Purpose

To determine whether the Office of Parks, Recreation and Historic Preservation (Parks) adequately monitored its concession contractor, Tri-State Snacks and Concessions (Tri-State), at Riverbank State Park, and whether Tri-State remitted the appropriate contract-related revenues to Parks. The audit covers the period February 1, 2011 to June 30, 2014.

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. Tri-State operates Riverbank’s 150-seat restaurant, under a five-year revenue contract with Parks that started in August 2010. The contract terms required Tri-State to remit a flat monthly fee and a percentage of annual sales revenues over $750,000 to Parks. Tri-State is required to maintain adequate books and records to support its revenue remittances.

Key Findings

• We found that Tri-State did not comply with all contract requirements, such as hours of operation and maintaining financial records.
• Tri-State owes Parks at least $10,485 in licensing fees and potentially as much as $37,034 in additional fees, as a result of underreported and possibly unreported sales revenue. There were unexplained deposits made to Tri-State’s contract-related bank accounts.
• In addition, Parks did not adequately monitor Tri-State’s operations to verify the accuracy of its revenue reports or compliance with other contract terms.

Key Recommendations

• Recover the $10,485 in licensing fees due Parks based on the underreported Tri-State revenues identified in this report.
• Follow up on the $37,034 of potentially underpaid licensing fees due Parks (based on unreported sales) and the unexplained deposits into Tri-State’s contract-related bank accounts.
• Develop and implement an effective revenue 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 contractors’ internal controls; periodic reviews of contractrelated books and records; and verification of sales and other major contract requirements.

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)