OFFICE OF THE AUDITOR

Transcription

1 OFFICE OF THE AUDITOR DEPARTMENT OF AVIATION INTERNAL CONTROL REVIEW AND CONTRACT COMPLIANCE AUDIT NOVEMBER 2007 Dennis J. Gallagher Auditor

2 Dennis J. Gallagher Auditor Mr. Turner West, Manager Department of Aviation City and County of Denver City and County of Denver 201 West Colfax Ave., Dept. 705 Denver, Colorado , FAX Dear Mr. Turner West and Mr. Richard Kindorf: November 28, 2007 Mr. Richard Kindorf, President Ampco System Parking 801 South Grand Avenue, Suite 775 Los Angeles, California Attached is the Auditor s Office Audit Services Division s internal control review, and contract compliance audit report of Ampco System Parking - Mt. Elbert parking lot operations at Denver International Airport. The audit period was for January 1, 2006 through June 30, The purpose of the audit was to determine whether Ampco and the City and County of Denver complied with certain terms and conditions of the contract and whether internal controls were adequate. We identified significant internal control deficiencies related to Mt. Elbert Lot operations. These weaknesses resulted in a potential loss of City revenues and created a public relations issue owing to public reports of alleged theft occurring at the location. If you have any questions, please call Kip Memmott, Director of Audit Services, at Sincerely, Dennis J. Gallagher Auditor DJG/kh cc: Honorable John Hickenlooper, Mayor Honorable Members of City Council Members of the Audit Committee Ms. Kelly Brough, Chief of Staff Mr. Claude Pumilia, Chief Financial Officer Mr. Chris Henderson, Chief Operating Officer Mr. Joseph M. Morales, Chief Deputy District Attorney Mr. David Fine, City Attorney Ms. Lauri Dannemiller, Executive Staff Director, City Council Ms. Beth Machann, Controller Ms. Cheryl Cohen-Vader, Chief Deputy Manager of Aviation 1

3 Mr. West and Mr. Kindorf November 28, 2007 Mr. Stan Koniz, Deputy Manager of Aviation for Business and Technologies Mr. Patrick Heck, Deputy Manager for Aviation - Revenue Management and Business Development Ms. Dorothy Harris, Assistant Deputy Manager of Aviation for Landside Services Mr. Pete Gingras, Assistant Deputy Manager of Aviation/Properties Ms. Laura Trujillo, Co-Assistant Deputy Manager of Aviation/Finance Ms. Amy Weston, Co-Assistant Deputy Manager of Aviation/Finance Ms. Sharon Shannon, Internal Audit Supervisor, Aviation/Finance 2

4 TABLE OF CONTENTS Transmittal Letter 1 Table of Contents 3 Internal Auditor s Report 4 Executive Summary 5 Background, Scope, Objective, and Methodology 6 Finding and Recommendation 9 Department of Aviation Response 15 Ampco Response 17 Supplemental Information Exhibit 1 Example of an Actual Mt. Elbert Cashier Lane Report 21 Exhibit 2 Examples of Tickets Used at Mt. Elbert Facility 22 Exhibit 3 Mt. Elbert Cashier Booth 23 Table 1 Findings of Some Audits Conducted to Determine the Revenue Loss at the Mt. Elbert Lot 24 3

