The New York City Department of Parks and Recreation recently endured a procedure that can send chills down the spine of any American — an audit.
City Comptroller John Liu announced on December 5 that an assessment of the Parks Department’s control over recreational, dining and retail concessions from July 1, 2008 through June 30, 2010 unearthed management errors that could have yielded a total of $8.8 million in revenue.
The Parks Department is responsible for soliciting and presenting concessions for various attractions across the 29,000 acres of the city parkland it controls, and concession operators typically pay a fee or provide a percentage of their total receipts to Parks.
“Parks are not just about concessions, but concession contracts should be better managed so that revenue flows to the city without unnecessary interruption,” Liu said.
Of the nearly $9 million that was reportedly squandered, $728,358 was from Queens, amounting to the second highest borough total behind Manhattan.
Premier Queens locations that were underutilized include the Clearview Café, which could have created an additional $379,167, the ice skating rink at Flushing Meadows-Corona Park, which could have produced an extra $119,667, and the Meadow Lake pathway, which lost $20,000 in potential revenue.
The auditors made 22 recommendations to Parks, including tracking the solicitation and award process, retaining written explanations of rejected proposals and examining why only a small number of responses to solicitations are received.
Parks has refuted many of the audit’s findings and claims that revenue cannot be sought above all other considerations. The department also maintains that various “extenuating factors” had to be taken into account before executing license agreements.
“Regarding the comptroller’s audit on Parks’ controls over the awarding of concessions, we disagree fundamentally with its process and analysis, and we believe it is inaccurate and misleading in its conclusions,” said the Parks Department in a statement.
“The comptroller’s report implies that Parks, in managing a portfolio of over 400 concessions, should ignore clear business and legal circumstances that necessitate, from time to time, a course of action that delays the commencement of new license agreements. These occasional delays are the result of decisions made in the best interest of the city.”
According to the Parks Department, the amount of foregone income detailed in the comptroller’s report represents less than 4 percent of the agency’s $230 million in total revenue generated over the three-year audit period.
The department also prides itself on being able to “maintain the level of revenue from its concessions at a generally constant level despite the severely stressed economic conditions.”
Based on the audit, however, Parks has seen a significant decline in concession revenues during the fiscal years of 2008, 2009 and 2010, with totals of $52.6 million, $46.1 million and $39.8 million respectively.
