ATLANTIC CITY — The Casino Reinvestment Development Authority briefly addressed a critical state audit during its first public board meeting since the report was released last week.
The discussion lasted roughly two minutes and revealed little new.
The meeting, the first since auditors criticized CRDA for failing to track millions of dollars spent on Miss America, beach concerts and The Walk outlets, also drew little interest from the public, some of whom were more concerned about noise on the Boardwalk and empty storefronts near Boardwalk Hall.
No one on the board, other than Chairman Robert Mulcahy, addressed the issue Tuesday.
Given the checkered history of the Casino Reinvestment Development Authority’s fiscal practi…
“I want to make sure that the public understands that the Casino Reinvestment Development Authority is audited annually by one of the top independent accounting firms in the nation,” said Mulcahy, reading from a prepared statement. “Those professional audits have resulted in unmodified clean opinions, confirming the authority’s design, implementation and maintenance of internal controls relevant to the preparation and fair presentation of financial statements. I think that’s very important in terms of things that have been said or done.”
Mulcahy was referring to Mercadien Asset Management, of Hamilton Township, Mercer County, which conducted CRDA’s 2017 statutorily mandated financial audit. Other firms, including Wiss & Company LLP and Friedman LLP, have been used by the authority in prior years.
But the 29-page state performance audit, released by the state Office of Legislative Services and the Office of the State Auditor, was the first such review of CRDA since its inception in 1984. The objective, according to the report, was to “determine whether financial transactions were related to the authority’s programs, were reasonable and were recorded properly.”
The Casino Reinvestment Development Authority was sharply criticized in a state audit for it…
One example noted in the report was a contract for emergency roof repairs at Boardwalk Hall that resulted in nearly $2.1 million being overspent by the authority.
In its response, CRDA said the lapse of time between identifying the need for the repairs and the subsequent emergency work was not taken into account by the auditors. Another example criticized CRDA for approving $2 million for a direct investment project for an unnamed casino licensee without supporting documentation.
The report ultimately concluded that although CRDA’s financial transactions were relevant, the manner in which certain expenditures, contracts and agreements were executed were not “always reasonable” or an “effective and efficient use of its funds.”
In responding on behalf of the board in a letter dated Aug. 21, Mulcahy indicated the authority agreed with some of the report’s findings while disagreeing with others.
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“We welcome the OLS’s (Office of Legislative Services) examination and critique of our operations and financial status, and the Authority will continue to seek opportunities to improve our processes so that we may better serve our stakeholders,” Mulcahy wrote.
The scope of the review covered the time period of Jan. 1, 2014, to Dec. 31, 2017, and was conducted over the course of 17 months, according to the state auditor.
On Tuesday, Mulcahy said the timing of the OLS report “did not allow for the inclusion of major, new financial control initiatives, which have been put in place.”
“The CRDA Board responded to the major legislative changes of 2011, including the absorption of the Atlantic City Convention Center and Boardwalk Hall, which was a complicated process requiring the adoption of new systems, which have now been implemented,” Mulcahy said. “The CRDA Board had to again deal with legislative changes in 2016 by redirecting the authority’s priorities and appropriately rightsizing and (streamlining) staff creating savings and efficiencies, including the $55 million that we have given to Atlantic City to pay for their bonds. While doing so it has maintained the investments, contributing to much of the new growth in Atlantic City.”
Mulcahy also noted that CRDA has put $1.9 billion into Atlantic City, adding, “I say that so that there is some perspective about what the agency has done for the area here.”
Charles Goodman, an Atlantic City resident, told the board that while that number “had merit,” it failed to explain “how that money was spent and how much of what was spent went to the good of the community.”
“Why can’t we just, as grown, intelligent (men), accept the fact that what we have done over these 27 years didn’t work out the way we wanted it to?” Goodman asked.