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Audit finds reporting gaps, recommends reconciliations for Veterans United Amphitheater
Summary
External auditors told the Virginia Beach Development Authority that Live Nation and VBDA need stronger reconciliations, certified statements and verification of tax remittances after tests found spreadsheet errors and incomplete documentation.
External auditors presenting to the Virginia Beach Development Authority on March 11 said procedures for calculating rent and local taxes at the Veterans United Home Loans Amphitheater do not fully comply with the facility lease and recommended stronger reconciliations and certified financial reporting.
The audit, presented by Linden (audit presenter) and Keith (audit presenter), reviewed revenue, rent calculations and remittance of local taxes for the 2023–2024 concert seasons and compared reported amounts to the ground-lease and facility-lease agreements. Linden described the amphitheater as “a prime attraction of our city,” and stressed the audit focused on whether revenues and taxes were recorded and remitted in accordance with the agreements.
Auditors said they found two primary issues. First, Live Nation did not provide a reliable breakdown of ticket revenue in a form VBDA could use to recalculate basic rent; ticket revenue was maintained in ad-hoc Excel spreadsheets, which auditors flagged for formula and completeness risks. Keith said, “the purpose of the audit was to determine whether Veterans United Home Loans Amphitheater operates in compliance with the terms and conditions set forth in the management agreements.” He said the available ticket documentation made it difficult to re‑create the basic rent calculation from the annual income statements.
Second, auditors said VBDA could not always confirm that local portions of sales and admissions taxes were reported and paid as required by the lease. The auditors identified specific lapses including instances where items such as chair rentals, some concession items and merchandise (for example, blanket sales in packaging) were not separately reported to VBDA and a formula error in an Excel worksheet that produced a $12,800 admissions‑tax discrepancy in one month. Auditors said Live Nation had not furnished quarterly or annual financial statements to VBDA for the past five years, making independent verification harder.
The auditors' recommendations included: 1) require Live Nation to provide source documents and a reliable annual reconciliation tying per‑performance ticket and parking amounts to the annual income statement; 2) require Live Nation to certify as “true and correct” amounts reported to VBDA prior to remittance; 3) have VBDA confirm tax payments with the proper tax authority; and 4) require periodic audited financial statements from Live Nation for VBDA review.
During discussion, commissioners and staff asked how often audits occur (auditors said this was the first in their recent series of facility audits) and raised the risk that underreporting would reduce admission tax revenues that feed a TIF (tax increment financing) fund. Staff noted Live Nation had engaged an external auditor (recorded in the meeting as Cherry Beckert) and that audited statements for prior years were expected to be provided; auditors said Cherry Beckert was working on multi‑year audits for calendar years 2021–2023.
Staff and auditors agreed to follow up on procedures, timing and the specific supporting documentation VBDA will require from Live Nation. No formal board action was taken at the presentation; the auditors closed by reiterating that the amphitheater could more closely operate in compliance with the lease terms if the recommended reconciliations and certifications are implemented.
The authority and city staff said they will continue to work with the amphitheater general manager and Live Nation to tighten reporting and to confirm tax remittances.