5 City and County of Denver Dennis J. Gallagher Auditor 201 West Colfax Ave., Dept. 705 Denver, Colorado , FAX AUDITOR S REPORT We have completed an internal control review and contract compliance audit of the Management Agreement (Contract) dated April 9, 2002 between the City and County of Denver and Ampco System Parking at Denver International Airport for the period January 1, 2006 through June 30, The purpose of the audit was to determine whether Ampco and the City and County of Denver complied with the terms and conditions of the contract and whether internal controls for Ampco s Mt. Elbert parking facility were adequate. This audit is authorized pursuant to the City and County of Denver Charter, Article V, Section 1, General Powers and Duties of Auditor. We conducted our audit in accordance with generally accepted government auditing standards. An audit includes examining, on a test basis, evidence supporting compliance with the agreement and an assessment of the internal controls in place. We identified significant internal control deficiencies related to Mt. Elbert Lot operations. These weaknesses resulted in a potential loss of City revenues and created a public relations issue owing to public reports of alleged theft occurring at the location. We extend our appreciation to Airport and Ampco personnel who assisted and cooperated with us during the course of our audit. Audit Services Division Date: November 28, 2007 Staff: Dick Wibbens, CPA, Audit Manager Marcus Richardson, CICA, Internal Audit Supervisor Dr. Adeniyi Kelani, Lead Internal Auditor Traci Napue, CICA, Senior Internal Auditor Freddie Martin, Staff Internal Auditor Kip R. Memmott, CGAP Director of Audit Services 4

6 AMPCO SYTEM PARKING MT. ELBERT LOT EXECUTIVE SUMMARY FOR THE PERIOD JANUARY 1, 2006 THROUGH JUNE 30, 2007 This summary highlights the finding of the internal control review and contract compliance audit, which is more fully described in the Finding, Recommendation, and Response section beginning on page 9. The Finding, Recommendation, and Response section includes a response from the Department of Aviation and Ampco. Finding: Significant Internal Control Deficiencies Identified with Ampco Mt. Elbert Parking Facility Audit work identified substantial internal control weaknesses related to revenue collection processes at the Mt. Elbert parking facility ( the Lot ). Specifically, audit work found that the Mt. Elbert parking lot lacked electronic revenue control equipment, meaning parking employees were using a manual ticket issuance process for customer transactions. Additionally, audit work revealed that the Department of Aviation (DIA) did not fulfill their contractual responsibility to provide an adequate revenue control system for the Mt. Elbert Lot. Further, audit work determined that Ampco System Parking did not have adequate control over the manual tickets used at the Mt. Elbert Lot nor did they have sufficient supervision and monitoring systems in place to detect errors and irregularities made by their cashiers using the manual ticket system. As a result, the City may have lost revenues due to alleged theft occurring at the location. Subsequently, DIA and Ampco have taken several actions to investigate the alleged theft and to correct internal control weaknesses including installing electronic revenue control equipment. 5

7 BACKGROUND, SCOPE, OBJECTIVE, AND METHODOLOGY FOR THE PERIOD JANUARY 1, 2006 THROUGH JUNE Background Operations and Functions - Ampco System Parking has a contract with the City and County of Denver (dated April 9, 2002) to provide the management, staffing and services for the operation and management of the public parking facilities at Denver International Airport. Exhibits and Appendices are an integral part of the contract which further clarifies the scope of work, obligations, and conditions. Specifically, Exhibit A (Standard Operating Procedures SOP) of the contract details general standards and specific procedures that the City requires Ampco to meet. The company is required to deposit all gross revenue on a daily basis into the City s bank account. The City has an obligation under the contract to reimburse Ampco for certain operating expenditures (i.e., salaries and wages, benefit costs, and other expenses) and to pay the Ampco management fee. Ampco is also paid an incentive fee in order to encourage the maximization of revenue, full utilization of the parking facilities, and excellent customer service; and to further compensate Ampco and its employees for work performed. Ampco operates all Public Parking Facilities (approximately 38,975 spaces) owned by the City and County of Denver at DIA. These facilities consist of the following: A. Public Parking Lot, East and West - A five level parking structure located on both the east and west side of the Terminal with revenue control equipment. B. Economy Parking Facility Lot, East and West - A surface parking lot located adjacent to the parking garage on both the east and west side of the Terminal with revenue control equipment. C. Pikes Peak Shuttle Parking - A surface parking lot located on the south side of 75 th Avenue between Gun Club Road and Jackson Gap Street. This lot has revenue control equipment. D. Valet Parking Facility, East and West - Valet parking is located in the garage facility on level 4 with access from the passenger pickup drive on both the east and west side of the Terminal. Each side has revenue control equipment. E. Mt. Elbert Parking Facility (Overflow) - A surface parking lot located at 68 th Avenue and Valley Head Street, approximately 3.5 miles south of the Terminal with no revenue control equipment. F. Office Space - Over 9,945 square feet of offices, located in the Terminal Building on Level 1 West, Room Four additional satellite offices include vault rooms, supervisor s offices, and break rooms. 6

