Department of Aviation concessions management unit - August 2016
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Department of Aviation Concessions Management Unit
Released: August 2016 Download the Full Report here Download the Highlights Page here We undertook this audit because terminal concessions are a significant source of airport revenue, and the department relies on concessionaires' self-reported gross receipts to calculate amounts due for rent, which carries inherent risks. |
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We found:
Our recommendations focus on improving the recordkeeping and ensuring that files contain accurate, up-to-date, retrievable information, as well as ensuring that the concessions management unit has the resources necessary to monitor concessionaires' compliance with lease agreement terms.
- The airport has designed effective controls over financial reporting, and the controls seem to be working as intended
- The airport's internal audits indicate compliance with revenue reporting requirements
- The Department of Aviation's Internal Audit unit found underreporting amounting to about 0.2% in 151 audits of concessionaires over 20 months
- All billing rules for a random sample of 63 concession locations entered into aviation's property management system accurately reflected the concessionaire lease agreement terms
- The concessions management unit implemented best practices in four of five broad areas identified in industry literature
- The airport's compliance team made unscheduled visits and used concession observation forms to document periodic inspections, consistent with best practice
- Due to understaffing, the unit conducted no inspections between April and August 2015 and performed no open and closed assessments during 2015 to asses whether concessionaires were complying with approved hours of operation
- The unit did not, at the time of our audit, assess compliance with approved products or prices—we noted prices that appeared to exceed the standard of street plus 10% in 12 of 22 items reviewed
Our recommendations focus on improving the recordkeeping and ensuring that files contain accurate, up-to-date, retrievable information, as well as ensuring that the concessions management unit has the resources necessary to monitor concessionaires' compliance with lease agreement terms.