!"# %&'( )*+*" ,-.

" &/ *0" )*+*" 1&23*'&44"'

1homas . ulnapoll
ulvlslon of SLaLe CovernmenL AccounLablllLy
8eporL 2013-S-18 !uly 2014
)"4".*"5 678+8.7+4 9+8+:"2"8*
;'+.<."=
!"# %&'( )*+*" ,4>237. ?":7&8+4
@"A"4&32"8* BC*0&'7*>
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #
FG".C<A" )C22+'>
;C'3&="
1o deLermlne wheLher Lhe new ?ork SLaLe Clymplc 8eglonal uevelopmenL AuLhorlLy (C8uA)
has esLabllshed adequaLe conLrols over Lhe followlng nanclal managemenL funcuons: cash and
granL managemenL, revenue and collecuon acuvlues, procuremenL and conLracung, payroll, and
nanclal plannlng and budgeung. 1he audlL covers from Aprll 1, 2010, Lhrough SepLember 26,
2013.
H+.(:'&C85
C8uA operaLes Lhe WhlLeface and Core MounLaln Skl CenLers, and Lhe Clymplc faclllues ln Lake
lacld. ln november 2012, lL assumed managemenL responslblllLy of Lhe 8elleayre Skl Area ln
PlghmounL, new ?ork, from Lhe new ?ork SLaLe ueparLmenL of LnvlronmenLal Conservauon
(uLC). 1he ubllc AuLhorlues Law requlres C8uA Lo develop and lmplemenL a plan Lo maxlmlze
year-round uullzauon of lLs faclllues for local economlc beneL of Lhe communlLy, and Lo mlnlmlze
Lhe cosLs of malnLenance Lo Lhe SLaLe and local governmenLs. C8uA's personal servlce cosLs
LoLaled $38.3 mllllon from Aprll 1, 2010, Lhrough March 31, 2013, comprlslng abouL 43 percenL
of lLs overall operaung cosLs.
I"> 678578:=
- C8uA needs Lo lmprove lLs nanclal managemenL pracuces, parucularly cash managemenL.
uurlng Lhe Lhree scal years ended March 31, 2013, C8uA has used a llne of credlL (LCC) Lo cover
lLs baslc operaung cosLs lncludlng payroll. ln some cases, oLher SLaLe agencles have pald C8uA's
bllls, lncludlng $1.3 mllllon of caplLal lease paymenLs C8uA could noL pay slnce uecember 2008.
- AlLhough C8uA prepares four-year nanclal plans as requlred by Lhe ubllc AuLhorlues 8eform
AcL of 2009, from scal 2008-09 Lhrough 2012-13 lL over-pro[ecLed revenues by $7.1 mllllon and
under-pro[ecLed expendlLures by $18.3 mllllon. lurLhermore, C8uA's scal 2010-11 budgeL
had a neL $800,141 declL even Lhough Secuon 2613 of Lhe ubllc AuLhorlues Law requlres
C8uA Lo submlL a budgeL wlLhouL an operaung declL.
- C8uA has a $2.109 mllllon accounLs recelvable relaLed Lo accounLs of Lhe Lmplre SLaLe
uevelopmenL Corporauon (LSuC) and Lhe Lake lacld 8eglonal WlnLer SporLs Commluee, a
noL-for-proL organlzauon. Cf Lhls amounL, $1.7 mllllon was orlglnally promlsed ln 2009 by
a local noL-for-proL organlzauon from a granL lL would recelve from LSuC. 1he granL was
delayed because Lhe organlzauon had noL led all of Lhe requlred annual reporLs. AlLhough Lhe
organlzauon has subsequenLly led Lhe reporLs, Lhe SLaLe ulvlslon of Lhe 8udgeL (uC8) has noL
released Lhe funds. C8uA omclals advlsed LhaL wlLhouL Lhe $1.7 mllllon, lL lncurred operaung
expenses whlch had Lo be pald from lLs LCC and LhaL lL was awalung collecuon of Lhls amounL Lo
pay down lLs lnLeresL-bearlng debL. C8uA advlsed lL recelved Lhe $1.7 mllllon on Aprll 8, 2014.
- We revlewed a [udgmenLal sample of 29 procuremenLs LoLallng $8.2 mllllon Lo deLermlne lf
C8uA followed lLs procuremenL procedures. We ldenued 11 procuremenLs LoLallng $427,000
LhaL were noL compeuuvely bld. C8uA dld noL provlde sumclenL documenLauon as requlred by
lLs purchaslng pollcy Lo supporL why Lhe conLracLor was selecLed or why a compeuuve process
was noL used.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !
I"> ?".&22"85+<&8=
- uevelop a more accuraLe meLhod for esumaung expense and revenue amounLs used ln Lhe
muluyear nanclal plan Lo ensure LhaL Lhe budgeLs are balanced, operaung expenses are closely
scruunlzed durlng Lhe year, and esumaLes are revlewed Lo deLermlne LhaL Lhey are sull valld.
MalnLaln supporL for budgeL assumpuons and calculauons as requlred by Cmce of Lhe SLaLe
CompLroller regulauons.
- ConducL a Lop-Lo-bouom revlew of C8uA's organlzauon and spendlng Lo ldenufy cosL-
conLalnmenL opporLunlues.
- ConLacL uC8 Lo deLermlne Lhe sLaLus of lLs accounLs recelvable due from LSuC.
- Award conLracLs on a compeuuve basls Lo Lhe exLenL posslble. lully documenL any walvers
permlmng non-compeuuve procuremenLs lncludlng Lhe reason(s) for Lhe declslon.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> $
)*+*" &/ !"# %&'(
,-." &/ *0" )*+*" 1&23*'&44"'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*>
!uly 9, 2014
Mr. aLrlck 8arreu
Chalrman
new ?ork SLaLe Clymplc 8eglonal uevelopmenL AuLhorlLy
2634 Maln SLreeL
Lake lacld, n? 12946
uear Mr. 8arreu:
1he Cmce of Lhe SLaLe CompLroller ls commlued Lo helplng SLaLe agencles, publlc auLhorlues
and local governmenL agencles manage Lhelr resources emclenLly and eecuvely. 8y so dolng, lL
provldes accounLablllLy for Lax dollars spenL Lo supporL governmenL operauons. 1he CompLroller
oversees Lhe scal aalrs of SLaLe agencles, publlc auLhorlues and local governmenL agencles, as
well as Lhelr compllance wlLh relevanL sLaLuLes and Lhelr observance of good buslness pracuces.
1hls scal overslghL ls accompllshed, ln parL, Lhrough our audlLs, whlch ldenufy opporLunlues for
lmprovlng operauons. AudlLs can also ldenufy sLraLegles for reduclng cosLs and sLrengLhenlng
conLrols LhaL are lnLended Lo safeguard asseLs.
lollowlng ls our audlL reporL enuLled !"#"$%"& ()*+*$)+# ,+*+-"."*% /0+$1$"23 1he audlL was
performed pursuanL Lo Lhe SLaLe CompLroller's auLhorlLy under Arucle x, Secuon 3, of Lhe SLaLe
ConsuLuuon and Secuon 2803 of Lhe ubllc AuLhorlues Law.
1hls audlL's resulLs and recommendauons are resources for you Lo use ln eecuvely managlng
your operauons and ln meeung Lhe expecLauons of Laxpayers. lf you have any quesuons abouL
Lhls reporL, please feel free Lo conLacL us.
8especuully submlued,
45$" 67 %8" !%+%" 96.:%06##"0
;)<)2)6* 67 !%+%" =6<"0*."*% >$$6?*%+@)#)%A
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> (
)*+*" D&A"'82"8* B..&C8*+E747*> 1&8*+.* J8/&'2+<&8K
BC57* @7'".*&'K Carmen Maldonado
;0&8"K (212) 417-3200
F2+74K SLaLeCovernmenLAccounLablllLy[osc.sLaLe.ny.us
B55'"==K
Cmce of Lhe SLaLe CompLroller
ulvlslon of SLaLe CovernmenL AccounLablllLy
110 SLaLe SLreeL, 11Lh lloor
Albany, n? 12236
1hls reporL ls also avallable on our webslLe aL: www.osc.sLaLe.ny.us
L+E4" &/ 1&8*"8*=
8ackground 3
AudlL llndlngs and 8ecommendauons 7
Cash and CranL ManagemenL 7
8evenues 8
llnanclal lannlng 12
8ecommendauons 13
LxpendlLures 14
8ecommendauons 19
AudlL Scope and MeLhodology 20
AuLhorlLy 21
8eporung 8equlremenLs 21
ConLrlbuLors Lo 1hls 8eporL 22
Agency CommenLs 23
SLaLe CompLroller's CommenLs 32
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> )
H+.(:'&C85
1he Clymplc 8eglonal uevelopmenL AuLhorlLy (C8uA) ls headquarLered ln Lake lacld, new ?ork.
lL ls responslble for operaung and malnLalnlng Lhe Clymplc faclllues developed for Lhe 1980 WlnLer
Clymplcs, lncludlng Lhe Clymplc CenLer, Lhe Clymplc !umplng Complex and Lhe Clymplc SporLs
Complex ln Lake lacld and Lhe WhlLeface MounLaln Skl CenLer. ln 1984, lL assumed responslblllLy
for operaung and malnLalnlng Lhe Core MounLaln Skl CenLer ln norLh Creek, new ?ork, from Lhe
new ?ork SLaLe ueparLmenL of LnvlronmenLal Conservauon (uLC). ln november 2012, lL assumed
responslblllLy from uLC Lo operaLe and manage 8elleayre MounLaln Skl Area, ln PlghmounL, new
?ork. C8uA's venues lnclude a museum, Lralnlng faclllues, resLauranLs and banqueL faclllues, and
oLher amenlues provldlng access Lo varlous year-round recreauonal acuvlues.
