"The December Event"

The “Devil Is In The Details” 

In December, Oro Valley Council Member Tim Bohen confronted Assistant Town Manager Chris Cornelison at the town's Pusch Ridge Golf Course. The confrontation was the culmination of months of fruitless effort by Bohen to get substantiation of the reported rounds and revenue at the facility. Bohen did not believe the numbers reported to town by facility operator Indigo Golf.

Bohen searched for answers regarding Pusch Ridge rounds and revenue accounting

From June 2023 through early September, Tim Bohen tried in vain to get answers from town staff on the manner in which Pusch Ridge Golf rounds are gathered. Then, while listening to a September 19 town Budget and Finance Commission meeting, he learned that the town was going to have a special procedures audit performed on Indigo Golf financial information. This was a month and a half after the audit firm of Baker Tilly had already been engaged and actively working on the project.

As it turns out, Indigo Golf is the only organization that could provide answers to Bohen’s questions. In an email to Baker Tilly, Deputy Finance Director Wendy Gomez noted: "We wouldn’t have any of the contractor’s transaction data in our financial software system. We receive their monthly financials and book the activity in our system. Actual transaction data would need to come from [Indigo Golf]." (Source: Email from Gomez to Barter [Baker Tilly Employee], 8-31-23). Thus, Bohen sent emails to the audit firm with questions because they were going to have the access to the information he needed.

Bohen either did not get answers to his questions or received answers that were generic in nature. Indeed, the town may have played a role in that. Town Finance Director David Gephart told Baker Tilly not to respond to Bohen's questions because “…his questions only serve to generate additional questions.” (Source: Email from Gephart to Barter, 1-4-24).

(All of this is documented in the correspondence between the Town, Bohen and Baker Tilly.)

Bohen's frustration got the best of him

It was now December 18. Bohen still had no answers. The town scheduled a tour of the Pusch Ridge Golf facility to look at possible capital improvements. Bohen saw this as his chance to get his questions answered. 

According to Chris Cornelison, Bohen said that "... he didn't need the tour because he had already seen it... he wanted to see the clubhouse...he brought a list of questions he wanted to ask." Cornelison told him "... there is a process and protocol for getting those types of items...Bohen then started yelling at him." (Source V23120927). 

Three days later, Cornelison reported the incident to the police. He said he felt threatened. That was around the same time that Town Manager Wilkins told Bohen that he would need an escort to enter town facilities.

Bohen understands that his expression of anger towards anyone is unacceptable.  He has issued a statement regarding this (See panel).

Bohen never did get his questions answered...

 …even when the Baker Tilly auditor reported the results of their special procedures audit to the town at the January 10 town council meeting, Bohen's inquiries were abruptly curtailed by the Mayor. The matter should have been discussed first in a study session to give Bohen ample opportunity to ask questions because he had many.

Questions that are still reasonable to ask

At that meeting, Town Manager Wilkins told the town council that the special procedures audit gave a 'thumbs up' to the Indigo Golf reported financial results. That is an overstatement, according to the remarks of Baker Tilly partner Hemmerle.  Hemmerle stated repeatedly to the council and in communications with town staff that his firm could not express an opinion as to the fairness of the Indigo Golf provided  numbers... nor could he guarantee that there was no fraud. They had not performed an audit of the reported results. Indeed, the numbers have never been audited.

So, we will never know about the veracity of the past or future golf financial results...

… as reported by Indigo Golf to the town. The numbers have gone unaudited in the past. And as reported in a previous article, the town does not provide oversight of the numbers. As Ms Gomez said in her August email, the Town accepts the numbers and inputs them into the town's ledger.

Instead, we have Council Member Solomon leading the charge to punish Bohen

The council never did focus on what Bohen was trying to accomplish. Led by Council Member Steve Solomon, who is no stranger to threatening controversy, the council instead focused on punishing Bohen for his behavior. He was censured by the council and ordered to attend the next two council meetings by zoom or phone. The council also ratified the town manager's decision that Bohen must now be accompanied on any visits to any town facility.

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Oversight Challenges: Oro Valley's "Blank Check" Reliance on Indigo Golf's Financial Reporting Should Raise Concerns

A special procedures test of contractor "accounting"

The town's golf operator, Indigo Golf, does the bookkeeping and accounting of Oro Valley Municipal Golf.  Indigo handles the cash. It pays all bills. It provides a report to the town of financial results. The town relies on this information for making entries into its books; and for decision making.

The town contracted Baker Tilly, the town's external auditor, to perform special procedures to check the reported results. They performed four "tests" on the information provided by the town's golf operator, Indigo Golf.  The time period covered was fiscal 2022 and 2023.  They did not find any irregularities in reported revenues and expenses, as well as in "round of golf" reported.

