LTC 425-2017 World OutGames Miami 2017 Financial ReviewMIAMI
OFFICE OF THE CITY MANAGER
LTC# 425-2017 LETTER TO COMMISSION
TO: Mayor Philip Levine and Members of
FROM: Jimmy L. Morales, City Manager
DATE: August 14, 2017
SUBJECT: World OutGames Miami 2017 Financial Review
The attached financial review of the Miami Beach-Miami LGBT Sports & Cultural League, lnc.'s staging of the
World OutGames Miami 2017 was recently completed by the Office of Internal Audit. This review primarily
focused on identifying all provided sources of funds and expenditure destinations and whether these monies
were properly managed and accounted for between February 15, 2013 and June 4, 2017.
If you need additional information, please do not hesitate to contact me.
JLM/JJS
MllAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
Office of Internal Audit
Tel: 305-673-7020
TO: Jimmy L. Morales, City Manager
FROM:
DATE:
James J. Sutter, Internal Auditor~-
August 14, 2017 7vp
SUBJECT: Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
PERIOD(S): February 15, 2013 -June 4, 2017
This report is the result of a City Administration request to review the financial records of the
Miami Beach-Miami LGBT Sports & Cultural League, Inc. (LGBTSCL) regarding the 2017 World
OutGames scheduled to be held from Friday May 26th through Sunday June 4th. This review
primarily focused on identifying all provided sources of fund and expenditure destinations and
whether the LGBTSCL properly managed these monies to stage the World OutGames Miami
2017. As this is not a recurring event, this report emphasizes the deficiencies identified but
does not include recommendations and management responses to resolve these issues as
found in most Internal Audit reports.
INTRODUCTION
The World OutGames are a sporting and cultural event hosted every four years to bring
together lesbian, gay, bisexual and transgender athletes (LGBT) from around the world for a
celebration of sport, culture and human rights, in the spirit of true inclusiveness, regardless of
sexual orientation. The first World OutGames were held in Montreal, Canada in 2006 with
subsequent games taking place in Copenhagen, Denmark in 2009 and in Antwerp, Belgium in
2013.
The World OutGames are licensed by the Gay and Lesbian International Sport Association
(GLISA). Host cities are selected in a non-public process by its members. In February 2013,
the Miami Beach-Miami LGBT Sports & Cultural League, Inc. (LGBTSCL), a Florida not for profit
corporation formed to bid on the World OutGames, was selected by GUSA to host the 2017
games in Miami.
The World OutGames has three core elements according to their website:
• Sport: A sport component offering 8-1 O sport disciplines at the Continental level and 30-
35 sport disciplines at a World OutGames level. Which sports are included in an
OutGames is determined by both the Host City and GUSA and can be flexible to include
sports that are regional or continental favorites. Some of the sports selected for the
2017 games included badminton, basketball, beach volleyball, and field hockey.
• Culture/Celebrations: Cultural activities include music, dance and social activities such
as country and western dance, marching bands, concert bands, big bands, color guard,
cheerleading, choral festivals and leather events to name a few. The events range from
participatory to observatory and from judged to non-judged. World OutGames also
We are committed to providing excellent public service and safety to all who live, work, and play in our vibrant, tropical, historic community.
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typically include Opening and Closing celebrations featuring dance, music, song,
choreography and athleticism.
• Human Rights Conference: World OutGames will play host to an International
Conference on LGBT Human Rights, where delegates come together for workshops and
discussions led by internationally respected leaders in human rights, researchers, legal
scholars and trade organizations.
Per discussion with the LGBTSCL Chief Operating Officer, the World OutGames Miami 2017
initially started with a total of 37 sporting events. Prior to April 1, 2017, LGBTSCL cancelled
fourteen of these events which consisted of cycling, rowing, netball, martial arts, wrestling, flag
football, darts, dominos, bridge, rugby, poker, chess, cheerleading and billiards. Although, disk
golf was added as a result of patron demand, it was subsequently cancelled along with
marathon, half marathon, ballroom dancing, 5k run, 10k run and the triathlon on May 24, 2017,
leaving seventeen planned sporting competitions to take place.
In an effort to help support the World OutGames, the Mayor and City Commission ratified the
following Resolutions authorizing the disbursement of monies and/or the waiving of fees to
LGBTSCL:
• Resolution No. 2014-28492 dated February 12, 2014 approved a $100,000 grant with
$50,000 to be repaid once separate grant funding from the Miami Beach Visitor and
Convention Authority (VCA) was disbursed. City check number 359743 dated May 1,
2014 for $100,000 was subsequently issued and deposited intact by the nonprofit
organization.
• Resolution No. 2016-29579 dated September 27, 2016 approved the disbursement of
$300,000 in three equal installments based on achieving certain fundraising goals. As a
result, the City issued check number 407699 dated November 10, 2016 for $100,000
which was to be used for the salary for development/fundraising services ($50,000),
marketing travel expenses and activation fees ($25,000) and salary for Information
Technology website/digital services ($25,000). The remaining two $100,000 payments
were not issued to LGBTSCL as the specified fundraising goals were not satisfied.
• Resolution No. 2017-29828 dated April 26, 2017 eliminated the $50,000 repayment
provision specified in Resolution No. 2014-28492 above and it also waived Flamingo
Park rental/user fees in an amount not to exceed $3,750 plus special event permit
application, permit and square footage fees in an amount not to exceed $30,000.
Furthermore, the City reduced required deposits and extended permitting deadlines repeatedly
as well as provided a number of in-kind hours by staff. The City Administration also raised
monies from private companies to help pay for sporting event venues to ensure that registrants
could compete. Besides these monies, fee waivers and in-kind services given by the City, the
LGBTSCL was also awarded grants from the Florida Sports Foundation; Miami-Dade County;
and VCA; and received donations from companies like Adidas and various individuals to help
offset the costs of staging the games.
Information obtained through the registrants' database showed that a total of 2, 180 persons
were registered in either one or more sporting, cultural or human rights event(s). These patrons
were charged registration fees that increased from $150 for early bird registration to a maximum
of $400 as the event date approached and participation fees which ranged from $50 to $275 for
each sporting event in which they elected to compete. Lastly, there were packages available for
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anyone wishing to only attend the human rights conferences of $150 per day or $300 for all
three days.
As late as October 2016, the event producer was still projecting an event budget between $11.7
(full budget) and $5 (bare bones budget) million. City staff expressed concern around the
discrepancy between the budgets and fundraising efforts over the course of many months, but
event organizers maintained that all events would take place as planned and refused offers to
utilize low to no cost City venues up until the day before the planned opening.
Despite the aforementioned efforts and monies collected, the World OutGames Miami 2017 was
cancelled by the event organizers on opening day, May 26, 2017. Although the great majority of
athletes had already arrived, the event organizers announced the cancellation of all athletic
events except for the aquatics, soccer, and Country Western dancing competitions. With the
last minute underwriting support of the Greater Miami Convention & Visitors Bureau (GMCVB)
which subsidized the venue costs, the Human Rights Conference also took place as scheduled.
City staff and community leaders rallied immediately to salvage many events for the athletes
who were already in Miami Beach and in route. The Parks Department managed a robust
schedule of sporting events in parks and community centers including basketball, volleyball,
field hockey and more. The GMCVB partnered with the City to sponsor a welcome party for all
athletes and delegates at the Miami Beach Botanical Gardens. City staff also worked closely
with GMCVB staff to ensure representation at the National Hotel, the headquarter hotel, for
registrants to ask questions and gather information.
