SPRINGFIELD, Mass. (WWLP) – Springfield Mayor Domenic Sarno announced Monday night that an outside audit into the contract between the City and Kennedy Golf Management, Inc. (KGM) has been completed, and found procedures weren’t followed, and KGM owes Springfield a yet-to-be-determined amount of money.
Springfield’s Audit Committee used the outside firm Powers & Sullivan, LLC, to help make sure certain provisions of the City’s 2015 and 2016 golf course contracts with KGM were followed. The outside audit was started in August of 2016 after an initial review of golf course revenue and cash handling practices; as well as the Internal Revenue Service Criminal Investigations Unit’s issuance of search warrants on July 28, 2016 at the Veterans Memorial Golf Course and Franconia Golf Course.
The City terminated its contract with KGM in November of 2016 citing a suspected breach of contract.
According to Marian Sullivan from the Springfield Mayor’s office, Powers & Sullivan reported the following:
- It does not believe that KGM properly accounted for or deposited with the City all City revenues including cart rentals, greens tickets, tournament proceeds, and gift certificate revenues.
- Based on observations and conversations with various personnel, the City’s cash registers were not being used to properly record all revenues belonging to the City.
- Based on their analysis, the expense reimbursements (advances) made to KGM in 2015 and in 2016, KGM did not provide adequate support for its actual expenses and indicates that KGM was over paid.
- Reporting requirements of the two contracts were not met and the report cites deficiencies in the amount and timeliness of the reporting requirements of the contracts.
“The golf course contract with the City was ended on November 20, 2016 after the first review showed that the vendor was in breach of contract,” Sullivan said. “Now that this outside audit is complete, the City’s Internal Auditor will determine how much money the City is owed.”
Springfield City Councilor Timothy Rooke said the unaccounted-for amount of money was as much as $300,000, over an 8 year period, but auditors can’t confirm that amount; “They can’t confirm it because I think one of the problems is the IRS came in and seized a lot of records. So until we can get those documents, we won’t know the final dollar amount.”
Rooke said the City needs more information to determine how much money they’re owed. He added that City employee will now keep track of golf course usage and fees.