Report No. 2010-126
October 2010
Complete Audit Report

Findings in the audit of the St. Louis Regional Convention and Sports Complex Authority

Authority Suite
By agreement, the St. Louis Regional Convention and Sports Complex Authority (Authority) receives 42 tickets to the St. Louis Rams home football games at no cost for the use of one of the Dome suites. These tickets are distributed to the Authority's commissioners and staff, and government sponsors (state of Missouri - including the Department of Economic Development, City of St. Louis, and St. Louis County). The Authority's policy requires a $40 per ticket charge for most attendees to cover the costs of food and beverages served; government visitors and their guests are not charged for economic development reasons. During the 2008 football season, food and beverage costs of about $7,500 incurred during the use of the Authority's suite were not covered and were absorbed by the Authority. Approximately 30 percent of the tickets used were not assessed the charge for food and beverages. Attendance records did not always include details about the uncharged ticket users, making it unclear how some of the ticket users related to economic development. It appears some of these ticket users, including tickets used by the various Authority business associates and other guests, should have been charged for food and beverage costs. Additionally, the amount charged per ticket for food and beverages was insufficient to recoup the cost, and the cost analysis performed was inaccurate and did not include all food and beverage costs incurred.

In addition, the cost of food and beverages provided to Missouri state and local officials at Rams football games was not reported as lobbying expenses to the Missouri Ethics Commission and attendance records did not include enough detail to ensure costs were reported for all applicable individuals. Also, tickets were distributed to some commissioners even though they had not paid the cost for attending previous games as required by policy.

Expenditures
The Authority, the Convention and Visitors Commission (CVC), and the Rams entered into a contract amendment in September 2007. Under the terms of the agreement, the Authority agreed to pay approximately $30 million for improvements to the Dome and other costs. However, the Authority did not ensure a proper and reasonable price was paid when reimbursing the Rams for the purchase of LED scoreboards, totaling approximately $952,000. As part of the agreed costs, the Authority also reimbursed the Rams for consultant fees totaling $379,000; however, this payment was made from preservation funds, which are restricted to repair and replacement costs of the Dome. In addition, the Authority allocates a percentage of some operating costs to the Preservation Fund; however, such expenditures do not appear to be allowable expenses of the fund, and the Authority could not provide an explanation or documentation of the basis used to allocate these costs. Also, bids or proposals were not always solicited or retained for professional services acquired, and the Authority does not have a formal policy in place for procuring such services.

Board Supervision
The Authority's Board of Commissioners (the Board) could provide better oversight of the Authority's activities. While the Board is provided with updated summary financial information at each board meeting, detailed listings of expenditures are not included and supporting documentation for transactions had not been requested by the Board in recent years. We noted several significant transactions for which the Board did not request or receive detailed supporting documentation for review, such as multiple preservation expenditures made to improve and maintain the Dome and purchases on a credit card held by the Executive Director in the Authority's name. In addition, investment transactions made by a contracted financial advisor are reviewed and approved solely by the Executive Director.

Other Issues
Improvements are also needed over capital asset records, documentation of insurance coverage of the Dome, and board meeting minutes.

The Authority indicated a physical inventory had been performed by the CVC; however, records documenting the physical inventory count were not maintained by the Authority. Additionally, there is no documentation of the items added and disposed during a given period of time and proper authorization from the Authority was not documented to support the disposal of Dome property.

The Authority annually receives a certificate of insurance from the CVC as proof of insurance on the Dome; however, this certificate only provides a summary of coverage and does not include any details concerning the various levels of coverage or deductibles. Additional documentation is not requested by the Authority for review.

Open meeting minutes typically indicate the meeting was going into closed session, but the specific reason to close the meeting was not always documented. In addition, we noted instances in 2008 in which closed sessions were held; however, meeting minutes were not prepared or maintained in accordance with the Sunshine Law.

Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov