Background

As shown in Exhibit 1 of the Introduction to this audit report, the Aquatics Program of the Recreation and Park Department, which operates nine swimming pools located throughout the City, is assigned to the Department's Citywide Services Division. Eight of the nine swimming pools operate year-round; the open-air Mission Pool for the past two years has operated from May to February.

Status of 2006 Audit Report Recommendations

The five cash handling recommendations identified by the Budget Analyst for examination in this follow-up audit are concerned with enhancing patron convenience and Aquatic Program revenues by 1) implementing a system to print scrip tickets online, 2) developing a system that allows patrons to purchase monthly passes online, 3) increasing locations where swimming pool patrons can purchase scrip booklets and monthly passes, 4) reducing the incidence of unplanned closures, and 5) identifying opportunities for increasing pool attendance. Section 1 of this follow-up audit to the 2006 Recreation and Park Department Audit Report presents the Department's assessment of the current status of those 2006 recommendations and the Budget Analyst's conclusions concerning those assessments. This follow-up audit report section presents additional findings developed during the course of this cash handling follow-up audit.

Control Weaknesses in Collecting Revenues from Organizations

Section 12.40 of the Park Code, Aquatic Fees, lists the following type fees charged by the Recreation and Park Department:

The Aquatics Program provides facilities and services to organizations, such as public and private schools and swim clubs, for which there is no set fee. In order to determine the nature of payments made by such organizations to the Recreation and Park Department, the Budget Analyst surveyed seven organizations that use Aquatics Program facilities. Table 4.2 below displays the results of the Budget Analyst's inquiries.

Table 4.2

Swim Teams/ Private and Parochial Schools

The Budget Analyst was not able to contact Sacred Heart Cathedral. Initial contact was made with the Athletic Director at the Convent of the Sacred Heart, who informed the auditor that the school used Hamilton Pool for the period of February through April of 2006 and 2007. The Athletic Director also informed the Budget Analyst that the School had made a single payment for use of the Hamilton Pool to the Permits and Reservations Division of the Recreation and Park Department for use of Hamilton Pool for the 2007 period, but that in 2006, the swim coach of the Convent of the Sacred Heart would present a check to an Aquatics Program employee at Hamilton Pool every week or every two weeks during February through April of 2006. The Budget Analyst requested copies of the checks and was informed that the School's Business Office was the repository of the checks and that obtaining copies might prove problematic because of the amount of time that had elapsed.

The Budget Analyst informed the Aquatics Program Manager concerning the information obtained from the Athletic Director of the Convent of the Sacred Heart who, in turn, informed the Director of Administration and Finance. The Budget Analyst attempted to re-contact the Athletic Director, without success.

The Director of Administration and Finance stated that the Recreation and Park Department would conduct a follow-up with the Convent of the Sacred Heart and with Department staff. Following a period of approximately three weeks, the Director of Administration and Finance contacted the Budget Analyst concerning the Department's inquiry into the matter. The Director of Administration and Finance provided the Budget Analyst with a summary of interview with the employee who had reportedly received the checks and also reported that repeated attempts by the Department to contact officials at the Convent of the Sacred Heart were unsuccessful.

A redacted summary of required actions for the Recreation and Park Department to take based on the Hamilton Pool check revelations, provided by the Director of Administration and Finance, is as follows:

While the results of the interview suggest that the department needs to develop a clear policy and fees regarding swim teams and the use of our pools by outside entities, including schools swim teams and other organizations, I do not believe that fraud has taken place at Hamilton Pool. [name] has been tasked with developing a new policy and fees for use of the pools. In addition, he and [name] will follow up with [name] regarding the Hamilton Swim Team and the account for that team. It is clear that RPD staff should never handle money for organizations or programs that are not affiliated with RPD. The corollary to that, of course, is that any program associated with RPD must follow the department's cash handling policies and may not establish accounts outside of the city's accounting system.

The Budget Analyst concurs with the Director of Administration and Finance's assessment of the need for 93a clear policy and fees regarding swim teams and use of our pools by outside entities, including schools swim teams and other organizations.94 Further, the Budget Analyst concurs that only authorized Recreation and Park Department staff, namely staff assigned to the Department's Permits and Reservations Unit, should handle money for organizations or programs and that any organization of program associated with the Department must follow the Department's cash handling policies and not establish accounts outside of the City's accounting system.

Control Weakness in Possession of Lock Box Keys

Each of the swimming pools has a cash lock box into which pool patrons deposit cash or scrip in order to be admitted. Contract security services periodically exchange the lock box containing cash for an empty lock box and transport the lock box containing cash to the Revenue Unit at McLaren Lodge for processing. Three keys are required to actually open each of the lock boxes: (1) a key to open an access door to the lock box, (2) a key to remove the lock box from its enclosure, and (3) a key to actually open the lock box lid. As initially reported by the Revenue Unit, only Revenue Unit personnel are to have access to the keys that actually open the lock boxes.

