The situation as it currently exists has led to many concerns. Each of the following attachments document a unique concern.

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1 Project Name: Stroh Center Cash Handling Publication Date: xx/xx/xxxx Project Number: Project Type: Advisory Services Review Findings: After performing a review of processes and procedures applied by the Athletics Department to receive, record, and deposit cash and cash equivalents received throughout its operations, weaknesses were noted in the renting out and collection of receipts for the use of the Stroh Center. Additional scrutiny led to a focus specifically on transactions managed by the Stroh Center General Manager (Mr. Ben Spence) for events sponsored by the Ohio High School Athletic Association (OHSAA). For purposes of understanding the scope of events managed by Ben Spence, events held at the Stroh Center in recent years have included: - Cheer Competitions - Harlem Globetrotters - High School Athletic Practices - High School Graduations - Home and Garden Shows - Bowling Green City Events - Bridal Fairs - Various OHSAA games (Volleyball,Basketball,Wrestling) Issue The issues regarding the Stroh Center operations stems from a lack of segregation of duties at the Stroh Center combined with a lack of supervision of Mr. Spence. Specific concerns raised:. Mr. Spence has the authority and ability to monopolize communications and relationships with the OHSAA. In addition, Mr. Spence is responsible for the accounting for all aspects of the OHSAA event, he generates the settlement statement that is sent to the OHSAA to document the money collected and expenses paid during the event, handles and has the ultimate responsibility for the collection of cash for parking and ticket sales, and deposits all proceeds from the event in a personal bank account in his name. 2. In a case where an event ends up running at a deficit and the OHSAA is required to cut a check to make up for that loss, instructions from Mr. Spence to the OHSAA asks for the check to be made out directly to himself. 3. Other than settlement statements being available for review by his supervisors if asked, there is no evidence that any formal supervision over the financial aspects of the OHSAA events held at the Stroh Center exists. Mr. Spence s supervisor was aware of the existence of the personal checking account being used by Mr. Spence but had no access to this account. The situation as it currently exists has led to many concerns. Each of the following attachments document a unique concern. Section 3 Finding. This report and the issues identified in the attachments will be considered as one finding and tracked accordingly.

2 Project Name: Stroh Center Cash Handling Project Number: Attachment Concern: Invoicing Methodology/Inconsistency No Accounting system There is no accounting software used in the invoicing for to the use of the Stroh Center. Invoices are created by Mr. Spence from a template using Microsoft Excel. There does not seem to be any invoicing strategy other than assigning an invoice number that is the date of the invoice. This concern is coupled with the fact that Mr. Spence has no accounting responsibilities within the University. In short, there are no controls and support that are necessary to track the collection of outstanding receivables. Mr. Spence could simply send an invoice to OHSAA for $5,000 which would get paid. Mr. Spence could then create a fictitious invoice for $4,000 and pocket $,000 without any trail of this shortage being noted. Mr. Spence could keep the fictitious invoice in case he was ever asked for support, but it is unlikely anyone would ever ask for support for the $4,000. When it comes to the events at the Stroh, the University records whatever amount is deposited with the Bursar by Mr. Spence. When looking at the invoices created using an excel spreadsheet by Mr. Spence for Stroh Center events, there appear to be four types of invoices issued:. Invoices issued for Stroh Center use by internal users (department/group) 2. Invoices issued to external group/company other than the OHSAA functions 3. Invoices issued to OHSAA 4. Invoices issued to media/advertising agencies pertaining to OHSAA functions These are images from actual invoices issued for the four scenarios:. 2. Invoice BGSUE Invoice 27205CheerMax OHSAA DIII District Settlement Stmt Concerns Invoice SE3.8.4 to WNDH In each of these scenarios above, the instructions given to the customers are unique. When Mr. Spence is directing customers to Make all checks payable to Ben Spence it immediately calls into question the integrity of the process, not just internally but also in the eyes of the customer.

