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A whistleblower triggered an audit of Fair Park’s finances, the nonprofit’s CEO says
An audit of Fair Park’s finances was triggered after a whistleblower raised concerns last May about a lack of “appropriate controls” administered by the park’s operator, Oak View Group, Fair Park First CEO Brian Luallen said. The Dallas Morning News On thursday.
It is unclear what connection, if any, the individual had to Fair Park First or Oak View Group. Luallen declined to provide details about the whistleblower, citing the need to protect the individual.
The whistleblower alleged that funds controlled by OVG, including funds from restricted donors, had been “commingled” and moved in ways that risked violating the contract, Luallen said during an editorial board meeting.
Related:Fair Park operator failed to track parking concessions and sales, according to 2022 city audit
He added that he could not immediately verify the allegations at the time because Fair Park First staff do not have access to account statements. OVG360, the entertainment division of Oak View Group, controls and manages all bank accounts, Luallen said.
“That was a serious concern,” Luallen said.
Luallen brought the information to the nonprofit’s board and then-board chairman Darren James. Earlier this year, Fair Park First took over the audit process for OVG.
The audit’s initial findings — likely to be released in August — revealed the possibility that donor funds may have been used for day-to-day operations, such as maintenance work. Grants often have stipulations that restrict their use to specific capital improvement projects.
In a statement to The news On Thursday afternoon, an OVG spokesperson said any use of restricted funds to cover operating expenses was expressly directed or approved by Fair Park First CEO Luallen.
“While we are aware of an ongoing audit focused on a discrepancy in financial accounting between Fair Park First’s donor funds and Fair Park First’s operating expenses, it is important to note that all funds being examined were used solely for the benefit of Fair Park, and not for any other purpose,” the statement said.
Related:Fair Park First suspends fundraising until audit findings clarify park’s finances
The city of Dallas, including park director John Jenkins, has not yet responded to requests for comment. The city of Dallas hires the nonprofit to raise funds and develop its 277-acre property. OVG has been hired as a subcontractor to book events and operate Fair Park.
When Dallas brought Spectra, later acquired by OVG, and Fair Park First on board, the spirit of their agreement was to make the nonprofit the authority in overseeing Fair Park. However, the contract between the nonprofit and Spectra gave the for-profit company more financial power, according to the agreement.
OVG360 is responsible for the park’s overall maintenance, according to the agreement. Maintaining the lawn, attracting acts like the Rolling Stones and Coldplay and keeping the lights on in several buildings throughout the complex are all part of OVG’s job description.
The way the agreement between Fair Park First and OVG was drawn up also allowed the venue management company to manage bank accounts and oversee accounting, meaning that even though checks were made out to Fair Park First, OVG had the power to make deposits and withdrawals, according to the contract.
Related:Fair Park First reinstates CEO Brian Luallen, audit of its finances not yet released
Luallen and Veletta Forsythe Lill, the nonprofit’s new board chair, said Fair Park First is working with the city to amend the contract to add controls and give Fair Park First more financial oversight. The nonprofit has been working with the city for the past two years to make changes to the contract, Luallen said.
A 2022 Audit Obtained per The Dallas Morning News revealed that OVG360 and Fair Park First failed to adequately monitor revenue or comply with vendor agreements during three events. Following this audit, Fair Park First and OVG360 agreed to adopt enhanced audit and compliance policies, best practices and standard operating procedures, including other recommendations.