An audit of the decade-old nonprofit group that manages the Clark County Fairgrounds presents a mixed bag, showing that while the organization is successfully making money, more could be done to safeguard those funds.
The audit says that although the Clark County Fairgrounds Site Management Group has improved its financial controls, it could do a lot more to bolster oversight of the fairgrounds’ revenue-generating activities to better protect the roughly $4 million it takes in each year. The majority of that money — about $3 million — comes from the fair.
Since the creation of the management group in 2004, more money has come from renting facilities, such as the Fairgrounds Exhibition Hall. The fairgrounds management group is tasked with managing the grounds year-round.
The audit, released by the Clark County Auditor’s Office, reports 14 findings along with 23 recommendations to address problem areas. The problems range from cash receipts not being safeguarded properly to former employees having access to the accounting system.
John Morrison, the county’s fair manager, responded to the audit in writing, saying he agreed with the areas of concern.
The fairgrounds management group is reorganizing to emphasize internal controls, he said. Most of the audit findings regard issues that predate Morrison’s role as fair manager, a position he’s held for a year.
“We have already made significant progress since the audit began and will continue our work to address all of the issues on a priority basis over the next 12 months,” he said.
Changes include having the finance manager report directly to the fair manager.
The audit concludes that the site management group has profitably ushered the fairgrounds away from a volunteer, family-run operation to its current status as a professionally managed, multimillion-dollar business. But, with more money comes more responsibility.
Tom Nosack, internal performance auditor for the county, said the fairgrounds management group should do more to track the flow of money.
“There’s a lot of room for improvement,” Nosack said. “But with their (positive) attitude, it’s well within reach to do.”
The audit was the county’s first for the fairgrounds site management group since 2006, when the auditor’s office reviewed how the group manages contracts.
The group was created in 2005, shortly after the Fairgrounds Exhibition Hall was completed, to help manage non-fair revenue, such as the kind generated by the exhibition hall.
Over the years, the fairgrounds has been able to improve its financial standing, but on occasion it has courted controversy in doing so.
In 2012, the fairgrounds awarded Coca-Cola a high-profile and lucrative five-year dedicated sponsorship deal over Pepsi Cola and the Corwin family that distributes the soft drink locally through Ridgefield-based Corwin Beverage Co. For years, the Corwin family had secured their fairgrounds deal with a handshake.
Fairgrounds management has never divulged how much the contract with Coca-Cola is worth, citing a confidentiality agreement with the company. Morrison said it is more than what Corwin Beverage Co. offered.
While contracts between the fairgrounds and its contractors are handled differently now, Nosack said more could still be done to verify financial information. For example, contractors who provide concessions and parking services both self-report revenue.
“We didn’t see anything that told us (revenue) wasn’t being reported correctly,” Nosack said. “But over time, we need to move away from that.”
County Auditor Greg Kimsey in a statement commended the fairgrounds group for working closely with the auditor’s office, saying his office was able to identify problems before they turned serious.
