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Controller's audit finds weak oversight of Triangle Parking Lot; restaurant association disputes findings
Summary
The City Controller's office presented a management audit alleging weak Port oversight of the Triangle Parking Lot, missing controls and potential underreported revenue and unsupported expenses totaling about $591,486. The Fisherman's Wharf Restaurant Association called the findings "baseless" and requested the Controller review its records; the Port agreed to pursue a forensic audit and lease solicitation.
The City Controller's office told the Port Commission that a compliance audit of the Triangle Parking Lot management agreement showed multiple control and oversight failures and potential unreported revenue and unsupported expenses.
Tanya Lettishu, Director of Audits for the Controller's office, said the audit examined a sample period that included 4 months of revenue testing and 3 days of 100% expenditure testing and found 1) inadequate Port oversight and no documented property-management policies, 2) the management agreement had not been put through competitive bidding, 3) incomplete supporting documentation for expenses, 4) missing or unreconciled ticket sequences, 5) inadequate validation controls for parking, and 6) commingled business and personal accounts. The audit report presented a summary of amounts the team classified as potentially underreported or unsupported, totaling $591,486, with line items the audit described as roughly $236,000 for missing tickets, $330,000 in unsupported or unallowable expenses, $12,000+ for runouts, $6,562 for voided tickets and smaller amounts for vehicle damage and other items.
The audit team recommended that the Port require a formal contract between the Fisherman's Wharf Restaurant Association (FWRA) and the lot operator, install revenue-control equipment consistent with San Francisco tax-code requirements, strengthen validation controls, maintain annual budgets for Port approval, segregate duties, reconcile missing tickets and unbroken ticket sequences, and consider retaining a forensic accountant to quantify amounts owed to the Port.
FWRA leaders sharply disputed the findings during the public comment period. Nuncio Alijoto, representing the association, called the audit's allegations "baseless, untrue and defamatory" and urged the Controller's office to review documents the association said would refute each allegation. Tim McDonald, a long-time FWRA leader, told the Commission he had personally overseen accounting for decades and labeled the report "inaccurate, incompetent and libelous."
Port staff and the Controller's office responded that the audit followed government-auditing standards, that drafts and rebuttal opportunities had been provided to the FWRA, and that the Port agreed with the Controller's recommendations. Port staff said they plan to issue a solicitation for a new lease for the Triangle Parking Lot (bids expected Nov. 18, per staff's statement) and to engage a forensic auditor through the Controller's as-needed pool, with work expected to begin in January to examine the scope of potential unreported revenues and unsupported expenses.
The Commission treated the item as informational; Commissioners asked questions about audit scope and oversight. Several commissioners said they were concerned both by the Port's historical oversight gaps described in the report and by public allegations of wrongdoing, and they supported follow-up steps including the bid process and the planned forensic audit. The Port said it would follow up with the FWRA and the Controller's office to review documentary evidence and to report back to the Commission.
Next steps: Port staff and the Controller's office said they expect to assemble a forensic-audit contract through the city's as-needed pool in January and recommended forensic review for at least five years of records if the Commission determines that scope is necessary. The Commission also indicated it will receive a status update at a future meeting.