OVERALL OPINION/CONCLUSION
The Miami Beach-Miami LGBT Sports & Cultural League, Inc. (LGBTSCL) had ambitious plans
for the World OutGames Miami 2017 based on previous games' turnouts and their strong beliefs
in the local community. As a result, their October 2016 full budget projected $11.7 million in
revenues including $4 million in sponsorships with 15,000 registrants which would allow them to
have large opening and closing ceremonies, a main village, etc. and operate at a profit. The
organization downgraded their revenue estimates to $2.36 million in an updated budget
submitted to the City in March 2017 where they still maintained that the games would be
profitable. Unfortunately, their projections did not come to fruition with bank deposits in excess
of $1.4 million, the World OutGames were underfunded and a number of events had to be
cancelled thereby resulting in forfeited monies and unhappy participants.
Compounding matters was the lack of sufficient, complete and organized documentation to
support a portion of the monies that were received and/or disbursed. As a result, great reliance
had to be placed on the integrity of the LGBTSCL management to help explain these
transactions' business purposes. In addition, there was a lack of oversight from the Board of
Directors as staging the World OutGames became the responsibility primarily of a handful of
individuals who appeared to struggle with staging such a large event.
On a positive note, internet research subsequently performed did support management's claims
as to their vendors' existence and the type of services received from them. However, given
lapses in maintained documentation and identified internal control deficiencies, Internal Audit
could not feel reasonably assured that all monies were accounted for. The following
summarized shortcomings were noted during this review:
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1. The maintained general ledger was not necessarily accurate due to incorrect check
numbers and misclassified disbursements. It was determined that LGBTSCL's total bank
deposits equaled $1,449, 755.40 while withdrawals totaled $1,442,032.53 between February
15, 2013 and June 4, 2017.
2. Sufficient supporting documentation was not provided for 51 of the 349 1 (14.61 % ) checks
and 30 of the 311 (9.65%) non-check transactions paid (e.g. ATM withdrawals, wire
transfers, debit card payments) totaling $149,981.13.
3. Previously awarded reimbursement grants totaling $68,045 have been recently denied
payment while a $200,000 Florida Sports Foundation, Incorporated grant remains
outstanding.
4. At least $295, 100 continues to be owed to four hotels for unfilled rooms during the World
OutGames Miami 2017 according to furnished documentation.
5. LGBTSCL paid only two out of five minimum guarantee license fee installments and
therefore apparently owes $81,541.79 in U.S. dollars to GLISA (a Canadian company). The
total license fee for the event was $175,000 and penalties of $1,500 per week may be due
based on Appendices 3 and 4 of their February 28, 2013 signed agreement.
6. Six primary fundraisers were held during the reviewed period whereby a net total of
($1,387.06) was lost based on the documentation provided with the last one being held in
September 2016 which was eight months before the World OutGames Miami 2017 started.
7. Happy Copenhagen remitted $20,000 in wire transfers of the $25,000 specified in their
signed agreement with LGBTSCL but did not receive most of the designated benefits due to
the cancellation of the OutGames Village and the opening ceremonies.
8. Payments totaling $394,542 of $1,442,032 (27.4%) were identified as strictly related to
staging the games for facilities rental; venue insurance; lodging for sport officials, human
right presenters and speakers; and outside organizations hired to organize and manage
individual sporting events.
9. Over 12% of all identified payments ($174,250 of $1,442,032) were forfeited through
deposits or installments for venues and/or events that were eventually cancelled.
10. Operational practice shortcomings noted included not filing income tax returns since their
inception; bank reconciliations were frequently not completed timely by individual's
independent of LGBTSCL; having one signatory sign all checks; etc.
11. The fiscal agent relationship between the LGBTSCL and the Miami-Dade Gay & Lesbian
Chamber of Commerce Foundation, Inc. was used for more than the agreed upon grant
reimbursement purpose.
12. LGBTSCL did not submit fully accurate and timely financial reports to the City as required by
their signed grant agreement.
13. Temporary alcohol permits were obtained from an independent nonprofit organization during
the reviewed period but the terms of the arrangements appear to contradict Florida Statute
561.422.
14. City Resolution No. 2014-28492 required LGBTSCL to reimburse the City $50,000 of its
$100,000 award upon receipt of funding by the Miami Beach Visitor and Convention
Authority that was not repaid despite getting $50,000 annually in the 2014, 2015 and 2016
fiscal years until being waived by Resolution No. 2017-29828.
15. LGBTSCL's Chief Operating Officer charged $94,006.35 in business expenses to his
personal credit card to facilitate operations when monies were low of which $32,513.10 has
not been repaid to date.
16. The Board of Directors infrequently met after December 2013 based on provided minutes
1 -The total number of checks issued for the reviewed period is 525 before excluding rent and consulting fee payments.
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and agendas plus directors resigned but were not timely replaced or removed from the
Florida Division of Corporation's records.
17. Commission fees of 10% totaling $5,876 were paid on seven (7) donations although this
practice was not knowingly documented or approved by the Board of Directors.
18. Two (2) consultants received $36, 792 which was not reported to the Internal Revenue
Service and detailed records describing the work performed and hours worked by
contractors were not typically documented.
19. No detail on submitted local meal expenditures was provided to indicate the business
purpose or the attendees present in support of the eight (8) related transactions totaling
$634.27.
20. LGBTSCL did not obtain their annual business tax receipts for the 2014/15, 2015/16 and
2016/17 fiscal years.
PURPOSE
The purpose of this review is to determine whether Miami Beach-Miami LGBT Sports & Cultural
League, Inc. was fiscally responsible in managing and spending the monies received to stage a
successful World OutGames Miami 2017 and that all tested monies were accountable.
SCOPE
1. Confirm the total amount of monies raised and spent by the Miami Beach-Miami LGBT
Sports & Cultural League, Inc. (LGBTSCL) during the reviewed period.
2. Confirm that the LGBTSCL's maintained accounting records and supporting
documentation were organized, complete and sufficient.
3. Confirm that the internal control process and their established segregation of duties are
adequate.
4. Confirm that all tested monies received from various revenue sources were deposited
intact in the LGBTSCL's bank accounts and were properly reported.
5. Confirm that all tested monies received were expended in accordance with any
documented requirements established by the donor.
6. Confirm that tested expenditures were aligned with the LGBTSCL's business purposes.
7. Confirm that the LGBTSCL is current with the City concerning business tax receipts,
special event deposits, etc.
FINDINGS
1. Among other requested documents, Miami Beach-Miami LGBT Sports & Cultural League,
Inc. or LGBTSCL provided their QuickBooks prepared general ledgers, bank statements
(Wells Fargo checking and saving accounts from July 2013 through June 2017, a Bank of
America checking account from February 2013 through June 2017 and a PayPal account
from June 2015 till June 2017) and supporting documentation for many of these
transactions. In reviewing these documents, it became apparent that the general ledger
was not necessarily accurate as it was found to contain incorrect check numbers and
disbursement classification errors. Supporting documentation deficiencies are addressed
separately in finding #2.
