PT the Auditor
Black Helicopters, Intestinal Fortitude, Car Copulation and a PARCS Trifecta
For more than 15 years now, my Master and I have written article after article about audit and operational issues. Usually, the articles are critical of the operators or owners and their efforts to control their PARCS and the revenues reported by them.
Finally, in Parking Today Volume 16, No. 10, Page 32 (for those who missed the October 2011 article), an operator stood up and announced that they have a tolerance factor of 0.5% for uncollected tickets for any 24/7 location. This took some guts to publicly state what most operators neglect to mention to their clients every single day!
This is great! At last someone recognizes that uncollected tickets are a major issue, one needing to be addressed. Can that tolerance factor be even lower with a little work and effort? If so, what amount of bottom-line dollars does that bring to the owners, and maybe the operators if they have an incentive fee?
Let me offer some short stories from real-life audits, and then you judge for yourself and set a level of tolerance for your operator to meet or exceed.
The first is a shocker! A large hotel has valet parking with a $30 rate after 1 hour and 41 minutes ($5 every 20 minutes). The hotel does a large number of functions, events and banquets. If you stand at a distance during a break, you will see patrons with $10 bills in their hands (and claim stub) along the rail. The valets pull those vehicles and off the owners go.
So what’s shocking about that you may ask? The facility had a 7.5% uncollected ticket factor. The operator claimed that the uncollected tickets were all “room guests” paid through the room folio and that 7.5% wasn’t so bad. He had another hotel valet operation where the uncollected tickets were about 11%, he said. (I always thought that any uncollected ticket in a valet operation was called a stolen car with attached police report.)
My Master and I happened to be looking at a busy facility a few months ago. The average ticket price was $35.50, with a $40 all-day rate. During the 62-day window of July and August, the garage issued 59,789 tickets and collected or accounted for 56,548 tickets. That left 3,241 tickets unaccounted, or 5.4% of the issued tickets. At the average price of $35.50, the annualized value of the uncollected tickets was $690,333. That’s a lot of Milk-Bone biscuits to me …
In contrast, the same city, the same equipment, the same time window – but different operator. Tickets issued were 54,455 and collected were 54,385, a loss of 70 tickets over 62 days. The loss factor was 0.13%.
Must be those big black helicopters that snatch cars from the garage rooftops that account for the loss!
Now, the reverse of uncollected tickets. Another garage and a different city. In February and March, the garage issued 49,016 tickets, but collected 51,336 tickets (you read that right; it is not a typo) – a gain of 2,320 tickets in the 59-day reporting window.
This activity of more tickets being collected than issued had been reported by the operator for more than 10 months, and not a single person from the operator’s side thought there was anything unusual about the situation.
Watch out Detroit, Ford and GM. Now we know what those Lincoln Town Cars and Cadillac Sevilles do at night under the cover of darkness while parked in the garage: They must produce Minis!
On closer review, the March reported number of 1,255 additional collected tickets was found to be 282 uncollected tickets, a 1,537 difference. We found the issue was that credit card transactions to replenish debit card balances were counted as tickets collected. Needless to say, no one ever counted the tickets physically on a daily basis, nor did the manager ever reconcile against the PARCS daily report.
But how did this escape the area and regional managers and corporate review for the 10 months we looked at? I guess the light was on but no one was at home!
As reported in this space last month, it appears that a wonderful change has taken place at another garage we audit. I repeat it here because it was so outstanding. The location had a new manager assigned in May; this was Manager No. 14 in seven years and four months, and the facility had been managed by two different national operators during that time.
Every single day for the 31 days of July, the money reconciled with the PARCS-generated source document without a single adjustment – no over-rings, no under-rings, no cashier shortages or overages. The same pattern recurred in August and in September, except there was one cashier over-ring to mar a perfect three-month run.
In reviewing the ticket transactions, I noticed that every ticket was processed correctly, with no manual time/date entries; lost ticket forms were filled out properly and completely, with the overnight ticket inventory checked. The results? Every single ticket issued in the 92 days for July, August and September was accounted for – a 0% loss of tickets.
So in my opinion, this fellow gets a perfect score on all items for the months of July, August and September, and he deserves to be “Manager of the Quarter.” I can’t wait to see how long he can keep his streak running, now that he has set the bar this high for himself and any manager who replaces him!
So back to the operator who sets a 0.5% level of tolerance. We see that some garages are in a 0% to 0.13% tolerance factor; maybe we can work that down to a 0.3% or 0.4% factor. Now that’s professional parking!
Article Abstract from December, 2011