8 BACKGROUND, SCOPE, OBJECTIVE, AND METHODOLOGY During 2006, Ampco collected $105,244,150 in parking revenues from all public parking lots operated at DIA. Mt. Elbert s revenue share was $702,202 or.66% of total collected revenue for 2006 (Lot was only open 25 days during the year) and $645,325 for 2007 (Lot was open 26 days as of ). The Mt. Elbert Lot is used as an overflow lot when the other parking lots are at capacity. Scope Our audit of Ampco covers the period from January 1, 2006 through June 30, 2007 for Ampco s Mt. Elbert parking operation at DIA. However, as part of test work, we performed a detailed Unaccounted-for-Ticket analysis of the period 2002 through November Objective This audit of Ampco is authorized pursuant to the City Charter, Article V, Part 2, Section 1, General Powers and Duties of Auditor. The objective of the audit was to determine whether Ampco and the City and County of Denver complied with the terms and conditions of the contract and whether internal controls were adequate for operations at Ampco s Mt. Elbert parking lot. The audit summarizes important information regarding the alleged theft in the collection and reporting of parking revenues at the Mt. Elbert Lot. Additionally, the audit includes recommendations for improvements for Mt. Elbert operations, specifically, and the handling of future allegations of theft, generally. The audit scope does not include a determination of whether Ampco properly reported and deposited gross revenues for the public parking at DIA during the audit period. Additionally, the audit scope did not include a determination of whether Ampco was properly reimbursed for reimbursable expenses or if Ampco was paid their proper management and company incentive fees during the audit period. Methodology To meet audit objectives, we utilized several methodologies. These evidence gathering and analysis techniques included but were not limited to: 1) Interviews and discussions with management and staff of Ampco and DIA including internal auditors from both organizations; 2) Discussions with the City s Chief Deputy District Attorney; 3) A review of the internal control evaluation prepared by Jefferson Wells; 4) A thorough assessment of Lot internal controls including a walk-through of the operation and related accounting systems; 5) Examining of relevant City contracts and legal requirements; 6) An analytical review of gross revenues including various testing of gross revenue; 7) Physically counting 100% of unused tickets; 7

9 BACKGROUND, SCOPE, OBJECTIVE, AND METHODOLOGY 8) Verifying and recalculating revenue amounts recorded on tickets; 9) Tracing revenue collected to bank statements; 10) Verifying parking tickets purchased; 11) Reviewing numerous audit reports examining Lot internal controls and irregularities related to revenue, including theft allegations (Ampco, Airport Office, Jefferson Wells, and Antonio Lemus C.P.A., P.A.); and 12) Performing a detailed Unaccounted-for-Ticket analysis (for the period 2002 through November 2006). 8