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Internal Audit also made inquiries to LGBTSCL management and vendors' internet
information was compared to the World OutGames Miami 2017 work needs to help correct
these identified deficiencies. All this information was then compiled and an updated
transaction history was created with more accurate check numbers and classifications.
Internal Audit had no knowledge of any services paid for but not received or of any personal
relationships with these vendors that may exist. Lastly, this analysis does not include any
in-kind funding that may exist or anyone who directly paid monies to vendors for products
and/or services rendered as all transactions were centered on the bank statements.
Based on this updated transaction history, the following two charts were created to show
that LGBTSCL's deposits totaled $1,449,755.40 while withdrawals totaled $1,442,032 .53
between February 15, 2013 and June 4, 2017. Detailed dollar amount information can be
found in Exhibit A located at the end of this report.
Donations -Received
15.41%
Lodging Expense
10.58%
Operation Expenses
10.99%
Deposits $1,449,755.40
Withdrawals
($1,442,032.53)
Office Expense
Travel
4.48%
Fundraising Expenses
Rent Payment Received
0.31%
Miscellaneous
0.15%
2.67% Rights and Dues
Professional Services
0.64%
0.42%
Commission Fee
0.41%
Payment to American Express
4.26%
2. It was noted that 51 of the 349 2 (14.61 %) checks and 30 of the 311 (9.65%) non-check
transactions paid (e.g. ATM withdrawals, wire transfers, debit card payments) totaling
$149,981.13 were missing supporting documentation . Similar issues occurred with the
2 -The total number of checks issued for the reviewed period is 525 before excluding rent and consulting fee payments.
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deposits where there was not always sufficient information present to indicate the source of
the monies. Listed below are three different types of disbursement transactions that are not
considered as a business best practice and go beyond a supporting documentation issue.
a. Two separate checks payable to the LGBTSCL's Sports Director were issued so that he
could obtain cash to pay others. Check #2085 dated May 30, 2017 for $5,000 was
written so that the obtained monies could be used to pay the soccer officials. As no
supporting documentation was present, Internal Audit requested verification that these
monies were appropriately paid to the officials. After several days, an email dated June
11, 2017 and a copy of a Soccer Officials Receipt Sheet signed by an International Gay
& Lesbian Football Association (IGLFA) representative was provided. However, it still
was not signed by the individuals who supposedly received the payments. Similarly,
check #1929 dated February 17, 2017 for $396.86 was written to the Sports Director to
supposedly pay $375 to a rowing coach plus $21.86 for ground transportation but there
was no evidence verifying this transaction.
b. Checks #999 dated October 15, 2013, #1000 dated January 10, 2014 and #1539 dated
August 4, 2014 for $2,000, $750 and $1,200 respectively were identified as cash
advance payments issued prior to traveling. However, no documentation was provided
showing a reconciliation of the corresponding individuals' actual expenses with the
monies advanced after they returned home.
c. Eighteen ATM cash withdrawals occurred for a total of $4,471 but no documentation was
provided showing how the monies were actually spent.
3. The information listed below refers to reimbursement based grants that were either recently
denied or are on pending status as of the World OutGames June 4th conclusion:
a. An $18,000 tourism development grant and a $5,045 cultural grant awarded by Miami-
Dade County were not approved for reimbursement by the County Commission after the
games ended in June 2017.
b. A $45,000 grant from the Miami Beach Visitor and Convention Authority (VCA) was
rescinded in June 2017 as the Miami Dade Gay & Lesbian Chamber of Commerce
Foundation, Inc. (MDGLCC Foundation, Inc.) has withdrawn its fiscal agency and no
monies will be paid out according to the VCA's Executive Director.
c. The required documentation for a $200,000 grant awarded by the Florida Sports
Foundation, Incorporated is currently being prepared. It is unknown at this time whether
this grant will be approved for reimbursement.
4. According to information provided, four hotels claim that LGBTSCL still owes them money
regarding guaranteed unfilled rooms. Hotels' names and amounts claimed are the Marriott
Stanton South Beach ($141,293), National Hotel ($83,946), Courtyard Miami Coconut Grove
($69,861 ), and an undetermined amount to the Doubletree by Hilton Miami Airport &
Convention Center.
5. The World OutGames are licensed by the Gay and Lesbian International Sport Association
(GLISA). In February 2013, the LGBTSCL was selected by GLISA in a non-public process
by its members to host the 2017 games in Miami. The corresponding comprehensive
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agreement signed on February 28, 2013 detailed the responsibilities of both parties
associated with staging the games. Among its terms, Appendix 3 specifies the date and
amount in Canadian dollars (CAN) that each of the five licensing fee installments totaling
$175,000 CAN are due while Appendix 4 states that penalties of $1,500 are to be assessed
for each week or part of each week that the payment is late. The table in Exhibit B located
at the end of this report shows LGBTSCL's compliance with these terms and the
corresponding amounts (excluding penalties) apparently owed to GUSA as of August 1,
2017.
The Greater Miami Convention & Visitors Bureau or GMCVB timely remitted $50,849.18
U.S. dollars or $51,781.63 CAN on behalf of LGBTSCL as the first installment of the
minimum guaranteed license fee. Since these monies were paid directly to GUSA and were
not deposited into LGBTSCL's bank accounts, they are not included in finding #1 and
Exhibit A.
The table in Exhibit B shows that LGBTSCL apparently owes $81,541.79 in unpaid
installments. Penalties of $1,500 per week may be levied if GUSA elects to charge them.
Internal Audit has no knowledge of any abatement in license fees and/or penalties reached
between the two parties.
6. Fundraising should be an integral part of the World OutGames Miami 201 ?'s bank deposits
as LGBTSCL strived to increase revenues. Yet, only the following six primary fundraising
events were staged on the listed dates with the last one being held in September 2016:
DineOut at City Hall Restaurant
DineOut at Poseidon Greek Restaurant
White Splash
An Evening of Empowerment with Martina Navratilova
ArtScape at Collins Park
Silver Soiree
07/08/2015
10/05/2015
11/28/2015
12/11/2015
06/04/2016
09/08/2016
Lastly, Internal Audit's created transaction history showed that these fundraisers earned
$37,086.91 but spent $38,473.97 for a combined net loss of ($1,387.06) based on the
information provided by LGBTSCL management which indicates that these events were not
successful. However, these figures may or may not be totally accurate as there are some
unsupported documentation transactions that were assumed to be fundraising related that
were included in these calculations. Lastly, any in-kind donations or services received are
excluded as there is no known means to confirm or verify these transactions.
7. Happy Copenhagen, a joint project organization of Pan ldraet sports club and Copenhagen
Pride, entered into a strategic partnership agreement on December 15, 2015 with LGBTSCL
for the purpose of promoting international LGBT culture at World OutGames Miami 2017.
The short two page agreement requires Happy Copenhagen to remit $10,000 on February
1, 2016; $10,000 on July 1, 2016; and $5,000 on January 1, 2017 for a total of $25,000. In
return, they were to receive on-site event placement (expo booth, stage presence,
destination videos, etc. in the OutGames Village and opening ceremonies); brand placement
(premium brand placement as partner city, four (4) social media posts, one (1) full page
color ad in Souvenir Book, etc.); and four (4) All VIP access passes.
Happy Copenhagen remitted two $10,000 wire transfers ($19,944 was actually received
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after $56 in bank fees were deducted) were deposited by LGBTSCL into their Bank of
America checking account on March 2, 2016 and July 15, 2016. However, LGBTSCL
cancelled the OutGames Village and opening ceremonies so Happy Copenhagen did not
receive many of the specified benefits.
