An exterior view of the Hall of State at Fair Park in Dallas, May 10, 2024. (Tom Fox / Staff Photographer)
An audit is pending on allegations that the Fair Park
operator misused restricted funds, but documents obtained by The Dallas Morning News show management of several events at the city’s crown landmark were under scrutiny in 2022.
The 2022 audit of three events conducted by the city of Dallas found that OVG360, a division of Oak View Group, and Fair Park First failed to properly monitor revenue from parking, merchandise and food and beverage sales. Fair Park First is a nonprofit
that was contracted by the city to work with OVG360.
Other findings from the city audit include Fair Park First and OVG360′s lack of compliance with agreements between the operators and the event vendors.
In a statement Tuesday to The News, an OVG spokesperson said the circumstances of the 2022 audit were “isolated” and “event-specific situations” that were not related
to current allegations of misuse of restricted funds. OVG “proactively responded and addressed” issues found in the 2022 audit with the Fair Park First board and the city, according to the spokesperson.
“We have not seen the results of the current audit, so
we cannot comment on its specific findings. We look forward to getting the interim audit results, so we can respond accordingly,” reads a statement.
Fair Park First and OVG360 agreed to adopt improved audit and compliance policies, best practices and standard operating procedures, including other recommendations, according to a letter from Fair Park First CEO Brian Luallen also obtained by The News.
Luallen said the operational issues addressed in the audit don’t fall under the nonprofit’s purview. Instead, the three-party agreement among the city, the nonprofit and for-profit OVG360 “assigned OVG360 all facets of options and leave [Fair Park First] very little oversight or visibility of those operational aspects.”
Requests for comment from the city’s Park and Recreation Department were not immediately returned
Tuesday.
Audit of three events
The Park and Recreation Department conducted a contract review and audit in the summer of 2022 following a complaint received from an event promoter, according to emails from city staff, including John Jenkins, director of the department.
Jenkins shared the results with the Fair
Park First board in November 2022, according to a city of Dallas memo obtained by The News.
Auditors looked at three events held at Fair Park in 2021 and 2022 — a Coldplay concert, a Rolling Stones concert and the World Food Championship.
The audit reviewed invoices, event settlement reports, bank statements, revenue reports, ticket sales and agreements between vendors
and Fair Park First/OVG360.
City auditors found that for all three events, monitoring of revenues from merchandise, parking and food and drinks by Fair Park First and OVG360 “did not exist.” Instead, the operator relied on vendors’ revenue or gross sales reports without a verification process.
The audit also found that Ace Parking charged customers service fees for presold
parking tickets, which were not mentioned in the agreement between Ace Parking and the city of Dallas.
The audit examined whether three events held at Fair Park in 2021 and 2022 a Coldplay concert, a Rolling Stones concert and the World Food Championship were properly conducted according to their agreements.(City of Dallas records)
Fair Park First’s responses
Fair Park First disputed some of the findings and acknowledged others with a response to improve systems in the future.
Attached to Luallen’s letter is a line-by-line response to the city’s contract review, audit findings and recommendations.
“Reflecting on the outcome of the contract review, Fair Park First will work with OVG360 to take all steps necessary to adopt an improved series of audit and compliance policies, Best Practices, and Standard Operating Procedures identifying and curtailing any perceived issues,” wrote Luallen.
His nonprofit would hire an “independent third-party contract audit firm to review OVG360′s management of contracts along with individual Fair Park event and vendor contracts to ensure compliance,” Luallen said.
Auditors would be tasked with presenting findings annually of “ongoing contractual compliance audits.” The News has requested copies of audits related to Fair Park’s
management.
Luallen also acknowledged that the Fair Park First board has a committee that reviews OVG360′s annual performance.
In response to the 2022 audit, Fair Park First and OVG360 agreed to adopt improved audit and compliance policies, best practices and standard operating procedures, including other recommendations, according to a letter from CEO Brian Luallen also obtained by The News.(City of Dallas records)
Current audit
In April, Luallen
alleged in a statement that OVG360 potentially spent donor funds that were restricted for capital improvements on day-to-day expenses.
Malnory, McNeal and Company, PC was tasked with conducting a forensic audit of the recent allegations of financial mismanagement, according to Fair Park First.
Oak View Group denied all wrongdoing related to allegations of spending restricted funds in an April statement from a
company spokesperson.
“We are confident — and have documentation to support — that all uses of donated funds were with the full knowledge and approval of Mr. Luallen, acting on behalf of Fair Park First,” wrote Brian Rothenberg of Oak View Group.
In a statement Friday to The News, Luallen said Fair Park First has closely collaborated with the city “for some time” on
pivotal amendments to the management agreement that would enhance the nonprofit’s oversight and financial control.
“We are optimistic that these forthcoming changes in the weeks ahead will empower Fair Park First with enhanced governance and management capabilities, ensuring improvements in our visibility of operational challenges,” Luallen wrote.
The nonprofit recently
adopted a finance and controls policy, Luallen said, which outlines the procedures and controls to put in place to ensure proper management of funds, including unrestricted, and fully restricted donations.
“We are working with the city and OVG to create greater balance in the contract and improve financial controls,” he said. “It’s critical that Fair Park First have the tools in place for us to continue to revitalize this treasure in
our city. We have made a lot of progress at Fair Park, but there is more work to be done like continuing the work that’s been started at the Community Park as well as improving the Cotton Bowl.”
