The city of Cincinnati released a much anticipated audit Tuesday of the Cincinnati Parks Board, the city's parks department and the parks foundation.
City Manager Harry Black initiated the review last October at the request of Mayor John Cranley. The audit was requested as city voters were being asked to approve a one mill property tax levy to support the parks. That levy was ultimately defeated by a two-to-one margin.
At the time, park levy opponents and some media outlets questioned the actions of some park employees and the dual roles some of them played working for both the park board and the separate parks foundation.
Crowe Horwath, based in Indianapolis, conducted the financial review and the city released the group's 21 page report.
It includes five observations and what the report calls "opportunity for enhancement."
No Memorandum of Understanding
The audit found there is no governing document between the park board, the parks department and the foundation.
"In the event there is a dispute between the parties regarding transactions benefiting Cincinnati parks, there is no governing document which clearly identifies the responsibilities of each party which could result in a lack of accountability," written in the audit report.
The audit suggests the parties draft and approve a memorandum of understanding "outlining the relationship, responsibilities, processes and interaction between the parties."
Parks department employees performing duties for the foundation and the park board
The audit report found parks department employees provided "oversight, financial management and authorization for the park board and the foundation."
It said there is a risk employees are performing these tasks "with limited oversight and segregation of financial management and approval of activities."
"Parks department employees should not perform managerial/oversight duties, authorization of transactions or other day-to-day operational activity for the foundation," written in the report. "If there are situations where the foundation anticipates utilizing parks department employees to perform foundation-related activities, a memorandum of understanding should include the nature of the activities."
Foundation and park board payments to third-party vendors for expenditures benefiting Cincinnati parks
The audit found the park board and foundation made payments directly to third-party vendors for projects and services, and it said there is a risk these expenditures did not adhere to the city's procurement policies.
"When the parks department and/or park board request foundation funds or other third party funding for a project or activity benefiting Cincinnati parks, the transaction could be in the form of a grant request and/or cost reimbursement agreement," the report found.
Park board financial accounting records and audit oversight
"The park board does not utilize a double entry accounting system to track its activities and balances," written in the report. "In addition, the park board does not have an external audit of its activities on a stand-alone basis, nor has it been subject to city internal audit procedures."
The audit suggests setting up a double-entry accounting system process, which the report finds could be accomplished by using the city's existing account system. It also recommends a periodic external review of parks financial statement.
Comprehensive budget
"The park board does not prepare a comprehensive budget of expenditures to be incurred for the benefit of Cincinnati parks and identification of the funding sources for the expenditure," the report stated. "As a result the park board cannot provide on a periodic basis a comprehensive comparison of actual expenditures for all Cincinnati park acidity to the comprehensive budget."
The audit suggests the board could align the current year master plan initiatives and operating needs of the parks with the current year budget and actual results.
City Manager Black says the audit findings have been shared with the park board and some of the recommendations are already being implemented.
"I am confident that this report, when acted upon, will strengthen financial operations and lead to more efficient and effective management of the Parks Department," Black wrote in a memo to the mayor and council members. "As such, the administration’s focus will be on actively assisting with implementation of the recommendations."
Mayor John Cranley, who is in Philadelphia for the Democratic National Convention, released a statement after the audit findings were made available.
"We intend to conduct a thorough assessment of the insights and observations set forth in this fiscal review," Cranley wrote. "I believe the findings identify a number of opportunities for enhancement that will serve as a catalyst for continued discussions on how to improve the procedural, as well as fiscal operations of the Parks Board and Foundation."
Otto Budig, Jr. is the president of the Cincinnati Parks board and is also a member of the Cincinnati Public Radio Board of Directors, which oversees the operation of WVXU.
