monitoring the more closely. this is why we decided that we would not pass it along. or this recommendation, i should say. if there were walk up sales between 1:00 and 4:00, they could have happened at any of the other rental car counters. no economic impact. but not collecting the fines, we did not collect that money, said that is an economic impact. we did not have a customer service impact, but an economic one. that was our rationale. supervisor farrell: ok. >> item 4, these are find code for submitting their annual certified statements. -- fines owed for submitting their annual certified statements very late. all of our tenants have 90 days
to supplement a state -- to submit a statement of sale. in many cases, we wind up owing the money because of these certified sales. for the last two years of their permit, they submitted their statements very late. for 2007 and 2008, the statement came in on an insufficient form. they were not acceptable. by the time the audit started, the permits had expired. we discussed with legal for how long can we run these fees out for an agreement that is expired? we did not get to a clear answer with them. we decided to choose a reasonable answer and we thought that would be when the audit started, everything went into
suspension at that point. the reports were not sufficient, and i told them, you are so late and these are not the right forms, let's let the audit run its course. maybe you'll get some guidance on how to get the format done properly. we started the late fees when the reports were due. to the point the audit started. and that wound up at 148 -- $146,000 in fines. this is part of that total fines of $261,000 that they did pay us. this year, the reports came in on time. they have hired an auditor. today, everything is going along well with this company. it was not a good start.
>> i have one quick summary to give you a big picture. all the 16 open items, 15 have already been implemented. that includes invoicing fox rent-a-car for the amount of money. this audit report, the finding was to collect $532,000. as of today, and since we have already taken action, we have already collected $262,000. all the recommended $532,000. the airport has already implemented what has been recommended by the team. to close the presentation, i would like to say thank you to tonia and her team.
they did a great job. we enjoyed the recommendations because that is a great help in terms of the airports improvements. thank you to the team and the gao committee. supervisor farrell: colleagues, any questions? thank you very much. tonia? let me just ask again, same question, going forward -- it seems like the fox of rent-a- car think it's a one-off that has been corrected. you never want to not collect fines. in terms of anything else in terms of the airport itself and your audit? >> we are fine. [inaudible] yes, we fully understand what
has been stated. >> for the fire department, we conducted a payroll audit. the title was undefined pay practices increase department expenditures. the one-your response on april 3. the overall risk of open and contested recommendations as a religious audit, they were high. tw at -- as it relates to the audit, they were high. of the recommendations, we had eight open, three contested, and 20 closed. many of the recommendations required action from other departments, department of human resources, ppsd. the status of each
recommendation reflects whether the fire department has reported performing its role in implementing the recommendations that require actions by multiple departments. we will continue to follow up with those other departments as needed. this audit was presented to the committee in october of last year. since then, an additional 14 recommendations have been closed as they relate to the fire department's role in implementing the recommendations. the three contested recommendations to be addressed individually on the following slide. of the eight open recommendations come at the department reports been in process of implementing five of them. the remaining three would require changes to the labor unions in the you -- mou and ask that the department of human resources bring certain issues to the negotiating table. the current mou expires in fiscal year 2013. >> [inaudible]
>> thank you for that. these recommendations were recommendation #three and four in the original report. there are closely related. these findings were presented again in committee in october of last year. what we did, we tested 13 of 63 retiree payouts for the year and found one instance where the retiree was paid out for more sick leave them was permitted by the cap. the department stated that the exception could be explained by a settlement related to a mou provision from 1995 that resulted in certain employees being permitted to exceed the sick leave cap due to pre- existing the accrual. the department could not produce the settlement at the time of the audit and does not been provided -- and we have not received it.