Found no irregularities but did not offer an opinion on the accuracy of the numbers

The auditor did not express an opinion on the fairness (accuracy) of Indigo Golf's numbers based on its test of perhaps 100 transactions in total. The auditor did not perform a financial audit of the numbers. The Town Council will rely on the Indigo Golf prepared financial results on February 7 when it assesses the future operations of the Pusch View Golf Course. 

The audit did reveal oversight challenges the town needs to meet

The auditor noted in their report that Indigo is not providing proper support for the bank account reconciliations. The town is a joint owner of this account. "We recommend the Town require their TPMC to maintain proper supporting documentation of review and approval of bank reconciliations with supervisor signature or initial. Additionally...we recommend the Town request and review monthly bank reconciliations."

One would have thought that the town would have been requiring this information. After all, this is "basic stuff".  Reconciling a bank account is an important oversight measure (see panel above) to ensure that the revenues received are deposited and that the expenses paid are accurately reflected in the financial records.

The current measures for overseeing the accuracy of information from a third-party business, which is owned by the town, are insufficient

According to Oro Valley Finance Director David Gephart, speaking to the town's Budget and Finance Commission last week, Indigo Golf handles all the accounting. The company submits its report to the town, and the town, without conducting an audit or verification, directly incorporates the received information into its financial records, accepting the numbers without further scrutiny. 

Three things the town can do now to enhance the assurance of Indigo's financial reporting

Municipal Golf is a town owned venture. The town should be engaging in oversight activities of the golf operator's bookkeeping and accounting. It is not. There are some things it can and should do. First, mandate that Indigo Golf submit an annual independent audit report to the Town, verifying the numbers provided. The town's annual audit does not encompass a review of these figures. Second, consider performing the bank reconciliations periodically, instead of relying on the operator. This involves the town examining a bank account under its ownership to ensure the accuracy of the information. Third, implement its own periodic review of reported revenues and expenses.

Town can institute these actions now

Council member Tim Bohen brought the town's attention to the necessity of scrutinizing the numbers provided by Indigo Golf. He did not believe that the revenue numbers were accurate. The special review did not confirm his suspicions. Regardless, his instinct that the current system is susceptible to fraud is accurate. Thus, there is a pressing need to establish oversight control.

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Oro Valley Orders Independent Audit of Municipal Golf Financial Results

Bohen has been focused on the accuracy of reported municipal golf operating and financial results

In our view, there are two council members who genuinely dedicate time to scrutinizing the Town’s financial results. One of them is Tim Bohen, a council member who, candidly, can be a source of challenge for other council members and Town staff due to his pointed questioning. Occasionally, the manner in which he poses these questions may make some people uneasy. However, his questions are consistently relevant.  Bohen is serving the public, not the staff nor the Town Council.

Bohen has been actively challenging the accuracy of the operating and financial data provided by municipal golf operator, Indigo Golf. Last spring, Bohen requested that the staff produce point-of-sale data to validate the revenue and golf rounds figures reported by Indigo Golf in their financial statements. Despite raising concerns about these reported results during at least two council meetings, Bohen received no response from the staff and no support from fellow council members. It’s important to note that Bohen wasn’t necessarily claiming that the numbers were incorrect; rather, he believed they appeared unusually high and not in line with what would typically be expected.

Frankly we thought the topic was dead 

That is, until Bohen asked Town Finance Director Gephart  at last week’s council meeting about a topic Bohen had heard during his attendance as the Finance and Budget Commission meeting earlier in the week. 

Town has engaged outside auditors to look at the reporting golf financial results

Gephart told the Council that the town has engaged an external auditor to conduct a specialized examination of the financial records provided by Indigo Golf. The auditor's scope of work includes a review of the contractor's internal control measures. Furthermore, they will assess the integrity of the accounting system by testing sample transactions within the revenue process, scrutinizing point of sale data, and cross-referencing it with the monthly income report. Additionally, the auditor will verify deposits made into the bank account, ensuring the presence of supporting documentation. The examination will also encompass an evaluation of expenditure records.

According the vendor…Municipal Golf earned a profit!

Indigo Golf has submitted an accounting golf operations for fiscal 2023 (See panel). According to their annual report, El Conquistador Golf achieved an operating profit of $73,600, a significant improvement from the originally anticipated loss of $701,139 for operations alone. It's important to note that these figures pertain exclusively to operations and do not encompass the substantial expenses associated with irrigation replacement, which amounts to millions, or other municipal golf capital investment. It remains unclear whether these reported results also encompass the performance of the Pusch Ridge course.

The audit matters for three key reasons

Incentive Fee and Financial Reporting

Indigo Golf receives an incentive fee based on the financial results, while also supplying these results to the Town. Therefore, an independent audit is crucial to ensure the accuracy and reliability of these reported numbers.