10 FINDING AND RECOMMENDATION FOR THE PERIOD JANUARY 1, 2006 THROUGH JUNE 30, 2007 Finding: Significant Internal Control Deficiencies Identified with Ampco Mt. Elbert Parking Facility Audit work identified substantial internal control weaknesses related to revenue collection processes at the Mt. Elbert parking facility ( the Lot ). Specifically, audit work found that the Mt. Elbert parking lot lacked electronic revenue control equipment, meaning parking employees were using a manual ticket issuance process for customer transactions. According to Section 4.03 of the contract, Ampco should not have been allowed to use a manual ticket issuance process. Specifically, Section 4.03 states that the City is obligated to have: Ticket Issuance Machines (TIMs) at all entrance lanes, ticket validation devices, gates at all entry and exit lanes, cashier terminals and fee display units, parking tickets for all TIMs, equipment monitoring system, intercom system, and a video monitoring system. Therefore, the City did not fulfill its obligation to provide the proper revenue control system as outlined in the contract for Ampco parking operations at DIA. Additionally, audit work found that Ampco did not have adequate control over the manual tickets used at the Mt. Elbert Lot nor did they have sufficient supervision and monitoring systems in place to detect errors and irregularities made by their cashiers using the manual ticket system. As a result, the City may have lost revenues and also experienced a public relations dilemma owing to public reports of alleged theft occurring at the location. Several Factors Contributed to Poor Control Environment Audit work identified multiple control weaknesses. The following bullets highlight various control weaknesses. Audit recommendations cited later in this report address each of these weaknesses. Lack of electronic revenue control equipment Despite evidence that DIA parking management personnel had been requesting the installation of electronic revenue control equipment at this Lot for years, no such equipment was installed until after the alleged theft. Subsequently, electronic revenue control equipment has been installed on the Lot. All other parking lot facilities at DIA already have this equipment in place. 1 Inadequate controls over tickets Audit work revealed several issues with existing controls for tickets. For example, for the period during which the alleged theft occurred, the manual tickets used for the Lot were two-part, detachable type tickets, meaning there was no carbon record of the actual portion of the ticket given to the customer and of that portion retained by the Ampco cashier (See Exhibit 2 for an example of the twopart and other styles of tickets used at the facility). In addition to the poor quality of tickets, DIA and Ampco management adhered to weak controls related to ticket 1 The revenue control system includes ticket machines and cash registers that record entry and exit information on each customer s parking ticket and has software to summarize all transactions. This type of system eliminates the need for cashiers to handwrite ticket information and establishes audit trails for all parking transactions. 9

11 FINDING AND RECOMMENDATION distribution and security. Specifically, DIA allowed Ampco personnel unfettered access to purchased tickets rather than requiring a third party to handle them, as is the practice at the other lots at DIA. Further, Ampco management did not maintain stringent control over tickets. For example, prior to the alleged theft, Ampco did not maintain a record of the ticket books and ticket sequence numbers for new tickets received and stored in the Ampco Vault room. Additionally, supervisors obtained and distributed tickets without signing off for the receipt and allocation of such tickets and no log was utilized to track tickets distributed to supervisors. Further, Supervisors distributed tickets to cashiers without always obtaining the signatures of cashiers acknowledging receipt. According to Section 10 D of the Contract s SOP, 2 Ampco is responsible for protecting from theft or misuse all parking tickets collected and Ampco is to be held accountable for all tickets issued. Additionally, SOP 10 F 1 requires that all collected tickets be stored in individual bags and that voided tickets be maintained in a separate container. However, voided tickets were stored in individual cashier bags with collected and unused tickets. Weak accounting practices - Processes used to account for Lot revenues were not adequately designed to detect differences between actual ticket amounts and the ticket total recorded on the Cashier Lane Reports. 3 Additionally, SOP 7 B 3 requires that cashier shift-end procedures include a thorough completion of the lane report. However, audit work determined that some lane reports were not signed by cashiers and ticket totals did not match total actual ticket values. Further, SOP 7 N requires Ampco to make regular cash drops to ensure no more than $300 is in the cash drawer at any given time. Yet, audit work identified cash Drop Slips for more than $300. Poor Collection Process - Audit work identified weak practices for collecting parking fees for customers who parked their vehicles for periods greater than the time paid for upon entering the Lot. Specifically, during the audit period, Ampco personnel simply placed promissory notes on customer vehicles in the Mt. Elbert Lot requesting payment on an honor system. Collection efforts did not occur for these promissory notes since the amount due and relevant customer information was not recorded. Insufficient daily audit procedures - SOP 8 F requires that all manually processed tickets be audited. However, routine audit procedures were not conducted on 100% of the tickets but were, instead, performed on a sample basis. A recalculation of the value of each ticket was not performed. Additionally, SOP 8 C requires the City to provide computerized equipment to take a daily license plate inventory of all vehicles remaining at midnight. Yet, audit work determined that no such license plate inventory of all 2 Contract terms including the Standard Operating Procedures (SOP) are the main authority and guidance for the operation of the Mt. Elbert parking lot at DIA. 3 Cashier Lane Reports are reports used by the cashier to document tickets processed and cash, credit card, and check deposits. 10

