The Minnesota state auditor's office released a report on the Pebble Creek Golf Club at the June 7 Becker City Council meeting in which they examined the books, records, accounts and affairs of certain topics in relation to the city-owned golf course.

 

Diane Arnold, Sherburne County Auditor, received a petition signed by 429 registered voters in Becker that asked the state to conduct an examination of Pebble Creek for the years covering Jan. 1, 2009 to Dec. 31, 2015.

 

The petition was requested by Lucky and Judy Balin of 10191 18th Avenue in Becker at the cost of $23,300 to the city. City Administrator Greg Pruszinske noted another $15,200 can be added to that total to cover the cost in staff hours to city employees during the “audit”.

 

The same Becker residents who contacted Arnold, petitioned State Auditor Rebecca Otto to examine the city's operation of the course for the years ending 2013, 2014 and 2015, which has struggled financially in those calendar years.

 

In the examination by the state, the petitioners had 16 issues and concerns they wanted addressed.

 

Of the 16 concerns, half had recommendations from the state auditor’s office and half did not with most of the issues Pruszinske said could be addressed by city policy procedures.

 

“Our review of this matter is that the majority of issues addressed did not contain any recommendations for changes or involved practices discontinued a number of years ago,” said Pruszinske.  “On the issues with recommendations, it appears the matters are primarily technical in nature and can be addressed by more formal policies and practices.”

 

Pruszinske said the examination can only be helpful to the city in smoothing out any outside concerns and creating even better transparency between the city and its residents.

 

“Given the grand scope of this review, I'm confident in the city's ability to make the recommended changes,” he said. “I also think the feedback provided by the OSA will be useful.”

 

The petitioners requested the state auditor investigate the golf club fee structure and should staff be allowed to offer free or reduced rates as part of the city’s wellness program.

 

The auditors recommended the city adopt a policy identifying who has the authority to provide free rounds and under what conditions they may be provided. They also recommended should the golf course administer free rounds, that free golf passes be provided with numbers on them to make sure they are properly accounted for.

 

As far as golf lessons, the petitioners wanted to know how fees were being collected for golf lessons and processed.

 

The auditors recommended the city draft a formal documented employment agreement and job description for the director of golf that identifies such things as the requirements, responsibilities, authority, compensation, benefits and terms for Troy Malo’s position.

 

The petitioners expressed concern about the accountability of pro shop merchandise being purchased at discounts prices to city employees. The petitioners were also concerned about internal concerns with inventory.

 

The state recommended the city discontinue the practice of providing pro shop merchandise to employees at discounted prices.

 

As far as inventory, Malo told the auditors that physical counts of inventory are typically performed twice during the golf season, once in October and once in January or February. The OSA requested documentation for the most recent physical count of inventory and were told the count sheets and other documentation were not being maintained regularly.

 

The state recommended Malo do periodic inventory and that documents of the counts be maintained. They also said variances between the actual inventory counts and the inventory maintained in the POS system be investigated.

 

The petitioners requested an examination of the city’s employee wellness package and the discounts, privileges, season passes and purchases of merchandise at the pro shop.

 

The state recommended the city consider obtaining an attorney general’s opinion regarding the city’s authority to offer these benefits to employees and “adopt” a program for preventative health services that includes clear wellness objectives and is in writing and approved by council.

 

The petitioners wanted the state to investigate the destruction and/or disposal of government records in regards to season pass applications and physical inventory count records.

 

The state recommended the city retain government records for the time provided in its record retention schedule and have those records retained indefinitely or until permission is issued to destroy them.

 

The petitioners were concerned the city may be absorbing the cost of food and beverages associated with certain practices of the golf club, including a 50% discount on food and fountain drinks for golf course employees during their work shifts.

 

The OSA reviewed the ledgers, credit card payments and information from the POS system for meal expenses and saw no evidence that meals purchased by staff at the golf course were charged to or reimbursed by the city. They recommended the city more closely monitor the documentation submitted by employees for credit card purchases and meal reimbursements.

 

The petitioners wanted information regarding the process of accounting for golf club receipts.

 

The OSA reviewed bank deposit slips for the month of May, 2015 and noted food and beverage deposits from the grill and bar were made daily while golfing fees and pro shop merchandise sales receipts were deposited weekly. They did find some discrepancies in some of the deposit time lines recommended council and management to be aware of the lack of segregation of duties between reconciling cash receipts to the POS system, preparing deposits and delivering deposits to the bank. Where possible, they suggested, the city should implement oversight p[procedures to ensure internal control procedures are being followed by staff to the best extent possible.

 

They also recommended the city ensure the golfing fees and pro shop merchandise sales receipts be deposited as often as possible, preferably daily.

 

The petitioners requested information about the terms of the agreement with Hunter’s Ridge restaurant. They wanted to know the timeliness of notification to the city that the restaurant was in arrears and under whose authority the debt was forgiven.

 

The state had no recommendations to the city for this concern.

 

The petitioners were concerned the city was paying for employees to play in the Chamber of Commerce golf tournament where the enterprise fund for the golf course shows it spent $440 in 2013 for the chamber golf tournament. No such payments were made in 2015 and 2015.

 

The state recommends the city follow a public purpose doctrine based on the Minnesota state constitution.

 

The petitioners requested information in regards to high school students using the golf course for practice and the fees being charged.

 

The state had no recommendation to the city following their examination of the practices.

 

The petitioners asked the state to find out the recorded value of the flag poles donated to the city in October of 2015.

 

The state said they found the city treasurer estimating the value of the flag poles below the city’s capital asset threshold of $10,000.

 

No recommendations were provided by the state.

 

The petitioners requested information on whether any golf club employees were terminated due to allegations of theft.

 

The state was informed that two golf club employees were terminated for theft (one in 2010, one in 2011). They said the city should have provided information regarding the allegations of theft to the OSA at the time as required by state statute, but did not. The state recommended the city comply with the state statute.

 

The petitioners requested a summary of lot fund transactions.

 

The state said the lot fund was established in 1993 to fund necessary improvements to Pebble Creek and was depleted by 2013. No recommendations were issued by the OSA.

 

The petitioners requested a summary of transfers to the golf course enterprise fund and the authority for the transfers.

 

The OSA reviewed the enterprise fund transfers in 2013, 2014 and 2015 and noted as long as they are approved by city council, there was no objections by the state.

 

The petitioners requested a budget-to-actual report for the golf course enterprise fund for the same three years.

 

The auditors said that general accounting principles do not require budget-to-actual reporting for enterprise funds and thus offered no recommendation.

 

Becker resident Adam Maskowski, whose name appears on the petitioners’ list,  sent a written statement to the St. Cloud Times on behalf of the residents who requested the audit. That statement said the petitioners ‘are pleased with the auditor's findings and the facts are now out there.’

 

‘We hope to see positive action from the mayor and City Council to hold the responsible parties accountable and move the course in a better direction with the recommendations from the auditors,” the statement read.

 

“The value in this exercise is the examining of our processes, identifying policy areas that are absent but needed and bolstering existing policy to improve our operations,” said Pruszinske. “Also, I think its worthy to mention we had made several changes (some years ago, some more recent) to improve our operations prior to and during this engagement.”

 

The entire OSA report is available online at www.auditor.state.mn.us/default.aspx?page=20160608.000.

 

The list of petitioners can be found on the Citizen-Tribune website.