Town Council Decision

The Town Council is set to decide the fate of the Push Ridge nine-hole golf course next spring. To make an informed decision, they must rely on accurate financial data, making the need for an audit paramount.

Homeowners Association Payments

Homeowners Associations are paying the Town of Oro Valley for golf course operation. If the golf courses are profitable, there's no justification for these payments to continue. An audit can determine the profitability and guide fair financial arrangements.

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D'Angelo: Progress, Commitment For More At Pusch View Golf

Tony D'Angelo, President of Pusch Ridge Golf, spoke last week to the Oro Valley Town Council regarding the progress on course operations and use. Tony and his fellow residents have taken charge of the destiny of the Pusch View Course.  They have returned the course to being an asset for the community. His remarks follow.

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Mr. Mayor and members of the town council, my name is Tony D’Angelo. I am an Oro Valley resident and President of Friends of Pusch Ridge Golf. This evening I wish to again thank you for supporting the Pusch Ridge Golf Course.

Course generates remarkable level of business

Exactly one year ago I spoke to you about the initial success of Pusch Ridge Golf. I am pleased to report that the course continues to generate a remarkable level of business from a very diverse audience. It is not just Friends playing, the word is out and all sorts of folks are enjoying the experience.

...Despite a very cold and rainy winter season

The first two months of operation this season golf rounds exceeded the same period last year. It is no fluke, people want 9-hole golf. The colder and wetter weather is impacting golf in January but we remain confident that the full season will be very successful. This year the town’s goal is for 39% utilization of available golf rounds. Friends believe we can reach close to 50% like we did last season. In the four days prior to this recent rain, we achieved 85% utilization.

Success is not by accident

Friends and Indigo Golf are following through on executing a detailed marketing plan. Our leagues continue to expand in membership. Hospitality workers are enthusiastically referring visitors to the course. Golf is Tourism! We continue to expand our social media effort to attract new players. Friends of Pusch Ridge Golf joined the Oro Valley Chamber of Commerce to further promote your business.

We have partnered with Indigo Golf to build business

We are working with Indigo Golf to attract special events and tournaments and we just initiated a new promotion with two local restaurants that reinforces the theme of Fast, Fun and Affordable. We also have Friends focused on golf initiatives for our youth.

Collaboration works

It is important to appreciate the power of collaboration between town staff and its residents. We have a great relationship and continue to partner on golf course revitalization projects, enhancements and promotions. As you begin the screening process for a new town manager, we respectfully ask you to explore each candidates skills and attitudes when it comes to engaging residents in solving town problems. This town is blessed with extraordinary talent and experience that should not be overlooked.

Let's keep it up!

Pusch Ridge Golf is a valuable town amenity and a viable business. Please don’t forget us. Let’s work together on continuous improvement and implementing practical solutions to facility challenges.

Thank you again for your support of our efforts to promote this unique recreational and economic town asset.

Tony D'Angelo

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Guest View-Tim Bohen: Town Golf “Success” is an Nothing More Than An Accounting Gimmick

Town golf is a financial drain on the community

The only thing we residents need to understand is that the 0.5% sales tax allocation grows annually. In 2021/22 it is $3.4M. That is the equivalent of 85,000 rounds at $40 a round or 34,000 rounds at $100 a round simply added to the bottom line.

Anyone can turn a $3.4M subsidy into a $200K profit

Look at the courses. The holes are almost always empty after 9 AM or so. The nearby [former] Vistoso golf course closed due to lack of play. 

In my analysis, the numbers reported to Council of actual rounds played are being fabricated
For example, the town claimed 6,212 rounds played in May with only 18 holes open. This is approximately 200 rounds a day for 30 days. But only a maximum of 20 golfers can tee off every hour (assuming that 4 tee off every 12 minutes) which is busy. Thus, in order for 200 daily rounds to be played, foursomes would be teeing off every 12 minutes for 10 hours straight every day! Do you see foursomes on every hole at 5 PM when the course would need to still be full to allow everyone to finish? Or even at 1 PM? Or even 10 AM?

I asked for an audit in a Council Meeting and we got crickets

This [reported] "success" is an accounting gimmick and nothing more. I estimate that we have 1000-2000 actual monthly rounds per 18-hole course being played at most. I suspect that the rest is your 0.5% sales tax proceeds being passed off as phantom golf rounds. Why? Because Indigo gets a management bonus based on golf revenue, which can only come from reported rounds played. But until Oro Valley gets an audit from Indigo, we'll never know what is actually happening.

You can call Community Center golf a success if you like. I certainly won't.
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Tim Bohen grew up in Southern California and moved to Oro Valley in 2015. He has a Bachelor’s degree in Physics from UCI and an MBA from Loyola Marymount. He graduated from the Oro Valley Community Academy in 2016 and the Citizens Academy in 2017. He has been on the Oro Valley Town Council since 2020. His interests include aviation and history.