• The Marina Yacht Harbor budget includes two gardener positions assigned and charged to the Neighborhood Services Division. Although these two positions work part time on Marina Yacht Harbor projects, the Neighborhood Services Division is unable to track gardening assignments to the Marina Yacht Harbor. By transferring the two gardener positions from the Marina Yacht Harbor budget to the Neighborhood Services Division budget, the Marina Yacht Harbor's allocation of budgeted positions would be reduced for purposes of distributing the Department's administrative overhead, an estimated reduction of approximately $49,152 in FY 2007-2008.
  
  
• Also, by developing procedures to identify actual allocation of gardener time to the Marina Yacht Harbor and to Neighborhood Services, and charge gardener time appropriately to the Marina Yacht Harbor Fund, costs for gardener time working on Marina Yacht Harbor projects would by paid by the Marina Yacht Harbor Fund rather than by the General Fund.
  
  
• The Marina Yacht Harbor lacks procedures to manage inventory and consequently cannot ensure that materials and supplies are not lost through theft or waste or that excess inventory does not build up. Although the Marina Yacht Harbor's policies require that all purchases are approved by the Harbormaster, according to the Harbormaster, in at least one instance in FY 2005-2006 the Structural Maintenance Division staff purchased surplus lumber not needed at that time for Harbor projects and charged the purchase to the Marina Yacht Harbor budget. The surplus lumber continues to sit in the Harbor's warehouse.
  
  
• Structural Maintenance Division managers rely on manual tracking of labor hours charged to work orders rather than the Department's maintenance management system, Total Managed Assets, resulting in inconsistent tracking of labor hours worked on Marina Yacht Harbor projects. Also, because the Division must manually enter labor hours into the City's payroll system, labor hours are not always charged correctly to the Marina Yacht Harbor Fund. Further, the Structural Maintenance Division does not provide work order estimates, and thus is not held accountable for actual Marina Yacht Harbor work order expenditures.

The Marina Yacht Harbor's Salary and Fringe Benefit Expenditures

The Marina Yacht Harbor's operating expenditures include salaries and fringe benefits for employees reporting to the Harbormaster and two gardeners reporting to the Neighborhood Services Marina Complex Manager (in which the Harbor is located). The budgeted positions for the Harbor from FY 2001-2002 through FY 2006-2007 are in Table 2.1. All but the two gardeners are Harbor staff.

Table 2.1
Budgeted Positions for the Marina Yacht Harbor
FY 2001-2002 through FY 2006-2007

Source: Annual Salary Ordinance FY 2001-2002 through FY 2006-2007

Although the Marina Yacht Harbor had one carpenter position prior to FY 2003-2004, all carpentry services to the Harbor are now provided by the Department's Structural Maintenance Division. In FY 2006-2007, the number of custodian positions decreased from two to one full-time position.

The Marina Yacht Harbor's Staff Allocation

As shown in Table 2.1 and Chart 2.1, the Marina Yacht Harbor's budgeted and actual salary and fringe benefit expenditures declined between FY 2001-2002 and FY 2006-2007.

Chart 2.1
Labor Expenditures for the Marina Yacht Harbor
FY 2001-2002 through FY 2006-2007

Source: Annual Salary Ordinance FY 2001-2002 through FY 2006-2007

Harbor Staff

Although the harbormaster does not have a formal staffing schedule for Harbor employees, the harbormaster maintains an informal summary of staff schedules, as shown in Table 2.2 below.

Table 2.2
Staffing Schedule for the Marina Yacht Harbor

Source: Marina Yacht Harbor Acting Harbormaster

Allocation of Gardeners to the Fund

Although the Marina Yacht Harbor budget contains two full-time gardener positions, these positions are supervised by the Department's Neighborhood Services Division and do not work full time on the Harbor. These gardener positions are charged to the Neighborhood Services Division rather than the Marina Yacht Harbor Fund.

The gardeners, who are managed by the Neighborhood Services Manager for the Marina Complex,¹ have work schedules that are cumulatively 1.7 full time equivalent positions, not 2.0 full time equivalent positions. The Budget Analyst was unable to verify actual work hours spent on the Harbor, because work schedules and timesheets do not reflect actual hours worked on the Marina Yacht Harbor and employees are not required to report time by project, or area (such as the Harbor) and simply report the cumulative number of hours worked.

Although the Neighborhood Services Manager could not quantify the hours worked on the Harbor by the employees, he estimated their true work effort on the Harbor to be less than that reported on the work schedule, because they have been managed as a part of a collective pool of gardeners that work in the Marina Complex.

Lack of Inventory Management

The Marina Yacht Harbor maintains supplies in their storeroom but does not maintain an inventory of the materials and supplies stored at the Harbor; they cannot account for levels of inventory or shrinkage. The Marina Yacht Harbor tracks materials and supplies purchases against the budget. Although the Marina Yacht Harbor does not have formal inventory policies and procedures, the Harbormaster states that the Harbor looks at the reasonableness of existing inventory before purchasing new inventory.

Although the Marina Yacht Harbor's policies require that all purchases are approved by the Harbormaster, according to the Harbormaster, in at least one instance in FY 2005-2006 the Structural Maintenance Division staff purchased surplus lumber not needed for Harbor projects and charged the purchase to the Marina Yacht Harbor budget. The surplus lumber continues to sit in the Harbor's warehouse.

The Marina Yacht Harbor and Structural Maintenance Division do not have procedures to track the Structural Maintenance Division's use of materials on Harbor projects. Materials for the Marina Yacht Harbor's facilities maintenance projects performed by the Department's Structural Maintenance Division are purchased from the Harbor's materials and supplies budget as well as the Harbor's facilities maintenance budget and are recorded in FAMIS. The materials and supplies are not recorded in the Department's maintenance management system, Total Managed Assets, that tracks work orders between the Structural Maintenance Division and the Marina Yacht Harbor.

Decentralized Management of Facilities Maintenance Projects

The Structural Maintenance Division's shops that completed work for the Harbor in FY 2005-2006 and FY 2006-2007 included the Carpentry, Iron, Heavy Equipment, Plumbing, and Electrical shops. The shops have a different log book tracking system from the Total Managed Assets system to track labor performed on work orders.

In theory, the Total Managed Assets system should have supplanted preceding work management systems when implemented in FY 2005-2006. However, as the managers have maintained preexisting logbooks, the Total Managed Assets system has become an adapted logbook that tracks hours worked per work order instead of only tracking total hours worked. Managers enter totals of hours worked upon job completion, supported by the logbook entries, which differ in the amount of detail of description offered per work order. Including the timesheets, managers keep a minimum of three systems, two completely manual, for the purpose of tracking employee's work effort. Table 2.3 lists a systems inventory of the structural maintenance function.

Table 2.3
Systems Inventory of the Structural Maintenance Function

Lack of Controls in the Work Order System

The following are findings from the random selection of 60 work orders in FY 2005-2006 and FY 2006-2007 (30 per year) of work completed by the Structural Maintenance Division at the Harbor, validating entries in logbooks, the Total Managed Assets system, and timesheets; and in-depth interviews.

Work Orders Are Issued Without Estimates

Structural Maintenance does not have a policy of issuing time estimates with work orders. Although a few of the work orders in the sample included estimates, they were not entered into the Total Managed Assets system by managers. Rather, these estimates were entered by implementation consultants during the Total Managed Assets system implementation process; they apply to some work orders automatically, and thus are not meaningful estimates. Issuing time estimates with work orders are a common and best business practice in the industry. By not issuing estimates, Structural Maintenance Division and Marina Yacht Harbor managers have no measure of whether specific maintenance projects are completed timely and efficiently. Consequently, managers have no effective tool to manage project expenditures.