During the preliminary survey segment of our follow-up audit pertaining to the Aquatics Program, the Aquatics Program Manager provided background and operational information on aspects of cash handling at the swimming pools. The Aquatics Program Manager demonstrated the process of removing a lock box from its enclosure at the swimming pools in order to transport the lock boxes to McLaren Lodge without actually having access to the cash in the lock box. However, the Aquatics Program Manager also informed the Budget Analyst that he possessed keys to actually access the cash in the lock boxes, and demonstrated that capability. Since the Aquatics Program Manager possesses keys to gain entry to all of the swimming pools, in the absence of a compelling operational need, it is not appropriate for him to also have access to the keys that actually open the cash lock boxes. The Budget Analyst notified the Director of Administration and Finance concerning the apparent internal control weakness of entrusting an individual with accesses to both the swimming pool facilities and lock boxes containing the cash at such facilities. The Director of Administration and Finance acknowledged the control weakness and had the Aquatics Program Manager return the lock box lid keys to the RPD Revenue Unit.

Reducing the Incidence of Unplanned Pool Closures

The Budget Analyst's Recreation and Park Department Audit of 2006 included a recommendation to reduce the incidence of unplanned swimming pool closures. The 2006 Audit noted closed pools due to staffing shortages on 15 different occasions between January and December 2005. The Budget Analyst's review of the Department's records for this follow-up audit showed a total of nine closings to due staff shortages for the period of October 1, 2006 through September 18, 2007, which is an improvement over the calendar year 2005 total of 15. However, on the one day that the Budget Analyst called around to each pool to check the accuracy and appropriateness of live and recorded information, the Martin Luther King, Jr. Pool voice message stated that the Pool would be closed on that day from 1:30 P.M. until 4:30 P.M. due to a lack of staff.

The Budget Analyst recommends that the General Manager, Recreation and Park Department, re-emphasize the importance of keeping posted pool hours as an important part of customer service, especially given that three of nine pools are currently closed for renovations.

Aquatics Program Handbook

The Aquatics Program Operations Manual dated Fall 2003 with the notation of Updated June 2004, includes a handbook addendum to 93outline the duties of the Aquatics staff with the implementation of the new model.¹94The Handbook includes instruction to sign and return an acknowledgment page that each staffmember has received and read the packet.

The Operations Manual addendum includes important safety and operational information including Duties associated with the Atrium,² Customer Service, Gate Keeping,³ and Duties associated with the Locker Rooms. However, the Aquatics Program Manager, who had assumed that position in September of 2006, was not aware of the existence of any acknowledgment statements. Therefore, there is no evidence that staff have received and read the Handbook.

Conclusions

Staffmembers of the Aquatics Program should not be involved in cash handling with organizations or programs that are not affiliated with the Recreation and Park Department. Also, any organization or program that is affiliated with the Recreation and Park Department should follow the Department's cash handling policy for such organizations or programs, which reportedly is being developed, including standardized fees for organizations to use the pools.

The Budget Analyst's Recreation and Park Department Audit of 2006 included a recommendation to reduce the incidence of unplanned swimming pool closures. The 2006 Audit noted closed pools due to staffing shortages on 15 different occasions between January and December 2005. The Budget Analyst's review of the Department's records for this follow-up audit showed a total of nine closings to due staff shortages for the period of October 1, 2006 through September 18, 2007, which is an improvement over the calendar year 2005 total of 15. However, on the one day that the Budget Analyst called around to each pool to check the accuracy and appropriateness of live and reported information, the Martin Luther King, Jr. Pool voice message stated that the Pool would be closed on that day from 1:30 P.M. until 4:30 P.M. due to a lack of staff. The General Manager, Recreation and Park Department, should emphasize the importance of keeping posted pool hours as an important part of customer service, especially given that three of nine pools are currently closed for renovations.

Recommendations

The Recreation and Park General Manager should:

4.1 Develop a clear policy and fees regarding swim teams and the use of City pools by outside entities, including schools swim teams and other organizations.

4.2 Emphasize the importance of keeping posted pool hours as an important part of customer service, especially given that three of nine pools are currently closed for renovations.

Costs and Benefits

The Budget Analyst's recommendations can be accomplished within the Recreation and Park Department's existing appropriated funding and authorized staffing levels and would enhance the efficiency and effectiveness of the Aquatics Program.

1 The 93new model94 refers to the elimination of swimming pool cashiers and locker attendants and an increase in the number of lifeguards/swimming instructors.

2 The Atrium is the front area of the building where patrons enter the facility.

3 Gate Keeping is to ensure that patrons make a payment in order to gain entry.