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HomeMy WebLinkAbout2122-1 2021 County Fair Ticketing and selected areas report ( Final 9-8-21)2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 2021 County Fair – Ticketing and selected areas To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org Deschutes County, Oregon David Givans, CPA, CIA Deschutes County Internal Auditor 1300 NW Wall St, Suite 200 Bend, OR 97701 (541) 330-4674 David.Givans@Deschutes.org Audit committee: Daryl Parrish, Chair - Public member Jodi Burch – Public Member Tom Linhares - Public member Scott Reich - Public member Summer Sears – Public member Stan Turel - Public member Patti Adair, County Commissioner Charles Fadeley, Justice of the Peace Lee Randall, Facilities Director Take a survey by clicking HERE 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 TABLE OF CONTENTS: HIGHLIGHTS 1. INTRODUCTION 1.1. Background on Audit …………..……………………………………………………..…….. 1 1.2. Objectives and Scope ………………….………………………………………………….… 1 1.3. Methodology …………………………………….…………………………………………….… 2 1.4. Background on Deschutes County Fair ……………………………………….…. 2-5 2. FINDINGS and OBSERVATIONS 2.1. Ticketing ….……................................………………………………………………….. 5-8 2.2. Money handling ……………………………………………………………..………….... 8-16 2.3. Third party food and beverage concessions …………………….……..…. 16-18 2.4. Contractor ………………………………………………………………………………………. 19 3. MANAGEMENT RESPONSES Deschutes County Fair & Expo ………………………………………………………... 20-24 Deschutes County Finance …………………………………………………………………... 25 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 HIGHLIGHTS Why this audit was performed: To review the 2021 County Fair for these selected areas. What is recommended Recommendations include: • analyzing convenience fee charges; • working on approach for overseeing fair money handling operation; • reinforcing proper transitioning of sellers; • basing future scheduling of volunteers on ticket sales data by hour; • developing a change policy; • reducing change fund and potential consolidation of oversight; and • providing a receipt book and a means to process credit cards. 2021 County Fair – Ticketing and selected areas The 2021 County Fair is under the management of Deschutes County Fair & Expo. The 2021 County Fair was a re-opening fair since the pandemic started and marks the 101th fair. A number of new initiatives were anticipated in the areas of tickets and management of the fair that made it especially important to have an audit. What was found The ticketing system provided a robust product to fulfill ticket sales (online and in-person) for the Fair. Nearly 67% of sales of admission tickets and carnival wristbands occurred online. A number of minor adjustments were identified and made to the ticketing system during the initial days of the fair. Ticketing system (Saffire) costs were not completely covered by convenience fee charges. Overall, Fair & Expo management’s planning for fiscal controls over money handling went pretty well. There were observations noted to help further improve the procedures put into place including: • improving coordination of money handling support; • additional training needed for sellers on transitions; • improving volunteer seller scheduling (with new ticketing data); • developing a County change fund policy; • reflecting on whether change funds might be decreased with increased online and credit card sales; and • restating accounting for carnival and gate admissions to agree with ticket system reports. Oversight of third party food and beverage concessions could be improved. Deschutes County Internal Audit 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 1 1. Introduction 1.1 BACKGROUND ON AUDIT Audit Authority: The County Internal Auditor has authority to initiate audits outside of the workplan for cause. After discussion with Deschutes County Fair & Expo management, audit committee chair, and County management determined the audit should be performed for the 2021 County fair. The internal audit contemplated looking at a new ticketing system, contractor led money handling; and contractor oversight over third party concessions, which were new for the County Fair. A number of the observations and recommendations were made during the start of the fair so that there was some time to address these during the fair. 1.2 OBJECTIVES and SCOPE Objectives: The objectives were. 1) Review and observe procedures for new ticketing machines and sales oversight. 2) Review and observe procedures for handling monies, change, and deposits. 3) Review and observe oversight over third party food concession sales. 4) Be aware of any issues with compliance with County policy, federal and state regulations and requirements, as may be applicable for these objectives. Scope and timing: The audit commenced July 20, 2021 and continued into August 2021. The County Fair ticket sales started in early July and went through the end of the Fair on August 1st. The County Fair is accounted for in Fund 616. The focus was on selected streams of revenues from the Fair. The scope did not include all revenue sources. Access was provided to the ticketing software system. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 2 1.3 METHODOLOGY This statement is your assurance that the audit was performed in accordance with professional standards. Audit procedures included:  Interviewed and observed County Fair staff, contractors and volunteers on ticket selling/redemption and money handling practices and procedures during the fair;  Analyzed general fiscal information on the County Fair ;  Analyzed and reconciled ticket sales and third party concession monies;  Inquired about control procedures developed for the money handling and ticket selling;  Reviewed ticketing software documentation and training provided online;  Reviewed and analyzed the ticketing application and associated data.  