3 Suggestion The Controller s office has a system in place for tracking non-student receivables. With this system, the actual invoicing and tracking of the receivables is taken out of the hands of the departments and given to the individuals trained on controls. Meetings should be scheduled immediately to ensure the use of this system is in place for the upcoming high school tournament season. 2

4 Project Name: Stroh Center Cash Handling Project Number: Attachment 2 Concern: Cash Handled by and Customer Payments made Directly to Stroh Cen General Manager As was noted in Attachment of this report, all invoices/payment requests pertaining to OHSAA events held at the University during the period under review, whether they were payments from the OHSAA or payments from the media for access to the Stroh Center for the OHSAA events, carry instructions to make checks payable directly to Mr. Spence. This alone would should have raised red flags, but a larger exposure appears to exist from the ticket sales which are all in cash. The cash from all ticket sales ultimately ends up in Mr. Spence s hands to be deposited in a personal checking account set up in his name. At the point in time that an event is over and Mr. Spence creates the settlement statement for the event, he will write a check from the personal checking account to the University in an amount that is supposed to represent the money due to the University. Concerns When it comes to the OHSAA events, Mr. Spence is essentially running a One Man Shop out at the Stroh Center. He reports to Jim Elsasser, Associate Athletic Director for Internal Affairs. Mr. Elsasser s role does not appear to be one of assisting in the administrative operations of the Stroh Center. Although Mr. Elsasser likely has relationships with OHSAA officials, it does not appear that he plays an active role in maintaining client relationships with OHSAA officials, preparing invoices, receiving checks, or depositing checks. There is also no evidence via initials on reports or electronic approval in the system of a review of the invoices, settlement statements, the Huntington Bank account in Mr. Spence s name, deposits, etc. It is possible that Mr. Elsasser will periodically request reports showing activity and numbers related to the renting out of the Stroh Center if requested and Mr. Elsasser certainly physically attends many of the functions held at the Stroh Center; but the Mr. Spence is solely responsible for the accounting for, reporting on, and handling of the money. The opportunity exists for a misappropriation of funds.

5 Work Performed To quantify the number and amount of personal checks written and deposited by Mr. Spence with the Bursar, a CashNet report for the period under review was run. Copies of the checks deposited with the Bursar were made. As was expected, all checks for events other than OHSAA events were made payable to BGSU or a similar payee, while all events sponsored by the OHSAA were made payable to Mr. Spence. The list of personal checks deposited by Mr. Spence for OHSAA events during the period under review includes: Deposit No. Created Operator Created Date Reference Cashiered Date Amount 9562 BSPENCE 4/4/202 OHSAA 202 4/5/2 $ 0, BSPENCE /2/202 OHSAA VB. /5/2 $, BSPENCE 3/9/203 OHSAA Wrestling 3/20/3 $ 0, BSPENCE 4//203 OHSAA Basketball 203 4/3/3 $ 3, BSPENCE 4/22/203 OHSAA - Misc. 4/26/3 $, BSPENCE /9/203 OHSAA Volleyball /20/3 $ 9, BSPENCE 3/3/204 OHSAA WR 204 3/4/4 $ 27, BSPENCE 4/8/204 OHSAA Basketball 204 4/4/4 $ 30, BSPENCE 4/6/205 OHSAA Basketball 205 4/4/5 $ 0,050 $ 3,682 Copies of the actual checks deposited are included: 2

6 Work Performed (continued) Suggestion Mr. Spence s background may to be suited for the operations side of the management of the Stroh Center but the Controller s office is trained in controls and accounting. It is Internal Audit s recommendation that Mr. Elsasser hold meetings with the Controller s office immediately to address the concerns noted above. 3

