Magazine

PT The Auditor

Truth, Justice and the American Way?

I had to make an appointment to see the vet the other day. Seems my vision had become somewhat “jaded.” Initially, I thought it was simply the bright sunlight filtering through my green auditor’s visor that was the cause of my problem. But even in the muted light from within the deep, dark recesses of the parking garages where somehow I always seem to find myself, my vision was still jaded.
After I talked with the vet, he realized the underlying problem was one reported earlier by Wall Street’s Motley Fool – “what a dirty little business this parking was” – and this was just one of the long-term effects of that ailment.
It seems I was lying under the table with my master in a room full of lawyers recently (as a whole, their profession is about as suspect as ours) to settle a case of admitted outright incompetence, fraud, thievery and employee willful misconduct. The issues were not contested by the operator, and the dollars were only marginally different between the parties. What then was the issue?
Can the operator pay the money and legal fees without having to admit any wrongdoing, keep the current contract, and still be permitted to bid on future offers without any penalty? Yep. Shocking, you say? Of course, normal folks would have said lock them up and throw away the keys, extract the pound of flesh that the public is entitled to, and let them wear the scarlet letter on their business card for the next several years.
Now, this was not a matter of simply a few dollars, we were talking about millions of dollars here!
No, the operator does not want to file an insurance claim because the insurance company will require them to file a complaint with the local constabulary. Can’t do that! We can’t afford to let their other customers know the fox was in the henhouse serving “fried chicken and scrambled eggs.” We can’t let the competition know what happened as they will use it to aggressively market against us with our client base. And we can’t let our existing client base know this as they may do an audit as well!
What to do? Simple. Hire a skilled law firm, make political contributions, support a fundraiser, buy a truckload of beef futures from Arkansas, and build a support base to claim that this was simply an isolated case. Pay the money from the corporate profits or other locations where the record keeping was not as “controlled” as it should be so no record becomes a public document.
Now that we have a plan, how do we change what was so black-and-white at 8 in the morning to be various shades of grays and blues at 4 in the afternoon? Oh! And how can we stage this to allow us to record this payment so that we can use it to offset our tax liability on the payment being made and not owe tax on the monies not reported as being received? Oh, the wonders of our skilled attorneys and accountants.
From the other side, how does a public entity agree to such a deal knowing that the payment made to settle what has now become “a contract compliance issue” will probably be made by diverting funds from some other henhouse that this operator manages or, better yet, from this henhouse in which they were just caught and are now permitted to remain and possibly extend their contract? (You really don’t expect the operator to actually reach into their own pocket, now do you?)
Better yet, the lawyer suggests that as part of the settlement, a portion of the repayment has to be in in-kind services at the garage: new painting, lights, signs, equipment, and so on. Great! When this is all done, the operator will issue a press release showing how “they” have made the facility even better, cleaner, more efficient, accountable and profitable. Better yet, the operator can use this as marketing hype as they bid other facilities within the city knowing that those who would be making the decision to accept future operating proposals will look at the marvelous job that was done at the old henhouse.
As the cock crows twice from the gables of the henhouse and the cycle simply repeats itself, maybe the Motley Fool was right – “what a dirty little business this parking was”– because we within the parking industry and our customers allow this to happen!

WOOF!

Article Abstract from August, 2007




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