Auditor Of Public Accounts
State Auditor Crit Luallen Releases Audit of Eastern Kentucky Exposition Center
State Auditor Crit Luallen released an audit of the Eastern Kentucky Exposition Center Corporation in Pikeville, Kentucky. The audit covers the fiscal year ending June 30, 2006. The Kentucky General Assembly, as part of the Center’s enabling legislation, mandated an annual audit of the Corporation.
The audit found that the Eastern Kentucky Exposition Center Corporation cannot continue to operate with the current financial structure. During the fiscal year of the audit, expenses for the exposition center were $1,673,841. However, recurring revenues were $887,995, resulting in a shortfall of $785,846. The deficit was covered using interest earned on the funds the General Assembly appropriated for construction.
A deficit is anticipated during the current fiscal year. However, the Corporation plans to cover this deficit by the remaining interest from the construction funds and $250,000 in coal severance money appropriated by Pike County Fiscal Court. While these funds have been found to address short-term cash flow needs, they are not a recurring revenue source and will not meet the Corporation’s long-term, on-going budgetary requirements. Based on the current contractual management agreement, projected revenues, and interviews with management, the corporation’s ledger cannot be balanced on an ongoing basis.
“The Auditor’s Office recognizes improvements being made by the Corporation and its management contractor, SMG. However, this audit shows the facility cannot continue to operate with the current financial structure. Local, community, regional, and state policy makers should be aware so they can work together for long-term solutions,” State Auditor Crit Luallen said.