C8uA omclals lndlcaLe LhaL C8uA generaLes an economlc beneL for Lhe reglon and Lhe SLaLe.
1o supporL Lhelr sLaLemenL, Lhey clLed a 2008 sLudy lssued by Lhe SLaLe unlverslLy of new ?ork
aL lausburgh LhaL deLermlned C8uA's economlc conLrlbuuon Lo Lhe local economy based on
2006 lnformauon was abouL $ 271.8 mllllon ln LhaL year. ln May 2013, anoLher organlzauon, Lhe
8eglonal Cmce of SusLalnable 1ourlsm (8CCS1), lssued a reporL based on vlslLors ln 2012 LhaL
concluded C8uA's economlc conLrlbuuon ln Lssex CounLy was $100.7 mllllon. 1hls vlLal economlc
role, coupled wlLh C8uA's nanclal slLuauon, underscores Lhe lmporLance of ensurlng C8uA's
operauons are emclenL and eecuve.
C8uA ls governed by a 12-member 8oard of ulrecLors, whlch lncludes Lhe Commlssloners of
uLC, Lhe Cmce of arks, 8ecreauon and PlsLorlc reservauon, and Lhe ueparLmenL of Lconomlc
uevelopmenL. 1he oLher nlne board members are appolnLed by Lhe Covernor wlLh Lhe advlce
and consenL of Lhe SLaLe SenaLe, wlLh slx represenung speclc geographlc areas. Secuon 2606
of Lhe ubllc AuLhorlues Law (A Law) supulaLes C8uA musL develop and lmplemenL a plan Lo
maxlmlze year-round uullzauon of lLs faclllues for local economlc beneL of Lhe communlLy,
and Lo mlnlmlze Lhe cosLs of malnLenance Lo Lhe SLaLe and local governmenLs. ln addluon, lL ls
requlred Lo malnLaln lLs asseLs ln a sLaLe of good repalr and accounL for lLs caplLal expendlLures.
lurLhermore, Lhe ubllc AuLhorlues 8eform AcL of 2009 requlres lL Lo develop four-year nanclal
plans, aL a mlnlmum, Lo help supporL lLs pollcy and program declslons.
Cn an accrual basls, C8uA has slgnlcanL losses each scal year. lrom Aprll 1, 2010, Lhrough
March 31, 2013, C8uA had losses each year, LoLallng $43 mllllon over Lhe Lhree scal years. Cn
a cash basls, C8uA's losses are slgnlcanLly lower, LoLallng $4.2 mllllon over same perlod - Lhe
dlerence aurlbuLable Lo non-cash lLems such as depreclauon, accounLs recelvable, and posL-
employmenL beneLs due lLs employees.
Secuon 2619 of Lhe A Law requlres C8uA Lo esLabllsh a slnklng fund Lo provlde for caplLal
lmprovemenLs and ma[or repalrs Lo Lhe Clymplc faclllues, and requlres a deposlL of 23 percenL
of neL operaung proLs each year. Powever, durlng our audlL perlod, C8uA had no proLs from
operauons and had no balance ln Lhe slnklng fund. lnsLead, C8uA ls dependenL on Lhe SLaLe and
oLher publlc enuues for caplLal conLrlbuuons and granLs.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> *
C8uA had a LoLal personal servlce cosL of $22.2 mllllon for scal year Aprll 1, 2012, Lhrough
March 31, 2013. As of March 31, 2013, C8uA had 284 full-ume and 1,363 seasonal employees.
C8uA supplemenLs lLs uckeL revenue wlLh corporaLe sponsorshlps, whlch lnclude cash paymenLs
and ln-klnd producLs or servlces. lor Lhe Lhree scal years ended March 31, 2013, C8uA had 43
dlerenL sponsorshlp arrangemenLs LhaL generaLed $928,174 ln LoLal cash revenue and over $2.3
mllllon of ln-klnd producLs or servlces. ln reLurn, lL generally provlded uckeLs for skllng or evenLs
held aL lLs venues, adveruslng, and sLays aL a Lhree-bedroom condomlnlum lL leases ln Lake lacld.
Slnce november 26, 1997, C8uA has malnLalned a llne of credlL (LCC) wlLh dlerenL prlvaLe
nanclal lnsuLuuons. C8uA's records show lL used lLs LCC, borrowlng a LoLal of $28.9 mllllon
beLween Aprll 1, 2006, and !une 18, 2013, and repaylng $26.7 mllllon ln Lhe same perlod. ln
addluon, C8uA has used caplLal lease agreemenLs Lo purchase ma[or equlpmenL for lLs skl cenLers.
Slnce !une 2007, lL enLered lnLo seven caplLal lease-purchase agreemenLs LoLallng $13.2 mllllon,
of whlch $10.3 mllllon was ouLsLandlng as of March 31, 2013.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> +
BC57* 678578:= +85 ?".&22"85+<&8=
1+=0 +85 D'+8* 9+8+:"2"8*
1he ma[orlLy of C8uA's operaung revenue ls earned ln Lhe lasL ve monLhs of lLs scal year, from
november Lhrough March. 1hls along wlLh C8uA's lack of adequaLe cash reserves and need Lo
borrow ln anuclpauon of granL fundlng cause lL Lo borrow from a Llne of CredlL (LCC) Lo meeL lLs
nanclal obllgauons. lor example, C8uA borrowed $900,000 from lLs LCC on lebruary 1, 2013,
Lo pay lLs annual SLaLe 8euremenL SysLem blll. ln addluon, lL borrowed $130,000 on CcLober 23,
2011, Lo cover lLs payroll cosLs. lL borrowed anoLher $100,000 for payroll on !une 4, 2013, desplLe
reporung LhaL Lhe 2013 skl season was hlghly successful.
Clven lLs cash slLuauon, C8uA relles on ouLslde conLrlbuuons and loans Lo cover cash shorLages.
ConsequenLly, C8uA's ouLsLandlng LCC balance on !une 18, 2013, was over $3.4 mllllon, and lL
reporLed balances aL Lhe end of scal years 2007-08 Lhrough 2012-13 ranglng from $2 mllllon
Lo almosL $4.6 mllllon. 8ecause C8uA has conunued Lo malnLaln LCC balances, lL has lncurred
$331,318 ln lnLeresL and fees beLween !anuary 2008 and !une 2013.
When dlscusslng C8uA's cash slLuauon, C8uA omclals lndlcaLed Lhelr organlzauon ls unllke mosL
publlc auLhorlues because lL has very cycllcal revenue sLreams. 1hey emphaslzed C8uA earns
nearly 83 percenL of lLs annual revenues over a ve-monLh perlod of wlnLer buslness. 1hey also
lndlcaLed LhaL revenues are largely dependenL on unconLrollable facLors such as weaLher and
Lourlsm Lrends.
Whlle many facLors conLrlbuLe Lo C8uA's cash slLuauon, we belleve managemenL and Lhe 8oard
of ulrecLors (8oard) can Lake cerLaln sLeps Lo lmprove C8uA's cash and granL managemenL, as
follows.
1he Lmplre SLaLe uevelopmenL Corporauon (LSuC) awarded C8uA a $13.2 mllllon Worklng
CaplLal CranL" (CranL) on SepLember 20, 2006 (explrlng on uecember 31, 2012). 1he CranL was
lnLended Lo ellmlnaLe over $10 mllllon of prlvaLe debL, along wlLh oLher llablllues, LhaL C8uA
lncurred beLween CcLober 1998 and Aprll 2003. ln addluon, C8uA was supposed Lo esLabllsh a
reserve fund Lo address any fuLure operauonal declencles. ln lebruary 2007, C8uA used Lhe
CranL funds Lo pay o $9.8 mllllon ln prlvaLe loans and caplLal leases, and $1.2 mllllon ln LCC
borrowlngs. ln addluon, lL used $2.4 mllllon of Lhe balance ln 2007 and 2012 Lo pay operauonal
cosLs lncludlng uullues, employee healLh lnsurance, and ouLsLandlng Workers' Compensauon and
8euremenL SysLem bllls.
Also, ln scal 2012-13, C8uA recelved a $3 mllllon approprlauon from Lhe new ?ork Works
rogram (n? Works). 1he approprlauon also specles LhaL $1 mllllon of Lhls amounL was for use
aL Lhe 8elleayre Skl CenLer.
1he 8oard passes resoluuons whenever LCC bank agreemenLs explre. 1hese resoluuons dene
Lhe renewal parameLers for Lhe nexL LCC, lncludlng why lL ls needed and Lhe amounL. Cenerally,
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> '
Lhe 8oard resoluuons lndlcaLe C8uA needs a LCC Lo sLay currenL wlLh vendor accounLs payable
obllgauons from caplLal pro[ecLs and operauons of venues. uurlng Lhe pasL several years,
C8uA has used lLs LCC usually Lo address cash ow challenges LhaL sLem, ln parL, from seasonal
ucLuauons ln operauonal revenue and anuclpauon of granL fundlng. C8uA lndlcaLed LhaL Lhe
ulrecLor of llnance generally lnluaLed each use wlLh Lhe resldenL/CLC's knowledge and consenL.