a copy of the settlement, or we have not received any type of documentation since the audit. the retiree was paid a wellness incentives, a bonus that was increased by the excess hours. from this analysis, we determined the department did not consistently applied the sick leave cap. for this particular retiree, the department chose to apply the sick leave cap at a different point in the calculation senate differ other retirees. that -- in the calculation they did four other retirees. it would cap their pay out at a lower rate than anymou indicates. -- than the mou indicates. that would help to ensure that
we do not violate the mou and that we do not pay out in excess of what we should be paying. to address recommendation number 3, the department must either produce the settlement, establish a significant -- a said -- a consistent payout, provide sufficient audit trail to support exceptions to the limitation. the department must ensure that mou is clear as to what point and the sick leave cap should be applied. we are looking for clarity, documentation that we can audit back and support. this recommendation was recommended -- recommendation 17 in the regional report. the department originally stated
that it agreed with the recommendation and proposed an acceptable solution to resolve the issue. in response to the six month follow-up request, it indicated that it would not implement the recommendations indicating that it did not agree with the findings and recommendation. the most recent response indicates that the pending implementation of the city wide payroll system will resolve the underlying issue. however, the recommendation is aimed at addressing the problem until the new system can be fully implemented. i do know they are part of the team that should be entering into parallel testing and moving into emerge in september or october. correct? when the audit was done, we are asking for procedures in place to adequately provide reasonable assurance of proper payout for retirees.
we've just found that the processes in place made it difficult to track whether they were paying out properly. >> i know we have a number of people from the fire department here. >> i am from the san francisco fire department, deputy chief administration. thank you for having us today to present on items that are outstanding.
>> good afternoon, supervisors. thank you for allowing us to respond to this item. we worked over the past year and a half and work berry well with them. thank you for that input. -- work very well with them. thank you for that input. we have taken the recommendation of the audit very seriously and have implemented many changes that we can internally. there are a couple of items that were touched on with regards to the extent the department can impact policies. one would be a large number of the items that reflect changes. it would require -- we are working with dhr very closely. secondly, it would be the emerge system. we a push to be one of the first departments to be in the first wave of conversion to the system.
we have been working very closely with the controller's office to be able to be assured that in the new system, we will be able to avoid these types of issues. parts of the discrepancies that we have is that we have a completely separate time capturing system. there are some discrepancies. we have been working with the team and will be part of the first rollout in the fall, august 4 september. we are looking forward to that and resolving some of these issues. supervisor farrell: going forward, they will be merged together? >> we are looking very forward to that. to touch on the open items.
we are actively working to resolve those. we have resolved those even in the time we submitted our greatest response. those are works in progress. a couple of those will be addressed with the new system. we are looking forward to that. i will touch on the contested items. first, there was a settlement back in 2009 with the city attorney and a list of employee use to allow them to exceed the sick pay threshold. at the time of the audit, we provided some documentation from debt settlement. maine the list of employees and the end result and balances -- mainly the list of employees and the end result and balances. we do not have it on file, the actual settlement. what we have is a list of items, a list of employees as a result of the agreement. we have been falling the terms
of the agreement. we have not had any new -- we have been following the terms of the agreement. we have not had any new employees run into this problem. that list has been reduced as employees retire. it has been mainly through a set number of employees that were involved in the settlement at the time. it is not something we would have the power -- the sick pay is outlined in the mou. it was a special circumstance as a result of the lawsuit. we were following the terms of the agreement. the last contested dealt with the monitoring assignments, that is part of the issue we have would be separate pay and labor systems. our time is tracked very accurately with regards to active assignments. we have people monitoring
movement on a day-to-day basis. some people are working in active assignment capacity. the request of the audit was to pull data back from our cases. they do not categorized the employees in the same way. we are looking to be able to clearly identify that and be able to go backwards and extract the data. that is our brief presentation. supervisor farrell: colleagues? thank you very much. tonia, same question. go forward? it seems like the settlement does not exist in paper form, a bad record keeping. i am sure it is not a preferred practice, it is what it is. in terms of their -- how do feel
about going forward? >> it will solve many issues that we are having in our payroll system as it relates to tracking and so forth. because we are decentralized. it will be helpful, and we are doing some work as auditors. i am very confident that the department's will be able to move forward in a consistent manner that would be acceptable. supervisor farrell: any others? are you all done with your presentation? >> thank you for your time. supervisor farrell: thank you for your time today and all of your hard work. much appreciated. with that, colleagues, i am going to open it up for public comment. i see mr. paulsen.
everybody is going to have two minutes. >> ♪ one in an audio million chance to make it happen a one in a million make it happen from you a one in a million audit chance of a lifetime that there will be no oversight and make it turn out right and happy mother's day to you 3000 miles away ♪ supervisor farrell: thank you. public comment is closed.
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