Audit faults TRAC planning, risks and communications

A recent audit slams Pasco’s TRAC facility for a number of management deficiencies, including risk management, strategic planning, budgeting and some aspects of its financial operations.

Franklin County commissioners are expected to hear a presentation on the report at their April 29 meeting.

The audit was conducted between Nov. 16 and Jan. 22 by Minneapolis-based CliftonLarsonAllen LLP, which was hired for $50,000 after the State Auditor’s Office found problems related to the handling of TRAC’s cash machines last year.

TRAC received the lowest grade allotted, “unsatisfactory,” in the area of business risk and strategic planning, the audit said. It was criticized for not having a policy to assess business risk on a periodic basis.

It was given a rating of “needs improvement” in the areas of revenue sales to cash processes, payroll processes, accounting and financial reporting and capital expenditures.

It was only considered “satisfactory,” the highest rating, for its purchase to pay processes.

Management has not provided short- or long-range capital budgets for maintenance or facility improvements, the report said. It recommends a seven-year budget to be prepared annually showing projected needs over time.

TRAC also has not developed a system to determine the profitability of different types of events, which is key in finding a target market, effective use of the facility and cash flow projections, the report said.

The report also recommends that TRAC adopt an enterprise risk management framework to help it better deal with uncertainty. At a minimum, management should work with the county each year to look at potential internal and external risks, and how to minimize the likelihood of adverse outcomes.

That would require the different parties to work together better than they now do, because TRAC, its advisory board, the county auditor and county commissioners also need to communicate better, the report said.

There is a lack of internal communication, as well as misunderstanding and ineffective actions, the report said. That exposes the facility to additional competitive and community pressure. It recommends that TRAC management and the auditor meet on a regular basis to discuss operations and risks.

The operation lacks written accounting policies and procedures, the report said. Management needs to provide monthly information to the advisory board with budget updates and event statistics.

Box office procedures are not documented, the report said. Management also needs to consider whether the facility’s box office setup is appropriate for the security of cash receipts and the safety and comfort of employees.

TRAC is also advised to better segregate its payroll duties, because its finance manager picks up paychecks from the county and then distributes them to employees.

CliftonLarsonAllen also suggests that TRAC create a “Code of Ethics and Business Conduct,” which is “meant to inspire” employees. It includes suggested themes like “build trust and credibility,” “respect for the individual” and “set the tone at the top.”

The report has suggestions for policies on whistleblowers, employee conflicts of interest and accepting outside gifts. It suggests referring media inquires to a public relations executive to ensure that everyone speaks with one voice and provides accurate information.

Troy Woody, who served as TRAC general manager for 10 years before resigning earlier this month to focus on his solar business, declined to comment Friday.

Commissioners Brad Peck and Rick Miller could not be reached Friday, while Commissioner Bob Koch said he could not comment because he had yet to see the report. County commissioners have final say on TRAC operations, though costs are shared with Pasco.

County Auditor Matt Beaton, who recommended the outside audit to commissioners, said he would wait until the presentation to commissioners to speak about it.

TRAC suffered what might be a record operating loss of $516,000 last year.

Commissioners found a private operator for the facility’s ATMs and separated operations of the neighboring recreational vehicle park from TRAC after the state audit.

This story was originally published April 24, 2015 at 10:23 PM with the headline "Audit faults TRAC planning, risks and communications."