Reviewed provided documentation on procedures.  Reviewed the prior recommendations on the Deschutes County Fair; and  Reviewed applicable Oregon statutes and Deschutes County Code. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. (2018 Revision of Government Auditing Standards, issued by the Comptroller General of the United States.) 1.4 BACKGROUND ON DESCHUTES COUNTY FAIR The 2021 Fair when looking at gross revenues for selected types reviewed as part of this audit, appears to have done very well with overall growth from the 2019 fair of 28%. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 3 TABLE I – Selected Fair revenues comparison CHART I – Composition of 2021 Fair paid admission demographics * Source of estimates: Information from ticketing system for gate receipt and carnival; final carnival closeout; and concession closeouts. Prior year fair data from County Finance reports. It is important to remember there were additional costs incurred this year in the ticketing system that will offset some of the gains seen on revenues from gate receipts and carnival. Overall, the 2021 fair had strong attendance numbers. The overall demographics (as determined by ticket type paid) was skewed towards the adult range. Children under 6 were free and were not tracked during this year’s fair. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 4 CHART II – Composition of 2021 Fair paid admissions count by day of week CHART III – Composition of selling fulfillment for 2021 County Fair Friday and Saturday attendance are consistently among the highest. The ticketing for the Fair utilized QR codes assigned to each and every ticket. Once these tickets were scanned they were no longer valid. As noted in Chart III, nearly 67% of sales of admission tickets and carnival wristbands occurred online. Only 33% of these sales occurred at the box office. Credit cards were used 85% of the time. In prior fairs, there was offsite sales but no online fulfillment. This online system was part of bringing on the new ticketing software for the fair. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 5 PICTURE I – 2021 County Fair Test Admission Ticket Tickets utilized large unique QR codes that were easily scannable by a cellular phone application. 2. Findings and Observations The audit included procedures to assess certain areas for the 2021 County Fair. Audit findings result from incidents of non-compliance with stated procedures and/or departures from prudent operation. The findings are, by nature, subjective. The audit disclosed certain policies, procedures and practices that could be improved. The audit was neither designed nor intended to be a detailed study of every relevant system, procedure or transaction. Accordingly, the opportunities for improvement presented in the report may not be all-inclusive of areas where improvement may be needed and does not replace efforts needed to design an effective system of internal control. A significant deficiency is defined as an internal control deficiency that could adversely affect the entity’s ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. The findings noted were not considered significant deficiencies. 2.1 TICKETING The Deschutes County Fair & Expo management utilized a new ticketing system for the 2021 Fair. The County chose Saffire’s system for providing ticket sales. The system provided unique tickets (with QR 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 6 codes) to patrons and accountability for redemptions and monies. Customers could buy tickets online; at the Fair & Expo box office; or at the gates during the fair. All purchasers received a unique ticket tied to their purchase and redeemable only once at the gate. The tickets cannot be duplicated. The ticketing system helped DCFE management assure that occupancy limits could be monitored for each day of the fair. In addition, the system provides important new data on ticket sales that has never before been collected. New ticketing system provided a robust product to fulfill ticket sales. Ticketing system (Saffire) performed well and provides robust data. The ticketing system and associated support provided a robust product to fulfill ticket sales (online and in-person) for the Fair. Fair management had a representative at the beginning of the fair that helped assure that the systems and setup were ready to perform. Aside from some small tweaks, and a network outage for credit cards (a banking issue), the system performed well. Data exports available provide valuable tools to support cash handling; oversight of sales; and ticket redemption. The system had numerous online tutorials to aid first time volunteers in operating the product. The system has additional features/products that also could be used to enhance or expand services provided at Fair & Expo. Some observations improved operation of ticketing system. A number of minor adjustments were identified and made to the ticketing system during the initial days of the fair. These were not significant, but did help in the efficient operation of the system. These suggestions implemented included: a. Added age range descriptions to admission tickets to help sellers. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 7 b. Setup for receipts provided a receipt on all gate sales. This required checking a box with each seller setup. This is consistent with County policy (F-11) requiring printed receipts. c. Setup of each seller as an individual user. This aided in reconciling each user’s sales activity. d. Extending ticket sales times to anticipate closure of the gates for the day (usually around 9pm). This was originally set to 8PM. e. Reviewed and noted a product that had not been set up with a convenience fee charge for online sales. f. Discussed the need for additional onsite training for ticket sellers and ticket scanners. Some online training was accomplished prior to the event. Ticketing costs not adequately covered by convenience fee. Ticketing system (Saffire) costs were not completely covered by convenience fee charges. Fair & Expo management indicated that it was their hope that the convenience fee for online sales would cover some of the increased costs for the online ticketing system. Costs include website, ticketing system point of sale rentals, and charges on sales made online. Convenience fees were only assessed on online sales. Fair & Expo management has been posting these fees with gate and carnival revenue. Fair management indicated that it was customary in the industry to only charge a convenience fee on online sales. The setting of a convenience fee of $1 on each product was anticipated to be close to the costs incurred. This new technology and the move back to a fair post-pandemic results in some increased costs. It is not clear yet what all the costs are. Visibility could be improved by separating the convenience fee from the gate and carnival revenues. Convenience fees are higher for online transactions. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 8 The concession fees collected were a little over $39 thousand and not sufficient to cover the estimated ticket system costs of $77 thousand let alone the other ticketing expenses. It is recommended for fair management to analyze and model whether a change needs to occur in the convenience fee charged in future fairs. {As indicated the goal should be to balance the revenues with the cost of the system.} It is recommended for fair management to split out convenience fee revenue and associated ticketing costs to improve transparency of the ticketing technology net cost. 2.2 MONEY HANDLING Overall, Fair & Expo management’s planning for fiscal controls went pretty well. The following observations are noted to help further improve the procedures put into place. Coordination of money handling support could be improved. In the past, County Finance significantly managed the money handling operation for the County fair. For the 2021 fair, Finance could not be as involved due to the retirement of the lead staff person; turnover in other key staff; the two year hiatus between fairs; and finance staff committed to their primary jobs and other projects. The lack of continuity in lead and staffing of these operations resulted in some confusion over how the operations was going to be staffed. Fair & Expo management resolved this by contracting for money handling services and reaching out for additional volunteers. Additional volunteer support was obtained through other County staff and staff from the County’s bank (First Interstate Bank). 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 9 Contractor for money handling provided effective and efficient oversight of the monies. Finance had established fair cash handling procedures, in prior years, to assure that dual custody of cash was maintained at all times. Finance staff who routinely staffed the event were well versed on the procedures but were not available for the 2021 fair. The contractor hired to provide money handling services was experienced with fair money handling and provided effective and efficient oversight of the monies. Some added benefits from this experience were certain efficiencies gained in money handling; new setups with gate sellers; and collaboration with volunteers at the gates. Certain practices with the gate sellers that cannot be detailed here, reduced the needed support in the financial back office operations. This was important since the staffing available was limited. Non-finance staff volunteers (and the County’s bank) do not always understand why their participation is important or what they should be looking for. The contractor was in charge of the process and volunteers could benefit from a better understanding of cash controls. There was a perceived risk of having insufficient and inconsistent staffing to oversee the money handling operation. Additionally, cash handling procedures were not written in a way to be taken up by an outside party. However, the contractor was able to provide updated procedures based on their experience with other fairs that resulted in more efficient cash management. It is recommended for Fair & Expo to work on a more consistent approach to overseeing the fair money handling operation. It is recommended for Fair & Expo management to formalize written procedures over financial areas of the County Fair (including change, gate receipts, and concessions). {The County Internal Auditor created a listing of observed procedures that should help in the creation of procedures.} 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 10 It is recommended for the Fair & Expo management and the contractor consider reviewing some aspects of money handling with volunteers on how their presence is an important control over the cash being safeguarded. Seller overages and shortages indicates additional training needed for seller transitions. The cash handling is monitored for each seller. Cash over or short from expected were higher than expected for certain sellers but average out over the day and the fair. The maximum difference was an $889 shortage (this was offset by a similarly large overage). These variances appears to have occurred due to transitions of selling between sellers in the early days of the fair and not segregating their activities by seller. Sellers were supposed to retain their own bank till for their entire shift. Other seller activity or use of another’s bank could explain the overages and shortages. Over the entire fair the cash over/short was less than a thousand dollars. This is fairly reasonable but could be better. The ticketing system and the system processes were to restrict a cash drawer and that responsibility to each seller. Cash amounts deposited that do not agree with reported cash sales in the system by seller could be related to these transitions with other sellers. Credit card transactions are not monitored in the same way. Ticket sellers received minimal training in advance (online videos) and some direct training to the initial sellers on the initial days of the fair. Gate captains provided further trainings as the fair went on or if there were questions. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 11 It is recommended we reinforce with the gate supervisors and sellers the importance of proper transitioning as sellers are relieved by any other seller. It is recommended for all sellers to stay in control of their own bank and not allow other sellers to use it. The scheduling of volunteer sellers and ticket takers could be improved. The County Fair utilizes volunteer sellers and ticket takers from the Redmond Rotary. The schedule developed for the 2021 Fair was fairly similar across the fair even though significant increases in attendance were anticipated for Friday and Saturday and for most afternoons. Impacting the overall system was the use of a ticketing system where a ticket was issued for each customer for each day. However, the online sales resulted in more tickets sold in advance and only needing to be redeemed. Sixty-seven percent (67%) of the sales occurred online. Though there is anecdotal evidence, there hasn’t been before now detailed data by hour of selling volumes by gate. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 12 CHART IV – 2021 County Fair Main gate transaction trends versus seller counts (actual and scheduled) Source: Seller counts and transaction counts from ticketing system; Scheduled sellers from schedules. The sellers were able to respond to increases in demand by activating more sellers. At times, the main gate had up to seven sellers. However, on the busiest days and times (Friday and Saturday afternoons) they only had a maximum of six sellers. They often used gate captains to fill in as demand picked up. On some of the corresponding lighter times and at the slower carnival and north gates there were sellers scheduled that perhaps weren’t used to their fullest. As seen in Chart IV above, scheduled sellers (yellow line) were fairly consistent for all days except Sunday, where the schedule was reduced. Sales volumes (columns) routinely peak in the afternoons 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 13 except for Sunday. Active sellers (blue line) were generally in excess of scheduled due to gate captains that could jump in and sell when needed. Afternoon peaks could have used additional staffing on Friday and Saturday. This kind of data will help in planning the schedule for gate sellers to better align with the anticipated flow of customers. The ticket redemption data would likely also be helpful in planning future schedules for ticket takers (scanners) as well. In the absence of sufficient staffing, customers may experience increased lines and frustration from long lines. It also was observed that for the sellers and ticket takers that were present, the customers were not efficiently moved to appropriate lines. Rotary didn't appear to be taking an active role in balancing the load between sellers at the gates. It is recommended for future scheduling of the gate sellers and ticket takers to be based on historical customer loading at the gates over date and time. It is recommended for Fair management and Rotary to address proactive customer flow management for selling and ticket redemption to better accommodate the anticipated rushes that occur by gate and by hour. County lacks a change fund policy. County departments regularly receive authority from the Board of County Commissioners to hold change monies in their department. County Finance provided significant change funds to the 2021 County Fair without getting a resolution approved from the Board. There was some confusion whether County Policy F-14 provided Finance with the authority. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 14 County policies do not address change funds. County policy (F-14) talks to Finance overseeing banking authority, but is silent on their authority to approve these change monies to be held in the department. It also doesn’t seem necessary to have a public discussion on these moves of monies that could be the target of theft. A change fund is a set amount of money used by a department to make change for customers who are purchasing goods or services. The monies should be safeguarded from misuse and theft. The County has a petty cash policy (F-8) but not a policy directly discussing change cash. The change funds came from a disbursement through the County’s disbursement workflows. The accounting system provides visibility and authorization for such disbursements. The department is responsible for the custody and protection of the monies until returned. It is recommended for Finance to develop a change policy (possibly through an amendment to the petty cash policy F-8) to address the requirements for change cash issuance and its accountability. Overall, 85% of sales were by credit card. Change funds might decrease with increased online and credit card sales. The 2021 County Fair had significantly online and credit card sales activities. Credit cards sales at the gate account for over fifty four percent (54%) of the dollars. This is a significant increase over the thirty six percent (36%) seen at the 2019 fair. In addition, the County operated food & beverage operation has seen improvements in credit card usage. Food and beverage separately manage their change and cash handling operations. If they worked together, they might be able to further reduce change funds needed. Change funds were reduced by about 21% from the 2019 County Fair. This reduction from historical levels was in part due to perceived impacts of moving sales online. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 15 Customers are using credit cards more frequently. The data from the new website and ticketing system can provide additional data on trends in cash sales. Cash used for change could likely be reduced. Obtaining and caretaking for greater change funds than is needed creates additional risk. Consolidating oversight of the change funds might streamline some of the cash handling risks. It is recommended for Fair & Expo management consider how much it can further reduce their change fund for the next fair and whether it could consolidate some of the oversight and needs of the food and beverage operation. Accounting for carnival and gate admissions should be restated to agree with ticket system reports. Initial accounting for the carnival understates the revenues by around $170,000. Gate admissions was similarly overstated. This is due to use of deposits for reporting the breakdown between these areas. Fair & Expo staff use deposit information for accounting as it is readily available. This is not as good as the underlying reporting available from the ticketing system. However, during the fair credit card revenues can deposit on days differently than they show up in reporting. This makes reconciling by day during the fair problematic. Staff did not reconcile ticketing system yet with the cash deposits. During the audit, the amounts were reconciled within a reasonable amount for a specific day and for the entire fair. Monies were identified that were still expected to be collected from Saffire. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 16 It isn’t quite clear how the overall deposit information resulted in the misstatement of revenues by object. Re-classing the sales (between gate admissions and carnival) to record the appropriate amounts will help in accurately reporting results of the Fair. Fair results are continually relied on for budgeting and projections. It is recommended for Fair and Expo management to consider re-classing sales (between carnival and gate admissions) to more accurately reflect the accounting. 2.3 THIRD PARTY FOOD AND BEVERAGE CONCESSIONS Third party food and beverage vendors are hired by Fair & Expo to provide more food and beverage options at the fair. Oversight of third party food and beverage concessions could be improved. Fair & Expo management changed the oversight of the third party food & beverage vendors to be handled by the contractor that handled cash monies and the contractor that managed the vendors. Monitoring food and beverage vendor sales is important as Fair & Expo receives a percentage of the sales reported. No written procedures were provided on the associated duties and procedures to take place. A couple of areas were noted that could be improved, including • Deschutes County receipt book was not available to contractor to receipt monies received from the third party food & beverage vendors. County policy (9-1999-075) requires Department specific pre-numbered duplicate receipts be used. • The contractor for auditing food and beverage did not have the ability to collect monies via credit card. The department should consider whether they should accept credit cards since these come with an added fee. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 17 • Reports did not notate the sales that were collected for Tuesday sales that occurred. They were notated but not detailed out. • One vendor indicated they didn’t have an appropriate register for the collecting sales information. Fair & Expo had registers but the contractors did not enforce this rule. • Some vendors did not have registers that used created traditional z tapes and instead provided online reports. With these controls not in place, there can be a lack of controls over the associated sales. This might result in under-reported sales and less shared revenue for Fair & Expo. It is recommended for Fair & Expo to plan and provide a receipt book and a means to process credit cards if they are allowed. It is recommended for the concession balancing spreadsheet be edited to include potential Tuesday sales. It is recommended for the contractors to adhere to the register rules without exception. Technology advances may provide additional options to control food and beverage sales. Controls over food vendors rely on trying to have control over their sales registers. Given the cash basis business there may be some sales that may not be recorded. With cash sales there will always be a risk of unreported or under-reported sales. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 18 CHART V – 2021 Fair: Trend in admissions vs. third party food & beverage concession gross revenues reported. The following chart (Chart V) was developed to see if reported daily third party food and beverage revenues moved along with admissions as would be expected. Overall, it appears that gross revenues for food and beverage was correlated with admissions. It cannot be determined if all sales were reported. Technology advances are moving in the direction of allowing control of all cash used at the fair. With the advent of new technology, a RFID chip can be used to load money and control all sales made with vendors for food & beverage. This would come with additional costs and practices that would need to be explored. It is recommended for the Fair & Expo management to consider whether implementing a control over all food and beverage sales (and the associated control benefit) outweighs the costs for setting up the system and whether this brings other potential benefits. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 19 2.4 CONTRACTOR Contract with new contractor for handling monies and third party food and beverage concessions could have been improved. The contractor was hired using the standard agreement used for many fair contracts. The contract waived much of the insurance coverages and did not include appropriate bonding coverage for the handling of monies. Legal Counsel had not reviewed this specific contract and nor had Risk Management reviewed insurance and bonding requirements. The contractor’s responsibilities replace the County's finance department’s role (in prior years) and handling significant cash, could arguably be a significantly higher risk. Bonding generally is required to cover the highest level of monies under custody. Fair & Expo in response to raised concern obtained a background check for the contractor as well as obtained a $100,000 dishonesty bond. Many vendors for County Fair fall under usage of a prescribed agreement form approved by County Counsel. However, most of those are not as financially impactful as this particular contractor. It is recommended for the County to use an expanded contract form for a contractor used for handling monies and include a background check, Legal Counsel review, Risk Management review, and appropriate bonding. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 20 3. Management responses Deschutes County Fair & Expo Director Geoff Hinds DATE: September 7, 2021 TO: David Givans, County Internal Auditor FROM: Geoff Hinds; Director, Fair & Expo CC: Tom Anderson, County Administrator Nick Lelack, County Administrator SUBJECT: Response to 2021 County Fair Audit – Ticketing and selected areas report #21/22-1 • It is recommended for fair management to analyze and model whether a change needs to occur in the convenience fee charged in future fairs. {As indicated the goal should be to balance the revenues with the cost of the system.} We agree with the auditors’ comments, and the following action will be taken; the operational cost of the new ticketing system will be taken into account during the FY 22 and future budgeting process. It is possible that increasing ticketing fee’s to cover the full cost of the system may create a higher than average/reasonable fee, and create negative consumer response; if so the expense of the new ticketing system may need to be supplemented through other budget means. • It is recommended for fair management to split out convenience fee revenue and associated ticketing costs to improve transparency of the ticketing technology net cost. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 21 Fair & Expo comments, continued We agree with the auditors’ comments, and the following action will be taken; as part of the FY 22 budget a new “Fee” class will be proposed for adoption. This new Fee class will be for the absorption of Convenience/Ticketing fees. • It is recommended for Fair & Expo to work on a more consistent approach to overseeing the fair money handling operation. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo will work proactively with Deschutes County Finance to find a consistent, workable model for future Fairs. Initial conversations indicate that this may include a continued hybrid model, of utilizing an outside contractor in tandem with County staff for each annual County Fair & Rodeo. • It is recommended for Fair & Expo management to formalize written procedures over financial areas of the County Fair (including change, gate receipts, and concessions). {The County Internal Auditor created a listing of observed procedures that should help in the creation of procedures.} We agree with the auditors’ comments, and the following action will be taken; Fair & Expo will create and adopt a written financial procedures process for the annual County Fair. This will include written process for, change, gate receipts, and concessions. • It is recommended for the Fair & Expo management and the contractor consider reviewing some aspects of money handling with volunteers on how their presence is an important control over the cash being safeguarded. We agree with the auditors’ comments, and the following action will be taken; prior to the annual fair written cash handling, and gate receipt process’ will be provided to all staff and volunteers for review. Where possible, prior to Fair a training/orientation will be conducted by Fair management and/or Contractor to provide an overview of the process. • It is recommended we reinforce with the gate supervisors and sellers the importance of proper transitioning as sellers are relieved by any other seller. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 22 Fair & Expo comments, continued We agree with the auditors’ comments, and the following action will be taken; additional training will be provided to gate supervisors and ticket sellers regarding proper procedures for opening and closing of each sales location, and for the transitioning of a seller at each sales location. • It is recommended for all sellers to stay in control of their own bank and not allow other sellers to use it. We agree with the auditors’ comments, and the following action will be taken; additional training will be provided to gate supervisors and ticket sellers, and each seller will be responsible for their own cash bank. Close out/transition procedures will be clearly defined for the transition between sellers at a single sales terminal, these procedures will not allow for the use of a shared terminal or cash bank. • It is recommended for future scheduling of the gate sellers and ticket takers to be based on historical customer loading at the gates over date and