During calendar year 2005, the Budget Analyst conducted a comprehensive management audit of the Recreation and Park Department and issued an audit report on January 12, 2006. On July 23, 2007, the Board of Supervisors adopted Motion 07-100 directing the Budget Analyst to perform a follow-up audit of the Department's progress in implementing the 2006 Recreation and Park Department Audit Report's recommendations concerning cash handling practices.

Purpose and Scope

The purpose of this follow-up audit regarding cash handling within the Recreation and Park Department is to (i) determine the extent to which the Department has implemented the cash handling recommendations of the 2006 Recreation and Park Department Audit Report conducted by the Office of the Budget Analyst and (ii) examine, evaluate, and report any additional cash handling shortcomings or deficiencies discovered during the course of this follow-up audit.

The 2006 Recreation and Park Department Audit Report included 18 findings and 169 related recommendations. The Budget Analyst identified 36 recommendations for evaluation that are either directly or indirectly related to cash handling. Section 1 of this audit report discusses the Budget Analyst's evaluation of the status of each recommendation along with pertinent comments from the Recreation and Park Department.

For purposes of our report, "cash" is defined to be all media used for the payment for goods or services, including coin, currency, check, money order, wire transfer, or credit card.

Audit Methodology

This follow-up audit was conducted in accordance with Governmental Auditing Standards, 2007 Revision, issued by the Comptroller General of the United States, U.S. General Accountability Office. Accordingly, the planning and implementation of this follow-up audit included the following basic elements:

Entrance Conference: The Budget Analyst conducted an entrance conference with designated senior staff of the Department to discuss the audit scope, procedures, and protocol.

Pre-Audit Survey: The Budget Analyst provided the General Manager with a listing of the cash handling recommendations from the 2006 Recreation and Park Department Audit Report and requested that the Department provide the Budget Analyst with a written response concerning the current status of implementing the 2006 recommendations. Further, the Budget Analyst interviewed senior staffmembers concerning completed and planned operational changes since the issuance of the 2006 audit.

Field Work: The Budget Analyst reviewed reports, observed processes, and interviewed management and staff at all levels in order to: (i) substantiate the Department's progress in implementing the audit recommendations and (ii) determine whether there were any additional cash handling issues that warranted consideration. Concerning the latter, the Budget Analyst performed standard audit procedures in gathering information to determine the causes and effects of any additional cash handling issues.

Analysis and Preparation of Draft Report: At the conclusion of the field work phase of this audit, the Budget Analyst conducted detailed analyses of the information collected. Based on these analyses, the Budget Analyst prepared findings, conclusions and recommendations. The analyses were incorporated into a draft audit report, which was provided to the Recreation and Park Department for review.

Exit Conference and Preparation of the Final Report: The Budget Analyst held an exit conference with the General Manager and his senior staff to review the details of the audit report, and to identify any areas of the report requiring clarification or correction. Based on this exit conference and further discussions, the Budget Analyst incorporated certain comments and clarifications into the final report.

Organizational Structure

The total number of full-time equivalent (FTE) positions authorized for the Recreation and Park Department in the FY 2007-2008 Annual Salary Ordinance is 1,123.08, which is 13.31 FTE more than the 1,109.77 positions authorized in the FY 2006-2007 Annual Salary Ordinance, but only 2.89 FTE more than the 1,120.24 positions authorized in the FY 2005-2006 Annual Salary Ordinance. The net change of 13.31 FTE from FY 2006-2007 to FY 2007-2008 is shown in the classification FTE changes below:

The Recreation and Park Department is organized into the functional divisions shown in Exhibit 1, below:

Exhibit I
Recreation and Park Department Organization Chart

Fund Sources and Uses

Table 1 below provides summary financial information based on total figures from the FY 2007-2008 Consolidated Budget and Annual Appropriation Ordinance.

Table 1

Summary Financial Information, FY 2007-2008

Source: City and County of San Francisco, Consolidated Budget and Annual Appropriation Ordinance, Fiscal Year Ending June 30, 2008, and Departmental records.

Exhibit II below depicts the revenue flows of Recreation and Park Department activities. Most of the flows are to the Revenue Unit, which is located in McLaren Lodge.

Exhibit II
Revenue Flows Diagram

CLASS System

The CLASS System is a computerized program registration and facility booking system that the Recreation and Park Department has been implementing in stages for the past approximately two years. The CLASS System is used by numerous recreation and park departments throughout the United States. The system description and implementation progress information that follows was provided by the Department.

CLASS is a program registration and facility booking software program that incorporates customer account information, program information, and facility information into one database. There are various modules to the CLASS software including Accounting Processes, Point-of-Sale, Facility Booking, Program Registration,⁴ Leagues and Memberships.