8. Bank withdrawals totaling $394,542 of $1,442,032 (27.4%) were identified as strictly related
to staging the sporting, cultural and human right's events which includes payments for
facilities rental; venue insurance; lodging for sport officials, human right presenters and
speakers; and outside organizations hired to organize and manage individual sporting
events. The aforementioned amount includes $170,200 of deposits or installments for
venues and/or events that were subsequently cancelled (see finding #9). If expenditures on
cancelled venues and/or event planning are not considered, the total disbursement amount
for staging these events would be $224,342 or 15.6% of total disbursements. One would
believe that this figure is low considering that the sporting, cultural and human rights events
are the underlying reason as to why the participants and their families come to the World
OutGames.
9. Payments totaling $174,250 were identified as deposits or installments for venues and/or
events that were subsequently cancelled. According to LGBTSCL's Chief Operating Officer,
the not for profit corporation experienced cash flow shortages at critical times which
prevented them from taking advantage of opportunities and caused the forfeiture of non-
refundable monies previously remitted. The following breakdown provides details on these
forfeited monies:
Amount
For Opening and Closing ceremonies (Not Held)
$75,000 Plans for large opening and closing ceremonies were initially drafted whereby
LGBTSCL would sell tickets and food/beverages as a means to raise revenues.
Consequently, they signed an agreement for the rental of the Marlins Stadium to
host these ceremonies at a total cost of $430,034. Three payments of $25,000 each
were made to Marlins Stadium Operator, LLC through check #1872 dated
12/9/2016, check #1885 dated 12/20/2016 and check #1916 dated 1/27/2017 before
they defaulted.
$27,000 Impression Group South, Inc. was hired to plan the opening and closing ceremonies.
As a result, five checks between 3/29/2017 and 5/18/2017 were paid to this event
planning and promotion company.
$16,700 Live Nation/The Fillmore was paid $5,000 through check #1998 dated 5/1 /2017 and
$11, 700 through a 5/24/2017 wire transfer to host the opening and closing
ceremonies after the planned rental of Marlins Park fell through.
Other Consulting Expenses
$37,500 Operations & Production Specialists or OPS received seven different checks
between 10/20/2016 and 5/3/2017 to provide on-site management for the sporting
events. OPS announced their separation from LGBTSCL on 5/25/2017, the day
before the games started, due to a lack of continuing payments.
$9,000 Paul Mokha was a rowing coach who received four separate checks between
2/6/2017 and 5/8/2017 for managing and producing the rowing event which was
ultimately cancelled due to the perceived high cost (LGBTSCL had a signed
agreement with Paul Mokha for $15,000).
$5,000 Run The City, Inc. was hired to run the marathon, half marathon, cycling, etc. which
was expected to cost close to $200,000 for which only one $5,000 payment was
processed on 04/20/2017.
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$4,050 Monies paid to Event CAD Plans, Inc. between April 2016 and May 2017 to draw up
site plans for the main village before being cancelled by LGBTSCL.
10. A review of LGBTSCL's operational practices identified the following shortcomings:
a. No Internal Revenue Service tax returns have been filed since the not for profit
corporation's inception.
b. Bank reconciliations for the provided Wells Fargo checking and savings accounts as well
as the Bank of America checking account were not completed timely. Although the bank
reconciliations' due date was not knowingly documented anywhere, standard industry
practice is to require their completion by the end of the following month (ex. October
2015's bank statements should be reconciled by November 30, 2015 and so on).
• Testing found that 44 of the 47 Wells Fargo checking account monthly reconciliations
were not completed timely (93.62%), 45 of the 47 Wells Fargo savings account
reconciliations (95. 7 4%) and 50 of 53 Bank of America checking account
reconciliations (94.34% ).
• The Wells Fargo joint checking and savings accounts from July 2013 through
January 2016 were reconciled in February 2016 by the LGBTSCL's Chief Operating
Officer while the remaining months through May 2017 were reconciled in late May by
an individual independent of the organization.
• The February 2013 Bank of America reconciliation was completed on February 5,
2016, those for March 2012 through January 2016 were done in February 2016 by
the Chief Operating Officer and those for February 2016 through May 2017 were
finished in late May 2017 by an individual independent of LGBTSCL.
A better segregation of duties would have occurred if the individual independent of
LGBTSCL would have completed all the bank reconciliations since the Chief Operating
Officer was in charge of finances and individually prepared most of the checks reviewed.
Furthermore, these completed bank reconciliations contain a number of entries labeled
"expense" or "deposit" that contained only the date and the corresponding amount so
that it balances. As a result, one has to spend time reviewing the supporting
documentation (if any exists) to determine the business purposes for these transactions.
c. LGBTSCL's Chief Operating Officer and the Chief Executive Officer were primarily
responsible for setting policies and running operations. The Chief Operating Officer,
who was also the Board of Director's Treasurer as of May 2014, individually signed
virtually every reviewed check. A recommended practice would have been to require all
checks above a designated threshold to have a second signatory and to have an active
Board of Directors reviewing and approving all financial transactions.
d. The same expenses were submitted twice by the former Chief Executive Officer for
reimbursement. This duplication went unnoticed and resulted in a $696.20 overpayment
due to their inclusion in check numbers 1636 and 1654 dated November 19, 2015 and
December 18, 2015 respectively. This money should be repaid to the not for profit
Florida corporation and paid out to creditors.
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e. Donor appreciation letters were not maintained which could be compared to the deposit
amount to provide greater assurance that all monies received were deposited intact.
f. Net income reports were typically not prepared for fundraisers to help determine events'
profitability and whether they should be held again. In addition, these documents would
help give better assurance that all monies were accounted for, especially since some
workers at fundraisers were knowingly paid with cash for their services rendered.
11. LGBTSCL and its donors realized the benefits afforded to section 501 (c)3 organizations
despite not actually receiving this designation and the MDGLCC Foundation, lnc.'s fiscal
agent relationship was used for more than the agreed upon grant reimbursement purpose.
The MDGLCC Foundation, Inc. is currently a registered Section 501(c)3 organization with
the U.S. Department of Treasury through the Internal Revenue Service. Benefits of this
designation include the federal income tax deductibility of donations and many states
(including Florida) which allow 501(c)3 organizations to be exempt from sales tax on
purchases. The LGBTSCL Board of Directors recommended applying for the 501 (c)3
designation in 2013 but for unknown reasons it was never applied for.
The MDGLCC Foundation, Inc. stated in a June 7, 2017 email that they acted as a fiscal
agent for the World OutGames for reimbursement grants only and LGBTSCL was never
authorized to use this arrangement in any other manner. A fiscal agent involving nonprofit
organizations is defined as an agreement for a tax-exempt charitable organization
(MDGLCC Foundation, Inc.) to accept donations on behalf of an organization (LGBTSCL)
that has not been granted tax-exempt status by the Internal Revenue Service. The fiscal
agent merely acts as a pass-through organization to allow the other organization to receive
the donation.
