By Leah Waters and Devyani Chhetri
Reprinted – by Texas Metro News
Website: https://www.dallasnews.com/
An accountant’s report released Wednesday showing $5.7 million of donor-restricted funds were misspent in Fair Park was tweaked Thursday to remove any mention of who’s at fault for moving money from bank accounts, according to documents obtained Thursday by The Dallas Morning News.
OVG’s general counsel Brian Rothenberg told The News in an emailed statement that the company received an “updated” version of the accountant’s report, the original version of which was widely distributed Wednesday by Fair Park First.
The original report pointed blame at OVG, the operator, for moving money in and out of bank accounts that held restricted donor funds and were supposed to be exclusively held by the nonprofit manager, Fair Park First, which has been raising money for specific capital improvement projects. The updated version, obtained by The News from OVG and Fair Park First on Thursday, does not mention who is at fault.
The original report said that “[OVG] ultimately failed to comply with the requirements” of the management agreement between the city and Fair Park First. The updated version says that “compliance” with the requirements “failed,” dropping the reference to OVG.
According to documents obtained by , Rothenberg put Malnory, McNeal & Company PC on notice in a letter sent Wednesday demanding the firm retract its previous statement assigning blame to OVG and issue an updated report — or else OVG reserved the right to “commence legal action.”
“This statement is odd in that it appears to be a legal conclusion that has no place in a report on accounting procedures that expressly states it is not an audit,” Rothenberg wrote in the letter. “More importantly, the statement is patently false and inaccurate, and evidences a gross misunderstanding of the Management Agreement and then the related Sub-Management Agreement.”
The management agreement is between the city of Dallas and nonprofit Fair Park First. The submanagement agreement details the relationship between Fair Park First and OVG as its for-profit operator. Fair Park First is the manager responsible for fundraising and supervising subcontractors. OVG, a subcontractor, is responsible for the day-to-day upkeep and operations of the park.
Fair Park First: Tweaked report does not absolve anyone
“I don’t know that the change represents absolution. It does represent neutrality,” Fair Park First Board Chair Veletta Forsythe Lill said Thursday. “OVG continues to make statements that indicate they do not understand the weight of donor agreements.”
OVG said previously that former Fair Park First CEO Brian Luallen and former board chair Darren James managed and directed all financial decisions, and OVG staff administered the transitions based on their guidance.
On Thursday, Luallen deferred to his previous comment Wednesday that he had an incomplete picture of which dollars were going where.
James didn’t immediately respond to a request for comment Thursday afternoon.
An auditor with Malnory, McNeal & Company, PC, declined to comment on the record when reached by The News Thursday.
The agency audited Oak View Group before Fair Park First took over the process earlier this year, according to documents obtained by The News.
All previous audits managed by OVG with the accounting firm were clean, with no mention of mismanagement of funds.
The weaknesses in the contractual agreements between the city, Fair Park First and OVG have contributed to a confusing scenario. OVG has control of funds that belong to the park; however, most transactions are made in Fair Park First’s name, since it’s the supposed manager.
In the end, there’s no clarity yet on who authorized what transactions, and a continual blame game ensues. The News is reviewing dozens of documents to learn who authorized the payments.
A city audit is still underway. Neither Fair Park First nor OVG is involved in that process.
| This story, originally published in The Dallas Morning News, is reprinted as part of a collaborative partnership between The Dallas Morning News and Texas Metro News. The partnership seeks to boost coverage of Dallas’ communities of color, particularly in southern Dallas. |
