Department of Agriculture and Markets

 

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Office of the New York State Comptroller

Taxpayers' Guide to State and Local Audits

Department of Agriculture and Markets
Catering with a Flair Contract (Issued 2/8/12)


Purpose
To determine if the New York State Fair (Fair) - a division of the Department of Agriculture and Markets (Department) - followed proper procedures in contracting with the firm Catering with a Flair (Contractor); whether the Contractor met the terms of the contract, including capital improvements and reporting of revenue; and whether all the transactions between the Fair and the Contractor were proper and conducted at arm’s length.

Background
The Fair, which dates back to 1841, promotes and highlights New York State and its agriculture, commerce, arts and sciences to residents and visitors.  The State Fairgrounds hosts more than two million people throughout the year through various events, performances and expositions, including the Fair. The Empire Room is a full service restaurant with banquet facilities used to host wedding celebrations, events and exhibitions at the Fairgrounds throughout the year. In 2002, the Fair contracted with Catering with a Flair to manage the Empire Room and provide catering services in exchange for a percentage of sales and certain required capital improvements. In 2009, the contract was extended through 2014.  In August 2010, the Office of the Inspector General issued a report questioning the propriety of several transactions between the Contractor and the former Fair Director, who was subsequently arrested for larceny. At the Inspector General’s request, the Department asked the Comptroller to undertake a complete audit of the Fair’s catering contract.  The Fair’s response to the draft of this report stated the contract with Catering with a Flair was terminated on November 30, 2012.

Key Findings

  • We concluded the Department followed proper procedures when entering into the contract, and that the Contractor accurately reported revenue and made required capital improvements. However, we also found instances where the Department needs to improve its monitoring of compliance with contract terms. For example, since 2002, the Fair has paid utility costs that could have been paid by the Contractor if the Fair had installed separate utility meters for the contracted facility. In addition, Fair officials did not annually obtain menus and audited financial statements from the Contractor as specified in the contract.

Key Recommendations

  • Strengthen contract monitoring practices to ensure compliance with all contract terms.
  • Assess the feasibility of installing separate utility meters related to space operated by the Contractor.

Link to full audit report (2010-S-53)

Other Related Audits/Reports of Interest
Department of Agriculture and Markets: Controls Over State Fair Revenues Report 2010-S-52


State Government Accountability Contact Information:
Audit Director: John Buyce
Phone:(518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236