time. We agree with the auditors’ comments, and the following action will be taken; with additional data from the use of the Saffire ticketing system at the 2021 Fair & Rodeo, Fair management will work with Rotary or other ticketing staff or volunteers to adjust/increase scheduling based on historic peak periods, and to reduce staff during periods of lesser sales volume. • It is recommended for Fair management and Rotary to address proactive customer flow management for selling and ticket redemption to better accommodate the anticipated rushes that occur by gate and by hour. We agree with the auditors’ comments, and the following action will be taken with additional data from the use of the Saffire ticketing system at the 2021 Fair & Rodeo, Fair management will work with Rotary or other ticketing staff or volunteers to adjust/increase scheduling based on historic peak periods, and to reduce staff during periods of lesser ticket redemptions. • It is recommended for Finance to develop a change policy (possibly through an amendment to the petty cash policy F-8) to address the requirements for change cash issuance and its accountability. N/A – See Finance response 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 23 Fair & Expo comments, continued • It is recommended for Fair & Expo management consider how much it can further reduce their change fund for the next fair and whether it could consolidate some of the oversight and needs of the food and beverage operation. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo management will work with Finance and banking staff to determine further reduced amounts of Cash to be held on grounds during each preceding fair & Rodeo. As Credit Card and online sales continue to increase, it is estimated that this amount (cash) could further decrease each year. • It is recommended for Fair and Expo management to consider re-classing sales (between carnival and gate admissions) to more accurately reflect the accounting. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo will re-class the sales between Admissions and Carnival to accurately reflect the earned revenue for each category. • It is recommended for Fair & Expo to plan and provide a receipt book and a means to process credit cards if they are allowed. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo will order Fair & Rodeo specific receipt books for use during the annual Fair & Rodeo; these receipt books will be part of the written established procedure. Additionally, a credit card processing terminal will be utilized for future “Check- Out” of vendors during Fair close-out. • It is recommended for the concession balancing spreadsheet be edited to include potential Tuesday sales. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo management and/or Contractor will amend the balancing spreadsheet to ensure that it includes a separate column for any/all days of sales including but not limited to Tuesday. • It is recommended for the contractors to adhere to the register rules without exception. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo will require all vendors to adhere to register rules without exception. Fair & Expo may acquire additional registers or sales 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 24 Fair & Expo comments, continued terminals that may be utilized by vendors who lack the appropriate equipment, there may be a charge for this service. • It is recommended for the Fair & Expo management to consider whether implementing a control over all food and beverage sales (and the associated control benefit) outweighs the costs for setting up the system and whether this brings other potential benefits. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo management will spend time this fall researching Coordinated Point of Sale systems to track all sales on grounds; and determine if the benefit outweighs the expense at this time. If these systems do not appear to be financially prudent at this time, management will continue to conduct annual research for future years. • It is recommended for the County to use an expanded contract form for a contractor used for handling monies and include a background check, Legal Counsel review, Risk Management review, and appropriate bonding. We agree with the auditors’ comments, and the following action will be taken; Fair & Expo will work with Legal and Risk management on the development of an agreement/expanded contract form to be utilized for any/all contractors who will be handling cash. This will include but not be limited to background checks and bonding, at levels determined by Legal or Risk Management. 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 25 Deschutes County Treasurer and Chief Financial Officer, Greg Munn DATE: September 7, 2021 TO: David Givans, County Internal Auditor FROM: Greg Munn, Treasurer and Chief Financial Officer CC: Tom Anderson, County Administrator Nick Lelack, County Administrator SUBJECT: Response to 2021 County Fair Audit – Ticketing and selected areas report #21/22-1 1. It is recommended for Finance to develop a change policy (possibly through an amendment to the petty cash policy F-8) to address the requirements for change cash issuance and its accountability. Agree that the current policies should be reviewed for possible modification. {End of Report} DESCHUTES COUNTY FINANCE DEPARTMENT Greg Munn, Treasurer and Chief Financial Officer 2021 County Fair – Ticketing and selected areas report #21/22-1 September 2021 2021 Page 26 Please take a survey on this report by clicking on the attached link: https://www.surveymonkey.com/r/2021CountyFair_2122-1 If you would like to receive future reports and information from Internal Audit or know someone else who might like to receive our updates, sign up at http://bit.ly/DCInternalAudit.