And for last year had a contractual review of the Sullivan Bimboky and Demse contract.

We began that around the August time period and completed it later in the in the year.

This report here is kind of the summary of that.

In contractual audits, we look at the primary document is the contract in place with the vendor.

And then we look at the financial records and all those things that go along with that.

I will say in this particular one, we did, uh, which is slightly different.

I know I've had some assembly members ask about this uh recently.

Uh we did allow the administration to put a more in-depth summary early on in the report.

So you don't normally see that here, but uh, we did provide that.

So uh I think Mr.

Falsey can probably speak to that uh as we go through here.

Um I don't want to spend too much time because I know there's quite a bit of the dialogue you'll probably have, but um on page four of the audit um is where we start with our individual findings.

Uh the first finding was uh basically summarized as the audited financials not submitted.

We there are no our job as internal auditors to take documents and then audit the the documents against what actually occurred.

When you don't have audited financials, that brings some significant challenges.

Um, and and our auditor who was on this uh spent a great deal of time and effort talking to everybody, did spend uh quite a bit of time uh with the vendor, and they're uh asking questions and trying to be able to get that.

But um contractually mandated, they're supposed to have audited financials so that uh we know how well the the facilities are running, um, what profitability or loss of profitability is going on, where the money is being spent, um, all of those types of things, since this is indeed a these are public facilities, and uh we're we're supposed to be good stewards of that.

So um not having audited financials submitted for them was uh was our what we felt was the most important when we go in findings, we put what we think is the most important one to the least important as we go through there.

So that's why the audited financials are are there in the first thing.

That should be the bedrock of our vendors and running our facilities.

Um I'm just gonna talk about the findings.

Uh let the if you want to ask the administration about their the recommendations or uh management comments, I'll kind of let you go with that.

Or do you want me to speak to them?

So we have you here, Mr.

Falsey.

Um, it's your call really.

It could be that just brief summary by the auditor and then additional information from or it could be you guys choose.

I think it may be most sufficient to let the internal auditor do the full presentation, and then I'll respond.

Thanks.

Okay.

Um so that that was basically the first finding.

The second one is inconsistencies in the contractor's financial records.

Um, the contract administrator, which in that case was Renee.

Um the numbers that were submitted to her did not match the numbers that were in the vendors' financial systems.

So as I said, we had our auditor actually over there working with them, trying to go through to be able to do that.

Normally you would use your audited financials to be able to pull off of when you don't have that, then we like to spend time uh looking into the system where the financial because that's our only source of doc of information to be able to do that.

Um, and in several areas uh that were here, the uh the items just didn't match up with what we had received with what was currently being shown in their system.

That just brings to our inability to know what actually happened for those different years uh uh without having that that firm understanding of what the numbers are.

Mr.

And I just noted Ms.

Silvers joined us at um I think it was 1050, no, 1046.

The uh third finding was that the revenue incentives are were not properly calculated in accordance with the contract.

Um during our reconciliation of the different things, we found that the incentives to be paid to the contractors should have been much lower than what was actually provided to the contract administrator.

Um there are specifics in the contractual agreement that talks about how those are supposed to be calculated.

Um, and through our uh audit of them, we found that the the amount that the that was being calculated was much higher than what should have actually been determined based upon the financials that we were able to do.

The fourth one, uh ticket surcharge requirements not always met uh for those that are aware in our contractual requirements for specifically Sullivan.

Uh as a way for the municipality to get additional revenue, there's surcharge added on top of the the um ticket prices, similar to what the PAC does for their roof uh bond replacement.

It's kind of a surcharge on top of that.

Um we found that there were events that were held at the Sullivan Arena where there were no um surcharge amounts put on to the ticket prices.

So that's a reduction in revenue for the city.

Um and then there's also supposed to be a uh a split in depending upon how much the ticket is and so forth.

Um question no surcharge was charged, but the surcharge exists.

So they weren't charged on, so there were some events did have surcharges, and some events did not have surcharges.

So the ones that did not have surcharges that that was in not in compliance with the contract.

And then additionally, within the the ones that were taken in by the vendor, they're supposed to be split so you can see which money specifically the Munis and which money is specifically for the Sullivan Arena and potentially for the vendor.

So not only were the so as I restated the ones that were collected were not spelled out correctly or delineated correctly, and as well as the fact that there were events that were took place where we didn't get a surcharge at all.

So that is a question for Falsey, which we can come back to is are we able to levy that charge, even though they didn't put it on the ticket because it's owed?

So we'll come back to that.

Thank you.

Mr.