Comptroller audit finds weaknesses in controls for DPW parking structures; department accepts recommendations

The City of Milwaukee Comptroller’s Office presented an internal audit on March 20 that found weaknesses in internal controls for Department of Public Works-managed parking structures and recommended seven corrective actions. Department staff accepted the findings and described steps to improve monitoring and reconciliation.

Auditors from the comptroller’s office told the Public Works Committee the review covered revenue activity from Jan. 1 through June 30, 2024, and analyzed about $3.1 million in revenue tied to five city-owned structures operated by outside contractors. Anna Gutierrez, an auditor on the engagement, summarized the conclusion: "the controls were not adequately designed or operating effectively during the scoping period." The audit identified late or missing contractor deliverables, gaps in procedures and limitations that prevented independent validation of some monthly revenue remittances.

Key findings highlighted by the audit included: - ABM (a contracted operator) did not submit required annual operating plans and annual performance reports on the contractor schedule; DPW received monthly activity reports but not the formal annual documentation called for in the contract. - Deer District LLC submitted an annual budget and two monthly split-revenue payments late during a personnel transition. - DPW lacked a documented set of procedures for daily operations and maintenance oversight of parking structures; ABM similarly did not provide detailed written operating guidelines for customer service, rates, technology, security and maintenance. - There was insufficient documentary evidence to independently confirm monthly prepaid (monthly-pass) revenues remitted by ABM because those receipts deposited to ABM-managed accounts were not provided as bank statements for city reconciliation. - The audit found delayed deposit/recording of some revenues; auditors reported revenue postings lagged by roughly two months in several cases, and that a single monthly remittance could be on the order of $200,000.

Comptroller staff recommended that DPW require contractors to deliver the missing annual documents on schedule, maintain documented policies and procedures, supply bank statements or otherwise segregate city receipts so the city can reconcile monthly prepaid revenues, and ensure timely deposit of checks to the treasurer’s office.

Chuck Schumacher, DPW finance/operations manager, told the committee the department already receives monthly budget and revenue detail from ABM as part of invoicing but accepted the audit’s recommendations. He said DPW has directed ABM to segregate city receipts into a dedicated bank account so the city can reconcile deposits against the contractor’s reports and invoices. Schumacher also acknowledged the department will work to improve internal procedures and timeliness of deposits.

Committee members pressed staff about the risk of lost revenue and the historical handling of cash. Auditors said they found no direct evidence of fraud in their scope, but stressed that lack of bank-statement access prevented a full independent confirmation of monthly prepaid revenues. The comptroller’s office rated several risks as medium and laid out steps for DPW to strengthen controls.

Alderman Lamont Westmoreland moved to receive and place the audit report on file; the committee approved that motion.

Speakers

- Anna Gutierrez — Auditor, Comptroller’s Office (government). First referenced at 4142.53. - Vashkin Batsa — Senior auditor, Comptroller’s Office (government). First referenced at 4148.93. - Adriana Molina — Audit manager, Comptroller’s Office (government). First referenced at 4153.49. - Chuck Schumacher — Finance/operations manager, Department of Public Works (government). First referenced at 4569.76. - Alderman Jose G. Bauman — Chair, Public Works Committee (government). First referenced at 0.40. - Alderman Lamont Westmoreland — Vice chair, Public Works Committee (government). First referenced at 11.68.

Authorities

- other: Contract provisions between City of Milwaukee and private parking operators (referenced by auditors and DPW staff)

Actions

- kind: other identifiers: {agenda_item_id:"241655"} motion: "Receive and place on file the comptroller's audit of DPW parking structures and lot revenue controls." mover: "Alderman Lamont Westmoreland" second: "not specified" vote_record: [] tally: {} outcome: "approved" notes: "Report received and DPW committed to follow-up actions: require contractor annual documents, segregate ABM receipts into dedicated account, and improve deposit timeliness."

Clarifying_details

- {"category":"audit_scope","detail":"Time period covered by audit","value":"2024-01-01 to 2024-06-30","units":"dates","approximate":false,"source_speaker":"Anna Gutierrez"} - {"category":"revenue_scope","detail":"Total revenue reviewed in audit","value":3100000,"units":"USD","approximate":false,"source_speaker":"Anna Gutierrez"} - {"category":"monthly_remittance","detail":"Example size of a monthly remittance referenced by auditors","value":200000,"units":"USD","approximate":true,"source_speaker":"Anna Gutierrez"} - {"category":"contract_term","detail":"Length of ABM contract referenced in discussion","detail":"3 years","value":3,"units":"years","approximate":false,"source_speaker":"Anna Gutierrez"}

Proper_names

[{"name":"ABM","type":"business"},{"name":"Deer District LLC","type":"business"},{"name":"Office of the Comptroller","type":"agency"},{"name":"City of Milwaukee Department of Public Works","type":"agency"}]

Community_relevance

{"geographies":["Milwaukee"],"funding_sources":[],"impact_groups":["city treasury","parking customers","contract vendors"]}

Meeting_context

{"engagement_level":{"speakers_count":6,"duration_minutes":80,"items_count":1},"implementation_risk":"medium","history":[{"date":"2024-01-01","note":"Audit scope begins"}]}

Topics

[{"name":"parking-revenue-controls","justification":"Audit focused on revenue controls, documentation and reconciliation for city parking structures.","scoring":{"topic_relevance":1.00,"depth_score":0.85,"opinionatedness":0.05,"controversy":0.55,"civic_salience":0.70,"impactfulness":0.60,"geo_relevance":1.00}}]

Provenance

{"transcript_segments":[{"block_id":"4142.5254","local_start":0,"local_end":120,"evidence_excerpt":"My name is Anna Gutierrez, and I'm an auditor, in the comptroller's department... the audit scope was from 01/01/2024 through 06/30/2024, and we reviewed approximately $3,100,000 in revenue.","reason_code":"topicintro"},{"block_id":"5833.535","local_start":0,"local_end":88,"evidence_excerpt":"Aldwin Westmoreland moves the receive and place on file. Thank you for coming down. Good job.","reason_code":"topicfinish"}]}