Kootenai County Fair board responds to audit concerns

COEUR d'ALENE — While an internal audit of the Kootenai County Fairgrounds drew concerns from some county officials, a member of the fair board, which oversees the operations, said funds have not been mishandled and steps have already been taken to address the red flags.

"There has never been a problem with misappropriated funds," board member Linda Rider said in a written statement to The Press.

"Annually, the fair undergoes an external financial audit done by a local CPA firm. Each year, if there are suggestions for operational improvements they have been implemented. The 2015 external audit was just completed and it was a clean audit."

A recent internal audit performed by county staff revealed that some employees have taken draws against their future pay since 2005 and other financial data and oversight red flags surfaced. County commissioners also expressed concerns that Americans with Disabilities Act (ADA) improvements haven't been implemented as soon as they'd hoped.

Rider said no disciplinary action against staff is planned as a result of the audit.

County finance officials said the audit showed most financial controls related to the annual August fair are in order.

In response to the audit, county commissioners on Monday unanimously decided to expand the volunteer fair board from seven to nine members in the near future in hopes of getting more members with business backgrounds on the board.

But Rider said the board already has five members with business backgrounds.

"It is safe to say that everyone understands what it takes to run a successful business," Rider said. "Any smart business person also knows that there is always room to improve and growth in a business demands upgrades. As our non-fair activities have increased, especially in the last three years, it has put a stretch on our staff that has required revisions.

"As past employees have left, jobs have been restructured to match different skill sets to better match our needs."

Rider said the fair board has already made financial changes due to the audits.

"This includes the outdated policy for pay draws, which are no longer allowed," she said. "This year we also hired an accounting consultant/CPA to assist in getting our bookkeeping in better order."

The county contributed $150,000 to the fair last year and plans to do so again in the fiscal 2017 budget. The amount is a tenth of the fairgrounds' $1.5 million budget. The rest of the funding comes from admissions from year-round events, sponsorships, ground rentals, vendor charges and food and beverage sales. The funding pays for a full-time staff of seven, utilities, garbage disposal, supplies, advertising, maintenance and other costs.

The cost for putting on the fair is about $526,000.

"Cash flow can be a challenge when about half of your yearly income depends on five days of good weather in August for a successful fair," Rider said.

Commissioners earlier this year passed a resolution granting the fair board authority to oversee the fairgrounds operations year-round, not just during the annual fair event as specified in state law.

While commissioners have been upset the ADA improvements haven't happened as quickly as they'd like, some upgrades such as new paving and handicap parking at the main entrance, new paved walkways and other smaller ADA items have been done.

"They are calling for improvements in the restrooms," Rider said. "However, what we really need are new restroom facilities and those would each cost $350,000 or more — something we simply have not had a budget to cover."

Rider said for at least the past 15 years the fair board's relationship with the county commissioners has been to submit a budget to them to quantify the county's contribution to the fair and meet a few times with them annually. A commissioner liaison to the fairgrounds also comes to some of the board's monthly meetings.

"A comfortable, respectful, but rather limited relationship," Rider said.

Rider said the fair board believes a solid waste bill that was delayed in getting paid due to less cash flow and a disagreement with a vendor who actually owed it triggered the internal audit and county officials wondering if money was being mismanaged at the fairgrounds.

Rider said, after years of being told the fair board is in charge of maintenance, it now needs to ask the county for permission on capital improvements.

Rider said, like most fairgrounds across the country, the local fairgrounds has had growing pains going from a three-day event in the 1970s to a year-round facility that operates more like a business hosting widespread events than a government entity. Some of the buildings at the site are about 50 years old and in desperate need of upgrades, especially if events can be held throughout the year, she said.