The MDGLCC Foundation, Inc. and the LGBTSCL created a joint Wells Fargo checking and
saving account for which one representative from each organization was designated as a
signatory. Donations to the World OutGames Miami 2017 would typically be deposited into
the Wells Fargo joint checking account so that the donor could benefit from the federal
income tax deduction provision. LGBTSCL management would then transfer monies from
this account as needed into their Bank of America checking account for which only their
Chief Executive Officer and Chief Operating Officers were signatories.
LGBTSCL management stated that they told vendors of their fiscal agent relationship with
the Section 501(c)3 registered MDGLCC Foundation, Inc. which resulted in an estimated 76
transactions totaling $15,600 in unpaid state sales taxes based on Internal Audit's
calculations. LGBTSCL maintains that vendors' decisions to charge state sales tax was
ultimately their own but this could not be verified except for the National Hotel. A June 7,
2017 email was received from the MGCLCC Foundation, Inc. which explicitly states that
LGBTSCL is not authorized to use their tax exempt certificate for their contract with the
National Hotel. State sales tax of $10,918.26 is included in the $83,946.40 owed to the
National Hotel as addressed in finding #4 so this amount is not included in the
aforementioned $15,600 figure.
12. LGBTSCL did not submit accurate and timely financial reports to the City. Exhibit 3 of the
grant agreement approved via City Resolution No. 2016-29579 requires LGBTSCL to submit
a copy of their financial reports to the City every two months starting with October 31, 2016
as a requirement for accepting $100,000 and potentially another $200,000 if the designated
Page 11 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
financial benchmarks are satisfied. After several requests from the City, the LGBTSCL
provided two separate financial reports in April and May 2017 showing the amount of grants
and donations committed and received plus any in-kind services.
Closer inspection of these reports found inconsistencies between the amount of revenues
received and the amounts actually collected. For example, the report received on March 29,
2017 shows that a Miami-Dade County Commissioner donated $25,000 when the
information provided by the Chief Operation Officer shows $35,000 and conversely the
report lists Centerplate as giving $25,000 when the records report only $6,471. The City
had previously determined that these reports included both confirmed and pending
sponsorships and commingled monies received with in-kind services. Lastly, no supporting
documentation was furnished to the City despite several requests.
13. A nonprofit organization obtained alcohol permits for the LGBTSCL's White Splashfunctions
in return for a negotiated flat fee. However, this arrangement appears to contradict Florida
Statute 561.422 as the events were not held on their premises but at the Aloft Hotel.
Furthermore, the nonprofit organization received a negotiated flat fee for the use of their
alcohol permit rather than LGBTSCL retaining all the net profits.
Florida Statute 561.422 states" ... the director of the division may issue a permit authorizing
a bona fide nonprofit civic organization, charitable organization, municipality, or county to
sell alcoholic beverages for consumption on the premises only, for a period not to exceed 3
days, subject to any state law or municipal or county ordinance regulating the time for selling
such beverages. All net profits from sales of alcoholic beverages collected during the permit
period by a nonprofit or civic organization must be retained by such organizations ... ".
In addition, LGBTSCL's Chief Operating Officer stated that a nonprofit organization obtained
an alcohol permit for a booth on Lincoln Road during a Halloween event. Profits were to be
split between LGBTSCL and the sponsoring nonprofit organization obtaining the permit.
Although there were supposedly no profits earned, this arrangement may not be in
compliance with Florida Statute 561.422.
14. LGBTSCL did not repay the City the $50,000 owed timely upon receipt of the VCA monies.
City Resolution No. 2014-28492 required LGBTSCL to reimburse the City $50,000 of its
$100,000 award upon receipt of funding by the VCA. These monies are in addition to the
$100,000 aforementioned payment issued in October 2016. Although additional monies
were received annually from the VCA during 2014, 2015, and 2016, they did not reimburse
the City. The City Commission ultimately adopted Resolution No. 2017-29828 effective April
26, 2017 thereby eliminating this repayment provision.
15. According to the Chlef Operating Officer, the not for profit corporation did not have sufficient
assets to secure company credit cards. Therefore, he used his personal credit card to pay
for organizational expenses, especially when the LGBTSCL's reserves were low. As funds
were subsequently received, he would periodically pay down his credit card's outstanding
balance. The commingling of business and personal purchases is not considered a
business best practice and has complicated the reconciliation process.
The Chief Operating Officer tagged $94,006.35 in purchases between May 2015 and June
2017 as World OutGames expenses through his American Express credit card. Internal
Audit had to rely on these tags as accurate because no other supporting documentation for
Page 12 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
these purchases were typically maintained other than the information present on the credit
card statement. For this reason, these expenditures were not included in the deposits and
withdrawals chart in Exhibit A located at the end of this report.
Three payments were made to American Express (check #1833 -October 19, 2016 for
$13,573 .91, check #2022 -May 8, 2017 for $27,000.00 and check #2071 -May 30, 2017
for $20,919.34), for a total of $61,493.25. As of completion of this review, LGBTSCL's Chief
Operat ing Officer claims an unpaid balance of $32 ,513.10 . Distribu t ion of card expenditures
is shown in the graph below, and detailed dollar amount information can be found in Exhibit
C located at the end of this report.
Miami Wo r ld Out-Games Expenses Paid Through Chief Operating Officer's Personal
American Express Card ($94,006.35)
General
4.41% Interest Charges
4.33%
Office Supplies
Meals Entertainment
1.94%
Dues
0.32%
16 . LGBTSCL created detailed pol icies and procedures that were approved on January 15,
2014 which included a description of the Board of Directors ' roles . Among other duties, the
Board of Directors are to seek and secure sufficient resources to adequately finance the
organization 's programs and objectives; ensuring prudent and judicious management of the
organ ization 's resources; and supervising the development and approval of a strategic plan,
operating plan and operating budget.
The Board of Director meetings were not routinely held so sufficient supervisory oversight
might not necessarily have been received. Although ten (10) meetings were held between
December 2012 through December 2013, fewer meetings were held as the World
OutGames Miami 2017 drew nearer based on provided documentation (5 agenda/minutes
present for 2014; 1 for 2015; 3 for 2016 and none for 2017).
Furthermore, LGBTSCL's Chief Executive Officer stated that five (5) of the ten (10) Board of
Directors members resigned, but were not replaced. In fact, a printout obtained from the
Florida Division of Corporations on May 26, 2017 still listed three (3) individuals as directors
despite apparently resigning months earlier.
17. As a financial incentive , the Chief Operating Officer stated that fundraisers had the option of
receiving a 10% commission payment on any donations secured that exceeded $1,000 .
Testing found that $5,876 was disbursed on seven (7) separate donations which was
Page 13 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
comprised of $4,376 paid to LGBTSCL's Chief Executive Officer and $1,500 to Arc and
Arrow Inc. (a LGBTSCL vendor). This policy was not knowingly documented or approved by
the Board of Directors or disclosed to donors.
18. LGBTSCL claimed that they did not have any employees as all staff members were paid as
independent contractors and no federal income taxes were withheld. A form 1099 contains
information about any income that has been received by the listed individual, or corporation
that would not normally be listed on a W-2 form. It is to be prepared and submitted for
designated workers whose annual income exceeded $600 .
As mentioned previously, all provided general ledger and bank deposit transactions during
the reviewed period were analyzed. In doing so, each consultant's total annual fees paid
was calculated and compared to the form 1099s submitted to ensure that the correct
amount was reported. Testing identified the following differences totaling $36,792:
a. Individual fees of $14,292 paid to the Chief Executive Officer were not reported in the
2014 calendar year.
b. One consultant who formed a single member LLC should have received a form 1099
that reported fees of $22,500 during the 2016 calendar year, but did not.