7 Project Name: Stroh Center Cash Handling Project Number: Attachment 3 Concern: Settlement Statements Produced for OHSAA Events Internal Audit and Advisory Services After each OHSAA event held at the Stroh Center, Mr. Spence produces a settlement statement called the Tournament Financial Report. In the simplest terms this settlement statement starts with all the money collected at the event. The largest dollar items include tickets sold and TV and Radio access fees (all checks made payable to Mr. Spence). From that total, an itemized list of charges relating to the event are deducted prior to Mr. Spence sending a final check to the OHSAA. Each of these charges are detailed and listed out in the final settlement statement to the OHSAA. The largest charges tend to be labor that Mr. Spence arranges for the events but also includes fees for police protection, rent of the Stroh Center, CSC and event staffing, other miscellaneous charges as unique as telephone access ($5) or mat tape for wrestling events. If, after the charges are deducted from the revenues, there is a deficit, Mr. Spence will bill the OHSAA for the deficit. Basketball events tend to operate with a profit, whereas events like volleyball have traditionally run at a deficit. Concerns With the weaknesses noted previously regarding Mr. Spence s conflicting roles, Internal Audit s ultimate concern is whether all the money owed to BGSU was collected and any monies collected was appropriately deposited into a BGSU account. In the simplest terms, if there was a valid reason for Mr. Spence to have a checking account under his name for which to deposit all the money related to OHSAA events held at the Stroh Center; if there was a reason for Mr. Spence to have the checks related to these events made payable to him; then Internal Audit would expect that this checking account would have a zero balance shortly after each event was settled with the OHSAA. The reason would be that the check that Mr. Spence writes to BGSU and deposits with the Bursar should be every dollar that remains in the account after the event was held. Work Performed Internal Audit received the settlement statements provided to the OHSAA for all the OHSAA events held from July, 202 present. Using this detail, as well as the checks deposited with the Bursar from Mr. Spence, Internal Audit is attempting to ensure that all amounts received, as well as all charges listed on the settlement statements are accounted for and verified. Suggestion Checks should never be made out to an employee of the University for this type of unrelated business income and never should such a checking account exist. Jim Elsasser should meet with the Controller s office to discuss the billing, receipt, and reconciliation of all rentals of the Stroh Center

8 Project Name: Stroh Center Cash Handling Project Number: Attachment 4 Concern: Cash Handling for Ticket Sales for OHSAA Events Held at Stroh Internal Audit and Advisory Services There appear to be little to no controls over cash collected for ticket sales for OHSAA events. All OHSAA tickets sold are strictly in cash no credit cards or checks are accepted. In situations such as these, there must be a strict numerical control over tickets and the tickets must be uniquely numbered. There must be someone independent of touching the cash that verifies the number of tickets sold to the cash deposited with the Bursar. In was noted that for events held at the Stroh Center, the Athletics ticket office handles the sales of tickets. The exception to this rule is for OHSAA events. In the case of OHSAA events, Mr. Spence hires individuals to perform the actual sales of tickets at the events. There is no evidence of independent verification of the number of tickets sold to the cash deposited in Mr. Spence s Huntington checking account. In the settlement statement provided to the OHSAA, Mr. Spence fills out a Ticket Report which lists out a starting ticket number and an ending ticket number. The difference between those two numbers is multiplied with the price of the ticket and that number is listed as the amount of money used in the settlement statement. The irony of this process is that the individual who handles the cash, deposits the cash, purchases the tickets to be sold, and hires the temporary staff that sells the tickets is also the person who fills out this report. To be blunt, all cash from ticket sales ends up in Mr. Spence s hands with no independent counting prior to his involvement and no verification by anyone that the amount of money turned into him was the amount of money eventually deposited into BGSU s account. Concerns Lack of controls over cash. Work Performed The facts as noted above were verified through discussions with Athletics personnel and the Ticket Office. For perspective, a listing of the amount of ticket sales reported for the OHSAA events held the last 3 fiscal years are noted: 3/3/204 Basketball $ 49,592 3/6/203 Basketball $ 20,386 0/23/204 Volleyball $ 7,022 3/5/204 Basketball $ 2,952 3/3/203 Basketball $ 55,570 //202 Volleyball $ 4,70 3//204 Basketball $ 48,930 3/2/203 Basketball $ 45,52 2/5/203 Wrestling $ 47,092 3/6/204 Basketball $ 3,232 3/9/205 Basketball $ 39,566 2/2/204 Wrestling $ 5,243 3/6/204 Basketball $ 24,296 3/8/205 Basketball $ 4,057 2/4/204 Wrestling $ 2,942 3/9/203 Basketball $ 3,988 3/20/205 Basketball $ 46,867 2/2/204 Wrestling $ 6,76 3/4/203 Basketball $ 32,74 0/22/203 Volleyball $ 7,206 $ 582,638 Suggestions Noted above

