Clearwater, Florida, is in hot water – or at least its parks and recreation department is. The department, which also oversees special events, has not tracked income and expenditures for city-related special events, including festivals, concerts and more.
And according to an article in the Tampa Bay Times, the city auditor is now conducting an audit of the special events division. It’s big news – but it’s also a warning to parks departments everywhere that host outside events, including sports.
The Tribune noted, “Before a consultant delivered his April 1 report on what type of covered concert pavilion would best suit the downtown waterfront, the city could only provide him rough estimates on the financial impacts of events at the existing band shell.”
That’s right – the city couldn’t tell whether special events were making money for the area – or costing it.
While the department uses a special revenue fund of about $200,000 to pay for upfront concert and festival expenses, like deposits for performers, that money is replenished with revenues the department collects, like ticketing and concessions. The balance fluctuates throughout the year but the mandate is for Parks and Recreation officials to manage the fund so they don't need to ask the City Council for more money, Finance Director Jay Ravins told the Tribune. Also of note:
“Other overhead costs incurred for hundreds of events citywide — from salaries of employees who staff 5K runs to equipment rentals for festivals in Coachman Park — are paid for with a separate pot of money, roughly $1 million allocated every year from the general fund. Unlike the special revenue fund, this spending account is not meant to be reimbursed.
When the Times in January requested profit and loss reports on city-related concerts and festivals over the past two years, Parks and Recreation Department Director Kevin Dunbar acknowledged the spreadsheets provided were not reliable.”
And once the Times started looking, they found some startling omissions. For example, the Clearwater Police Department spent $17,580 supporting the 2018 Sea Blues Festival but Parks and Recreation's accounting sheet did not reflect that expense for the event. (In fact, the department’s records showed a $12,643 profit – which was changed to a $19,119 loss after the Times made its request.)
Dunbar said he has not been tracking individual events because his responsibility is to make sure the overall special events fund, which pays for events throughout the city, is managed and that the fluctuating special revenue fund of about $200,000 for concerts and festivals is reconciled.
The department has come under fire before; in fact, this is the second audit that has been performed on it this year. A Jan. 3 report found Dunbar misused his position when he had two employees repair his home sprinkler system after work hours in 2017 without paying them. In July, then-recreation supervisor Bob Carpenter was arrested and charged with felony scheming to defraud after police say he pocketed $148,000 from a food vendor and soccer league and stole proceeds from ticket sales. (Carpenter pleaded guilty on Monday and is scheduled to be sentenced May 21).
In October, an administrative investigation into the department's handling of cash revealed a lack of controls to prevent theft and shortages. It also found that management did not ensure payments were entered into the online system. City Manager Bill Horne fired Carpenter's then-supervisor Brian Craig for a "gross lack of oversight" and negligence that enabled the theft. The department was also under investigation for its culture of bullying and harassment of women.
While all this information is explosive (as well as distasteful), it also serves as an object lesson regarding financial transparency. Multiple municipalities make their financial information available online and additionally provide contact information for officials in the event of questions.
Organizations that host special events that fall into the non-profit category are also held to a high standard of fiscal transparency. According to the Council for Non-Profits, non-profits are required to disclose certain financial information to the public upon request; board members have access to financial information in order to fulfill their fiduciary duty to the non-profit.
Sports events and organizations have already suffered from financial problems due to poor management, corrupt management or both – and some states have taken steps to try to crack down. And with news of embezzlement from youth sports organizations, the push for transparency keeps getting stronger.
Count on the Clearwater episode to have a ripple effect – and to convince organizations to keep updated records, as well as to have them available, whether to a parent or to the media.