Music Center Financials

We have new financials for the music center posted on the City Website:

Look for the new numbers on the bottom of this page.

Or go to it directly here

It is much more complete than anything we've seen assemble previously.  Look it over and start a discussion in the comments below.  

Update - April 16, 2016

How is everyone coming along with their review of the Financials?  When I started to look at the document I was looking for a couple things.  First does it incorporate or address some of the costs that have been brought up previously but were not accounted for.  Specifically, overtime for police duty and the effort put in by the human resources department.  As far as I can see, it does not.  I also thought I would check the addition of a couple of the sections. This took much too much effort for me and I believe some format changes will be needed for the final version.  The last item was to see if there was any insight into the "Accounting Services".  

Here's what I was looking at, check to see if maybe I missed something obvious.  I'm also still looking for other things that you found or think is important as we approach Monday's meeting.  Send me your thoughts and findings.  It will help me be more prepared

When checking to see if Police Overtime was taken into account I didn't see it listed specifically in the Operating Expenses overview.  

Music Center Operating Expenses from March 2016 report

So then I looked into the break out of "Staffing & Benefits" under Event Operations and then "Box Office/Maint Wages under Administrative.  I didn't see any entries that stood out to me as "police overtime".  I backed up my "look and see" search by using the Adobe Search function.  Searching "police" and "overtime" found no results.  "Security" had a few hits but none looked like us paying for members of our police department to provide security for the events.  

As many times as this has come up, I would have expected that the category would be obvious if it were in the report.  If it isn't in the report I would have expected at least a mention in the notes somewhere else on the summary section.  I also didn't see any type of attempt to capture the extra work the Human Resources department had to do but since this wasn't mentioned as often and it would have been much more difficult to capture than police overtime, I didn't look to hard.  

The next thing I tried to do was Quality Check the addition on some of the Expense Categories.  When I looked at Event Operations it could have been laid out better but I could match up the numbers.  For the Administrative Category the sub category entries where not intuitive and I stopped before making the numbers match.

To QC the numbers I gave each of the Sub Categories a letter:

Event Operations Expenses from Music Center report March 2016

Then I clicked on Event Operations which sent me to the sub category break out section.  There I assigned each of the sub categories entries a letter based on which sub category I thought they belonged.  Using this technique I was able to confirm the math for Event Operations:

If you try and do this too, you will see that staff made it easy to verify "Staffing and Benefits" (A) because they are all listed together one after the other.  When you get to "Supplies and Uniforms" (B) the first two items that make up this total are the first two items after the last item for (A).  However, to get the third entry for (B) you have to go two pages further into the report after some of the items for D&E, G and C are listed to find "Event Uniform Expenses".  Also, even though Concession Mdse and Liquor / Beer Supplies are broken out in the summary page when you go to the detailed look all those charges are mingled together.  So the Events Operations section doesn't get any gold star for clarity but at least it can be figured out without much difficulty.  

Event Operations Break Out pg 3
Event Operations break out pg 5

The Administrative wasn't quite as straight forward. It kind of starts out like it might be ok.  The first 8 items obviously fit into the Box Office/Maint Wages subcategory.  The spreadsheet even nicely adds these up for us.  But that total is only $87,517.83 and the entire category on the summary page totals to $96,174.  So one or more of the rest of the subcategories should be (or add up to $8656.  None of the subcategories obviously fit into wages.  Only the Payroll Processing Fees seem to fit but they are only about $3832.   If you get through this section let me know how you mapped each of the subsections to the subsection categories.

The other item I had hoped would help me was the break out of the "Accounting Services".  If you recall, in Exhibit A of the original agreement  the section titled "Operational Duties" contained paragraph (j) which reads "Maintain detailed, accurate and complete financial and other records of all its activities under this Agreement in accordance with generally accepted accounting principles.".   Reading the entire contract I'm under the opinion that this service was to be provided as part of the original contracted price. 

Later on in Jan 2015 the City Manager came to the members of the old council with a Memorandum of Understanding.   Section 3 of the MOU is titled Finance/Accounting.  Notice the last sentence in paragraph A. reads, "MEMI shall maintain detailed, accurate and complete financial and other records of all ts activities regarding the Facility in accordance with generally accepted accounting principles."   Which the same as what was supposed to be provided cost inclusive in the original agreement, only this time it is followed by paragraph B. which states:
  •  All persons performing finance /accounting duties for the Facility either as employees of MEMI or subcontractors shall at all times be covered by Fidelity/Third Party Crime coverage as listed in Exhibit B of the Agreement., All such direct expenses related to the staffing or subcontracting of financial and/or accounting services shall be paid out of Revenue and shall be included as Expenses directly related to or arising from the operation of the Facility. 

We see now this change costs the city $59,583.  Besides this fact, the other item I was concerned about when this MOU was in discussion was whether MEMI could hire employees of the City to perform work for the Music Center.  If I recall correctly the City Manager responded that outside employment was up to him to approve.  I was hoping that looking at this report would give me more insight about these accounting services; what company/person was doing the work and what exactly we were getting for this addon cost.