9 Project Name: Stroh Center Cash Handling Project Number: Attachment 5 Concern: Ohio Revised Code (ORC) Violations Mr. Spence directs the OHSAA to make payment pertaining to the use of the Stroh Center by the OHSAA via check made payable to Mr. Spence - These checks are then deposited into Mr. Spence s personal account with Huntington. It appears that other amounts received relating to University revenues including cash from ticket sales, cash for parking, and checks for media access to the events held at the Stroh Center are also deposited into Mr. Spence s personal checking account. Concerns Logically, the act of depositing these cash and cash equivalents into Mr. Spence s personal checking account creates a situation where the University is in violation of ORC Section 9.38 which in layman s terms requires monies received in excess of $,000 to be deposited with the Bursar within 24 hours of receipt and amounts less than $,000 to be deposited with the Bursar within 3 days. The actual wording is shown below. Work Performed Internal Audit found a spreadsheet that seemingly documented checks written from the Mr. Spence s checking account in question. By summing up the check amounts listed for the timeline in question (July 202 present) Internal Audit estimated a rough exposure of the revenue collected and deposited during this time that may have violated the ORC rule. The spreadsheet listed checks in excess of $500,000 for various fees associated with the OHSAA events. Logic would dictate that at least that amount was deposited during that period from gate receipts, parking fees, checks from media outlets given access to the OHSAA events, and checks from participating teams to purchase after game pizza that was offered by Mr. Spence. It should be noted that the spreadsheet listed an additional $655,000 worth of checks written prior to July 202 going back until Suggestions It would seem that any deposits currently being made at Huntington could be and should be instead getting deposited directly at the Bursar of the University. This simple act will eliminate future violations of the ORC section 9.38.

10 Suggestions (continued) For clarification and guidance, ORC Section 9.38 states: ORC 9.38 Deposit of public moneys. As used in this section and section 9.39 of the Revised Code: () "Color of office," "public office," and "public official" have the same meanings as in section 7.0 of the Revised Code. (2) "Legislative authority" means a board of county commissioners, a board of township trustees, the legislative authority of a municipal corporation, or the board of education of a school district. A person who is a state officer, employee, or agent shall pay to the treasurer of state all public moneys received by that person as required by rule of the treasurer of state adopted pursuant to section 3.09 of the Revised Code. A person who is a public official other than a state officer, employee, or agent shall deposit all public moneys received by that person with the treasurer of the public office or properly designated depository on the business day next following the day of receipt, if the total amount of such moneys received exceeds one thousand dollars. If the total amount of the public moneys so received does not exceed one thousand dollars, the person shall deposit the moneys on the business day next following the day of receipt, unless the public office of which that person is a public official adopts a policy permitting a different time period, not to exceed three business days next following the day of receipt, for making such deposits, and the person is able to safeguard the moneys until such time as the moneys are deposited. The policy shall include provisions and procedures to safeguard the public moneys until they are deposited. If the public office of which the person is a public official is governed by a legislative authority, only the legislative authority may adopt such a policy; in the case of a board of county commissioners, the board may adopt such a policy with respect to public offices under the board's direct supervision and the offices of the prosecuting attorney, sheriff, coroner, county engineer, county recorder, county auditor, county treasurer, or clerk of the court of common pleas. If a person who is a public official receives public moneys for a public office of which that person is not a public official, that person shall, during the first business day of the next week, pay to the proper public official of the proper public office the moneys so received during the current week. Effective Date: Compliance Requirement: Ohio Rev. Code Deposits of public money. of Requirement: Public money must be deposited with the treasurer of the public office or to a designated depository on the business day following the day of receipt. Public money collected for other public offices must be deposited by the first business day following the date of receipt. For example, a government employee, other than the fiscal officer collecting funds and issuing a receipt, must deposit the funds with the government s fiscal officer on the business day following the day of receipt. As an alternative to depositing the funds with the government s fiscal officer, the employee instead may deposit funds with the government s designated depository on the business day following the day of receipt. If the amount of daily receipts does not exceed $,000 and the receipts can be safeguarded, public offices may adopt a policy permitting their officials who receive this money to hold it past the next business day, but the deposit must be made no later than 3 business days after receiving it. If the public office is governed by a legislative authority (counties, municipalities, townships, and school districts), only the legislative authority may adopt the policy. The policy must include provisions and procedures to safeguard the money during the intervening period. If the amount exceeds $,000 or a lesser amount cannot be safeguarded, the public official must then deposit the money on the first business day following the date of receipt. 2

11 Project Name: Stroh Center Cash Handling Project Number: Attachment 6 Concern: Personal Use of OHSAA Monies by Ben Spence Internal Audit and Advisory Services After receiving access to the personal Huntington account used by Ben Spence to handle money related to the OHSAA events going back to 203, checks, ATM withdrawals, and debit card transactions were noted that appear to show a comingling of funds between personal and business use. These transactions were not reflected anywhere on the financial report supplied by Mr. Spence to the OHSAA showing the activity of a specific event. Concerns The following checks, ATM withdrawals, and debit card transactions appear to support the possibility that Ben Spence has used some of the OHSAA money for personal use: Check # Date Amount Payee 759 4/24/204 $ Cash 760 4/30/204 $ 2, Ben Spence 76 5/3/204 $, Ben Spence 762 5/27/204 $, Ben Spence 764 6/2/204 $ Ben Spence 765 6/30/204 $ Ben Spence 766 7/24/204 $ Ben Spence 767 /2/205 $ CGS 840 3/30/205 $ 5.00 BG Barber Shop 842 5/5/205 $ Ben Spence $ 7,24.92 ATM Withdrawals Date Amount 7/3/202 $ /3/202 $ /6/202 $ /3/202 $ /3/203 $ /4/203 $ /29/203 $ /7/203 $ /5/203 $ /3/203 $ /8/203 $ /22/203 $ /5/203 $ //203 $ /25/203 $ /6/203 $ /8/204 $ /29/204 $ $,770.00

12 Debit Card Transactions Unsupported 2/8/203 $ BSN Sport Supply 2/9/203 $ Staples 3/4/203 $ 8.85 Meijer 5/6/203 $ 8.78 Wendy's 5/2/203 $ 5.58 El Zarape 7/8/203 $ Kroger 8/6/203 $ Myles Pizza 8/29/203 $ 7.9 Frickers 8/30/203 $ BGSU Athletics /22/203 $ 5.42 Frickers 2/0/204 $ 8.0 El Zarape 2/25/204 $ 9.4 McDonald's 2/25/204 $ 3.40 Tim Hortons 5/2/204 $ Buffalo Wild Wings 5/2/204 $ 20.8 Meijer 0/30/204 $ 3.74 Penn Station /5/204 $ 4.99 SRVCFEE.com 5/4/205 $ BGSU Athletics 5/7/205 $ Jimmy John's 5/7/205 $ 0.37 Frickers $,