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Contract review finds Chamber never submitted tourism financial reports to City

An external review of the public funds spent by the Turlock Chamber of Commerce to promote tourism on behalf of the City of Turlock was presented to the City Council in a special meeting on Thursday, a process the Council undertook in an effort to close out a long-standing contract between the Chamber and the City of Turlock.

The report itself prompted questions from the Council as well as the findings, which included a number of instances when the Chamber overspent its allotted budget to run the Convention and Visitors Bureau.

Lambert Van Laar presented Kemper CPA Group's findings to the Council, which he said was an "agreed upon procedures engagement" and not an audit.

The fact that the report wasn't an audit, as was requested in a resolution approved by the City Council on May 12, was an issue for members of the Council and the Chamber of Commerce.

"By our own resolution when we initially contacted the firm, the request in fact was made to conduct a formal accounting/audit of the Convention and Visitors Bureau," said Council member Bill DeHart.

City Administrative Services Director Kellie L. Jacobs-Hunter and Van Laar explained that a formal audit involved an organization-wide review and what the City requested was a review of compliance with specific transactions regarding the tourism bureau.

"Let's not go out next time and ask for a formal accounting/audit, if we don't mean a formal accounting/audit. I believe that there is an issue to be made there...but it behooves us to move towards resolution this evening and I support that," said DeHart.

The report itself found that the Chamber of Commerce exceeded the Council-approved budget to run the Convention and Visitors Bureau in 2010, 2012 and 2014 for a total of $48,139.80. The report also included 105 transactions with a value of $233,722 over the past six years that did not have proper documentation.

According to the report, other questionable expenses included $54,600 over the years to publish a Chamber Directory and $51,780 for official city maps.

The report also found that the Chamber did not submit annual financial reports, as mandated by the agreement to run the tourism board.

"They are out of compliance with the agreement because they never made any financial reporting...they did annual reports [where] they kind of summarized what their activities were, but there were never any actual financial reports of what their actual expenditures were or comparisons to the budget," said Van Laar.

Over the years, the City never requested the annual financial report from the Chamber, something Vice Mayor Amy Bublak addressed.

"I am disappointed in the City and I'm a part of that; I've been on Council for six years and this is a very disappointing situation to be in where we didn't have an oversight on our contracts like we should have and we have addressed that by our Strategic Plan," said Bublak.

Although Bublak acknowledged the City's part in not enforcing the agreement over the years, she said the City cannot let the issue drop.

"We can't just forgive this funding...we can't just consider it done because it is public funds and that would be a gift of public funds and that's illegal," Bublak said.

Along with having a point of contention on whether the review should have been a formal audit, as was voted on by the City Council, the Chamber also had an issue with the parameters of the process.

"We disagree with Kemper's interpretation of the contract to determine their specific analysis. So what we would ask going forward is that the City would consider the Chamber's interpretation of the agreement and addendums as part of a final resolution," said Chamber interim President and CEO Paul Wright.

Before voting on a resolution to move forward with this issue, the Council discussed exactly how that process would work.

Councilman DeHart requested public meetings to discuss possible reparations to the City, while Mayor Gary Soiseth said the process would move much quicker if he had confidential meetings with the Chamber representative and then brought a resolution back to the Council for discussion and adoption.

Council member Steven Nascimento suggested a two-member Ad Hoc Committee to meet with the Chamber, but again Soiseth argued that the issue needed to be resolved in a timely manner.

The Council voted 5-0 for the Mayor to move forward with creating a resolution.