Objective

To determine whether the New York City Department of Finance (DOF) identifies and collects fines and fees that are due for parking violations. This audit covered 262,765 cases with outstanding balances of $108,314,492 from January 1, 2012 through February 1, 2019.

About the Program

DOF is responsible for collecting and processing payments for parking fines for the approximately 30 entities that can issue parking summonses within New York City (NYC). During fiscal years 2017 through 2019, DOF processed more than 34 million summonses totaling more than $2.8 billion that were issued to vehicles for parking, red light camera, bus lane camera, and school zone camera violations. DOF’s responsibilities include generating and mailing notices of violations, collecting the amounts due, and adjudicating summonses that are disputed by the respondents.

To accomplish these tasks, DOF maintains its Summons Tracking and Accounts Receivable System. DOF’s Computer Assisted Collection System aggregates summonses issued to the same respondent into case numbers, and then assigns small-dollar cases (under $350) to outside collection agencies (OCAs) under contract with DOF and cases with the highest probability of collection to in-house staff.

DOF’s Collection Division is responsible for collecting all amounts due from summonses that are in judgment (i.e., a vehicle owner has failed to pay the fine, plead not guilty within the time allowed, or appear for a hearing). The Collection Division includes the Parking and Environmental Control Board Compliance Unit, which has an In-House Collections Unit responsible for collecting fines and fees for violations issued within NYC, and also the Outside Collection Agency/External Inquiry Unit, which refers violations to two outside OCAs under contract with DOF.

The DOF Collection Division only enforces collections from respondents who have New York plates and live within NYC. DOF refers other cases to the NYC Law Department, which contracts with a law firm to collect amounts due with a net balance of at least $999 if the respondents’ addresses are in certain other states.

According to DOF reports for unpaid parking violations in judgment as of February 1, 2019, the outstanding balances due from New York State respondents (outside of NYC) totaled about $67.6 million. Fines and fees due from respondents with addresses outside of New York State totaled $145 million, including $97 million due from respondents in states where DOF refers cases to the NYC Law Department. The balance remains with DOF for collection.

Key Findings

We reviewed selected aspects of the In-House Collections Unit, including respondents outside New York City and outside New York State, respondents outside NYC but within the State, and summonses returned from OCAs as uncollectible. Overall, we determined that DOF did not maximize collection of fines and fees owed for parking violations. NYC has large outstanding balances due from summonses for parking violations, and DOF has not always taken timely action to collect the fines and fees.

• Our review of a sample of 153 cases from the In-House Collections Unit totaling amounts due of $2,192,063 revealed that DOF took action to collect in only 35 cases (23 percent).
• Due to the large volume of outstanding summonses for parking violations, some overdue amounts have fallen outside the statute of limitations.
• Cases assigned to OCAs have often been classified as uncollectible, and no further collection activities have been taken by either the OCA or DOF.
• Incorrect address information is contributing to a lack of collection. In many cases where the vehicle license plates were registered in New York State but the respondent’s address was outside of New York State, the address information DOF had on file differed from the Department of Motor Vehicles registration database.

Key Recommendations

• Improve efforts to collect amounts due on summonses issued to vehicle owners residing outside of New York State.
• Increase efforts to collect amounts due on parking summonses for vehicles registered in New York State but with out-of-state addresses that have not been referred to the NYC Law Department.
• Develop and implement policies and procedures to address the collection of: amounts due for parking summonses in judgment; debt from lessee liable summonses; and debt from cases with high balances that were returned from OCAs.
• Establish policies and procedures to continue collection efforts on cases that are returned by secondary OCAs.