No audit; WCVB offers review

The commissioners asked for an audit.

The visitors bureau provided a review.

In September, the Warren County commissioners proposed taking the county tourism promotion agency (TPA) designation from WCVB. Along with the TPA goes the 3 percent hotel bed tax collected in the county. The commissioners cited a desire for more “efficient utilization” of the bed tax dollars as the reason for the change.

Since then, Commissioner John Bortz said the agency is not “in full compliance with how their financials should be kept.”

Almost two years ago, long before the TPA change proposal was made, the commissioners requested financial information.

The Times Observer made a similar request in November. A report of the 2011-2012 fiscal year by Haines & Company CPAs dated Dec. 3, 2013, was the majority of the information provided as an answer to that request. That document was also provided to the commissioners.

According to the cover page of the document produced by Haines & Company, the conducted analysis of the WCVB finances was a review, not an audit.

“A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole,” according to Haines. “Accordingly, we do not express such an opinion.”

“Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted,” according to Haines.

WCVB Board President Karen Sobkowski said the agency has not had audits conducted for years.

“When we quit receiving state funding… (the director) stated an audit was no longer necessary,” she said. “No one questioned that. That was why the couple of years went by without one.”

Previous audits had cost the agency in excess of $5,000 Sobkowski said. Haines’ 2011-2012 review cost about $2,500. “We did not have a quote from him for an audit, but he said it would be considerably more,” she said.

According to Sobkowski, the commissioners were on board with the review.

In a 2012 meeting with the commissioners, “They said regardless of whether it was a stipulation or not to have an audit, that it would be prudent to do so,” Sobkowski said. “We totally agreed and met with Mr. Haines immediately. Mr. Haines suggested a financial review.”

“The commissioners were aware of this, and were shown the letter he gave us saying what the review entailed, and they were a-okay with it,” she said.

According to a 2007 state addendum to the county code regarding bed tax collection, “An audited report on the income and expenditures incurred by a tourist promotion agency receiving any revenues from the tax authorized under this section shall be submitted annually by the tourist promotion agency to the county commissioners.”

In December, Sobkowski said Haines was working on a 2012-2013 financial report and would have that completed “in about two weeks.”

Review results

According to Haines, the “organization receives approximately 88 percent of its support from state and local governments. It is possible that in the near-term these support programs could cease, adversely impacting the organization and its ability to continue its operations.”

Total revenues for the year ending June 30, 2012 were $161,021. Haines lists “room tax revenue” at $140,739, membership dues of $9,110, and cooperative advertising of $7,124. Sobkowski said the agency has almost 100 members.

On the expense side, Haines shows a total of $206,054, including $142,799 labeled “promotional” and $63,255 as “operational.”

Sobkowski said operational costs include payroll, building, and utilities. Promotional expenses include “advertising and the like.”

She said the director at the time “committed to paying for much, much more than the organization could afford… without the permission or knowledge of the board.”

Haines listed the bureau’s total assets as $705,102, with the Visitors Center building accounting for $590,782 of that.

“Property and equipment are pledged as collateral for long-term debt,” Haines reported.

“The Northwest Savings Bank credit line is secured by the property,” Sobkowski said. “This was created when the property was purchased in Starbrick and the building built.”

“The balance is now slightly over $47,000,” she said. The agency is paying down that debt at $500 each month.

“Throughout our municipal meetings this fall we have made the above information very public, as we wanted everything out in the open,” Sobkowski said. “We have never tried to hide anything. We brought the financial issues we faced to the commissioners’ attention, and followed up with them throughout.”