PDF: Carter Street doc.
The Chattanooga Convention Center violated its policies on how vehicles were bought and sold, according to an audit.
The audit, conducted by the Chattanooga accounting firm Johnson, Hickey & Murchison, PC, found in five instances vehicles were bought or sold outside the center's purchasing and procurement policies.
"We have a history of vehicle purchases that did not get approval," said Jimmy Hudson III, chairman of the Carter Street Corp., which manages the convention center.
All expenditures in excess of $10,000 must be approved by the board, according to the audit.
Mr. Hudson said that despite a line-item budget for vehicles approved by the board, "each individual vehicle transaction was not approved." Also not approved was the financing of the vehicles, he said.
Upon learning of the discrepancies, the board took several steps, according to the audit report.
"Nobody was hiding anything. We made a mistake," Mr. Hudson said. "We reported it, and we moved on."
An additional audit was requested to determine whether there were other purchasing procedure violations. No additional violations were found, the report states.
The board met with then-Executive Director Tim Riddle and "reconfirmed with him that the corporate resolution dated April 16, 2003, was in effect for all purchases of the organization and should be followed without exception," according to the report.
Mr. Riddle agreed, the report states.
The board also notified the State Comptroller's Office, which has performed an independent investigation. Those findings are to be released later, according to the report.
Mike Shuford, interim director of the convention center, said he "expects the state comptroller to find the same thing as the audit report" with no new violations.
He said a Hyundai Genesis was purchased 11 months ago, and a Ford F250 was purchased two years ago. Mr. Riddle drove the Genesis as his company car, Mr. Shuford said.
When the Hyundai was bought, a center van was sold and the center opted to keep the F250. The last vehicle is a Jeep Grand Cherokee, which Mr. Shuford said he drives.
The board agreed Wednesday to have Mr. Shuford contract with an outside party to sell the Ford F250 truck and Hyundai Genesis. The sale of the two vehicles will leave a Ford F150 and Jeep Grand Cherokee for use.
Mr. Riddle was executive director of the convention center from 1990 until January, when he resigned. He said he planned to return to the private sector.
Mr. Riddle could not be reached for comment.
Mr. Hudson said a policy review is scheduled for "sooner than later" to avoid similar mistakes in the future.
"As time evolves and businesses practices change we need to make sure we are up to date," he said.