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County audit flags FMC procurement, vendor disclosures and contract controls
Summary
An internal audit covering FMC operations from 2017–2023 found gaps in related‑party disclosures, inconsistent competitive bidding and missing vendor contracts; FMC management agreed with the audit’s 10 recommendations and staff reported steps already taken to improve controls.
Robin Rose, the county’s internal audit manager, presented the financial and operational review of the Fairgrounds Management Corporation (FMC) covering calendar years 2017–2023. Rose said the audit focused on program profitability, vendor contracts, maintenance and capital improvements, and organizational structure and found that FMC has made recent improvements but that important control gaps existed during the audit period.
Key audit findings presented included: instances of undeclared related‑party relationships involving vendors that received approximately $934,000 over the review period and for which disclosure or recusal documentation was not provided; inconsistent use of competitive bidding for professional services; and seven of 32 tested vendors lacked formally executed contracts, representing about $430,000 in payments. The audit also identified payments outside approved scopes, unallowable reimbursements, and instances where executive responsibilities were delegated to third‑party consultants rather than FMC leadership.
Rose said FMC management agreed with all 10 recommendations and has taken steps including updating purchasing policies, terminating certain vendor relationships, establishing centralized contract review processes and hiring a deputy executive director. The audit team recommended that FMC provide certain external auditor communications and that the FMC board and the Board of Supervisors provide formal responses to two recommendations.
Committee members praised the current FMC leadership for accepting recommendations. Celine Duarte, FMC executive director, acknowledged the work: "It was easy for us to move ahead and agree with most of these because these are things that we had pointed out before they were brought to our attention." The committee asked for a follow‑up report in six months to track implementation of audit recommendations.
Note on transcript anomalies: an audit slide presented comparative security expense figures; the transcript renders one line as "500000%" which appears to be a transcription error. The committee asked FMC to review security cost drivers; staff acknowledged the transcript’s numeric rendering should be checked against the audit slides and final report.
The committee voted to receive the audit report and asked for a formal update on completion of the audit recommendations.
