Auditor extends service offer to Chevy Centre

By David Skolnick

The mayor is ‘open’ to a performance audit of the center.

YOUNGSTOWN — Ohio Auditor Mary Taylor is offering the services of her office to conduct a performance audit on the city-owned Chevrolet Centre.

The offer came Tuesday, the same day her office released an audit of the city’s 2006 financial statements.

The audit includes only one finding for monetary recovery, which was resolved in June.

It has nine noncompliance citations or findings and 21 recommendations to improve the city’s financial operations.

A performance audit would compare the center with other entertainment/sports facilities and provide recommendations to make the center more cost efficient, Taylor told The Vindicator on Tuesday.

“It’s an option they can take,” she said. “I think it’s worth discussing with city officials. There has been concern expressed about the operations.”

During its three years of operating, the center has financially struggled, and experienced a complete changeover in management and ticketing.

The center cost $45 million to build with the city borrowing $11.9 million to pay its portion of the building’s construction.

“We are obviously open to anything that would assist with the overall operation of the Chevrolet Centre,” Mayor Jay Williams said of the performance audit. “We’ve had a lot of concerns of our own.”

Williams said he’d “love to talk” to Taylor about a performance audit of the center.

The cost of the audit would be paid by the city.

“The cost would depend on the extent of review the city would want us to do,” said Taylor, whose office has never done a performance audit on a facility such as the Chevrolet Centre.

The 2006 city audit found three noncompliance findings related to the center.

One was the city’s failure to conduct an independent audit of the center’s operations under the management of International Coliseums Co. The audit was part of the city’s contract with ICC, which no longer manages the center.

Instead, the city had Cohen & Co., a Youngstown accounting firm, examine certain operating procedures at the center.

“There’s a difference between a full-blown audit and agreed-upon procedures,” Taylor said. “The latter is not the same as an audit. It’s a lesser review of the center’s operations and finances.”

Williams agreed, adding that while the ICC contract stated “audit,” the intention all along was to do a smaller and less expensive review.

The other two findings related to the center were the city’s failure to live up to provisions in the contract with ICC for the two sides to meet quarterly and the city’s failure to produce documentation showing updated business plans for the facility.

Both contract provisions were followed, but the city didn’t provide the auditor’s office with the paperwork, said Finance Director David Bozanich.

Taylor acknowledged that the 2006 audit was released late. The 2005 city audit was made public in January 2007.

The delay happened for a variety of reasons, she said.

This portion of the state has a large number of “backlogged audits,” forcing Youngstown’s to be delayed, Taylor said.

Also, the “city delayed in getting us completed financial statements,” she said. Williams said those who work for the state auditor never made mention of that to him.

The two sides also had a lengthy dispute about the city’s no-interest loan program to businesses.

The city provides the loans to companies for business development. The loan is backed by an irrevocable letter of credit from an accredited bank.

The city incorrectly classified the loans as “cash” rather than “loans receivable,” Taylor said.

By counting the loans as cash, it made the city’s general fund appear to have a $472,064 surplus as of Dec. 31, 2006.

The city’s general fund actually had a $3.96 deficit, Taylor said.

“It looks like there’s more cash than there actually is,” she said.

The city can collect those outstanding loans at any time, and has done so early on four occasions, Bozanich said.

The issue is how is the money classified, Williams and Taylor said.

The city is charging 0.25 percent interest on each loan and is reclassifying them as loans, Williams and Bozanich said.

The only finding for recovery was against Carmen S. Conglose Jr., the city’s ex-deputy director of public works. He received $3,341.16 in education bonuses over a nine-year period for having a bachelor’s degree.

Conglose doesn’t have a bachelor’s degree even though his personnel file in the finance department has a bogus one from Youngstown State University.

Conglose repaid the money to the city. He was convicted June 13 of soliciting or receiving improper compensation and sentenced to 30 days of house arrest.

The city now requires those receiving education bonuses to sign an affidavit that they earned a college degree. Also, the city requires those receiving the bonuses to have the college from which they graduated send a sealed transcript to the city’s law department.

Overall, Williams and Bozanich said they were pleased with the audit.

“It was fairly routine with no material weaknesses,” Williams said.

While there is room for improvement, Taylor said, “There’s nothing major or significant except the one finding for recovery.”

skolnick@vindy.com