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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Audit: State Fair Park

Audits


Wisconsin law requires the Legislative Audit Bureau (LAB) perform a yearly audit of State Fair Park in West Allis. The latest analysis is complete following a review of State Fair Park revenue and expenditures, the park’s use of in-kind support, the current status of the Milwaukee Mile racetrack, and the state’s purchase of the Wisconsin Exposition center, located on the Fair park grounds.

First, some good news. During fiscal year 2008-09, revenue exceeded expenditures by $828,000 thanks to increased attendance at the Wisconsin State Fair that led to increased admissions, concessions, and parking revenues. The result is State Fair Park attained positive operating results for the third consecutive year, allowing the park to reduce its accumulated cash deficit on June 30, 2009 to $7.8 million.

The bad news is the deficit reduces funding opportunities for other state programs and reduces the state’s ability to raise revenue from investment earnings. The LAB says State Fair Park must continue to reduce the deficit.

Concerns were raised by the LAB about in-kind support, “businesses providing goods or services to State Fair Park in exchange for admission tickets, parking passes, advertising exposure, and other items.” Though in-kind support can be beneficial to the park, the LAB cautions there is a risk of inappropriateness and notes there are few safeguards in effect to guarantee transparency and accountability.

The LAB examined 122 in-kind agreements from the 2008 and 2009 Wisconsin State Fairs and wrote about its findings:

“In nine instances, a formal written agreement did not exist; instead, the details of the transaction were agreed upon verbally or informally by e-mail. Further, there were inconsistencies between the number of main stage concert tickets provided to businesses and the numbers included in agreements. For example, for the 2008 fair we found that a total of 3,238 main stage concert tickets had been distributed, but documentation in the in-kind support agreements indicate that only 1,450 were to have been provided.”

Another LAB concern: the combination of in-kind support with procurement transactions may have resulted in bidding processes where all businesses may not have had an equal opportunity to participate; in other words, there may have been favoritism. The LAB offers this example:

State Fair Park provided a Milwaukee automobile dealership with storage space on the fairgrounds in 2009, in exchange for a $3,000 credit to purchase a vehicle. State Fair Park used this credit in April 2009 for the purchase of a used vehicle from the dealership. State Fair Park prepared a simplified bid document and made a down payment on the vehicle three days before completing the simplified bid. Officials indicate that State Fair Park had researched online bids before making the down payment but cannot provide supporting documentation. While this in-kind exchange was beneficial for State Fair Park, it may appear as if State Fair Park had intended to purchase a vehicle from this dealership before it obtained the other bids.”


There are problems with managers distributing State fair tickets. The LAB found that “department managers did not submit ticket request forms to the ticket office as required; ticket request forms were not available in 12 of the 22 ticket disbursements reviewed; procedures were not in place to verify the number of tickets requested to a written agreement or other supporting documentation to ensure tickets are being distributed for appropriate purposes; the spreadsheet used to track tickets distributed by managers does not include the business purpose for providing these tickets, limiting its usefulness as a monitoring tool; and accounting staff were unable to reconcile the tracking spreadsheet to the electronic ticket system for the 2008 Wisconsin State Fair. State Fair Park estimated an unreconciled difference of $18,000 remains, indicating that some tickets were likely distributed without a ticket request form.”

Improvements were made to the process, and the LAB determined there was an unreconciled difference of $1,600 remaining it reviewed the 2009 Wisconsin State Fair.


The Milwaukee Mile Racetrack: No national races are being held at the Milwaukee Mile during 2010. State Fair Park projects revenue from racing events will exceed expenditures by $80,900 for the 2010 racing season. This will be offset by track and grandstand improvements. Debt service costs related to the renovation will cost State Fair Park $1.9 million. The LAB has calculated State Fair Park will suffer a net loss on racetrack operations of nearly $2.0 million during 2010.

Wisconsin Exposition Center: The state purchased the facility during December 2009, and State Fair Park assumed ownership during May 2010, anticipating revenue will surpass expenditures during both fiscal year 2009-10 and fiscal year 2010-11.

Recommendations made by the LAB:

State Fair Park should report to the Joint Legislative Audit Committee by March 1, 2011, on steps being taken to improve controls and better monitor the use of in-kind support, steps to improve controls and better monitor the distribution of Wisconsin State Fair tickets by managers, long-term plans for managing the Milwaukee Mile racetrack, and the status of Wisconsin Exposition Center operations.

I commend the outstanding LAB for another thorough review. You can see the full audit here.

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