Lastly, it was noted that LGBTSCL's independent contractors received fixed checks
depending on the availability of funding. There was typically no supporting documentation
provided showing how many hours were actually worked during the pay period or the tasks
completed. The only exception noted was when LGBTSCL's Chief Executive Officer was
paid an hourly rate prior to receiving his monthly flat rate in October 2015.
19. No detail on submitted local meal expenditures was provided to indicate the business
purpose or the attendees present in support of the eight (8) related transactions totaling
$634.27.
20. LGBTSCL did not obtain their annual business tax receipts which operated since March
2015 from their offices located at 1220 Washington Avenue. As a result of their nonprofit
status, they should have received annual business tax receipts from the City but would have
only been liable to pay the fire inspection fees component. Yet, a review of the City's
Financial Systems showed that annual business tax receipts were not billed or received for
the 2014/15, 2015/16 and 2016/17 fiscal years.
JJS:MC:NB
Review performed by Assistant Internal Auditor Mark Coolidge and Senior Auditor Norman
Blaiotta
F:\OBPl\$AUD\INTERNAL AUDIT FILES\DOC16-17\REPORTS -FINAL\WORLD OUTGAMES MIAMI 2017.docx
cc: Kathie Brooks, Assistant City Manager
Daniel J. Oates, Police Chief
John Woodruff, Chief Financial Officer
Eva Silverstein, Tourism, Culture and Economic Development Department Director
Keith Hart, Chief Operating Officer, Miami Beach-Miami LGBT Sports & Cultural League,
Inc.
Page 14 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc . Financial Review
World OutGames Miami 2017
August 14 , 2017 DRAFT
Exhibit A -Deposits and Withdrawals
MIAMI BEACH-MIAMI LGBT SPORTS & CULTURAL LEAGUE
Deposits and Withdrawals
February lS, 2013 -June 4, 2017
Registration Fees
Grants
Donations -Received
Sponsorships
Hotel Prepayment
Fundraising Event Proceeds
Refunds -Received
Loans
Rent Payment Received
Mi see Ila neous
Initial Deposit
Consulting Fees
Advertising I Promotional
Operating Expenses
Lodging Expense
Venue Fees
Office Expense
Sporting Events
Travel
American Expre ss
Fundraising Expense
Licensing Fees
Professional Services
Refunds -Given
Commission Fee
Loan Repayment
ATM -Cash Withdrawals
Miscellaneous
Bank Fees
Donations -Given
Loan -Returned by Bank
I nsura nee
Duplicate Payment
Meals (Local)
AMEX Interest Charges
Withdrawals Total
$
$Amount
$480,590.41
381,941.00
223,464.18
213,029.12
79,848 .01
37,086.91
21,588.80
5,500.00
4,500.00
2,000.11
200.00
6.86
1,449, 755.40
296,498.27
169,013.94
152,610.83
1 21,563 .95
84,184.43
65,475 .00
64,630 .68
61,493.2 5
38,473 .97
19,444.25
9,300.00
6,092 .52
5,876.40
4 ,500 .00
4,471 .12
2,000 .00
1,855.88
1,000 .00
1,000.00
1,000 .00
696 .20
634.27
$1,442,032.53
% From Total
33.15%
26.35%
15.41%
14.69%
5 .51 %
2.56%
1.49%
0.38%
0.31%
0 .14%
0.01%
0.00%
100%
2 2.90%
20 .56%
11.72 %
10 .58 %
8.43%
5 .84 %
4 .54 %
4.48 %
4 .2 6%
2 .67 %
1 .35 %
0 .64%
0 .42 %
0.41%
0 .31 %
0 .31 %
0 .14%
0 .13%
0 .07 %
0 .07 %
0 .07 %
0.05 %
0 .04%
100%
Expenses
through
Bank Withdrawals by
Chief
Operating
Expense Classification
+ Credit Card
Officer's
Expenditures
American
Express card
0 $3 30,217 .57
24 ,310 .89 * 320,809 .16
4,149 .18 173,163 .1 2
0 15 2,610 .83
0 1 21,563 .95
5,191.43 ** 89 ,375 .86
0 65,475.00
41 ,714 .88 *** 106,345 .56
(61,493 .25) 0 .00
7,866 .58 46 ,340.55
740 .00 20,184.25
0 9,300 .00
0 6,09 2.52
0 5,876.40
0 4 ,500 .00
0 4,471 .12
0 2,000 .00
0 1,855 .88
0 1,000 .00
0 1,000 .00
1,860 .59 2,860 .59
0 696 .20
4,106 .88 **** 4 ,741 .15
4 ,065 .92 4 ,065 .9 2
$32,513.10 $1,474,545.63
% From
Total
Considering
Credit Card
Expenses
22.39 %
21.76 %
11.74%
10 .35 %
8.24 %
6.06 %
4 .44%
7.2 1%
0 .00 %
3.14%
1.37 %
0 .63 %
0.41 %
0.40%
0 .31 %
0 .30 %
0.14 %
0.13 %
0.07 %
0.07%
0.19%
0 .05 %
0 .32 %
0 .2 8%
100%
Note: Deposits and Withdrawals chart includes transactions from Wells Fargo, Ban k of America and PayPal. Further details on
next page. American Express expenditures and applicable percentage distribution are shown in right pane .
* Includes AMEX expenditures tagged by LGBTSCL Management as "Marketing" and "Advertising"
** Includes AMEX expenditures tagged by LGBTSCL Management as "Office Supplies" and "Phone"
*** Includes AMEX expenditures tagged by LGBTSCL Management as "Travel" and "Tolls/Parking"
**** Includes AMEX expenditures tagged by LGBTSCL Management as "Meals Staff" and "Meals Entertainment"
Page 15 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
Notes on Deposits and Withdrawals Chart (Exhibit A)
Deposits by Source
Registration Fees: Consists of payments received by World OutGames sporting, cultural and
human rights events' participants.
Grants: Complete breakdown
City Of Miami Beach
Miami Beach Visitor and Convention Authority (VCA)
Miami-Dade County Tourism Development Council
Greater Miami Convention & Visitors Bureau
Miami Dade County Cultural Grant
VCA reimbursement
Total
$200,000
150,000
20,000
5,500
4,941
1,500
$381,941
Donations -Received: Donations received from multiple sources (individuals/corporations).
This classification would include monies to pay for services (e.g. fundraising event tickets,
lodging, and registration fees) but they were excluded due to the lack of detailed information.
Within the total amount is $18,000 from AIDS Healthcare Foundation and $8,366 (net of
collection fees) raised through the Generosity-INDIEGOGO website by the Miami-Dade Gay &
Lesbian Chamber of Commerce Foundation, Inc.
Sponsorships: Complete breakdown
Adidas
Blackpool Promotions
My Gay Miami Sponsorship
Happy Copenhagen
Fentress Architects
Hill International
Centerplate
Global Spectrum
Federation of Gay Games
Advertising Proceeds
Total (Rounded)
$100,000
49,965
20,000
19,944
5,000
5,000
6,471
4,854
1,005
790
$213,029
Hotel Prepayment: Deposits received by LGBTSCL from registrants, allocated to pay for
lodging at the National Hotel only. Within the total amount is $39,553 in wire transfers received
from Happy Copenhagen and $19,713 from Pan ldraet (a Copenhagen sports club).
