Purpose

We assessed the Office of Parks, Recreation and Historic Preservation’s (Parks) administration of the concession services at Riverbank State Park operated by Riverbank Restaurant Group, LLC (RRG), for the period May 1, 2004 to December 31, 2013. The objectives of our audit were to determine whether Parks received all of the income it was entitled to, and RRG made all required capital investments, pursuant to contract terms.

Background

Riverbank State Park (Riverbank), a 28-acre rooftop park on the west side of Manhattan, is open 365 days a year and has a variety of indoor and outdoor athletic and cultural facilities. In March 2004, Parks entered into a 10-year contract with RRG to provide food concession services at Riverbank. The anticipated State revenues resulting from this contract were estimated at $160,000 annually. In addition to paying the monthly licensing fees, RRG was contractually required to invest a minimum of $622,000 in capital improvements and concession-related upgrades.

Key Findings

• RRG’s reported monthly sales, and Parks’ associated licensing fees, were significantly less than anticipated in the contract (a difference of about $11.6 million in sales and $580,000 in licensing fees from 2005 to 2009).
• Further, RRG did not submit the correct amount of licensing fees on the revenues it did report. At the time of our audit, RRG owed Parks $136,459 in licensing fees.
• Parks did not perform a thorough vendor responsibility check on RRG before the contract was awarded, and Parks did not adequately monitor RRG operations on a timely basis.

Key Recommendations

• Perform a thorough vendor responsibility check on all potential vendors before awarding contracts.
• Establish an effective contract monitoring system. Such monitoring should include (but not be limited to): periodic site visits to the location of the contracted services; an assessment of the contractor’s internal controls; periodic reviews of contract-related books and records; and verification of sales and other major contract requirements.
• Work with the Attorney General’s office to pursue collection of the $139,634 judgment against RRG.

Other Related Audits/Reports of Interest

Office of Parks, Recreation and Historic Preservation: Administration of Contract X00310 - Bethpage Associates, LLC (2001-R-4)
Office of Parks, Recreation and Historic Preservation: Food and Beverage Concession Contract - Jones Beach State Park (2006-R-2)