We found C8uA's procedures for uslng lLs LCC do noL ensure each charge ls sumclenLly
documenLed and prompLly repald. Slnce lebruary 2007, C8uA has Lracked wheLher LCC charges
are operauonal or caplLal relaLed, buL lL dld noL documenL ll Lhe resldenL/CLC approved each
charge or why avallable cash balances could noL cover Lhe charges. lor example, C8uA dld noL
documenL wheLher lLs bank balances were Loo low and/or monles were belng held Lo pay bllls
wlLh a hlgher prlorlLy. lurLhermore, C8uA does noL have a sysLem Lo Lrack Lhe speclc anuclpaLed
granL each LCC charge was assoclaLed wlLh and Lhe fundlng source of each repaymenL. 1herefore,
lL cannoL accounL for wheLher LCC drawdowns for speclc anuclpaLed granLs were prompLly
repald aer relmbursemenL was recelved.
1he 8oard resoluuons also glve C8uA's Chlef Lxecuuve Cmcer (CLC) auLhorlzauon Lo Lake Lhe
necessary sLeps" Lo renew Lhe LCC. 1he 8oard does noL speclfy Lhe crlLerla for selecung Lhe
bank and lnLeresL raLe llmlLs. Slnce scal 2006-07, Lhere have been elghL renewal agreemenLs
wlLh banks for LCC accounLs. C8uA dld noL award Lhese agreemenLs compeuuvely, and dld noL
documenL Lhe declslon-maklng lnvolved unul lL selecLed Lhe bank lL began uslng ln !uly 2013.
C8uA's omclals lndlcaLed LhaL several years ago numerous banks were conLacLed Lo negouaLe
posslble loan Lerms. Powever, only one of Lhese banks would glve C8uA a LCC because of C8uA's
poLenual nanclal dlmculues. C8uA kepL renewlng lLs LCC wlLh Lhls bank unul 2012. AL LhaL
polnL, C8uA conLacLed varlous banks Lo lncrease Lhe LCC and decrease lLs lnLeresL raLe.
ln Lhe fuLure, omclals lndlcaLed C8uA wlll documenL each LCC charge wlLh a formal memo LhaL
shows Lhe resldenL/CLC's approval. 1hey also lndlcaLed Lhey wlll documenL LCC uses more
sLrlngenLly ln relauon Lo speclc granLs or SLaLe funds Lo beuer ensure Lhe LCC ls repald for
charges relaLed Lo speclc fundlng sources. 8ecause C8uA dld noL Lrack LCC charges assoclaLed
wlLh speclc granLs and Lhe repaymenL fundlng source, lL cannoL provlde breakdowns lndlcaung
whaL poruons of Lhe LCC balance and accumulaLed lnLeresL relaLe Lo operauons or granL
relmbursemenLs. 1o mlnlmlze LCC lnLeresL and fees, omclals should ensure C8uA prompLly pays
down Lhe LCC when lL recelves granL relmbursemenLs or when exLra cash becomes avallable.
?"A"8C"=
C8uA should sLrlve Lo maxlmlze all revenue-generaung opporLunlues. C8uA omclals lndlcaLed
Lhey have Laken numerous sLeps Lo lncrease revenue Lhrough caplLal lmprovemenLs and by
lmplemenung new ways of uslng faclllues year-round. We belleve C8uA could Lake cerLaln oLher
acuons LhaL may lncrease lLs revenue. 1hls lncludes Laklng addluonal sLeps Lo ensure lLs corporaLe
sponsorshlps are beneclal and LhaL ouLsLandlng accounLs are collecLed.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> ,
!:6*26028):2
Sponsorshlps are markeung arrangemenLs beLween buslnesses and C8uA. 1he buslnesses pay
- elLher ln cash or wlLh ln-klnd donauons of goods and servlces - ln order Lo be ldenued as
sponsors aL C8uA evenLs and venues and ln C8uA publlcauons. Sponsors' names are llsLed on
C8uA's WebslLe and on Lhe elecLronlc slgn aL C8uA's Clymplc CenLer ln Lake lacld. Sponsors
provlde lLems such as vehlcles, beer, wlne, soda, paper goods, and hoLel rooms. Sponsors may
recelve speclal conslderauon such as excluslvlLy (e.g., an excluslve beverage conLracL). Sponsors
may also recelve uckeLs Lo C8uA evenLs and use of faclllues, lncludlng Lhe use of a condomlnlum
aparLmenL aL Lake lacld, whlch C8uA leases for Lhls purpose.
We revlewed seven sponsorshlp agreemenLs valued by C8uA aL $2.828 mllllon durlng Lhe Lhree
scal years ended March 31, 2013. Cf Lhls amounL, $2.094 mllllon ls for ln-klnd goods and
servlces, and $734,000 ls for cash. We found C8uA had recelved all Lhe cash paymenLs specled
ln Lhese agreemenLs.
8egardlng ln-klnd donauons, Lhe largesL valued sponsorshlp ls wlLh a vehlcle manufacLurer. C8uA
provlded records whlch show Lhe value of Lhls agreemenL aL $1.76 mllllon over Lhe Lhree years
revlewed. under Lhls agreemenL C8uA recelves use of up Lo 12 vehlcles, whlch musL be reLurned
when replaced or aL Lhe end of Lhe agreemenL. We valued Lhese vehlcles based on Lhe monLhly
lease value and arrlved aL a LoLal of $219,627 over Lhe Lhree years. C8uA acLually booked lncome
of $270,000 from Lhls agreemenL. Slnce C8uA does noL own Lhese vehlcles, we belleve LhaL a
more represenLauve value ls Lhe lease value of Lhe vehlcles. ln reLurn, C8uA provldes uckeLs
Lo lLs venues plus adveruslng and condomlnlum use esumaLed aL $381,000 per year. lL appears
C8uA ls glvlng up much more Lhan lL recelves, and we belleve C8uA needs Lo re-evaluaLe Lhls
sponsorshlp agreemenL.
1he remalnlng $334,000 balance ls for oLher goods, of whlch C8uA could noL accounL for $37,043
of ln-klnd producLs lL recelved from Lhe sponsors. Cmclals sLaLed LhaL lLems such as beer, wlne,
and soda are rouunely glven away by sponsors aL evenLs buL are noL Lracked. lurLhermore,
C8uA clalmed lL used $36,000 ln hoLel sLays recelved from a sponsor buL decllned Lo provlde
lnformauon documenung who sLayed ln Lhe rooms Lo demonsLraLe LhaL Lhe use was for C8uA
buslness purposes.
We also found Lhree of Lhe seven sponsors had recelved more sLays aL Lhe C8uA-leased
condomlnlum Lhan called for ln Lhelr agreemenLs, lncludlng one LhaL recelved 43 excess sLays
durlng our audlL perlod. ln LoLal, Lhe Lhree sponsors recelved an addluonal 34 nlghLs, valued
aL $13,300, over Lhelr agreed alloLmenL of 74 for Lhe Lhree scal years ended March 31, 2013.
lurLher, C8uA omclals dld noL requesL or recelve $12,000 of free beverages due C8uA Lhrough
one sponsorshlp agreemenL aL Core. Cnce we broughL Lhls Lo C8uA's auenuon, omclals advlsed
LhaL Lhey would requesL Lhe free producL golng forward and use lL aL oLher venues.
When respondlng Lo our prellmlnary ndlngs, omclals lndlcaLed LhaL C8uA used Lhe ln-klnd goods
recelved from sponsors for buslness purposes. ln addluon, Lhey lndlcaLed C8uA has lmplemenLed
a more sLrlngenL Lracklng sysLem Lo manage and accounL for Lhe dlsLrlbuuon of ln-klnd goods
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #"
recelved. 8egardlng Lhe excess condomlnlum sLays, omclals acknowledged cerLaln sponsors had
recelved excess sLays buL clalmed Lhls pracuce helps C8uA malnLaln sLrong worklng relauonshlps
wlLh Lhese sponsors whlch cannoL be quanued. We quesuon Lhls pracuce because lL could
lead LhaL Lo favorlusm and Lhese excess sLays are noL consldered by C8uA when lL calculaLes Lhe
economlc beneL of sponsorshlp agreemenLs.
C8uA omclals lndlcaLed Lhey do noL have wrluen procedures regardlng developlng sponsorshlps
and Lhey do noL use formal 8equesLs for roposal (8l) or oLher compeuuve means Lo obLaln
sponsors. Cmclals advlsed LhaL Lhey prefer Lo use sponsors assoclaLed wlLh Lhe Clymplcs or u.S.
Clymplc Commluee (uSCC). C8uA lndlcaLed LhaL uslng an agreemenL wlLh uSCC may llmlL lLs
ablllLy Lo seek compeuuon for sponsorshlps, slnce lL may have Lo approach uSCC for approval
Lo use oLher sponsors. ConLrary Lo Lhls sLaLemenL, we noLed LhaL C8uA's WebslLe oers varlous
sponsorshlp opporLunlues, and lnvlLes buslnesses Lo lnqulre, whlch appears Lo be a compeuuve
process.
C8uA dld noL formally analyze wheLher Lhe proposed Lerms were beneclal before reachlng
sponsorshlp agreemenLs. We belleve C8uA should perform and fully documenL a formal cosL/
beneL analysls for each of lLs corporaLe sponsorshlp agreemenLs Lo deLermlne lf lL recelves falr
value exchange wlLh lLs sponsors. ln response Lo our prellmlnary ndlngs, omclals advlsed LhaL
C8uA's 8oard approved new procedures ln !une 2013 LhaL requlre a formal cosL/beneL analysls
before each new sponsorshlp agreemenL ls execuLed.
