March 16, 2017

AUDITOR’S REPORT

We have completed an audit of Red Rocks Events Contracts. The purpose of the audit was to determine whether venue users comply with contract terms and whether Denver Arts &Venues and Red Rocks personnel monitor, control, and account for venue user revenues.
Our audit revealed that venue users generally comply with contracted terms and that Denver Arts & Venues and Red Rocks personnel are properly monitoring, controlling, and accounting for the use of Red Rocks as an event space. Our audit did, however, identify several areas for improvement regarding internal controls surrounding event user agreements. Specifically, we noted that management is not always ensuring that all contracts are executed before the events take place. Second, we found that not all invoiced amounts are being properly supported with authorizing documentation. Third, the exclusive ticketing agent has not provided assurance that its system provides reliable ticket sales information. Fourth, Denver Arts & Venues is not using electronic funds transfer for venue use payments. Finally, Denver Arts & Venues personnel are not documenting management decisions when interest penalties are waived.
Through stronger controls over managing venue user agreements, Denver Arts & Venues will be better positioned to ensure that promoters and other users comply with the agreements and that the proper revenue is collected. Our report provides five recommendations to achieve this end.

This contract compliance performance audit is authorized pursuant to the City and County of Denver Charter, Article V, Part 2, Section 1, General Powers and Duties of Auditor, and was conducted in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

We extend appreciation to Red Rocks and Denver Arts & Venues operational and accounting personnel who assisted and cooperated with us during the audit.

Denver Auditor’s Office

Timothy M. O’Brien, CPA
Auditor

Red Rocks Event Contracts Audit March2017

http://www.denverinc.org/wp-content/uploads/2017/03/RedRocksEventContracts_March2017.pdf