Work Orders Can Be, Issued, Approved, and Completed by Same Entity

Although the majority of work orders for the Harbor are issued by the Harbormaster, Structural Maintenance Division shop managers can also issue their own work orders for Marina Yacht Harbor projects. Three work orders, or five percent of the sample, were work orders that were issued by shop managers completing the same work order. Unlike purchase orders, work orders are not required to have approval from the Harbormaster to be completed. While an emergency may require decisive action in the absence of the Harbormaster, everyday maintenance jobs do not, and this adds to the unaccountability of the system.

Labor Charges to the Fund are not linked with the Work Order System

Ideally, the Total Managed Assets system work orders should have been verified by managers' logs and correctly entered onto timesheets. However, this was found to be the case in only two of the 60 sampled work orders. In practice, the accuracy of the system is compromised by the manual entry of logbook entries, tallied totals in the Total Managed Assets system, and manual entry on timesheets. Because the Division must manually enter labor hours into the City's payroll system, labor hours are not always charged to the correct index code.

Some work order totals were not entered onto timesheets. The Budget Analyst verified 72 hours of work entered into the Total Managed Assets system that were not charged to the Fund. The Budget Analyst also observed apparent undercharges of 288 and overcharges of 771 hours; however, these apparent discrepancies cannot be verified because timesheets only reflect total work hours by fund, and may or may not have included work on other work orders charged to the same fund.

Conclusions

The Recreation and Park Department needs to strengthen management tools to track expenditures between the Marina Yacht Harbor and other divisions within the Department.

Currently, the Marina Yacht Harbor budget contains two gardener positions that are under the management of and charged to the Neighborhood Services Division. The gardeners' work schedules and timesheets do not reflect actual hours worked on the Marina Yacht Harbor and employees are not required to report time by project, or area (such as the Harbor) and simply report the cumulative number of hours worked.

Although the Department's Structural Maintenance Division performs facilities maintenance projects for the Marina Yacht Harbor, neither the Structural Maintenance Division nor the Marina Yacht Harbor have sufficient procedures to ensure adequate management oversight. The Marina Yacht Harbor does not track its materials inventory and neither the Harbor nor the Structural Maintenance Division track the use of materials on projects. Also, the Structural Maintenance Division does not provide work estimates for facilities maintenance projects, and the Harbor and the Structural Maintenance Division lack procedures to ensure that facilities maintenance projects are completed cost-effectively.

Recommendations

The Recreation and Park Department Director of Finance and Administration should:

Costs and Benefits

The Recreation and Park Department should be able to implement these recommendations within its existing operations.

By transferring the two gardener positions from the Marina Yacht Harbor to the Neighborhood Services Division, the Marina Yacht Harbor's allocation of budgeted positions would be reduced for purposes of distributing the Department's administrative overhead. Based on FY 2007-2008 allocation of costs, the Marina Yacht Harbor's overhead allocation would be reduced by $49,152, or 17 percent, from $291,469 to $242,318.

Also, by developing procedures to identify actual allocation of gardener time to the Marina Yacht Harbor and to Neighborhood Services, and charge gardener time appropriately to the Marina Yacht Harbor Fund, costs for gardener time working on Marina Yacht Harbor projects would by paid by the Marina Yacht Harbor Fund rather than by the General Fund. For example, if gardener time allocated to Marina Yacht Harbor projects equaled approximately 1.0 full time position in FY 2007-2008, estimated gardener salary and benefit costs of approximately $75,374, plus additional administrative costs, would be transferred from the General Fund to the Marina Yacht Harbor Fund.

Improved budgetary controls and management practices in overseeing maintenance work orders and inventory to ensure more cost-effective maintenance and materials management.

1 The Marina Complex includes the following parks: Alice Marble Park, Alta Plaza Park, Allyne Park, Broadway West, Cowlhollow Park, Faye Park, Julius Kahn Park, Lafayette Park, Marina Green East, Marina Green West, Marina Green Central, Marina Library, Moscone Park, and Palace of Fine Arts.