Fair expects audit results

The Red River Valley Fair should get a clearer picture this week of its much-scrutinized financial situation.

That's when the fair association expects to see the results of its first full audit in a decade. The topic is on the agenda at Thursday's meeting of the fair's nine-member governing board.

The fair association typically receives a yearly financial report at its annual November meeting. But this year, board members decided they needed a more intensive financial review. It wasn't ready by November.

The fair association has seen a financial downturn in recent years, losing an estimated $236, 000 in 2005.

Association President Kyle Anderson refused to say on Friday why the board sought the audit, citing legal reasons.

Bruce Olson, former fair manager, is suing the fair association and Anderson. The board decided in December not to renew Olson's employment, three weeks after a consultant's report stated the fair's board members and management needed more employee and financial accountability. The report was prepared by Great Plains Benefits Group

Olson is suing the board and Anderson for a minimum of $100,000 each, claiming he was given a seven-year contract in 2003. Fair officials maintain there is no contract.

Fair attorney Jonathan Garaas - who won't represent the fair in this lawsuit because of his involvement - said another lawyer has not been selected. The fair's insurance agency will choose the lawyer, he said.

Anderson said he hasn't seen this year's audit report and didn't know what it would show.

"No idea," he said.

For the audit on Thursday's agenda, a firm collected financial information at the fair office, he said. Red River Valley Fair bookkeeper Judie McKay said the Fargo firm Widmer Roel did the audit.

The fair's last full audit was in 1995, according to October 2005 board meeting minutes. That audit report was not available late Friday afternoon.

Previously, the fair relied on an annual financial report published with a disclaimer stating that the financial statements were not audited, according to Great Plains Benefit Group, which was hired to review board members and Olson.

The Bismarck-based firm found other potential problems, including:

- Employees related experiences where they were "instructed to execute financial activities not within the scope of usual and customary business practices.

- Financial records were removed at the end of the year and presumed destroyed. Olson, in a response to the report, said he was alarmed to learn that financial records could have been removed and proposed outsourcing the fair's accounting.

- Cash payments to entertainers may not be reflected in the fair's accounting program. Olson, in his reply, said some entertainers prefer to have part of their payment in cash for operating expenses. He said he never exceeded the contract amount.

- Some employees are paid annually for unused vacation time despite a prohibition in the fair's policy manual.

Olson blamed another staff member who told him it was a general practice.

- Board members didn't routinely review monthly expenditure reports until October.

Anderson said a search for a new manager is not yet under way.

The fair association is a public body that receives about $104,000 from Cass County each year.

Readers can reach Forum reporter Andrea Domaskin at (701) 241-5556