FAYETTEVILLE — The Fayetteville Advertising and Promotion Commission received a clean report in its first external audit.
“There were no deficiencies that we identified that rose to the level that they would have to be included in this letter,” Roxie Benincosa with Beall Barclay told commissioners Monday.
The commission contracted with the Rogers accounting firm in January based on direction from city officials.
“It was just time,” Vicki Deaton, Fayetteville’s internal auditor, said about the organization that receives more than $2.5 million in hotel, motel and restaurant taxes each year and awards thousands of dollars to various festival organizers and nonprofit groups.
By The Numbers
Tax Revenue
Hotel, motel and restaurant taxes, which were about 80 percent of the Advertising and Promotion Commission’s revenue last year, are up $62,332, or roughly 6.2 percent, through the first five months of 2013.
2013 2012 Percent Increase
January*$211,138$205,9392.5 percent
Feburary*$187,562$178,2895.2 percent
March*$213,526$201,015 6.2 percent
April*$228,865$217,8405.1 percent
May*$228,289$203,96612 percent
Year-to-date*$1,069,381$1,007,0496.2 percent
Source: Fayetteville Advertising And Promotion Commission
The commission, for accounting purposes, is considered a “component unit” of the city. The city is the entity with the legal authority to levy a tax on hotel stays and food purchases in restaurants. It’s up to the seven-member commission, with two city appointees, to manage the tax money it receives.
The city’s only other component unit is the Public Library and it has been audited for years, Deaton said.
Auditors with Beall Barclay noted in a 16-page report the commission reports its finances on a modified accrual basis, meaning revenue is posted as it is received and expenditures are listed when paid. The system of accounting is a different model than what the city uses.
Jerri Kuburich, the commission’s accountant, told commissioners Monday it makes sense to stick with the modified accrual basis of accounting. Otherwise, a November event that has been booked at the Town Center would appear on the commission’s monthly financial statement, even though the event has not yet been paid for, Kuburich explained.
“For me, it’s a little more confusing for an entity like the A&P Commission to go to a full model,” Benincosa said.
Marilyn Heifner, executive director of the commission, said it would cost about $13,000 to conduct an audit using the city’s accounting principles, whereas this audit cost $8,000.
Benincosa noted several minor problems that the audit uncovered but weren’t listed in Beall Barclay’s report. Benincosa told commissioners inventory at the Visitors Center could be recorded better. She said depreciation on the Town Center should not include land depreciation — only the value of the building. And, she added, several small invoices were not properly carried over from the prior year’s budget.
The commission reported about $3.2 million revenue in 2012. Nearly 80 percent came from hospitality taxes. Other money came from rental income, Visitors Center sales and advertising and parking fees at the Town Center parking deck. The commission’s largest expenditures in 2012 were payments on Town Center bonds ($674,000); advertising ($573,000); salaries and wages ($456,000); and funding for festivals and nonprofit groups ($366,000).
The commission reported a $4.2 million balance at the end of 2012, up about $225,000 from the beginning of the year.