NY State Audit of ORDA Finds Problems
SAM Magazine--Albany, N.Y., July 10, 2014--The New York State comptroller's office released an audit this week of the Olympic Regional Development Authority (ORDA) that found some serious flaws and made some key recommendations. ORDA oversees the operation of Whiteface, Gore and, more recently, Belleayre. The audit spanned from April 2010 to September 26, 2013. Here were the key findings:
• ORDA needs to improve its financial management practices, particularly cash management. During the three fiscal years ended March 31, 2013, ORDA has used a line of credit (LOC) to cover its basic operating costs including payroll. In some cases, other State agencies have paid ORDA’s bills, including $1.5 million of capital lease payments ORDA could not pay since December 2008.
• Although ORDA prepares four-year financial plans as required by the Public Authorities Reform Act of 2009, from fiscal 2008-09 through 2012-13 it over-projected revenues by $7.1 million and under-projected expenditures by $18.3 million. Furthermore, ORDA’s fiscal 2010-11 budget had a net $800,141 deficit even though Section 2613 of the Public Authorities Law requires ORDA to submit a budget without an operating deficit.
• ORDA has a $2.109 million accounts receivable related to accounts of the Empire State Development Corporation (ESDC) and the Lake Placid Regional Winter Sports Committee, a not-for-profit organization. Of this amount, $1.7 million was originally promised in 2009 by a local not-for-profit organization from a grant it would receive from ESDC. The grant was delayed because the organization had not filed all of the required annual reports. Although the organization has subsequently filed the reports, the State Division of the Budget (DOB) has not released the funds. ORDA officials advised that without the $1.7 million, it incurred operating expenses which had to be paid from its LOC and that it was awaiting collection of this amount to pay down its interest-bearing debt. ORDA advised it received the $1.7 million on April 8, 2014.
• We reviewed a judgmental sample of 29 procurements totaling $8.2 million to determine if ORDA followed its procurement procedures. We identified 11 procurements totaling $427,000 that were not competitively bid. ORDA did not provide sufficient documentation as required by its purchasing policy to support why the contractor was selected or why a competitive process was not used.
The audit then went on to make some key recommendations:
• Develop a more accurate method for estimating expense and revenue amounts used in the multiyear financial plan to ensure that the budgets are balanced, operating expenses are closely scrutinized during the year, and estimates are reviewed to determine that they are still valid. Maintain support for budget assumptions and calculations as required by Office of the State Comptroller regulations.
• Conduct a top-to-bottom review of ORDA’s organization and spending to identify cost-containment opportunities.
• Contact DOB to determine the status of its accounts receivable due from ESDC.
• Award contracts on a competitive basis to the extent possible. Fully document any waivers permitting non-competitive procurements including the reason(s) for the decision.
For the full audit, click here.