12 FINDING AND RECOMMENDATION vehicles was performed during the period reviewed. A lot audit is a comparison of the ticket value recorded on the customer s portion of the ticket to the value recorded on the cashier s portion of the ticket. Starting in November 2006, DIA began conducting these lot audits. Contract provision limitations Audit work identified several problematic contract provisions and in some cases, a lack of necessary provisions. For example, Section 7 K of the SOP states that it is the responsibility of Ampco to handle all money matters of the parking operation. Further, the SOP indicates that Ampco management is responsible for handling all disputes and that Airport Management will only be involved as a last resort. Further, the current contract does not contain a financial penalty for unaccounted for tickets. Previous parking lot contracts contained such a provision. Inadequate enforcement of contract language Audit work determined that DIA did not consistently enforce contract provisions. For example, we found that the Department of Aviation charged the $50 penalty fee for most but not all incorrect transactions they found during the course of their audit. Weak Control Environment Resulted In Several Negative Impacts Audit work determined that deficiencies identified with Mt. Elbert Lot revenue controls had several negative potential and tangible effects. For example, allegations arose claiming that widespread theft was occurring at the Lot and these allegations were made public. More specifically, on November 26, 2006, Ampco and the Airport Parking Office received an from a Whistle Blower detailing a scheme being used by several cashiers to allegedly steal significant amounts of monies from the Lot. Several news stories were subsequently released in late June 2007, highlighting the claims of the unidentified whistleblower. 4 Owing to the poor controls governing the ticket issuance process including weaknesses with contract provisions and a lack of a reliable audit trail, we were unable to quantify the amount of potential theft. However, Ampco remitted a payment of $3,749 5 for the revenue loss that was incurred due to theft or negligence of Ampco System Parking employees. 6 Of the $3,749, Ampco identified $2,200 involving 411 processed tickets that had a fee written on the ticket that was less than the actual fee that should have been charged. Further, an Ampco investigation into the theft conducted in January 2007 identified an additional $595 in lost revenue. Finally, an additional audit performed by DIA, for the period of March through October of 2006, asserts that Ampco owes the City an additional $14,500 primarily for ticket deductions that are allowed according to the contract (the $14,500 does not represent lost revenue). 4 The Audit Services Division was unable to determine the identity of any whistleblowers during the course of the audit. However, the Division did receive a copy of one whistleblower allegation. 5 A breakdown of the total payment of $3,749 is as follows: $2,795 from two Mt. Elbert audits; $954 from a credit card theft from another public parking lot at DIA. 6 Letter from Ampco General Manager to DIA personnel, dated May 18,

