Audit Finds Problems With Fair's Accounting : Bookkeeping: Officials must propose plans within 30 days to correct 68 deficiencies. So far no criminal charges are planned.

TIMES STAFF WRITER

State auditors said Thursday they uncovered illegal and inaccurate bookkeeping practices at the Ventura County Fair, including the improper transfer of more than $300,000 in horse-race betting proceeds to the fair's operating budget.

Within 30 days, fair officials must propose plans to correct the 68 deficiencies found during the audit of the fair's books for the period from Jan. 1, 1988, to Sept. 30, 1990. The audit was done by the California Department of Agriculture's Division of Fairs and Expositions.

However, the fair so far faces no criminal charges and has greatly improved its bookkeeping procedures in the past 12 months, state officials said.

According to the two-month audit, which was completed this week, fair officials:

* Violated state wagering laws with the unauthorized transfer of $337,129 in proceeds from satellite horse-race betting to its operating budget in 1988 and '89.

* Spent and received hundreds of thousands of dollars more than it had budgeted in 1988 and '89.

* Lost thousands of dollars in interest in a change of banks in 1989.

* Failed to pay state sales tax on fair souvenirs in 1988, '89 and '90.

* Improperly reimbursed four able-bodied fair volunteers $100 each in 1990 for citations that they received after parking in handicapped-only spaces, by passing the tickets off as mileage claims.

The audit "obviously shows that they need to work at improving certain levels of their accounting operation," said Kim Myrman, assistant director of the Division of Fairs and Expositions.

However, she added, "I don't see anything in this audit that would be considered criminal or fraudulent," although the parking ticket episode "was inappropriate."

Fair officials, who requested the audit last autumn to learn if they had been losing money, declined to comment Thursday. The audit offers no conclusion as to how much money may have been lost.

"It would be unreasonable to have anyone comment because they haven't seen the report yet," said fair spokeswoman Terri Raley.

The fair's Finance Committee is scheduled to meet at the Ventura County Fairgrounds in Ventura at 9 a.m. today to discuss the audit.

Meanwhile, the Ventura County district attorney's office also is awaiting a copy of the audit to decide how to proceed with its inquiry into the fair's finances, said Special Assistant Dist. Atty. Donald D. Coleman.

"If the results of the audit reveal information that requires further criminal investigation, we will do so," Coleman said. "We have spoken to the fair manager. He has been cooperative."

Despite the criticisms and recommendations in the audit, the fair's bookkeeping systems are "average in relationship to the other fairs we've audited to date," said Mimi Khan, who supervised the audit.

"We've finished approximately 12 audits in the last year and a half. This is one of the more complicated fairs as far as accounts," said Khan, whose department oversees the 80 county fairs statewide. "I think we could probably say overall that their accounting system is adequate, although there are weaknesses we need them to improve on."

Fair officials must respond within 30 days to the audit and propose a plan to correct the bookkeeping omissions, errors and improprieties, Myrman said.

In addition to accounting problems, the audit cites management procedures at the fair that could be causing it to lose money.

The fair has not inventoried its equipment since 1976. Inventory sheets were used instead to record purchases of new equipment and improvements to buildings at the fairgrounds, the audit says.

The fair also gave free admission to children on two days and senior citizens on one day during each fair in 1988, '89 and '90. The state Food and Agriculture Code allows only one free admission day for children and no free admission day for senior citizens during county fairs, the audit says.

And the audit says the fair improperly let some part-time employees work more than the 119 days allowed for temporary help in 1988 and '89; in 1990, 5% of the temporary employees exceeded the limit.

The audit lists numerous inadequate or inaccurate bookkeeping procedures on accounts ranging from the carnival operator to the ticket booths. "Adjustments were made to the cash accounts to force them into agreement with the bank," it noted.

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