Friday, May 25, 2018
Business

Financial expert recommends changes for Hernando fair association

BROOKSVILLE — The Hernando County Fair Association needs to get its financial and procedural act together because past practices have put the organization in a bad light with the community, have put board members at risk and have generated questions about conflicts of interest.

That was the message sent to the association by its own financial expert when he provided the fiscal statements the organization needed to receive its permit for the event several weeks ago.

Certified public accounting firm Kierzynski & Associates of Spring Hill even provided a road map for how the fair association can improve — one that mirrors recommendations made in a report from a fair board subcommittee last month.

The accounting firm noted several problem areas with the fair board's leadership. These include a failure to file its federal tax return and annual financial reports on time, allowing its corporate status to lapse, and not properly monitoring possible conflicts of interest by board members.

Not filing reports on time, the accounted noted, sends the wrong message. "Being a volunteer association, appearance to the public is very important,'' the report states.

"Never let the state of Florida annual report lapse,'' was another recommendation. "Appearances from this one act are very damaging. Personal liability is open when a corporation does not exist.''

Although the association's own procedures call for an audit every five years, none has been conducted in recent memory. The accountant requested the fair board minutes when the board decided not to do an audit. Fair association spokeswoman Sandra Nicholson says those minutes don't exist because the subject was never discussed. Nicholson, who is past president, accepted responsibility for not getting audits done.

The accountant also notes that, even though the association has a policy on conflicts of interest, it must do more to "work around conflicts'' even if it means substituting officer duties to avoid them.

And like the association subcommittee's recommendations, the accountant also recommends a "full review of internal control" by an outside accounting firm.

Board member Jim Gordon, who was part of the three-person board subcommittee that issued the earlier report, said he agreed with Kierzynski & Associates' assessments and wants to see the board act on them. It is his understanding that an audit will be completed after this year's fair, to be held April 4-12.

"This is what it's going to take to get things to the way they should be," Gordon said. "This is what the public wants."

According to the report, the fair association earned $279,908 during the most recent fiscal year, which ended May 31. The money came from the annual fair, facility rentals and other activities. The report said the association's expenditures totalled $255,107, not including depreciation allowances for property and equipment, leaving a cash profit for the year of $24,801.

The report also noted that the association entered into several barter transactions but "did not account for the value of such services. Therefore, the related income and expense for these transactions has not been reflected'' in the financial report.

Nicholson said the association has that documentation but the accountant never asked for it.

Nicholson said she has been too busy getting the fair put together to read the financial report carefully.

Although the association missed an Oct. 15 filing deadline with the Internal Revenue Service, Nicholson said she believed that the new accountant has agreed to file the association's required forms and has not missed a deadline extension.

The fair board's tax-exempt status is intact, she said.

Nicholson was among three fair representatives who appeared before county commissioners in January seeking $20,000 in financial help to stage this year's fair. However, commissioners declined to act on the request until additional information could be provided. A few days later, the Hernando County Sheriff's Office launched an investigation looking into the association's financial dealings. The investigation is ongoing.

"We don't know what's going to happen with the sheriff. They keep asking for more things but they haven't found anything yet,'' said county Commissioner Nick Nicholson, Sandra's former husband and the county's fair board representative. "Until it's over, we don't know what's going to happen.''

He said he has also not had a chance to look at the financial report or the recommendations but he believes the fair board will do what it can to tighten up its procedures.

Sandra Nicholson, who is not a board member, said she thought the board would act on all the recommendations.

"As far as I know, it's at all feasible," she said, adding that if all the questions about the fair's operations are simply a way to make it straighten out its house and put on a good event, "then that's not a problem at all.''

Nicholson said that the fair is on track to take place in its usual manner, but noted that several key volunteers have been unable to help with the start-up.

"This year has just been crazy,'' she said. "As things got dropped, and things happened, there was nobody there to pick up the slack,'' she said.

At its monthly meeting Thursday, board members discussed ways to recruit as many volunteers as possible for the event.

Nicholson had a message for the fair board and people who will come onto the board in the next few months:

"Someone else is going to have to step up to the plate and share some of this responsibility,'' she said. "The board members they put in place, they're going to have to get in here and work."

Logan Neill can be reached at [email protected] or (352) 848-1435. Barbara Behrendt can be reached at [email protected] or (352) 848-1434.

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