Patrons can register for a course, book a facility, or purchase a swimming admission ticket using the CLASS software. Currently, patrons can perform all of these actions by walking up to a "front desk" area in McLaren Lodge or designated recreation centers and transact with Department staff. Currently, clients can register and pay online for courses only.

The Program Registration module has been set up and is currently being used by our customers. We have over 9,000 households set up with accounts in our system. This spring will mark our 6th registration session since our initial rollout in the winter of 2007. The athletic fields are being booked by the Permits staff into the Facility Booking module. We are using the Point-of-Sale module for selling aquatics admission tickets at McLaren Lodge and would like to move toward including internet sales as well. We are also exploring ways that CLASS might be utilized to track attendance and entry to our aquatics facilities.

The software package has an extensive reporting module that is used to gather financial and statistical data as well as compile scheduling information for facilities, instructors and activities. The reporting module is also used to extract mailing lists and produce email blasts for marketing and for exporting brochure information for the Department's activity guide.

We are getting set up to use CLASS for Point-of-Sale admissions at the Japanese Tea Garden in Golden Gate Park. This should be up and running within the next month. We will also set up the Marina with Point of Sale as a means to track berthing payments and other revenues and hope to have this running by June 30, 2008.

We are currently working on rolling out the Golf module of Class at Harding Park golf course. The system will manage tee time booking and tee sheet management plus provide Point-of-Sale capability. Once the CLASS system is functional at Harding, we will build a timetable to roll out the system to our other golf courses.

We are developing a procedure to introduce a program membership card which can be used for drop in program payment at a few recreation centers around the city. Customers will pay for the card just as they would register for a course. At each visit to a class, the drop in amount will be subtracted from the card's balance once the card is scanned at a scanning station.

Currently, most of the Department's programs are in the database. Soon we will be entering our recreational league programs into the system as well so that we can track the various leagues, teams and players and collect league fees.

Our next step in using CLASS for permits is to start booking picnic areas and recreation center facilities using the software. We hope to implement part or all of this process in the next 3-6 months.

The Budget Analyst notes that implementation of CLASS and the reduction in the number of sites at which cash is collected, has greatly reduced the amount of cash collected at recreation centers and resulted in much improved programming, scheduling and revenue collection processes on a more centralized basis.

The Parks Trust

The Parks Trust, founded in 1971 and formerly known as Friends of Recreation & Parks, is a nonprofit organization that supports San Francisco parks, recreation centers and open spaces through funding major capital projects, such as raising approximately $12 million of the estimated $19.2 million for the reconstruction of the Conservatory of Flowers, funding smaller restoration and renovation projects such as the Golden Gate Park Carrousel and the 6th Avenue entrance to Golden Gate Park.

The Parks Trust, acting as a fiscal sponsor through its Park Partners Program, affords small park groups with the opportunity to make physical improvements and support community driven projects in neighborhood parks. For the fiscal year ending June 30, 2007, the Parks Trust reported $7,232,776 in revenue and $7,046,821 in expenditures, including $4,346,326 in Park Partner expenditures and $259,961 to support Recreation and Park Department programs.

As discussed in Section 2 of this audit report, revenues generated by unauthorized fees from recreational activities are deposited in Parks Trust accounts and are disbursed through an informal system that is also used to disburse monies also deposited in Parks Trust accounts from gifts to the Recreation and Park Department.

Organization of this Report

Section 1 of this cash handling audit report contains all of the recommendations from the, 2006 Recreation and Park Department Audit Report, along with the Department's statements concerning the implementation status of each recommendation. The sections following Section 1 contain the Budget Analyst's findings of the: (i) differences with the Department's implementation status reports and (ii) findings and recommendations concerning cash handling that were not presented in the 2006 Recreation and Park Department Audit Report.

Acknowledgements

The Budget Analyst would like to thank the management and staff of the Recreation and Park Department for their cooperation and assistance during this cash handling follow-up audit. We hope the findings contained in this report provide useful tools for the General Manager and his staff as they work to improve the operations of the Recreation and Park Department. We would also like to thank the Parks Trust staff for their cooperation and assistance.

1 Fuhrman Bequest

2 2006 Rec & Park Rev Bond ($13,250,000), Neighborhood Rec/Park Facilities ($2,145,094) and Neighborhood Parks & Squares ($110,000).

3 The Departmental Transfer Adjustment (DTA) is an adjusting factor required to compensate for what would otherwise result in double counting because of transfers within the Department. For example, $22,590,548 of the $22,728,048 allocated to Administration is a transfer from operating programs within the Department.

4 Public access for program registration is through www.sfRecOnline.org