>$$6?*%2 B"$")<+@#"
As of AugusL 2013, C8uA had 67 accounLs recelvable, whlch had a LoLal balance of $2.916 mllllon,
where $2.334 mllllon ln balances were more Lhan 90 days overdue. We revlewed all 67 accounLs.
C8uA omclals advlsed several debLors provlded assurances LhaL accounLs would be made currenL.
1hese accounLs LoLaled $730,091. C8uA furLher lndlcaLed LhaL $36,746 owed for more Lhan one
year would be wrluen o.
1he remalnlng $2.109 mllllon was relaLed Lo accounLs of Lhe Lmplre SLaLe uevelopmenL
Corporauon (LSuC) and Lhe Lake lacld WlnLer SporLs Commluee, a noL-for-proL organlzauon.
Cf Lhls amounL, $1.7 mllllon was orlglnally promlsed ln 2009 by a local noL-for-proL organlzauon
from a granL lL would recelve from LSuC. Powever, LSuC has held up paymenL of Lhls granL
because Lhe noL-for-proL organlzauon dld noL le lLs annual reporLs. Whlle Lhe organlzauon
has now led Lhese reporLs, Lhe SLaLe ulvlslon of Lhe 8udgeL (uC8) has noL released Lhese granL
funds. AnoLher $271,830 was due from Lhe Lake lacld WlnLer SporLs Commluee from 2009
and 2010. AL our closlng conference, C8uA omclals advlsed LhaL wlLhouL Lhls granL, lL lncurred
operaung expenses whlch had Lo be pald from lLs LCC and LhaL lL was awalung collecuon of Lhls
amounL Lo pay down lLs lnLeresL bearlng debL. (ln response Lo our dra audlL reporL, C8uA
omclals lndlcaLed Lhey recelved Lhe $1.7 mllllon from uC8 on Aprll 8, 2014.)
BC57*&'M= 1&22"8*=: We are pleased LhaL Lhe funds were recelved shorLly aer we lssued our
dra reporL.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> ##
AnoLher $123,781 ls owed by LSuC for Lhe consLrucuon of Lhe Lake lacld Convenuon CenLer.
We were advlsed Lhls amounL ls noL collecuble, buL C8uA has noL wrluen lL o. 1he remalnlng
$13,000 was charged Lo LSuC's accounL buL has noL been pald.
lurLher, C8uA should Lake more proacuve collecuon measures when lL provldes venue vouchers
and uckeLs Lo area buslnesses Lo sell on lLs behalf. 1he buslnesses sell Lhe vouchers and uckeLs aL
a dlscounLed value and keep an agreed upon amounL wlLh Lhe balance due Lo C8uA. ln one case,
8elleayre had an agreemenL wlLh an area skl shop durlng scal 2012-13 Lo sell dlscounLed uckeLs
redeemable on speclc days. 8elleayre lssued 1,300 uckeL vouchers Lo Lhls skl shop, and C8uA
recelved paymenL for only 1,173 uckeLs LoLallng $33,190. Powever, C8uA dld noL blll Lhe shop
unul aer Lhe purchasers acLually redeemed Lhe uckeLs aL 8elleayre. C8uA dld noL requlre Lhe
skl shop Lo reLurn Lhe unsold uckeLs or Lo pay C8uA lLs share of uckeLs sold whlch may noL have
been used. Also, C8uA dld noL auempL Lo accounL for why 327 uckeLs were noL redeemed. 8y
noL dolng so, C8uA cannoL deLermlne wheLher Lhe skl shop gave C8uA all Lhe monles lL collecLed
for uckeLs LhaL were purchased buL never redeemed.
C8uA should have a rouune cycllcal credlL and collecuon process where lL deLermlnes wheLher
accounLs recelvable are collecuble, sends accounLs for collecuon where necessary, wrlLes o
uncollecuble accounLs, and deLermlnes wheLher Lo conunue Lo exLend credlL Lo oLhers. C8uA
dld noL malnLaln evldence LhaL sLa had perlodlcally revlewed wheLher accounLs recelvable were
collecuble. ln response Lo our ndlngs, managemenL lndlcaLed C8uA wlll lmplemenL a formal,
documenLed quarLerly revlew process Lo beuer ensure lL collecLs and properly classles pasL due
accounLs. lalllng Lo Lake proacuve measures Lo collecL accounLs recelvable may conLrlbuLe Lo
C8uA noL havlng sumclenL cash reserves Lo pay lLs bllls.
C.:#6A"" >&<+*$"2
C8uA reporLed havlng $38,373 ln ouLsLandlng employee advances aL Lhe end of scal 2011-12.
C8uA aurlbuLed Lhese amounLs Lo Lhe followlng:
C8uA omclals lndlcaLed LhaL Lhe $36,307 relaung Lo Workers' Compensauon clalms was from
prlor Lo 2007 and have been carrled forward on Lhe nanclal sLaLemenLs slnce Lhen. 1here was
no analysls of Lhls accounL Lo deLermlne Lhe cause of Lhe recelvable and wheLher lL should be
collecLed or wrluen o. AL lLs !une 23, 2013, meeung, Lhe 8oard deLermlned LhaL Lhls amounL
should be lnvesugaLed and dealL wlLh approprlaLely accordlng Lo Lhe ndlngs of LhaL lnvesugauon.
Slmllarly, Lhe 1989 salary advances has been carrled forward wlLhouL examlnauon. 1he $1,473 ln
ouLsLandlng employee Lravel advances was for Lhree employees. WlLh our asslsLance, C8uA ls ln
Lhe process of resolvlng Lhese Lravel advances.
!"#$%#&' (")*%+&,-."+ /)*0"1%% 234,+5%& 67897:;
/)*0"1%% <#,4%0 234,+5%& =9>;?
=@A@ B,0,#1 234,+5%& ?@=
!"#$% &'()'*'
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #!
C8uA should perlodlcally revlew and verlfy Lhe employee advances accounL Lo ensure umely
acuon ls Laken Lo collecL and/or close ouL open lLems, and Lo Lake collecuon acuon where
necessary. 1he resulL of Lhese accounLs noL belng revlewed ls LhaL amounLs due Lo C8uA are noL
collecLed umely and Lhen evenLually become uncollecuble.
678+8.7+4 ;4+8878:
Conslderlng C8uA's conunued sLruggles Lo malnLaln scal balance ln Lhe mldsL of rlslng cosLs
and decllnlng SLaLe approprlauons, lL ls lmperauve LhaL lL employ cosL savlng and sound plannlng
sLraLegles movlng forward. As such, we belleve C8uA should develop, and regularly updaLe, a
reallsuc and deLalled muluyear nanclal plan almed Lowards bulldlng lLs cash reserves. lL should
also esLabllsh ongolng monlLorlng LhaL Lracks Lhe sLaLus and lmpacLs of nanclal plan acuons.
Slnce mosL of C8uA's revenue ls collecLed ln Lhe wlnLer monLhs, Lhls underscores Lhe need for
C8uA Lo budgeL lLs monLhly needs upfronL and save proLs durlng peak perlods. Whlle C8uA
develops four-year budgeLs, Lhey are noL an eecuve Lool for managlng spendlng and conLrolllng
borrowlng because Lhey do noL accuraLely esumaLe revenues and expendlLures. uurlng scal
years 2008-09 Lhrough 2012-13, C8uA's budgeLs over-pro[ecLed revenues by $7.1 mllllon and
under-pro[ecLed operaung expenses by $18.3 mllllon compared Lo acLual resulLs.
(C8uA replled Lo our dra audlL reporL LhaL lLs revenues were over pro[ecLed $3.6 mllllon and
expenses were under-pro[ecLed $13.4 mllllon durlng Lhe same perlod of ume. 1he response
also sLaLes LhaL preparlng Lhe budgeL ls a challenglng feaL ln llghL of Lhe need Lo prepare a aL"
budgeL per Lhe requesL of sLaLe budgeL makers. All budgeL supporL, lncludlng assumpuons,
documenLauon, and pro[ecuons, ls malnLalned by Lhe ulrecLor of llnance.)
BC57*&'M= 1&22"8*=: We revlewed our work papers and malnLaln LhaL Lhe amounLs ln our
audlL reporL are correcL for operaung revenues and expenses. Powever, even uslng C8uA's
amounLs lLs esumaLes were o by several mllllon dollars ln boLh revenues and expenses. 1hls
mauer was reporLed Lo C8uA omclals ln our prellmlnary ndlngs so Lhelr sLaLemenL LhaL Lhey are
unaware of whaL documenLauon was revlewed Lo come Lo such gures" ls noL accuraLe. ln lLs
response, C8uA also sLaLes lL has documenLs Lo supporL lLs budgeL. Powever, when asked for such
documenLauon durlng Lhe audlL, Lhe ulrecLor of llnance Lold us Lhere was no documenLauon Lo
supporL Lhe budgeL for any of Lhe Lhree scal years revlewed.
