An audit of a contract between the city of Colorado Springs and a company that sells advertising space on government-owned bus benches and bus shelters found that the terms are generally being met.

But the audit found a few holes, including the city’s inability “to perform reconciliations to ensure they were receiving the correct amount of revenue” from Lamar Corp., city documents state.

Lamar was providing the city a collections report that “was insufficient to verify that all receipts due the City have been recognized and paid,” documents state.

On the bright side, the contract requires the city to be paid at least $50,000 a year, and the amount has been exceeded every year for the past 10 years. However, the audit doesn’t say by how much.

City Auditor Denny Nester issued a series of recommendations to fix the deficiencies, and the city’s Transit Services office, which oversees the contract, accepted them all.

“The new revenue contract in 2012 will state that payment has to be made on an ‘accrual’ basis,” Transit Services wrote in its response to the audit. “In the new contract, Transit will also require monthly reports that support the current period advertising, amount due to the City and the advertising locations so that spot checks could be performed by the City.”

The audit found two other areas that needed improvement.

They include:

The contract language and processes were lacking.

Lamar and the city each have a list of inventoried bus benches and bus shelters, the audit states.

But the numbers don’t match up.

Lamar counts 491 bus benches and 140 bus shelters while the city says there are 495 bus benches and 125 bus shelters.

Also, the contract states that revenue owed the city can be offset through in-kind services.

“City personnel indicated approximately $7,000 of in-kind services were provided in lieu of revenue in 2009. Our review noted insufficient documentation of the activities provided or City approval of such activity for adequate internal controls,” the audit states.

The contract does not address discounts Lamar provides to some of its customers.

Since “Lamar provides productions and other services, it is possible that a discount could be taken on advertising to obtain greater production cost. This would maximize Lamar’s revenues and reduce the revenues due the City,” the audit states.

To read the entire audit, click here.

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