|Questions asked of applicants, the last one they should have asked!|
|Committee reviewing applicants for IG job.|
Here is an example of how MIAMI DADE COUNTY ignored the IG's good advice and audit in the past to get us some revenue from the American Airlines Arena ---AS PROMISED BY THE HEAT IN THE COUNTY AGREEMENT WITH THEM FOR THE FREE LAND. Miami Dade doesn't have money for libraries but they make excuses for the Miami Heat's non-payment (see Lester Sola's press release) even though the team is flush with money:
To: Hon. Carlos A. Gimenez, Mayor, Miami-Dade County Hon. Joe A. Martinez, Chairman, Board of County Commissioners and Members, Board of County Commissioners
From: Christopher Mazzella, Inspector General
Date: October 31, 2012
Subject: 0G Audit of the Agreements Between Miami-Dade County and Basketball Properties, Ltd., et.al., to Operate the American Airlines Arena; Audit Close-out, Ref. IG11-34
RE: Miami-Dade County's Response to OIG Item 23 Letter-OIG Audit Report IG11-34 Audit of the Agreements Between Miami-Dade County and Basketball Properties, Ltd., et. al. to Operate the American Airlines Arena
The audit-identified questioned expenses include: $614,000 paid to lobbyists, $12,300 for political contributions, $17,500 for charitable contributions, and $24,300 for non-arena related memberships and dues. ISO states that it believes that the OIG-identified questioned costs are, in its opinion, legitimate business expenses that are reasonable and customary. For the current fiscal year 2013, ISO has approved BPL's budget for these items totaling $326,684-$294,000 for lobbyist fees, $5,000 for charitable contributions, and $27,684 for membership fees/dues. Moreover, ISO states that it will allow BPL to continue to include the salary of a BPL vice president, as an operating cost, notwithstanding the fact that executive compensation is an unallowable Arena operating expense, pursuant to the Agreements. We reaffirm our position that the subject expenses are not appropriate given the nature and the terms of the County's business arrangement with BPL. In addition, ISO states that it met with the County Attorney's Office to discuss what comprises executive compensation and will not be pursuing this issue. As you recall, this audit was partially predicated on the fact that Arena net operating revenues have never exceeded the threshold triggering profit sharing between BPL and the County. In other words, since its inception, the County has yet to receive any portion of profits from the Arena, despite the fact that profit sharing was a major selling point for the approval of the Arena deal. This condition has been prolonged because of BPL's debt liabilities-i.e., related party loans-which BPL has been paying off for the last several years. These loans were necessitated by operating deficits-expenses exceeding revenues. The audit-identified questioned expenditures directly added to the deficits. Our recommendations for the County to negotiate credit adjustments to the Schedules of Management Agreement Computations would bring the County closer to eliminating the deficit gap sooner and, thus, bring the County nearer to realizing profit sharing. In closing, we are encouraged that our audit has resulted in the implementation of
administrative controls that promote fiscal prudence. The OIG considers this audit closed but unresolved, with regards to the two discussed issues.
I am in receipt of your letter dated September 27, 2012 regarding the County's position on issues found in item 23 of our response to the OIG's final report. We have met with Basketball Properties Limited BPL representatives on several occasions to discuss a number of issues including those outlined in your letter. The County has reviewed the expenses associated with lobbyist's fees, political contributions, charitable contributions and memberships/dues and have concluded that they are legitimate business expenses allowed under the current agreement.Therefore, we will not be challenging these past charges.
For the Arena's 2012-2013 fiscal year, the County has approved operating expenses for lobbyist fees $294,000 and requested appropriate back-up to justify actual expenses, charitable contributions $5,000 andmemberships dues $27,684. We feel these expenses are reasonable and customary for an operation such as the Arena. Finally, we met with the County Attorneys' Office to discuss the issue of bonuses, incentive payments and commissions as they relate to the agreements. Based on these discussions and our review, we will not be pursuing this matter at this time. Should you have any questions, please contact me at 305-375-2363.
Lester Sola, Director
MDC Internal Services Department