lurLhermore, C8uA's scal 2010-11 budgeL had a neL $800,141 declL even Lhough pursuanL
Lo Secuon 2613 of Lhe A Law C8uA ls requlred Lo submlL a budgeL wlLhouL a declL Lo Lhe
1own of norLh Llba ark ulsLrlcL for lLs approval each year. We asked managemenL Lo provlde
supporL for Lhe revenue and expense daLa on C8uA's budgeLs, lncludlng Lhe assumpuons Lhey
used when developlng Lhe gures. 1he CompLroller's regulauons (2 n?C88 arL 203) requlre
LhaL agencles develop budgeLs and LhaL Lhey reLaln Lhe supporL for Lhelr assumpuons. Powever,
C8uA managemenL responded LhaL Lhey do noL malnLaln documenLauon Lo supporL Lhelr budgeL
gures.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #$
Clven lLs cash slLuauon, lL ls lmporLanL for C8uA Lo scruunlze all operaung expenses Lo ldenufy
any non-mlsslon crlucal spendlng LhaL could be reduced or ellmlnaLed. ln scal 2008-09, C8uA
prepared a nanclal plan (lan) aL Lhe Covernor's requesL whlch lndlcaLed lL was ln Lhe process of
assesslng lLs organlzauonal sLrucLure and spendlng. AlLhough Lhe lan menuoned some posslble
cosL-savlng measures, lL dld noL provlde deLalled sLeps for achlevlng long-Lerm solvency.
uurlng lLs quarLerly meeungs, C8uA's 8oard revlews lnLernal proL/loss sLaLemenLs (SLaLemenLs)
generaLed by Lhe llnance ulrecLor. We revlewed Lhese SLaLemenLs for Lhe Lhree scal years
ended March 31, 2012, and noLed LhaL more Lhan half of C8uA's venues lose money, and only
Core, WhlLeface and Lhe C8uA SLore had proLs. We also noLed LhaL C8uA does noL allocaLe
lndlrecL cosLs (ranglng from $6 mllllon Lo $7.9 mllllon annually durlng Lhe Lhree years) Lo venues
when calculaung Lhelr proLablllLy. Whlle mlnuLes from a lebruary 2009 8oard meeung show
LhaL members dlscussed Lhe need Lo do a Lhorough proLablllLy assessmenL of all C8uA venues,
lncludlng Lhe lndlrecL cosLs assoclaLed wlLh each, Lhere ls no evldence LhaL Lhls occurred.
ManagemenL lndlcaLed C8uA has noL formally performed a Lop-Lo-bouom organlzauonal
sLrucLure and spendlng revlew Lo ldenufy cosL-conLalnmenL opporLunlues.
AL our closlng conference, C8uA's managemenL advlsed LhaL lL ls well aware LhaL some of lLs
venues conunually operaLe aL a loss. Powever, Lhey conslder C8uA a famlly," and Lhe proLable
unlLs carry Lhe unproLable unlLs. neverLheless, we urge C8uA Lo revlslL lLs posluon on venues
whlch repeaLedly lose money.
ln response Lo our prellmlnary ndlngs, omclals lndlcaLed LhaL lL ls unreallsuc LhaL a muluyear
plan or an ongolng budgeL could help C8uA resolve lLs annual nanclal sLruggles. 1hey lndlcaLed
LhaL Lhey develop annual budgeLs and muluyear plans annually based on dlrecuon from uC8
along wlLh prlor performance. Whlle no slmple x may exlsL, we belleve C8uA could Lake
proacuve measures Lo beuer prepare for lLs fuLure cash needs. 1hls lncludes developlng more
reallsuc and supporLable muluyear plans almed Loward bulldlng sumclenL fuLure cash reserves.
WlLhouL sumclenL cash reserves, any unforeseen clrcumsLance, such as a delay ln governmenL
approprlauons and granLs or equlpmenL breakdown, may severely lnhlblL C8uA from meeung lLs
nanclal obllgauons.
C8uA's 8oard and managemenL should collecuvely have Lhe skllls, knowledge and experlence
Lo do a beuer [ob of esumaung revenues and expendlLures. lssues such as Lhe weaLher and
Lhe SLaLe's budgeL have been and wlll conunue Lo be parL of C8uA's buslness envlronmenL. lL ls
lmporLanL LhaL C8uA omclals develop a formal plan LhaL can be lmplemenLed when condluons
change LhaL lmpacL C8uA's operauons.
?".&22"85+<&8=
1. LsLabllsh and follow procedures for Lhe LCC whlch, aL a mlnlmum:
- uene requlremenLs for selecung a LCC bank and documenung Lhe assoclaLed declslon
maklng,
- uocumenL why avallable cash balances could noL cover Lhe LCC charges,
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #(
- uocumenL approvals for each use, and reporL each use Lo Lhe 8oard,
- Lnsure Lhe LCC ls prompLly repald, and
- 1rack Lhe ouLsLandlng balances LhaL should be repald from speclc granL relmbursemenLs.
2. LsLabllsh and follow procedures for Lhe corporaLe sponsorshlps whlch, aL a mlnlmum:
- uevelop conslsLenL evaluauon procedures Lo deLermlne wheLher a sponsorshlp ls
beneclal for C8uA, and reLaln documenLauon of Lhe evaluauon,
- 1rack Lo ensure all ln-klnd Lrade lLems due Lo C8uA Lhrough sponsorshlp agreemenLs are
recelved and used for an C8uA buslness purpose, and

(C8uA omclals replled Lo our dra reporL LhaL lL agrees LhaL Lhe Lracklng of ln-klnd
goods needs Lo be more sLrlngenL and lmplemenLed a formallzed process Lhrough Lhe
C8uA CorporaLe uevelopmenL Croup.)
- 1rack C8uA's sponsorshlp responslblllues Lo ensure C8uA does noL compensaLe sponsors
beyond Lhe Lerms of Lhelr agreemenLs.
3. Lnsure all accounLs recelvable are revlewed perlodlcally (e.g., quarLerly) Lo deLermlne lf older
accounLs are sull collecuble or should be wrluen o. 8eLaln documenLauon of Lhese revlews
and any amounLs LhaL are wrluen o.
4. ConLacL uC8 Lo deLermlne Lhe sLaLus of lLs accounLs recelvable due from LSuC.
(C8uA omclals replled Lo our dra audlL reporL LhaL Lhe $1.7 mllllon was recelved.)
3. Lnsure LhaL employee advances are reconclled and any amounLs due are recovered ln a umely
manner. lf an employee does noL accounL for or reLurn Lhe advance, Lake acuon Lo recover Lhe
amounL due.
6. uevelop a more accuraLe meLhod for esumaung expense and revenue amounLs used ln Lhe
muluyear nanclal plan Lo ensure LhaL Lhe budgeLs are balanced, operaung expenses are
closely scruunlzed durlng Lhe year, and esumaLes are revlewed Lo deLermlne LhaL Lhey are sull
valld. MalnLaln supporL for budgeL assumpuons and calculauons as requlred by Lhe new ?ork
Code 8ules and 8egulauons.
7. ConducL a Lop-Lo-bouom revlew of C8uA's organlzauon and spendlng Lo ldenufy cosL-
conLalnmenL opporLunlues.
8. 8evlew proLablllLy by venue and conslder ad[usung operauons aL venues whlch repeaLedly
lose money.
FG3"857*C'"=
We found C8uA could Lake cerLaln sLeps Lo lmprove accounLablllLy for lLs expenses and beuer
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #)
manage spendlng. Speclcally, lL needs Lo lmprove lLs payroll reporung pracuces. We also found
LhaL lL used resLrlcuve pracuces ln some of lLs procuremenLs, whlch undermlned Lhe lnLenL of
Lrue compeuuon. ln oLher lnsLances, lL remalned ln unproLable agreemenLs, spenL beyond lLs
means, and dld noL use ouLslde fundlng as lnLended. 1o beuer ensure lL can conunue meeung lLs
nanclal obllgauons, lL should address Lhese lssues.
/+A06##
8ased on a sample of 30 employees, we found LhaL C8uA accuraLely reporLs acLual salarles pald
Lo Lhe SLaLe's ubllc AuLhorlues 8eporung lnformauon SysLem (A8lS) as requlred. We also found
lL generally reporLed payroll lnformauon umely. Powever, we found C8uA dld noL properly reporL
base salarles for hourly workers and dld noL separaLely reporL employees' hollday pay Lo A8lS
as requlred.
SLaLe publlc auLhorlues are requlred Lo annually reporL speclc lnformauon abouL all sLa Lo
A8lS. 1hls lncludes Lhelr base yearly and acLual salarles pald regardless of wheLher Lhey work Lhe
enure year. When calculaung each hourly employee's base yearly salary, auLhorlues are expecLed
Lo muluply Lhe hourly pay raLe by Lhe acLual number of regular hours an employee worked
durlng Lhe year. SLarung uecember 2010, publlc auLhorlues have also been requlred Lo reporL
all overume, performance bonuses, exLra pay, and any oLher compensauon recelved by each
employee as reporLed on Lhelr W-2 Lax sLaLemenL. A8lS auLomaucally calculaLes employees'
LoLal compensauon pald by addlng Lhe reporLed exLra pay elds, lncludlng hollday pay, Lo salary
pald.
uurlng our Lesung, we found C8uA dld noL use Lhe correcL meLhod for calculaung hourly
employees' base yearly salarles. When calculaung employees' yearly base salarles, C8uA groups
Lhem under speclc [ob caLegorles, and Lhen muluplles a seL number of hours by Lhe [ob caLegory
wage raLe. under Lhls meLhod, Lwo employees ln Lhe same caLegory wlll have Lhe same base
yearly salary regardless of Lhe hours Lhey acLually worked.
We LesLed wheLher C8uA properly reporLed 30 sampled employees (16 full-ume and 14 parL-
ume) Lo A8lS. Whlle C8uA correcLly reporLed Lhelr LoLal wages pald, lL dld noL separaLely
reporL any of Lhelr hollday pay as requlred. 8ased on C8uA's payroll records, 23 of Lhe sampled
employees recelved hollday pay LoLallng approxlmaLely $30,834 for 1,008 hours worked ln scal
2012-13, lncludlng Lwo employees who earned $3,383 and $4,179, respecuvely, ln hollday pay.
