An Audit Is Like a Colonoscopy ...
March, 2006A friend told me that an audit is like a colonoscopy. It's not pleasant, but it finds problems and can help you correct them before they destroy you. In his case, his audit focused him on parts of his business that he had been neglecting and showed him where he needed to make some changes.
His attitude was one of discomfort mixed with gratitude. He caught his problem in time, before it was fatal.
I'm stunned when I'm given an audit assignment and the object of the audit fights tooth and nail to prevent me from getting the information I need.
I went to one location where the garage manager told me that his boss had told him to stonewall me, that I was getting nothing. I reminded him that I worked for his customer and asked if a phone call was necessary to open the doors. He said yes.
So he and his company went through the embarrassment of having their customer call them, remind them of paragraph suchensuch of their management agreement, and tell them in no uncertain terms that they were to give me everything concerning that garage.
Now think about it. I make my money in the parking business. I don't want to find things that don't exist. I simply want to help both the owner and the operator to better understand what is happening in the garage and make things right.
Of course, if the operator "goes to the mat" and says not only "no" but "hell no", then not only I but also the owner begins to wonder what they have to hide. It makes me want to turn a cursory one-day look-see into a fact-finding expedition. Let's face it: Audits mean that the operator may have to come up with some funds that went missing. It's a question of how much.
I can always find something - an access card left on that is unpaid; lost tickets unaccounted for; maybe an invoice charged to the wrong account. Most of these are easy to find and mean little more than some slight changes in housekeeping.
However, if I go in with an adversarial situation in the beginning, the owner is going to expect me to find a lot more. And if it's there, I probably will.
By the way, some garages are nearly perfect. There is nothing to find. The manager has his eye on the situation, and usually the only thing I do there is make recommendations on marketing, or perhaps back up the manager in his requests for new equipment, better lighting or signage. See, I can be a big help to the operator in these cases.
However, some garages aren't so perfect. Sure, there is the possibility of theft, but most of the time it's errors I find. Lots of cards left on and not billed - this is a big one, and an easy one to fix. There are also issues with lost tickets. Very few garages fully account for lost tickets. The operators have a "percentage" in mind that is acceptable, and if it falls below that, they sell the owner on the idea that, say, "5% lost tickets is an industry norm." Balderdash.
If a garage issues 1,000 tickets a week and the average ticket is $7.50 and the garage has a 5% lost ticket rate, that's 50 tickets a week or 2,600 a year. Twenty grand off the bottom line. Is that what we want owners to think is the industry norm? By the way, 200 tickets a day is a small garage; how many tickets a day do they issue in your garage?
See, I think the garage manager should try to get every ticket back, and when one is lost, there should be a lost ticket form for each one.
When I am auditing a garage, I try to send in a "mystery parker" with only two feet and have him drive out and claim a lost ticket. Then I arrive a couple of days later and attempt to find the form for the lost ticket. To date, I haven't found one yet. And seldom is there an overage for that shift. That tells me there is a problem. It also tells me where to start looking.
If a garage has its monthly permits under control and its lost tickets are nonexistent (without a lost ticket form), then my guess is that everything else is pretty good, too.
OK, you operators, you have my secret. Solve those two problems and take the audit pressure off.