Natchez Convention Center financial statements released to public
Published 12:01 am Friday, February 16, 2018
NATCHEZ — A financial performance review of the Natchez Convention Center released earlier this week revealed the contracted management company did not properly provide financial statements required under its agreement with the city.
Amid a reconsideration of who should manage the convention center going forward, the Natchez Board of Aldermen requested the review.
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Natchez Mayor Darryl Grennell said he had not yet been able to examine the review, but he said the findings would influence whether the city decides to issue on RFP for management of the convention center or renegotiate with New Orleans Hotel Consultants, which has managed the property since 2007.
The review, conducted by Madison accounting firm Collins, Barr and Hembree Ltd., stated that convention center manager NOHC did not comply with the terms of its contract with the City of Natchez.
After first submitting financial documents that had been presented to the city in March 2017 — documents that many city officials considered inadequate — Collins, Barr and Hembree obtained profit and loss statements and balance sheets for 2014 through Sept 2017.
A determination resulted that “there is no evidence that (NOHC) provided annual profit and loss statements nor annual budgets to the City in a timely manner,” as the contract stipulated NOHC would.
NOHC has always provided the city with financial reports, but this is the first receipt of detailed financial statements, according to the review.
The statements acquired showed income rising from approximately $720,000 in 2014 to approximately $846,000 in 2016, though the review noted adjustments had to be made in the NOHC’s reporting of revenues.
The review states that in 2014 and years prior, revenue for future events was being recorded at the time contracts were signed, meaning the revenue was expected but not yet collected.
NOHC, the report says, began deferring income for future events in 2015, totaling approximately $43,000 of income from signed contracts for future events deferred at Dec. 31, 2015 and approximately $66,000 deferred at yearend 2016.
Of the four years reviewed, three showed net gains: $2,190 in 2014, $36,879 in 2015 and $16,321 as of Sept. 2017.
The year 2016 showed a net loss of $27,734.
The accountant firm also analyzed a sample of 20 of the larger cash payments made by NOHC throughout the three-year period reviewed. Through that analysis, the firm determined the expenditures appeared to fall in line with reasonable operating expenses as spelled out in the city and NOHC’s contract, though it notes that “the contract states that all expenses not specifically listed are subject to approval by the city.”
One significant adjustment Collins, Barr and Hembree noted that resulted from the review was the addition of $128,000 to 2016 catering fees income to correct a misstatement. The income for that year originally was $88,298 while catering expense was $188,944.
Another note made on catering expenses is that 71 percent of catering fees went to the Natchez Grand Hotel — also owned by Reuther — in 2016.
Discussions with multiple convention center employees led to the consensus that “no special emphasis is placed on conducting business with the Grand Hotel.”
For years other local caterers have complained that the convention center steered business to the Grand Hotel and away from them.
The two other significant adjustments noted by the firm consisted of an approximately $29,000 overstatement of 2014 accounts payable expenses and an approximately $15,000 overstatement of cash in 2017, both of which were corrected.
The review also states that NOHC has engaged Silas Simmons LLP to assist with preparing internal financial statements.
“Although no assurances are given by the CPA firm since they are only providing accounting assistance, their involvement should add more credibility to the internal financial statements,” the financial review reads.
A joint committee between Grennell, the Natchez Convention Promotion Commission and the city’s public properties committee comprised of three aldermen, plans to meet within the next two weeks to thoroughly examine and discuss the review.
“So that once we go through it … we can make a recommendation to the board of aldermen in terms of proceeding, (whether it be) an RFP or whatever, based on their deliberations,” Grennell said.
CPA Wallace Collins said he would not offer additional comments, but that “the report speaks for itself” since his group was commissioned to provide the review for the mayor and board of aldermen’s benefit.
Ward 1 Alderwoman Joyce Arceneaux-Mathis said after discussing the review with Collins, she interpreted that aside from a few issues here and there, everything stands mostly in order.
She added that unlike Grennell, who said he would like to see the board proceed with an RFP, is unsure of where she stand on the convention center’s managerial future.
“What I don’t want to do is lose the momentum (in regards to tourism) that we have,” Mathis said. “I really don’t want to lose that momentum, but I’m open to other options.”
NCPC Chairman Lance Harris, Ward 3 Alderwoman Sarah Smith and Ward 6 Alderman Dan Dillard did not respond to requests for comment.
The entire financial review can be viewed here.