1he A8lS Pandbook sLaLes LhaL for LoLal compensauon Lhe amounL calculaLed should maLch Lhe
employees' W-2 amounL.
ln addluon, when revlewlng C8uA's payroll pracuces, we noLed C8uA dld noL have a pollcy
sLaung whlch employees are requlred Lo work holldays, and whaL documenLauon ls requlred.
ManagemenL lndlcaLed C8uA wlll updaLe lLs procedures and beuer documenL preapproval of
hollday work. lurLher, Lhey lndlcaLed A8lS requlremenLs are someumes confuslng. Lven so,
Lhey lndlcaLed C8uA wlll sLrlve Lo meeL Lhem ln Lhe fuLure. WlLhouL adequaLe lnformauon abouL
base salarles and exLra pay, C8uA may have a more dlmculL ume when budgeung and managlng
payroll spendlng. Also, SLaLe declslon makers may lack sumclenL daLa Lo make lnformed plannlng
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #*
and pollcy declslons.
We also found C8uA had 23 names LhaL appeared on Lhe payroll Lwlce. We revlewed personnel
lnformauon and concluded LhaL for 13 of Lhese palrs, Lhere were Lwo dlerenL people on Lhe
payroll. lor 12 oLher palrs, Lhe llsungs were for Lhe same person, usually when a person moved
from a parL-ume posluon Lo a full-ume posluon (or vlce versus). ln 23 of Lhe 23 cases, Lhere were
Lwo enLrles ln Lhe A8lS daLabase. 1o lmprove clarlLy, C8uA should only reporL an lndlvldual once
ln Lhe posluon held aL Lhe end of Lhe scal perlod reporLed.
/06$?0"."*% +*& 96*%0+$1*-
We revlewed a [udgmenLal sample of 29 procuremenLs LoLallng $8.2 mllllon Lo deLermlne lf C8uA
followed lLs procuremenL procedures. We ldenued 11 procuremenLs LoLallng $427,000 LhaL
were noL compeuuvely bld. AlLhough C8uA's purchaslng pollcy requlres a record documenung
Lhe declslon Lo walve compeuuon, none was provlded. We also found C8uA dld noL have any
conLrols over Lhe modlcauons Lo conLracL amounLs and Lerms.
ln one case, a conLracLor was awarded a Lwo-year conLracL LhaL pald $33,040 ln each year. 1he
conLracL ended ln 2009. C8uA omclals renewed Lhls conLracL annually Lhereaer wlLhouL seeklng
compeuuon or negouaung Lhe cosL of Lhe addluonal servlces lnLo Lhe conLracL. C8uA pald Lhls
conLracLor an addluonal $1.8 mllllon beLween Aprll 1, 2010, and March 31, 2013, for servlces
ouLslde Lhe scope of Lhe conLracL. 1hese addluonal servlces should have been separaLely bld.
C8uA omclals Lold us aL Lhe closlng conference LhaL when Lhe conLracL explred ln 2013, Lhe new
conLracL was awarded Lhrough a compeuuve process, whlch selecLed Lhe same conLracLor. 1hey
also lndlcaLed LhaL Lhe new conLracL requlres LhaL any work ouLslde Lhe scope of Lhe conLracL be
compeuuvely awarded accordlng Lo C8uA's procuremenL procedures.
We revlewed Lhe conLracLs for C8uA's food and beverage concesslons aL Core, WhlLeface, ML.
van Poevenberg, Lhe Clymplc [umplng complex, and Lake lacld faclllues, as follows:
- !uly 2004 ve-year conLracL
- !uly 2009 Lwo-year exLenslon agreemenL
- !uly 2011 Len-year compeuuve conLracL
We found Lhe 2011 conLracL was compeuuvely bld, however, we quesuon Lhe clause ln Lhe 2009
exLenslon agreemenL requlrlng C8uA Lo make $300,000 ln leasehold lmprovemenLs whlch ln
prevlous conLracLs were Lhe responslblllLy of Lhe conLracLor. We noLed LhaL Lhe 2004 conLracL
requlred Lhe conLracLor Lo make up Lo $1.123 mllllon ln leasehold lmprovemenLs, fully amoruzed
by !une 2009. 1he 2011-21 Len-year conLracL requlred Lhe conLracLor Lo make up Lo $3 mllllon
ln leasehold lmprovemenLs. 8oard mlnuLes from May 2009 lnclude a dlscusslon of Lhe $300,000
lnvesLmenL and noLed LhaL C8uA dld noL have Lhe funds Lo lnvesL. 1he mlnuLes lndlcaLed LhaL
C8uA would have Lo borrow funds, buL clalmed Lhe lmprovemenLs were needed Lo lmprove
revenues from Lhe concesslons. C8uA dld noL have any documenLs Lo supporL Lhe lmprovemenLs
LhaL were made. We quesuon C8uA's [udgmenL ln LhaL lL had no funds Lo make Lhls lnvesLmenL,
and LhaL such lnvesLmenLs should have conunued Lo be Lhe conLracLor's responslblllLy.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #+
lurLhermore, C8uA negouaLed solely wlLh Lhls same conLracLor Lo Lake over 8elleayre skl renLal
equlpmenL concesslons for Lhe 2013-14 skl season. 8elleayre prevlously managed Lhe skl renLal
funcuon dlrecLly wlLh lLs own employees. C8uA dld noL seek or conslder any oLher proposals. Cn
CcLober 11, 2013, C8uA amended Lhe Len-year conLracL Lo glve Lhe conLracLor responslblllLy for
managlng 8elleayre's skl renLal concesslons.
C8uA omclals clalmed Lhe change was necessary because 8elleayre's skl renLal equlpmenL was
ln poor condluon, and C8uA was unable Lo upgrade lL wlLhouL ouLslde help. under Lhe conLracL
amendmenL, Lhe conLracLor ls requlred Lo lnvesL up Lo $1.3 mllllon aL 8elleayre, lncludlng upgradlng
Lhe skl renLal equlpmenL. Clven lLs long-sLandlng worklng relauonshlp wlLh Lhls vendor, we belleve
C8uA should ensure any conLracL modlcauons and/or exLenslons lnvolvlng Lhls conLracLor are
cosL-eecuve, ln Lhe besL lnLeresL of Lhe AuLhorlLy and aL arm's-lengLh, by seeklng compeuuon
before maklng such arrangemenLs. WlLhouL an open, compeuuve process for procurlng revenue-
generaung concesslonalre servlces, C8uA may noL obLaln Lhe mosL proLable arrangemenLs
posslble. We noLe LhaL C8uA's rocuremenL Culdellnes, Cperauve ollcy and lnsLrucuons sLaLe
LhaL conLracLs may be awarded on a non-compeuuve basls only where Lhe CLC or hls deslgnee
makes a wrluen deLermlnauon LhaL Lhe umely procuremenL of Lhe goods or servlces precludes
selecuon of a conLracLor pursuanL Lo a compeuuve process or Lhe conLracLor has unlque or
excepuonally scarce quallcauons or experlence. We were noL provlded a wrluen deLermlnauon
LhaL a walver was approprlaLe ln Lhls clrcumsLance.
We also revlewed Lhe conLracL wlLh Lhe 8elleayre ConservaLory (ConservaLory) whlch C8uA
conunued Lo honor when Lhe ueparLmenL of LnvlronmenLal Conservauon Lransferred 8elleayre
Lo C8uA ln november 2012. 1he ConservaLory promoLes and manages concerLs aL Lhe skl cenLer.
8ased on Lhe exlsung conLracL Lerms, C8uA ls responslble for semng up Lhe sLage and provldlng
securlLy for shows. C8uA also has Lo provlde Lhe ConservaLory wlLh free omce space year-round
(lncludlng paylng for uullues and malnLenance) and malnLaln Lhe grounds. 1he ConservaLory
recrulLs and pays for Lhe enLerLalnmenL, arranges for Lhe lnsLallauon of Lhe LenL coverlng Lhe
sLage and Lhe show sound, llghung, and seaung. uurlng Lhe 2013 8elleayre concerL serles LhaL
ended ln AugusL 2013, one auLo show and 13 concerLs Look place. 1he ConservaLory charged
admlsslon for Lhese shows, buL shared none of Lhls revenue wlLh C8uA. C8uA omclals expressed
concerns abouL Lhls arrangemenL. C8uA omclals advlsed us Lhe ConservaLory had already
recrulLed Lhe varlous muslcal arusLs and publlclzed Lhe evenLs for 2013 when C8uA Look over, so
lL was noL pracucal Lo end Lhe conLracL. C8uA should conunue Lo pursue a falr arrangemenL wlLh
Lhe ConservaLory whlch, aL a mlnlmum, covers C8uA's cosLs assoclaLed wlLh Lhese evenLs.
C8uA also has conLracLs wlLh Clymplc aLhleLes Lo promoLe C8uA and Lhe Lake lacld reglon.
Among oLher Lhlngs, Lhe conLracLs speclfy Lhe aLhleLe musL wear C8uA's logo aL wlnLer sporung
evenLs and make personal promouonal appearances. ln reLurn, Lhe aLhleLes recelve nanclal
compensauon and can use C8uA's faclllues for Lralnlng. C8uA awarded $148,300 Lo aLhleLes
durlng Lhe Lhree scal years ended March 31, 2013.
