Navajo Parks & Rec facing sanctions
July 4 celebration losing money

Copyright © 2008
Gallup Independent
By Kathy Helms
Diné Bureau

WINDOW ROCK — The Navajo Nation is estimated to have lost more than $250,000 on this year’s “4th of July Celebration,” with the department’s Enterprise Fund making up the loss, according to the Office of the Auditor General.
The fund is supposed to be used to manage the Nation’s tribal parks, according to Acting Auditor General Elizabeth Begay. She, senior auditor Ernest Chischilly, and associate auditor Daniel Colello presented the report Monday to the Budget and Finance Committee.

“Total expenses incurred in holding the fourth of July 2008 Celebration amounted to $522,415. However, the Special Events Office, which was previously called the Fair Office under the Parks and Recreation Office, only raised $271,619 in revenues, resulting in net loss of $250,796,” Begay said.
“The Parks and Recreation Enterprise Fund subsidized the loss incurred. Based on our interviews with the department manager, he acknowledged that they did incur a loss year after year in producing the Fourth of July Celebration.

“Given the significant amount of monies involved in producing the Fourth of July Celebration, which is approximately half a million (dollars), we recommend that the Parks and Recreation Department needs to conduct a cost-benefit analysis in continuing to hold this event,” she said.

Parks and Rec first was audited in 2001 and two deficiencies were identified related to accounting for its revenue and paying temporary workers and department employees out of cash payouts, auditors said. A corrective action plan was approved by Budget and Finance in 2002.
There were six corrective measures under Finding 1 that the department was required to implement, five of which still are not implemented. There also were two corrective measures under Finding 2. Only one has been implemented.

Auditors recommended sanctions against the program and its director by withholding 10 percent of the program’s operating budget as well as 20 percent of the program director’s salary. A more comprehensive audit of the department is expected by the end of the quarter.

Auditor Chischilly said one of the findings called for Parks and Rec to install a computerized ticketing system.

“Because they have not implemented this corrective measure, there has been a discrepancy of $8,064 between the recorded ticket sales and the actual cash received,” he said.

Another measure called for installing turnstiles to count the number of customers and attendance. Though turnstiles were installed, the review found a difference of 585 between the amounts of tickets sold on July 4th and 5th and the turnstile counts. “This means that 585 people entered without paying,” he said.

“Furthermore, for the rodeo-concert held on July 4th and the rodeo on July 5th, the number of tickets sold, passes issued, and the number of rodeo contestants with helpers totaled approximately 6,600. This number is 1,600 less than the estimated 8,200 people that attended the rodeo events for those two nights.” That translates to approximately $20,500 of potential revenue loss.

A computerized scanning system with bar codes, which would monitor VIP and complimentary passes, has not been developed. Carnival ride tickets were not inventoried prior to sales and ticket sales report forms were not verified at the end of each shift.

The square footage of food and concession space at $25 per square foot, which is the basis for rental payment by the carnival operator, was not verified, thus, there is no assurance that the revenues from the carnival-related activities were correct, auditors said. The Special Events Office also lost $4,000 in advertising fees because it failed to comply with established contract provisions.

Finally, five Parks and Rec exempt classified employees received additional compensation in cash totaling $6,547, which is inconsistent with the personnel policy and standards of conduct for exempt employees, auditors said.
B&F’s Jonathan Nez said there is discussion of the Navajo Nation talking over management of Canyon de Chelly but questioned whether Parks and Rec has the capacity to do that.

“A lot of communities are concerned, especially Monument Valley, about their way of life in the park, and I did not hear any indication of helping their quality of life inside the park with these funds,” Nez said.

Hoskie Kee recommended that when legislation now being developed regarding Parks and Rec comes to the committee, “that the Fund Management Plan for this program that was recently approved by Budget and Finance should be recalled.” He said the Nation allocated $2.7 million to improve park facilities.

Lorenzo Curley asked that the upcoming audit report address whether any of the monies which were to be used to address trash issues within the parks were impacted by use of the funds for the 4th or other fair activities.

B&F Chairman LoRenzo Bates said that if the corrective action plan were implemented, “you would cut your loss in half.”