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Turlock City Council approves external audit of CVB in 4-1 vote

POSTED May 12, 2015 10:51 p.m.

The Turlock City Council voted to conduct an external audit of the Convention and Visitors Bureau Tuesday evening in a 4-1 vote with Council member Steven Nascimento casting the sole dissenting vote.

An internal audit of the CVB dating back five years was conducted by City staff after the Turlock Chamber of Commerce decided to terminate its contract with the City to operate the organization, a contract it held for 24 years. The CVB, which is taxed with bringing tourists to town, is funded by Transit Occupancy Tax dollars, or money generated when visitors stay in local hotels.

In closing out the contract, the City performed an internal audit, the findings of which alleged that the Chamber spent CVB funds improperly according to the contract. On April 24 the City sent Chamber President and CEO Sharon Silva a letter that states that 43 expenditures totaling $241,297.07 in the past five years did not qualify as permissible. Since then, the chamber provided additional documentation in turn reducing the amount owed to $186,015.60.

While Nascimento cast the dissenting vote Tuesday evening, he did clarify that he is not against the external audit, but rather the vote’s additional caveat of establishing a committee to assist in the process. Council member Amy Bublak appointed herself and Council member Matthew Jacob to serve on the ad hoc committee that will assist the outside firm as well as City Attorney Phaedra Norton and Administrative Services Director Kellie Jacobs-Hunter in the process.

Jacobs-Hunter reviewed the preliminary findings of the internal audit for the council which she estimated were no more than 5 percent of the Chamber’s general ledger. The City reviewed various budget categories, such as administrative expenses and overhead costs, and asked for documentation when the permitted amount was exceeded, but the lack of receipts and invoices have been an issue said Jacobs-Hunter.

“Also, we looked at transactions where cash was moved from the CVB checking account, which is where the City’s funds went, and cash was moved from that checking account into the Chamber’s checking account directly with no memo,” said Jacobs-Hunter.

Nascimento pointed out that depending on the year of the audit, the CVB both overspent and underspent its budgeted amount. This could be indicative of a misconception by CVB administration that money not spent one year would be freely available the next, something that the internal audit does not reflect he said.

While he acquiesced that Jacobs-Hunter is not charged with making such judgment calls regarding the value of the spending, he said that “I think it’s important to identify that the overwhelming majority of these were legitimate expenditures by the Convention and Visitors Bureau in efforts to promote the City of Turlock and tourism.”

Council member Bill DeHart echoed a similar sentiment that his concern is that “we’re holding them accountable for their own efficiencies.”

The external audit is aimed to flesh out precisely what the Chamber owes, something Bublak said is necessary if the council is to do its due diligence as an elected body.

“We’re not placing blame on a person, we’re going through a procedure and we have to go through this procedure because that’s why we’re elected — to be the stewards of the funding and to make sure we’re doing the right thing with the money the taxes are giving us. By going outside to an audit, we’re actually being accountable and transparent. It’s an objective, unbiased assessment that we should be in fact doing because that’s what the people want from us,” said Bublak. “Conventional wisdom is that government cannot be effective in the absence of public trust. This is taxpayer money and we need to make sure we’re doing the right thing.”

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