ST. PETERSBURG - CLEARWATER

INTERNATIONAL AIRPORT

CONTRACT REVIEW

AIRCO GOLF, INC.

REPORT NO. 2000-06

DATED: JUNE 1, 2000

The Board of County Commissioners

and

Clerk of the Circuit Court

Pinellas County, Florida

The Internal Audit Division has completed an audit of the Airco Golf, Inc., lease administered by the St. Petersburg - Clearwater International Airport.

PURPOSE

The purpose of this audit was to: 1) determine if the terms of the Airco Golf contract were being complied with, 2) evaluate the effectiveness of the Airport contract oversight process, and 3) determine compliance to any applicable laws.

SCOPE

The scope of this audit included a review of the contract, insurance coverage and other documents that were required of the contract. We confirmed timely receipt of rent payments. We tested Airco's internal controls over the collection of fees and other contract-related fee calculations. Our review covered the Airco Golf contract from March 1, 1995, through the period ending January 31, 2000. We performed such other audit procedures as we considered necessary in the circumstances.

BACKGROUND

The Board of County Commissioners and Airco Golf, Inc., entered into the original lease agreement in July 1961. Since then, additional amendments have broadened the original subject of the lease to include the driving range and the Half Way House, which serves food and beverages. The lease payments on the additional properties are fixed. The lease payments on the basic golf course contract are fixed monthly payments netted against an annual payment, due by January 30 for the previous calendar year, equal to 20% of the gross income on green fees established at 40% of the Golf-Package revenue collected. The contract is administered by the St. Petersburg - Clearwater International Airport.

INTRODUCTION

The results of our review are shown below. They begin with an overall evaluation followed by detailed discussions of the findings and recommendations with management's response.

OVERALL EVALUATION

We have concluded that the activities under the Airco Golf contract were in compliance with the contract and that the Airport had adequate documentation supporting lease payment receipts. Airco's internal controls affecting the recording of the Golf-Package fees are in need of improvement.

FINDINGS AND RECOMMENDATIONS

FINDING 1 - The revenue for daily Golf-Package fees was not always reported accurately by Airco.

Airco's contract requires that revenue generated from green fees be used in the annual calculation of rental fees due to the St. Petersburg - Clearwater Airport. Airco's financial statements are used to determine the Golf-Package and green fees revenue.

Airco's internal controls should assure that daily revenues for Golf-Package fees are properly reported to ensure that annual lease payments are calculated accurately. A random sample of 30 days was selected from the time frame of January 1, 1999, through December 31, 1999, to test reporting procedures and to assess the internal controls for reconciling/recording the fees. We noted the following internal control weaknesses:

Audit supervised by:

Audit performed by:

Approved:

Karleen F. De Blaker
Clerk of the Circuit Court
Ex Officio County Auditor

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