Fundraising Event Proceeds: Deposits that are tied to monies earned at fundraising events
such as White Splash, Silver Soiree and ArtScape Collins Park.
Page 16 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
Refunds -Received: Complete breakdown
City of Miami Beach (CMB) deposit refunds
Refund Spectra
Refund Light House Project
Fee Refund /Other Refund (Bank Fees Related)
Total (Rounded)
CMB deposit refunds breakdown:
$10,894
10,000
500
195
$21,589
$5,000 deposit refund for fundraising event held at Collins Park on 6/4/2016 entitled Artscape Collins
Park.
$2,500 deposit refund for fundraising event held at Aloft Hotel on 11/28/2015 entitled White Splash
Pool Party.
$3,394 partial deposit refund for a fundraising event on 10/31/2015 entitled Halloween on Lincoln
Road.
Note on Refunds -Received: LGBTSCL initially remitted $500 to the Light House Project to rent a room for a meeting. However,
the meeting was subsequently cancelled and the monies were refunded. Similarly, the $10,000 payment from Spectra, who
manages the Miami Beach Convention Center for the City, was refunded to LGBTSCL because the property was being renovated
and could not accommodate the planned World OutGames activities. LGBTSCL's initial $10,000 payment is recorded in Exhibit A
as "venue fees" under the Withdrawals by Expense Classification section.
Loans: Loans given by the Chief Operational Officer when LGBTSCL's funds were low.
Rent Payments Received: For sub-renting office space to Miami Beach Gay Pride Inc.
Miscellaneous: $2,000 erroneous bank transaction. It is offset with a $2,000 withdrawal also
classified as miscellaneous.
Initial Deposits: Deposits related to opening the bank accounts.
Section intentionally left in blank.
Page 17 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
Withdrawals by Expense Classification
Consulting Fees: All individuals, corporations and single-person limited liability corporations
(LLCs) who received monies in exchange for hours worked during the reviewed period. A
complete breakdown is shown below.
Ivan Cano {Chief Executive Officer)
Lynare Robbins (human rights/diversity)
Carol Coombes (culture, arts and film)
Marc Brown (former Sports Director)
Jordan Selders (current Sports Director)
P3P, LLC (fund raising)
Kiana Wise (marketing)
BravaBravo (project management)
Scott Galvin (volunteer recruitment)
Melba Deleon (2 week assignment)
James Ambrose (2 week assignment)
Total (Rounded)
$106,992
69,400
57,344
28,308
25,894
24,000
9,100
7,500
680
500
500
$330,218
Note on Consulting Fees: Chief Operating Officer, Keith Hart, did not receive any consulting fee payments during the reviewed
period.
Advertising I Promotional: This classification includes all expenditures related to advertising
and promotions. Companies which received payments of $10,000 or more are shown below.
Arc & Arrow Creative/ QLIXI Marketing Group/ Lion Creative
Goodman Public Relations
Multi Media Platforms Worldwide Inc.
Murry Agency
Gayhills Inc.
Total (partial)
$140,337
30,600
23,400
18,098
10,000
$222,435
Note 1 on Advertising I Promotional: Arc & Arrow Creative, QLIXI Marketing Group, and Lion Creative were grouped together
based on Information provided by LGBTSCL's Chief Operating Officer and were later confirmed through an internet search which
disclosed that Arc & Arrow Creative Group LLC and QLIXI Marketing Group were the same company and subsequently Lion
Creative, LLC acquired Arc & Arrow Creative Group LLC in 2015. These three companies were compensated for creating
LGBTSCL's website and logo as well as for providing professional marketing and branding.
Note 2 on Advertising I Promotional: The total for this classification do not include expenditures made through LGBTSCL Chief
Operating Officer's personal American Express credit card. According to tags made by the Chief Operating Officer, a total of
$24,310.89 ($23,434.45 on "marketing" and $876.44 on "advertising") was expended. if these amounts were considered,
expenditures would equal $320,809.16 which is 21. 76% of total expenditures.
Operating Expenses: This classification includes catering, music, moving expenses and
expenses related to the cancelled open & closing ceremonies as mentioned previously in the
report:
Marlins Stadium Operator, LLC
Impression Group South, Inc.
Live Nation
$75,000
$27,000
$16,700
Page 18 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
Note on Operating Expense: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating
Officer's personal American Express credit card. According to tags made by the Chief Operating Officer, a total of $4,149.18 was
expended under the classification called "General". If these amounts were considered, expenditures would equal $173, 163.12
which is 11. 74% of total expenditures.
Lodging Expense: Complete breakdown
National Hotel
Officials and Presenters (Marriott Stanton South Beach)
Aquatics -Officials (Marriott Stanton South Beach)
Human Rights Speakers (Marriott Stanton South Beach)
- --------------
Total (Rounded)
$112,000
25,000
11,186
4,425
$152,611
Amounts reported for the National Hotel represent monies LGBTSCL received directly from
registrants to pay for lodging, which were subsequently transferred to the National Hotel.
Conversely, the payments to the Marriott Stanton South Beach Hotel represent rooms paid by
LGBTSCL for the listed groups at no charge to the group.
Venue Fees: Organizations receiving payments of $10,000 or more are shown below.
Operation & Production Specialists (OPS)
Aquatics -Ransom Everglades School
New World Symphony
Miami Theater Hub Inc.
Doubletree Miami (Flooring)
Spectra
Total (partial)
$37,500
25,000
17,231
10,449
10,000
10,000
$110,180
Note on Venue Fees: LGBTSCL's $10,000 payment to Spectra, who manages the Miami Beach Convention Center for the City,
was subsequently refunded because the property was being renovated and could not accommodate the planned World OutGames
activities. The return of these monies is recorded in Exhibit A as "refunds -received" under the Deposits By Source section.
Office Expense: This classification includes expenditures directly related to the general
operation of the organization. The highest disbursement in this group is LGBTSCL's office rental
payments of $57, 189.
Note on Office Expense: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating
Officer's personal American Express credit card. According to tags made by the Chief Operating Officer, a total of $5, 191.43
($1,596.43 on "phone" and $3,595.00 on "office supplies") was expended. If these amounts were considered, expenditures would
equal $89,375.86 which is 6.06% of total expenditures.
Travel: It includes air fare, lodging, ground transportation, meals, and travel reimbursements.
Note on Travel: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating Officer's
personal American Express credit card. According to tags made by the Chief Operating Officer, a total of $41,714.88 ($41,417.66
on "travel" and $297.22 on "tolls/parking") was expended. If these amounts were considered, expenditures would equal
$106,345.56 which is 7.21 % of total expenditures.
Through inquiries to LGBTSCL management, travels were identified and summarized in the
chart shown below.
Page 19 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
Year Month Location Reason
2013 February Antwerp, Belgium I Antwerp -Bid presentation for World OutGames
Amsterdam, Netherlands Amsterdam -marketing, public relations and
ta lent recruitment
June/July Santo Domingo, Latin American Marketing -Santo Domingo Pride
Dominican Republic
August Antwerp, Belgium Attendance at OutGames Ill -Marketing, receiving
GUSA Flag as next host, observation and
interviews of sporting events.
