In March of 2010 an audit of VenuWorks’ contract compliance with the city was completed and provided to the City of Burnsville for the financial operations occurring in 2009. The audit was completed by an independent third party which is fairly typical for any principal-agent model such as this one.
Before we go anywhere please read through the entire audit document yourselves. Here are some highlights:
Each facility is limited to one credit card and that credit card should only be used for travel and emergency use. The Manager had only one credit card but the credit card was being used for non-travel and non-emergency use.
The Executive Director and Business Manager of the BPAC should be the only signers on credit card accounts. The credit card in the name of the BPAC had other individuals as signers.
Credit card statements should be paid monthly to ensure that interest and penalties are not incurred. We noted that two of the three credit card statements selected for testing were not paid on a timely basis.
All credit card statements should be approved by the Executive Director or General Manager of the BPAC. We noted no documentation of approval by the Executive Director of the BPAC on any of the three credit card statements we selected for testing.
Travel and Entertainment:
All three of the expense reports lacked receipts; however, reimbursement was still made.
Petty cash can be used for any purchase under $25. It was noted that purchases were being reimbursed from petty cash that were over the $25 limit.
Conflict of Interest:
Per inquiry of BPAC staff, they indentified one organization that if the BPAC contracted with a potential conflict of interest could arise. During our reading of the contract entered into with this organization, we noted two facility usage agreements that were signed on behalf of the organization by a councilmember of the City. As part of our procedures for the testing of these contracts, we did not determine of a conflict of interest as defined in the Minnesota Statutes actually exists.
This expense reimbursement lacked complete, supporting, and appropriate documentation for the $1,431.82 of reimbursement to the employee. The supporting documentation attached to the request for reimbursement totaled only $1,058.92.
Segregation of Duties and Other Controls:
It was noted that the Executive Director approved his own expense reports.
We noted checks written that only had the Executive Director’s signature and were not signed by a second approved signer. These checks included checks written to the Executive Director and signed by the Executive Director totaling $4,499.
Now would be a good time to mention that most of the staff involved in the issues found in the audit of VenuWorks’ 2009 financial practices have left the company. They include Wolf Larson, the prior Executive Director of the Burnsville Performing Arts Center, the previous Business Manager Susan Eder, among others. I’ll let you ponder whether or not their departures had anything to do with these eventual findings.
As taxpayers in Burnsville what do you think about this audit of VenuWorks’ problems handing the financial side of the Burnsville Performing Arts Center? Do you think that it’s right that the company is still being employed by the city? How about the fact that thousands of dollars went missing due to some pretty unethical operating procedures? Whatever you have to say about VenuWorks and this audit go ahead and let me hear what you have to say!