13 FINDING AND RECOMMENDATION Despite the lack of auditable data required to quantify thefts, we conducted audit tests intended to ascertain the total amount of possible theft. Specifically, we identified approximately 2,000 unaccounted for tickets for the period The average cost of a ticket during that period amounted to $27 per ticket. An extrapolation of these amounts revealed potential revenue losses exceeding $50,000 over the period. In addition to the negative impacts of potential unidentified revenue losses due to alleged theft and to the public relations damage, weak controls and the subsequent allegations of theft have caused the City to expend significant resources to identify and correct problems after the fact. In addition to resources allocated by the Auditor, DIA and Ampco expended significant resources to perform audits of Lot operations. DIA and Ampco Corrective Actions As noted, DIA and Ampco have taken several actions to investigate the alleged theft and to correct internal control weaknesses. These activities included: Audits and Investigations In response to allegations of theft, both DIA and Ampco performed several audits to determine the possible extent of revenue loss and to assess internal controls (See Table 1 Findings of Some Audits Conducted to Determine Revenue Loss at the Mt. Elbert Lot). Additionally, several Ampco employees were disciplined and/or terminated for revenue handling, overages/shortages, or for not following procedures. Further, DIA personnel contacted City police to investigate the alleged theft. However, according to an dated June 26, 2007, the police lacked sufficient information to conduct an investigation at that time. Improved Internal Controls Based on the results of these audits, DIA took action to improve the Lot s control structure. For example and most significantly, DIA installed revenue control equipment in August 2007 (See Exhibit 3 for photographs of Mt. Elbert collection booths before and after the alleged theft). Additionally, DIA required the purchase of enhanced parking tickets (see Exhibit 2 for examples of parking tickets used at Mt. Elbert) and Ampco and DIA made improvements to the ticket purchasing process as well as to accounting policies and procedures (as described below). o Improved Ticket Management Process Ampco s manager ordered Mt. Elbert Parking Lot tickets before the alleged theft. After the alleged theft (July 2007), DIA took full responsibility for ordering tickets. Specifically, DIA ordered tickets and then utilized a log to transfer those tickets to Ampco. Ampco personnel signed off for the receipt of tickets at both the supervisory and cashier levels. Upon the installation of revenue control equipment, a third party currently has responsibility for controlling tickets i.e. loading tickets into revenue control ticketing dispensing machines at the Mt. Elbert Lot. The utilization of a third party to exclusively handle tickets is a key internal control. An enhanced segregation of duties structure was implemented as well. 12

14 FINDING AND RECOMMENDATION o Lot Audit Procedure Enhancements DIA and Ampco enhanced Lot audit procedures. For example, as noted previously, prior to the alleged theft, Ampco did not audit 100% of Mt. Elbert Lot tickets and did not perform Field or Lot audits in 2005 and However, as of November 2006, DIA employees began conducting these audits. Ampco began conducting these audits in March Shoppers were also used. Recommendations We recommend that DIA implement the following recommendations to ensure that significant internal control weaknesses for Mt. Elbert Lot activities are corrected. These recommendations are in addition to the corrective actions already taken by DIA mentioned above. 1. DIA Should Enhance Contract Administration Practices We recommend that DIA strengthen contract administration practices over Ampco parking facilities. Specifically, we recommend that DIA consistently enforce the following provisions in the current contract: a. Section 10 F 1 of the SOP to store voided tickets in a separate container. b. Section 8 F of the SOP to audit all manually processed tickets completely. This should include a recalculation of ticket values and the total ticket values should be compared to the Total Dollars in tickets on the Cashier Lane Report. All differences should be investigated further. c. Section 7 B 3 of the SOP to require all cashiers to sign and date Cashier Lane Reports and to include all necessary information. d. Section 7 N of the SOP to make regular cash drops to ensure no more that $300 is in the cash drawer at any given time. e. Section 8 C of the SOP to take a daily license plate inventory of all cars remaining at midnight in all parking facilities at DIA, especially in the Mt. Elbert Lot. Additionally, if it has not already been done, we recommend that DIA exercise their right as outlined by Section 6.07 of the contract and charge the penalty of $50 for all incorrect transactions identified in the audits conducted. 2. DIA Should Examine Theft Reporting Practices We understand that DIA reported the theft to airport police (in accordance Section of the Colorado State Statute) when the allegations were made. However, if future theft allegations are made, we recommend that DIA provide to the police department all the key information gathered from audits and other work of the alleged theft. We believe it is the police department s responsibility to determine whether or not to pursue a criminal investigation based on the situation and amount of evidence. Adherence to this recommendation should help with any criminal investigation process. Further, we recommend that DIA immediately contact the City Auditor in future situations involving alleged theft so that our Office can help to identify and correct internal control weaknesses and in order to quantify possible City losses. 13

