City of Hartford Keney and Goodwin Golf Course Accounts and Operations Audit
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Management Action Plan
Completion Date: April 30, 2013 Responsible Person: Julio Molleda, Director, Finance Department W
e will work with the Corporation Counsel’s Office to ensure that the practice of allowing MDM or any other entity to forgo re
nt payments to pay for capital improvements or any other expenses be discontinued so that revenue and capital improvement costs and expenses are properly accounted for in the future. Letter of Credit
Contrary to Section 2.04 of the Lease Agreement, after numerous requests by the Corporation Counsel’s Office, MDM did not “de
liver to the Landlord
(the City), for the benefit of Landlord, an unconditional, clean, irrevocable letter of credit (the “LOC”) in the amount of T
wo Hundred Fifty Thousand and 00/100 Dollars ($250,000), issued by a bank reasonably acceptable to Landlord that accepts deposits, maintains accounts, has a local Hartford,
Connecticut office, and negotiates letters of credit, and whose deposits are insured by the FDIC.”
Finance Department management informed us that a valid LOC was received from MDM for the first year of the lease term, however, LOCs had not been received from MDM for any of the subsequent years of the initial term of the lease. Finance Department management provided us with a copy of an email sent to MDM in July 2012 requesting a copy of the LOC and informed us that they also requested a copy of the LOC from MDM on a number of other occasions by phone. We were informed by
the Corporation Counsel’s Office that if they have not received a valid LOC from MDM by an established deadline
, they will be proceeding with appropriate action in accordance with the terms and conditions of the Lease Agreement. We recommend that action be taken to ensure that LOCs and other contractually mandated documentation are obtained, as required, by any future lease holders. It is our understanding that this and other work required to ensure that MDM is in compliance with all of the terms and conditions of the Lease Agreement have in the past been the responsibility of the Finance Department Asset Manager. It should be noted that this position is currently vacant.
Management Action Plan
Completion Date: April 30, 2013 Responsible Person: L. John Van Norden, Deputy Corporation Counsel As noted above, if the City does not receive a valid LOC from MDM by an established deadline, the
Corporation Counsel’s Office
will be proceeding with appropriate action in accordance with the terms and conditions of the Lease Agreement. In addition, action will be taken to ensure that LOCs and other contractually mandated documentation are obtained, as required, by any future golf course lease holders.