C8uA publlclzes LhaL lL sponsors aLhleLes, however, lL does noL have formal crlLerla for selecung
who wlll recelve C8uA supporL. ManagemenL Lold us candldaLes musL be from (or currenLly
reslde ln) Lhe reglon, compeLe ln a wlnLer Clymplc sporL, be a member of a nauonal World Cup
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #'
Leam, and achleve noLable accompllshmenLs aL compeuuve evenLs. Lach candldaLe musL submlL
a leuer of lnLeresL and lnLervlew wlLh C8uA managemenL. C8uA senlor managemenL makes
Lhe nal selecuon declslon and deLermlnes Lhe amounLs for each of Lhe agreemenLs. 8y noL
publlclzlng Lhe avallablllLy of fundlng and noL havlng formal award crlLerla, Lhese conLracLs are less
LransparenL Lhan Lhose awarded under C8uA's ordlnary procuremenL procedures. C8uA omclals
replled Lo our prellmlnary ndlngs LhaL Lhey should noL publlclze aLhleuc fundlng opporLunlues
because lL only sponsors ellLe aLhleLes. 1hey furLher belleve Lhe beneL C8uA recelves from
Lhese arrangemenLs ls greaLer Lhan whaL lL spends.
8egardlng procuremenLs, C8uA omclals advlsed us LhaL movlng forward, Lhey wlll Lhoroughly
revlew all procuremenLs Lo ensure procuremenL procedures are properly followed.
9+:)%+# D"+2"2
A Law Secuon 2611(13) requlres C8uA Lo obLaln ubllc AuLhorlues ConLrol 8oard (AC8)
approval before conLracung wlLh any publlc corporauon for paylng debL Lhrough a lease-purchase
agreemenL for caplLal lmprovemenLs. As parL of lLs revlew, AC8 assesses wheLher a publlc
auLhorlLy's funds or revenues can cover proposed llablllues before Lhey are lncurred. Powever,
C8uA dld noL seek AC8 approval for any of Lhe seven caplLal lease-purchase agreemenLs lL
enLered lnLo slnce 2007. ln addluon, C8uA dld noL seek compeuuon when obLalnlng Lhese leases
as requlred by lLs rocuremenL ollcy.
Among Lhese agreemenLs was a $3.6 mllllon, 13-year lease-purchase agreemenL wlLh Lhe ower
AuLhorlLy of Lhe SLaLe of new ?ork (n?A) for energy-emclenL snowmaklng compressors aL Core
and WhlLeface. 1he Cmce of Ceneral Servlces (CCS), as Lhe lease admlnlsLraLor, makes Lhe
monLhly lease paymenL Lo n?A on C8uA's behalf. Slnce Lhe lease sLarLed ln uecember 2008,
CCS pald n?A $1.3 mllllon of lease paymenLs for C8uA. Powever, C8uA has noL relmbursed
CCS and ls currenLly CCS's largesL accounL recelvable.
ln response Lo our prellmlnary ndlngs, C8uA omclals lndlcaLed LhaL AC8 approval was noL
requlred. We dlsagree, and C8uA would beneL by followlng Lhe approval requlremenLs of Lhls
provlslon. 1he AC8 revlew serves as an lndependenL check of C8uA's ablllLy Lo Lake on addluonal
debL. lf C8uA had soughL AC8 approval for Lhe n?A lease-purchase agreemenL, lL mlghL noL
have been allowed Lo lncur Lhls debL glven lLs cash slLuauon.
!%+%" 9+:)%+# >::06:0)+16*2
under Secuon 93 of Lhe SLaLe llnance Law, uC8 approval musL be soughL before SLaLe caplLal
approprlauons can be reallocaLed Lo caplLal pro[ecLs oLher Lhan Lhose orlglnally approved.
Powever, we found C8uA spenL over $437,000 of n? Works fundlng on seven unapproved pro[ecLs
and dld noL provlde evldence LhaL Lhe approprlaLe approvals were soughL before dolng so.
C8uA has seL up unlque codes Lo Lrack spendlng on each of lLs caplLal pro[ecLs. Powever, lL dld
noL ue Lhe pro[ecL codes Lo speclc fundlng sources durlng our scope perlod. 1herefore, lL could
noL easlly accounL for lLs use of n? Works fundlng. SLarung ln scal 2013-14, omclals lndlcaLed
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> #,
Lhey more rlgorously Lrack how C8uA uses SLaLe caplLal fundlng. C8uA also lndlcaLed LhaL n?
Works fundlng was used for unexpecLed emergencles lnsLead of whaL was orlglnally auLhorlzed.
Powever, we noLed LhaL over half of Lhe unapproved spendlng was noL for emergencles. lor
example, C8uA used $232,000 of n? Works fundlng Lo renovaLe a lodge resLauranL and reLall
shop aL Core and Lo consLrucL an observauon deck aL WhlLeface wlLhouL documenung LhaL Lhe
approprlaLe approvals were obLalned prlor Lo redlrecung funds Lo Lhese oLher pro[ecLs.
uurlng C8uA's scal 2011-12 and 2012-13 nanclal audlLs, C8uA's lndependenL accounung rm
recommended lL develop a formal caplLallzauon pollcy whlch denes Lhe crlLerla for classlfylng
lLems as caplLal asseLs. We concur wlLh Lhelr concluslon. Such a denluon should lnclude a
mlnlmum dollar amounL and useful llfe (e.g., ve or seven years). Cenerally, lLems whlch do noL
meeL an agency's denluon of caplLal asseLs are consldered operaung expenses. Whlle C8uA has
seL up unlque codes Lo Lrack lndlvldual pro[ecLs, we noLed cerLaln pro[ecL dlsbursemenLs funded
by Lhe n? Works dld noL appear Lo be ellglble caplLal cosLs. 1o lllusLraLe, we found dlsbursemenLs
LoLallng $3,994 for adveruslng, $16,087 for fuel, and $30,000 for bobsled repalrs conLalned wlLhln
Lhese pro[ecL codes. WlLhouL a formal caplLal cosL denluon, Lhere ls an lncreased rlsk SLaLe
caplLal fundlng may noL be spenL as lnLended.
?".&22"85+<&8=
9. Adhere Lo A8lS payroll reporung guldellnes for calculaung annuallzed base salarles and
separaLely reporung hollday pay.
10. lmplemenL a pollcy sLaung whlch employees are requlred Lo work holldays, and whaL
documenLauon ls requlred. CompensaLe non-represenLed employees who work holldays by
granung compensaLory ume.
11. Award conLracLs on a compeuuve basls Lo Lhe exLenL posslble. lully documenL any walvers
permlmng non-compeuuve procuremenLs lncludlng Lhe reason(s) for Lhe declslon.
(C8uA omclals agreed wlLh Lhls recommendauon and lndlcaLed Lhey wlll Lake acuon Lo
lmplemenL lL.)
12. CbLaln AC8 approval before enLerlng lnLo any lease-purchase agreemenL for caplLal
lmprovemenLs.
13. Lnsure SLaLe caplLal approprlauons are used for Lhelr auLhorlzed purpose and LhaL Lhe
approprlaLe approvals are soughL when funds are reallocaLed Lo oLher pro[ecLs.
14. lormally dene whaL qualles as a caplLal cosL and obLaln 8oard approval for Lhe denluon.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !"
BC57* ).&3" +85 9"*0&5&4&:>
We audlLed C8uA Lo deLermlne wheLher lL has esLabllshed adequaLe conLrols over Lhe followlng
nanclal managemenL funcuons: cash and granL managemenL, revenue and collecuon acuvlues,
procuremenL and conLracung, payroll, and nanclal plannlng and budgeung. 1he audlL covers Lhe
perlod Aprll 1, 2010, Lhrough SepLember 26, 2013. Cur deLalled Lesung of Lransacuons covered
from Aprll 1, 2010, Lhrough SepLember 13, 2013. Powever, for Lhe dlscusslon of C8uA's nances,
lL was necessary Lo expand Lhe audlL perlod Lo lnclude SLaLe scal year 2007-08.
We obLalned an overvlew of C8uA's nanclal managemenL pracuces Lhrough lnqulry, analyucal
procedures, observauons, and Lhe lnspecuon of records and reporLs. ln Lhls process, we revlewed
and analyzed varlous nanclal-relaLed lnformauon (lncludlng C8uA's recenL audlLed nanclal
sLaLemenLs and A8lS reporLs), and LesLed selecLed Lransacuons for compllance wlLh esLabllshed
procedures and sLaLuLory requlremenLs. ln addluon, we lnLervlewed C8uA omclals and sLa
regardlng Lhe processes and conLrols.
We revlewed bank sLaLemenLs, Lracklng spreadsheeLs and oLher relevanL nanclal documenLauon,
8oard meeung mlnuLes and LranscrlpLs, and oLher records. ln addluon, we [udgmenLally sampled
30 employees (16 full-ume and 14 parL-ume) of Lhe 284 full-ume and 1,363 seasonal employees
Lo LesL wheLher C8uA properly reporLed Lhelr earnlngs Lo A8lS durlng Lhe perlod Aprll 1, 2012,
Lhrough March 31, 2013. We also revlewed employmenL records and umesheeLs for 23 lndlvlduals
llsLed more Lhan once on Lhe annual reporLs LhaL C8uA submlued Lo A8lS durlng Lhe Lhree scal
years ended March 31, 2013. Also, we revlewed a sample of 29 conLracLs Lo deLermlne lf C8uA
could documenL lf Lhe selecLed vendor was Lhe mosL economlcal and/or approprlaLe avallable.