15 FINDING AND RECOMMENDATION 3. DIA Should Strengthen Parking Facility Contract Language Since the current contract is expected to expire April 16, 2008, we recommend that DIA review the Contract/SOP to identify opportunities for improvements for airport parking facilities. We specifically suggest a thorough review of the following sections of the contract/sop: Contract Provision Reference Contract Sections: SOP Sections: 7 K 10 D Provision Description Unaccounted-for-Tickets Ampco is responsible for protecting the parking operation from theft or misuse of all parking tickets collected and they should account for all tickets issued. Recommended Enhancements DIA should consider adding unaccounted-for-ticket language in the contract similar to the language that was included in a previous contract dated November 22, 1993 between Mile High Parking and the City. In that contract, Mile High Parking was to pay the City for each unaccounted-for-ticket over.3% (.003 X total number of issued tickets) of the total issued tickets each month. Mile High was required to pay the City $5.00 per unaccounted-for-ticket over the.3% and interest on such amounts at a rate of 18% per annum from the last day of the month in which the tickets were issued until paid. 14

16 DEPARTMENT OF AVIATION RESPONSE 15

17 DEPARTMENT OF AVIATION RESPONSE 16

18 AMPCO SYSTEM RESPONSE 17

19 AMPCO SYSTEM RESPONSE 18

20 AMPCO SYSTEM RESPONSE 19

21 SUPPLEMENTAL INFORMATION SUPPLEMENTAL INFORMATION 20

22 EXHIBIT 1 Exhibit 1 Example of an Actual Mt. Elbert Cashier Lane Report (October 6, 2006) 21

23 EXHIBIT 2 Exhibit 2 Various Ticket Styles Used at Mt. Elbert Parking Facility Raffle Style Ticket NCR Style Ticket Electronic Style Ticket The Raffle style ticket was used from 2002 through November The Cashier wrote the necessary information on both portions of the Raffle style ticket. The top portion of the raffle style ticket was provided to the customer and the bottom portion was retained by the cashier. The NCR style ticket was used between December 2006 and August The cashier wrote the necessary information on the NCR style ticket and that information automatically transferred onto the 2 nd part of the NCR ticket. The Mt. Elbert Lot began using the Electronic ticket August The cashier does not write anything on these tickets. The cashier simply collects the Electronic ticket from the customer and inserts it into the cash register. The cash register computes the ticket value. 22

24 EXHIBIT 3 Exhibit 3 Mt. Elbert Cashier Booth (Before the Alleged Theft) (After the Alleged Theft) 23

25 TABLE 1 Table 1 Findings of Some Audits Conducted to Determine the Revenue Loss at the Mt. Elbert Lot Audit Audit Period Audit Group Report Summary of findings Date November 21-24, 2006 (Thanksgiving Audit) Ampco System Parking (Local Office) January 2007 $595 in lost revenue was found and many employees were actively involved. Ampco was unable to take the desired level of prosecution against the involved employees. Six employees were terminated for their actions. March October 2006 Ampco System Parking (Home Office) March 2007 There were 411 tickets processed that had a fee written on the ticket that was less than the actual fee that should have been charged for a total of $2,200. There were 12 tickets processed in which the customer was overcharged for a total of $95. Ampco was unable to verify the value of the ticket to the credit card slip since cashiers did not write the ticket number on the credit card slip and the tickets were not time-stamped. March October 2006 Department of Aviation Airport Parking Office Report Received September 26, 2007 Ampco owes $14,541 for the following: Undercharges $625 Processing Penalties $16,116 Total Due City $16,741 Less: Amount Paid ($2,200) $14,541 24