Discussion Draft. Not For Distribution. Subject to Change.

Version Date: November 23, 2009

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CITY OF PORTlAND T'RANSPOR-

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Discussion Draft. Not For Distribution. Subject to Change. Version Date: November 23,2009

EXECUTIVE SUMMARY

AKT LLP is pleased to provide a summary of our work performed on the addendum to RFP TRN062, Financial Review/Risk Analysis of the City of Portland's Six Parking Garages. The focus of this work was to provide partial implementation of the recommendations from our report on March 27,2009.

Our work on this addendum was intended to provide the garage management team within the Bureau of Transportation (PBOT) fully accrual based financial statements and the supporting schedules required to provide substantiation through reports from their prtrnaryvendor, Star Park. In particular, this work focused on the revenue streams and verification of collections and subsequent deposits to City accounts.

We have developed, delivered, and trained Star Park on the detailed reconciliation processes and reports necessary to tie together the Accounts Receivable Aging reports, Lot Sum reports, profit and loss statements, and deposit reports from the City bank accounts. When complete, accurate, and timely, this

system will provide both the basis for full accrual reporting of revenue expenses to the City ledgers and

a significantly greater level of assurance that Star Park is recore all revenues related to the City's

garages and depositing all receipts collected on those revenue ank accounts. At this writing, Star

Park has not successfully completed the necessary s, procedures, and reports to

meet this standard.

We met with PBOT to clarify the planning session, we met with We also conducted a meeting statements and working

and to develop a delivery plan. Following this Star Park and with PBOT on several occasions. Star Park facilitating the delivery of the financial Ities described by Star Park in their attempts to reconcile.

Meetings with Star held with the staff directl their internal processes and receivable. We discussed the

templates and gain consensus in their use. Meetings were the work. We also met with Star Park management to discuss ,Qtlvvl", to reduce the efforts required to fully reconcile the accounts between cash and accrual based financial statements. Star Park

agreed with the proposed reconciliation processes and templates. Star Park was able to make moderate changes in their processes to accommodate this requirement.

Meetings with the City were to inform them of our progress and to develol2....?.fficiellt.fevie.W .. p[Q.Qes.s~~Jbf!L would ensure the continued compliance of Star Park reporting. Efforts with Star Park were more intensive and less productive than anticipated. As a result, we met with PBOT to develop contingency plans in the event that Star Park was not able to deliver the necessary financial statements.

A significant portion of our work was to develop templates for the reconciliations of Validation and Monthly Accounts Receivable. The templates were based on the understanding gained during the first phase of this work. The use of these tools enable' Star Park to deliver a full set of accrual based profit and loss reports, and to provide reconciled accounts receivable reports with supporting aging by customer. Concurrently with our efforts, PBOT developed by-garage budgets. This information will be incorporated into the accrual based profit and loss statements and used for analysis and planning by PBOT. Other efforts are being made by PBOT garage management to increase the levels of visibility and analysis of information.

AI<TLLP

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Discussion Draft. Not For Distribution. Subject to Change. Version Date: November 23, 2009

PROJECT OVERVIEW

During the first phase of this project, we worked with PBOT and with Star Park to develop a deep understanding of their internal processes and systems. From the information gathered, a set of recommendations were developed and presented to PBOT in March of 2009. This second phase was a partial implementation of the recommendations.

Toward this goal, AKT assisted in:

• Bringing financial statements provided by Star Park into full accrual for all revenue streams and into compliance with GAAP accounting standards.

• Revising the contents of the financial reporting package delivered monthly to PBOT.

• Providing reconciliation templates to Star Park for both Validations and Monthly revenue streams that

would work within the information produced from Star Park's existi rocesses and systems.

• Providing reconciliation templates to Star Park for both Valida their "Lot Sum" reports to Star Park's internal Accounts Rece

" reports to copies of the

• Providing reconciliation templates to Star Park for deposits made to the City Accounts.

• Training Star Park on the use of the templates and changes that would better support the rt:>(',..,nn,

ited guidance on internal process

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, doing an integrity review, and using

revised reporting package to su

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Work as presented to the City in June 2009 has internal financial systems. These issues caused

Work on financial systems currently in process within the City to record fully accrued financial statements. As a result, ot pursue the following tasks listed on the Statement of Work:

accompanying depreciation schedule.

The completion of some tasks I been hampered by significant iss delays and re-work beyond prohibited the addition 0 through agreement with

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• Template and procedures for ar Park to increase effectiveness of collection efforts.

• Cash flow projections.

We developed templates to aid Star Park in the reconciliations of Validation and Monthly Accounts Receivable to Lot Sum and accounts receivable aging reports. These templates are attached as Appendix A. The template created to assist Star Park in reconciling Lot Sum reports to the deposit statements from the City's bank account is attached as Appendix B. Procedures to bring Monthly revenues into full accrual were developed on site with Star Park. The use of these tools is intended to enable Star Park's delivery of financial reports bringing a greater level of assurance to PBOT that the revenues and collections against those revenues have been completely and accurately reported.

AKT LLP

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Discussion Draft. Not For Distribution. Subject to Change. Version Date: November 23. 2009

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This project included developing a common expectation of information delivery. Both PBOT and Star Park have made adjustments to their initial requirements based on this project. For example. with Validation revenues we worked with PBOT to accept a composite invoicing. collection process and aging report rather than by garage. This was seen as a reasonable compromise based on the substantial additional work that would have been required by Star Park to invoice and collect by garage. PBOT will have the most significant portion of the information as the revenues will continue to be recorded by garage and included in the by-garage profit and loss statements.

All parties have agreed to the use of the templates attached here. as well as the process changes suggested. However, Star Park has not yet successfully completed the necessary changes to their systems, procedures, and reports to meet to implement the agreed templates and processes.

We are pleased to have assisted PBOT in their efforts t accountability from their primary garage vendor. Star Pa willingness to "make this work" from both PBOT and timely. accurate. meaningful, and useful reporting.

SUMMARY

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riate levels of reporting and e collaborative attitudes and

AKTllP

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