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Missing payments recouped in Tempe Tempe is recouping hundreds of thousands of dollars in debts to the city. An internal audit has revealed spotty contract oversight enabled companies and non-profits to go without paying rents, taxes or city-service fees, for years in some cases. One of the largest oversights was $105,353 never paid by the Tostitos Fiesta Bowl for police, fire and traffic services used on game days in 2001, 2003, 2004 and 2005. The study put a magnifying glass to how and when people pay debts owed to Tempe. Often, the internal investigation found, no city staffer was put in charge of contracts, so unpaid debts would pile up without anyone doing anything about it. As a result, Tempe taxpayers lost out on money that would have otherwise gone into Tempe's General Fund for police, fire and other city services. "I'm quite disturbed by what I see is going on," said Councilman Hut Hutson. "This shows we have some seriously lax operations in our procedures . . . I don't think it was deliberate on anybody's side, just complacency." Investigators audited 23 city contracts, selected from more than 900 overall. They found problems in 21 of them, totaling more than $340,000 owed to the city. Some chunks of missing money were relatively small - such as $800 in land-lease payments from the Tempe Family YMCA, which hasn't been billed for its $100-a-year rent in at least eight years. Amounts from others were larger, such as Ruby Tuesday, which owed $72,665 because operators never paid Tempe the agreed-upon 10 percent of its net profits as part of a 1994 redevelopment agreement. Of the 23 contracts studied, 11 were selected because Tempe internal auditor Ken Jones said preliminary investigation pointed to problems. The remaining 12 were picked randomly from the about 115 contracts that generated fees for Tempe. Those numbers raised questions for Council member Barb Carter. "My concern is, is this the tip of the iceberg?" she said. "How many more are there, and how long will it take us to get caught up, and will we ever be able to collect from those entities?" Jones believes the study identified most of the city's missing money because some of the largest accounts were among those audited, he said. The missteps were unintentional, he added, saying the most disconcerting problem was oversight. For instance, the previous occupants of what is now the My Big Fat Greek Restaurant space on Mill Avenue never paid rent in May 2003 for the Crocodile Cafe. The unpaid rent was noticed and documented by Tempe's financial services department, which collects the checks. But nothing was done about it, Jones said, because financial-services employees didn't create the lease agreement in the first place, so they didn't assume responsibility for making sure the lease terms were being honored. "When you don't have that responsibility assigned to a single person, people tend to think that someone else is taking care of it," Jones said. It's a problem the report takes seriously. "Internal control is also the primary mechanism for deterring fraud," the initial report stated. As a result of the report, changes have been implemented. An auditor now tracks all of the city's contracts in a new database. Specific employees have been assigned as point-people for each of the city's contracts. Tempe also has started using a set contract initiation and approval process to add consistency. The most recent numbers show $277,768 out of the missing $340,000 has been collected. Internal Audit has deemed another $34,774 "uncollectible" because of subsequent bankruptcy or other legal reasons. |