Editor’s note: The Barrie Colts' response to the city audit is reported here.
It passed through Barrie council with little or no fanfare but a recent report on the city’s agreements with the Colts organization for operation of the Sadlon Arena makes for fascinating reading.
The report is also rather disturbing.
City hall’s Internal Audit has only a handful of employees, including Sarah MacGregor, the director since the department’s creation in 2016. Reporting directly to the city CAO, its tasks include ensuring adequate controls are in place to protect corporate assets, finding efficiencies, investigating fraud allegations and educating city employees to reduce risk.
At the request of Barrie’s general manager of community and corporate services several years ago, the Internal Audit department took a look at the city’s third-party agreements with the Barrie Colts organization for the period of Jan. 1, 2018 to Feb. 28, 2023. The results were presented to the city’s finance and responsible governance committee in late September.
City hall has two agreements with the Colts for the Sadlon Arena: one covering advertising in the building and the other covering food and drink sales. The city, as the owner of the facility built with taxpayers’ money, is supposed to get a portion of the revenue from both.
The audit found that wasn’t happening regularly for the past few years. Sometimes the amount due wasn’t being submitted, sometimes the amount was being “underreported.” Internal Audit conducted a survey of 25 advertisers, picked at random, and found 68 per cent of them had “discrepancies” affecting the city’s revenue.
A total of just under $20,000 was underreported to the city between 2017 and 2020, said Internal Audit, noting the real figure was likely greater because of “advertiser agreements requested but not received” and “corporate sales summary reports not yet issued” by the Colts.
In fact, Internal Audit was unable to assess another $51,570 in eligible revenue because the advertiser agreements or other information requested was not received from the Colts organization. In some cases, the Colts said agreements did not exist for the period being reviewed, despite revenue being reported from those advertisers.
On the concession side, the news was even worse.
(As a side note, the Colts have been somewhat unusual in today’s world by accepting only cash, not debit or credit, for food and drink in the Sadlon Arena. The Internal Audit report says examining the organization’s cash handling controls and procedures was “outside the scope of the city’s contractual rights.”)
The Colts, called the “Sadlon tenant” in the report, neither reported its concession income nor submitted any money to the city between September 2021 and June 2022, citing the pandemic and relief measures implemented by the city.
But the audit report notes the city’s COVID-19 relief measures, offered to some of the city’s commercial tenants, ended on July 1, 2021 — before the period in question — and the Colts were never offered such relief. In fact, the Sadlon Arena was open during that time but the city wasn’t being paid any concession revenue. Furthermore, the Colts were accruing an amount as payable in their own accounting system, just not actually forwarding it to the city.
That amount? $50,717.
In May, city council voted to extend the current agreement with the Colts organization for the Sadlon Arena to extend the “existing facility use and concession agreements on the same terms and conditions” for nine months while a new deal is negotiated. Those discussions should be interesting.
Barry Ward is a veteran editor and journalist who also served on Barrie city council for 22 years. Fair Comment appears regularly in BarrieToday.
