Fall On the Green Audit Calls for Tighter Controls of Special Events

There were fewer smoking guns and more signs of a village board coming apart at the seams with the unveiling of the long-awaited 2011 Fall On the Green audit.

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The auditors, Baker Tilly Virchow Krause LLP, turned up "minor financial irregularities" caused mainly by the village’s own lack of written procedures and policies for managing village-sponsored special events.

The Oak Lawn Village Board voted to pursue a forensic audit last summer after the mayor tapped Bob Streit (Dist. 3) to take over as the special events committee liaison from fellow trustee Tom Phelan (Dist. 6), who had held the position for seven years.

The cost to do the audit was $13,500, and an additional $5,000 in legal fees was spent responding to a reporter's freedom of information act request, according to the village board minutes from Aug. 14.

Reading select excerpts from the auditor’s report during Tuesday’s village board meeting, Streit by excluding certain elected officials from the sponsor tent.

“Throughout the report literally on every single issue raised, the auditor states they have requested any and all written policies and procedures regarding food vouchers, beer tickets, wrist bands, sponsors, hospitality tent and vendors,” Streit said. “In every single case we learned that the village did not have a formal written policy in effect.”

The auditor determined that the village had purchased 2,000 food vouchers, issuing approximately 1,585 to volunteers, sponsors and nearby residents. According to the auditor’s report, 1,426 food vouchers were remitted for payment. The number of food vouchers that were not remitted was 159.

Streit alleged in his call for a forensic audit that

The report also affirms that the village purchased 1,780 beer tickets, 1,000 of which were given to event sponsors. The rest of the beer tickets—780 in total—were given to nearby neighbors for being inconvenienced by the event.

Approximately 2,500 beer tickets--numbers 75,001 through 77,500--were issued, and total beer ticket sales were $67,011.

"If it was assumed that all previous issued tickets were sold, and that a portion of the last tickets issued were sold, the variance between the total amount collected and total tickets issued could range between $7,990 and $10,849," the report said.

The auditors, however, admitted to not being able to “accurately determine, with reasonable certainty, what the costs of beer and wine should have been for the event,” because the village did not keep an inventory of unused beer tickets.

The report further stated:

"We inquired with Village personnel to determine what the procedures were for handing in unsold tickets at the end of each day and if an accounting was performed for these amounts and the Village was unable to identify a specific number of unsold tickets."

A specific vendor was used to supply all the beer sold at the event and only charged the village the kegs used, exerting more "cash control," the report said.

Auditors also identified 18 bottles of unopened top shelf liquor including such brands as Sapphire Bombay gin, Seagram's Seven and Dewar’s White Label, missing from the 2011 Fall On the Green sponsor tent inventory.

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Leftover liquor and wine from the previous year’s event were kept under lock and key in a village-owned building until the next year's Fall On the Green event. After the village sold the building, the inventory was moved to another vlllage property where it was stored out in the open.

When village employees went back to the building in August 2012, they could not identify which wine had been left over from 2011, nor could employees locate the 18 bottles of liquor.

Based on the village’s accounting system, auditors identified a "small variance" of $4,533. After a $3,000 payment was received from a 2010 sponsor, which was appropriately excluded from the 2011 Fall On the Green books, there was a remaining difference of $1,522. Auditors said the difference was attributed to a "miscoding" of unrelated event items being charged to the village’s specifically identified Fall On the Green line item accounts.

Throughout the report, the auditors recommended that formal written procedures be put into place for better tracking of food and beer vouchers, record keeping, and more cash controls over beer and wine sales, among others.

“I would say the amateurish and clumsy nature of the contrived scandal is one thing, but the lack of comprehension in the reading of the report we received is a whole other thing,” Phelan told Streit. “I’m not sure you’re reading the same report I received.”

After the meeting, Streit said that he and Phelan both received the same report.

"He did receive the same report I did. The report is extremely critical of the way things were handled with Fall On the Green and mentions some very serious and significant findings," Streit said. "When you have tens of thousands of dollars of things in value that are unaccounted for that is very significant. You can't blow that off  by saying people had a good time, let's move on."

Do you think the 2011 Fall On the Green forensic audit was a waste of taxpayers' money? Tell us in the comments.

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