Miranda Pederson/Daily NewsTim Jones of Bowling Green takes a swing Saturday at Paul Walker Golf Course, one of three city-owned courses whose bad accounting is costing the city tens of thousands of dollars each year, according to a recent internal city audit.

An internal city audit describes Bowling Green’s public golf courses as rife with lax accounting, probably leaking tens of thousands of dollars from the money-losing program.

The city runs three golf courses: nine-hole Paul Walker and Riverview, and 18-hole CrossWinds, which altogether employ about 50 people. Those courses have a combined annual budget of $2.8 million, but only bring in $1.5 million; the $1.3 million difference is subsidized by the city.

As her first major project, city Internal Auditor Deborah Jenkins reviewed the division’s operations and records for the past year. But she was unable to track most bank transactions – because those records are regularly discarded, according to her report.

“In my opinion, the internal controls over the Golf Division Operations are not sufficient and adequate to ensure that revenue is properly collected, recorded and accounted for, or that inventory and assets are properly recorded, safeguarded and accounted for,” Jenkins wrote.

The software system used by the Golf Division deletes all transactions after daily reports are printed out, she found. Additionally, paper records at Paul Walker and Riverview are thrown out after daily deposits are reconciled; those at CrossWinds are kept for a year, but they aren’t reviewed by managers.

That makes it nearly impossible to track who’s paying for what, catch anyone stealing from the city, or tell how many people are playing for free.

Overall, Jenkins found that managers haven’t been reviewing transactions at the courses, there’s no way to track rain checks, gift certificates and who’s paid for what, and inventory control is sketchy at best. She recommends establishing standardized procedures, implementing various financial controls and securing city property.

In a series of responses to Jenkins’ findings, golf course managers said they would do just that. Most of the new controls are to be in place Jan. 1, with more linked to the arrival of new financial software in March.

The city’s audit committee and city commissioners got copies of Jenkins’ report in November, but it’s not scheduled for public discussion until Jan. 7. The Daily News requested a copy and was denied, under the exception in the Kentucky Open Records Act for draft documents.

A copy leaked to the Daily News shows that it was completed by Jenkins on Oct. 26. Until it is formally discussed by the committee, that body’s chairman Charles Hays declined to discuss its contents. He said it may undergo unspecified changes before the January meeting; Jenkins is still discussing her findings with city Golf Director Bob Jeffers, Hays said.

Since the audit was completed, one Golf Division employee quit and one has been fired, said City Commissioner Brian Strow, an audit committee member and a longtime opponent of subsidies to the city golf program. Both were low-ranking staff, however, and Strow doesn’t think that’s enough.

“I do believe someone needs to be held accountable,” Strow said. “There was, in my mind, gross negligence in many aspects of management of the golf courses.

“If this were my golf course, that I owned … I would be looking for a new manager.”

He’s looking for someone to step forward and say they were the person in charge of financial controls.

“I want to know, where does the buck stop? Whose responsibility is it?” Strow said.

Mayor Elaine Walker said it’s clear that Golf Division controls weren’t as stringent as they should have been, but the audit was done specifically to discover that and recommend improvements as one of many ongoing efficiency programs.

“This is why you do these internal audits,” she said. “If the procedures were not in place in the past to account for this better, then we need to change the procedures.”

The audit, the Golf Division’s responses and the audit committee’s recommendations should be accepted without searching for a scapegoat, Walker said. All city departments will eventually be examined as the Golf Division has been, and the last thing city officials should do is establish a precedent of punishing employees for acknowledging their situations, she said: The goal is to improve efficiency, not exact retribution.

“Let’s see if we can have the employees work with us to do that, rather than going on the attack,” Walker said.

City Parks & Recreation Director Ernie Gouvas said he’s glad the audit was done, since its purpose was to reveal any shortcomings, so he and other staff can fix them.

“It’s my department, ultimately, but we’re not accountants,” he said. “I think that what we were doing is not out of the ordinary, by any means.

“The audit’s a good learning tool. We’ve never had the benefit of an audit before. It’s not like we’re uncooperative; we welcomed it.”

Jenkins’ report specifically thanks Golf Division staff for cooperating with her audit, and she recorded no attempts to conceal information.

The sooner other city departments are audited, the better – including other arms of Parks & Recreation, Gouvas said. Although the aquatics and fitness programs make money, they too should be examined for efficiency, he said.

The city created an audit committee early this year, one of many changes sparked by the 2005 arrest of former Chief Financial Officer Davis Cooper. He admitted to embezzling more than $3 million from city tax receipts over 20 years. The committee’s job is to review city financial statements in conjunction with Jenkins, whose job was also created as a result of the Cooper scandal.

Strow said he’s glad that Jenkins’ first close examination was of the Golf Division.

“There’s been much suspicion for a long time that the golf courses needed to be audited,” he said.

Attacking that $1.3 million subsidy has been his “pet project for 2007,” Strow said, adding that several citizens have told him about rounds of golf being given away.

While numerous problems showed up in just one day of on-the-spot audits, the lack of a paper trail for older transactions makes it impossible to tell how much the city may have been losing, he said.

“Imagine what we could overturn if we had the receipts from all year,” Strow said.

Among Jenkins’ biggest findings was the lack of rules and records for giving complementary rounds of golf. A log of those round cards is supposed to be kept, but it doesn’t match the number recorded on monthly reports, she wrote, and only 14.57 percent of complementary rounds reported showed up in the log. Between July 2006 and July 2007, that could mean more than $38,000 in golf revenue slipped through the city’s fingers, she calculated.

Not all of those rounds are necessarily lost money, according to Walker. Some are probably things like the city’s free golf day for its employees, she said.

Jenkins recommended strictly requiring use of the log to record complementary rounds, and monitoring that log closely. Golf Division managers agreed to tighten those controls by Jan. 1, according to their response recorded in her report.

Reviewing the transactions at CrossWinds for just one day – Sept. 1, 2007 – Jenkins found an unexplained transaction for $50.42, followed by a void. She notified Golf Division Manager Bob Jeffers, who couldn’t explain it but said he would check, her report says.

“Subsequently, the employee in question resigned,” Jenkins said.

Letting any employee void a transaction can allow them to pocket cash or give unapproved discounts, so any voids should be supervised, she said. Golf Division managers told her they will do so from now on.

Similarly, access to rain checks and gift certificates was wide open, with no way to track their use, Jenkins found. Golf managers said they would begin logging them and reviewing those records regularly.

Jenkins found one pickup truck that had been inadvertently dropped from the department’s inventory, several inaccurate property descriptions, and poor security for equipment, especially golf carts. She recommended dividing up inventory control responsibilities, installing security cameras and removing keys from golf carts. Course managers agreed to secure storage buildings by Jan. 1 and change the inventory system when the new software arrives.

When Jenkins polled customers at all three courses as to whether they had receipts for their games and carts, results varied widely. Only three of 18 people at Riverview had receipts, and some errors in charges turned up on those. Six of Paul Walker’s 16 customers had receipts; one player gave her a false name at first, and was presumed to be playing on someone else’s season pass.

At CrossWinds, all but seven of 47 players had receipts. They were all charged correctly, and all said they had receipts to start with.

To keep employees from pocketing customers’ fees and players from sneaking onto the course for free, Jenkins recommends stiffening the receipt policy, using the new software to track the number of players, and giving incentives for customers to keep their receipts. Again, course staff said they would do so in short order.