We revlewed seven corporaLe sponsorshlp agreemenLs Lo deLermlne lf C8uA provlded and
recelved all lLems and servlces lncluded ln Lhose agreemenLs. lurLher, we revlewed C8uA's
sysLem of Lracklng Lhese ln-klnd lLems Lo deLermlne lf all lLems recelved by C8uA were used for
buslness purposes.
We conducLed our performance audlL ln accordance wlLh generally accepLed governmenL audlung
sLandards. 1hose sLandards requlre LhaL we plan and perform Lhe audlL Lo obLaln sumclenL,
approprlaLe evldence Lo provlde a reasonable basls for our ndlngs and concluslons based on
our audlL ob[ecuves. We belleve LhaL Lhe evldence obLalned provldes a reasonable basls for our
ndlngs and concluslons based on our audlL ob[ecuves.
ln addluon Lo belng Lhe SLaLe AudlLor, Lhe CompLroller performs cerLaln oLher consuLuuonally and
sLaLuLorlly mandaLed duues as Lhe chlef scal omcer of new ?ork SLaLe. 1hese lnclude operaung
Lhe SLaLe's accounung sysLem, preparlng Lhe SLaLe's nanclal sLaLemenLs, and approvlng SLaLe
conLracLs, refunds, and oLher paymenLs. ln addluon, Lhe CompLroller appolnLs members Lo
cerLaln boards, commlsslons and publlc auLhorlues, some of whom have mlnorlLy voung rlghLs.
1hese duues may be consldered managemenL funcuons for purposes of evaluaung organlzauonal
lndependence under generally accepLed governmenL audlung sLandards. ln our oplnlon, Lhese
funcuons do noL aecL our ablllLy Lo conducL lndependenL audlLs of program performance.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !#
BC*0&'7*>
1he audlL was performed pursuanL Lo Lhe SLaLe CompLroller's auLhorlLy under Arucle x, Secuon 3,
of Lhe SLaLe ConsuLuuon and Secuon 2803 of Lhe ubllc AuLhorlues Law.
?"3&'<8: ?"NC7'"2"8*=
A dra copy of Lhls reporL was provlded Lo C8uA omclals for Lhelr revlew and commenLs. 1helr
commenLs were consldered ln preparlng Lhls nal reporL and are auached ln Lhelr enureLy aL Lhe
end of Lhls reporL. Cur re[olnders Lo cerLaln C8uA commenLs are lncluded ln Lhls reporL's SLaLe
CompLroller's CommenLs.
WlLhln 90 days aer nal release of Lhls reporL, as requlred by Secuon 170 of Lhe Lxecuuve Law,
Lhe Chalrman of Lhe Clymplc 8eglonal uevelopmenL AuLhorlLy shall reporL Lo Lhe Covernor, Lhe
SLaLe CompLroller, and Lhe leaders of Lhe LeglslaLure and scal commluees, advlslng whaL sLeps
were Laken Lo lmplemenL Lhe recommendauons conLalned hereln, and where recommendauons
were noL lmplemenLed, Lhe reasons why.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !!
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*>
Andrew A. Sanllllppo, Lxecuuve uepuLy CompLroller
318-474-4393, asanllppo[osc.sLaLe.ny.us
1lna klm, uepuLy CompLroller
318-473-3396, Lklm[osc.sLaLe.ny.us
8rlan Mason, AsslsLanL CompLroller
318-473-0334, bmason[osc.sLaLe.ny.us
O7=7&8
A Leam of accounLablllLy experLs respecLed for provldlng lnformauon LhaL declslon makers value.
97==7&8
1o lmprove governmenL operauons by conducung lndependenL audlLs, revlews and evaluauons
of new ?ork SLaLe and new ?ork ClLy Laxpayer nanced programs.
1&8*'7EC*&'= *& L07= ?"3&'*
1+'2"8 9+45&8+5&P AudlL ulrecLor
?&E"'* 9"0'0&QP AudlL Manager
9+'( ?"8P AudlL Supervlsor
H'+85&8 ,:5"8P Lxamlner-ln-Charge
R&8+*0+8 H"'8=*"78P SLa Lxamlner
D+>4" 14+=P SLa Lxamlner
?&E"'* S&'8P SLa Lxamlner
)+44> ;"''>, SLa Lxamlner
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !$
B:"8.> 1&22"8*=
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !(
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !)
*
CommenL
1
*
CommenL
2
* See SLaLe CompLroller's CommenLs, age 32.
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !*
*
CommenL
3
*
CommenL
4
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !+
*
CommenL
3
*
CommenL
3
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !'
*
CommenL
6
*
CommenL
6
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> !,
*
CommenL
7
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> $"
*
CommenL
8
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> $#
*
CommenL
9
*
CommenL
10
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> $!
)*+*" 1&23*'&44"'M= 1&22"8*=
1. AlLhough C8uA omclals documenLed LhaL Lhey had conLacLed varlous banks Lo obLaln a
new LCC, Lhere was no formal sollclLauon documenL, such as an 8l, whlch would seL forLh
ln wrlung Lhe servlces requlred and resulL ln a formal response from lnLeresLed vendors.
2. We conunue Lo belleve LhaL Lhe value of Lhe vehlcles provlded by Lhe sponsor should be
based on Lhe annual cosL Lo lease Lhese vehlcles. C8uA does noL own Lhe vehlcles and
ls merely allowed Lo use Lhem for a perlod of ume. ln facL, C8uA's Sponsorshlp-vehlcle
valuauon ln Ceneral Ledger" shows LhaL lL asslgned a monLhly value of $730, whlch an
C8uA omclal Lold us ls Lhe leased value of Lhe vehlcle for one monLh. 8ased on Lhls
lnformauon, C8uA booked $7,300 for one monLh for Len vehlcles. 1hls LoLals $270,000
over Lhree years. We quesuon C8uA's commenLs LhaL ln exchange for Lhese vehlcles,
C8uA provldes uckeLs Lo venues, adveruslng, and overnlghL sLays Lo Lhe sponsor LhaL noL
only [slc] have llule Lo no acLual" cosL Lo Lhe organlzauon." We belleve Lhere ls a value
Lo Lhe uckeLs, adveruslng and overnlghL sLays because C8uA ls glvlng away Lhe use of lLs
faclllues whlch are pald for and malnLalned wlLh revenues earned by C8uA as a publlc
auLhorlLy. lor example, C8uA has Lo pay for Lhe condomlnlum.
3. 1he audlLors were noL provlded documenLauon LhaL Lhe $36,000 of hoLel sLays was for
C8uA employees or oLher buslness purposes. ln facL, C8uA omclals refused Lo provlde
any lnformauon abouL Lhe lndlvlduals LhaL acLually sLayed aL Lhe hoLel or Lhe speclc
reason.
4. Sponsorshlp agreemenLs are conLracLs, and, as such we examlned Lhe records Lo deLermlne
whaL C8uA and Lhe sponsor were requlred Lo provlde. 1he Lerms of Lhe conLracL and
Lhe value of Lhe goods and servlces Lhe sponsor has Lo provlde are developed by C8uA
omclals. 1he audlL resulLs show LhaL Lhe sponsor recelved more value Lhan C8uA. ln
addluon, C8uA could noL [usufy why Lhey dld noL seek compeuuon for a conLracL wlLh a
sponsor when Lhe agreemenL explred ln !uly 2011.
3. We revlsed Lhe reporL based on lnformauon ln Lhe response Lo our dra reporL.
6. ConLrary Lo C8uA's response, no documenLauon was provlded Lo supporL Lhe sLaLemenLs.
1he amounLs ln Lhe audlL reporL are based on C8uA's operaung budgeLs, annual reporLs,
and annual cerued nanclal sLaLemenLs. 1hese documenLs were obLalned from C8uA
durlng Lhe audlL. ln addluon, we lssued prellmlnary ndlngs on Lhls Loplc Lo C8uA omclals
and Lhelr response provlded lnformauon whlch was used ln Lhe preparauon of Lhe dra
audlL reporL.
7. Whlle C8uA provlded a brlef reason why conLracLs are noL always compeuuvely bld,
slLuauons such as emergency procuremenLs or where only one vendor responds musL
be documenLed ln C8uA's procuremenL les aL Lhe ume lL occurs. 1he les should also
conLaln all requlred approvals.
8. C8uA ls a publlc beneL corporauon managed for Lhe beneL of Lhe Laxpayers. As
such, procuremenLs should be made ln an open and compeuuve manner. Powever, ln
respondlng C8uA menuons a long-sLandlng worklng hlsLory wlLh Lhe concesslonalre.."
whlch should noL overrlde Lhe requlremenL Lo glve oLher vendors an opporLunlLy Lo
compeLe for buslness.
9. All of Lhe lease purchase agreemenLs are noL wlLh prlvaLe corporauons. ln facL, Secuon
!"#$%&%#'
@7A7=7&8 &/ )*+*" D&A"'82"8* B..&C8*+E747*> $$
2611 (13) only applles Lo C8uA and requlres AC8 approval of borrowlngs wlLh publlc
corporauons. 1herefore, our concluslon ls correcL because Lhe lease purchase agreemenL
ls wlLh n?A.
10. 1he response Lo Lhe dra reporL does noL accuraLely capLure Lhe changes made Lo Lhls
lssue from Lhe prellmlnary ndlngs reporLs Lo Lhe dra reporL. Speclcally, we lnlually
reporLed LhaL $1.4 mllllon of expenses were noL caplLal. C8uA provlded documenLs and
Lhe amounL was revlsed Lo $76,172 whlch we malnLaln were noL caplLal expenses.