2014 January Las Vegas, NV Sin City Shoot Out -Multi Sports Tournament
March Ljubljana, Slovenia European Gay & Lesbian Sports Foundation
(EGLSF) -AG
June Buenos Aires, Argentina G Network Conference and Sports Recruitment in
LA -GMCVB
June Portland, OR LGBT Sports Summit
July Santo Domingo, Meeting with Dominican Republic's Ministry of
Dominican Republic Sport. With Jose Luis Suero
August Copenhagen, Denmark Copenhagen Pride -Meeting with COP and
Ambassador Gifford
November Buenos Aires, Argentina Copas de la Americas
2015 March Krakow, Poland EGLSF -AG
June Tel Aviv, Israel Israel PRIDE -Tel Aviv -PAID BY ISRAELI TOURISM
June Portland, OR LGBT Sports Summit
August Stockholm, Sweden EuroGames 2015
2016 March Los Angeles, CA To Meet with Jason Collins and Cyd
Glasgow, Scotland EGLSF -AG
July Atlanta, GA HOOP -Basketball Tournament in Atlanta
August Copenhagen PRIDE Copenhagen Pride
Sporting Event
Meeting with EGLSF Marketing Partner
Basketball Tournament
December Asian Promo for 7 cities Sydney/Brisbane/ Adelaide/Melbourne/ Auckland
in 17 Days Sports Teams
Bangkok -ILGA -Human Rights Conference
Hong Kong -Sports Team
2017 January Las Vegas, NV Sin City Shoot Out -Multi Sports Tournament
March Dusseldorf, Germany EGLSF -AG
Nuremberg, Germany Meeting Adidas to finalize sponsorship
American Express: These numbers refer to three (3) payments made to LGBTSCL Chief
Operating Officer's American Express credit card through check #1833 -10/19/2016 for
$13,573.91, check #2022 -5/8/2017 for $27,000 and check #2071 -5/30/2017 for $20,919.34,
for a total of $61,493.25. These expenditures were not included in the Deposits and
Withdrawals chart (Exhibit A) and are shown in Exhibit C.
Page 20 of 22
Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League, Inc. Financial Review
World OutGames Miami 2017
August 14, 2017 DRAFT
Sporting Events: Expenditures relating to planning and operating sporting events. Complete
breakdown
Aquatics -Nadadores of South Florida
Soccer -Soccer Marketing Promotions
Rowing -Paul Mokha
Badminton I Thomas Shek
Jordan Selders (Soccer Referees)
Track & Field -Run the City
Jordan Selders (Rowing)
Aquatics -Florida Gold Coast
Total
Fundraising Expense: Withdrawals/payments that are tied to fundraising events.
$26,960
12,855
9,000
6,235
5,000
5,000
375
50
$65,475
Note on Fundraising Expense: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating
Officer's personal American Express credit card. According to tags made by the Chief Operating Officer, a total of $7,866.58 was
expended. If these amounts were considered, expenditures would equal $46,340.55 which is 3.14% of total expenditures.
Licensing Fees: Includes one payment of $19, 144 to Gay and Lesbian International Sport
Association (GUSA).
Note on Rights & Dues: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating Officer's
personal American Express credit card. According to tags made by the Chief Operating Officer, a total of $740.00 was expended. If
these amounts were considered, expenditures would equal $20, 184.25 which is 1.37% of total expenditures.
Professional Services: Computer aided design or CAD, engineering and lawyer services.
Refunds -Given: Refunds given to participants.
Commission Fee: 10% commission fee paid on seven (7) received donations.
Loan Repayment: Payments related to short term loans made to LGBTSCL by its Chief
Operating Officer.
Miscellaneous: $2,000 erroneous bank transaction. It is offset with a $2,000 deposit also
classified as miscellaneous.
Bank Fees: Includes overdraft, returned check, foreign transaction, ATM fees, among others.
Donations -Given: To the International Gay and Lesbian Aquatics (IGLA) organization.
Loans -Returned by Bank: A $1,000 loan was received and returned by the bank.
Insurance: Performance Bond
Note on Insurance: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating Officer's
personal American Express credit card. According to tags made by the Chief Operating Officer, a total of $1,860.59 was expended.
If these amounts were considered, expenditures would equal $2,860.59 which is 0.19% of total expenditures.
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Internal Audit Memorandum
Miami Beach-Miami LGBT Sports & Cultural League , Inc. Financial Review
World OutGames Miami 2017
August 14 , 2017 DRAFT
Meals: Local meals
Note on Meals: Totals for this classification do not include expenditures made through LGBTSCL Chief Operating Officer's personal
American Express credit card. According to tags made by the Chief Operating Officer, a total of $4, 106.88 ($2,270.62 on "mea ls
staff' and $1 ,836.26 on "meals entertainment") was expended. If these amounts were considered, expenditures would equal
$4,741.15 which is 0.32% of total expenditures.
Duplicate Payment: Expense reimbursement paid twice with checks #1636 and #1656.
Exhibit B -GUSA Licensing Fees
GUSA Licensing Fees
2013 $50,000.00 06/30/2013 $50,849.18 $51,781.63 $1,781.63 $1,749.55
2 2014 $20,000.00 0610112014 $19, 144.25 $20,797.17 $797.17 $733 .82
3 2015 $20,000.00 0610112015 $0.00 $0.00 ($20 ,000 .00) ($16,004. 79)
4 2016 $35,000.00 06101 12016 $0.00 $0.00 ($35 ,000.00) ($28 ,008.39)
5 2017 $50,000.00 0312712017 $0.00 $0.00 ($50 ,000.00) ($40 ,011 .98 )
TOTAL $175,000.00 $69,993.43 $72,578.81 ($102,421 .19) ($81,541 .79)
FOOTNOTES:
* The GMCVB made the first licensee installment payment to GLISA on behalf of LGBTSCL. Although th e first installment payment actually equaled $50,849.18 U.S.,
no documentation was received to explain the reasons for the overage 90 it was all assumed to have been paid to GLISA.
-The agreement requires all payments to be l n Canadian dollars so the exchange rates as of the 06/10/2013 and 06/30/2014 payment dates
were 1.0183376359 and 1.0863404929 respectively.
·-$1 CAN equaled $.9819925576 and .92052 17025 U.S. dollars as of the 06110/13 and 05130/14 payment dates
August 1, 2017'sexchange rate of $1 CAN equals $.8002395953 U.S. was used in those instances whereby no payment has been received to date
06/10120 13
0513012014
NIA
NIA
NIA
Exhibit C -World OutGames Miami 2017 Expenses Paid through American Express
World OutGames Miami 2017 Expenses Paid through American Express
Amix Tag5 Tota~ £K %
Travel $41,417.66 44.06%
Marketing 23,434.45 24.93%
Fund raising 7,866.58 8.37%
General 4,149.18 4.41%
Interest Charges 4,065.92 4.33%
Office Supplies 3,595.00 3.82%
Meals Staff 2,270.62 2.42%
Insurance 1,860.59 1.98%
Meals Entertainment 1,836.26 1.95%
Phone 1,596.43 1.70%
Advertising 876.44 0.93%
Dues Subscriptions 740.00 0.79%
Tolls/Parking 297.22 0.32%
"11
Note: Expense classification on Chief Operating Officer's American
Express are based on the tagged reports provided.
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