Audit Report On The New York Yankees Rental Credits For The First Quarter Of 2008 January 1 – March 31, 2008
AUDIT REPORT IN BRIEF
According to a 1972 lease agreement between the New York
Yankees (the Yankees) and the City of New York (the City)
that is overseen by the Department of Parks and Recreation
(Parks), the Yankees are responsible for the care and upkeep
of the City-owned Yankee stadium, and must pay the City
rental income. However, the lease also allows the Yankees
to offset against any rental income due the City, costs
incurred by the Yankees for maintaining the stadium. Thus,
every dollar spent and accounted for as a maintenance credit
results in a dollar-for-dollar decrease in the rent due
the City.
Under the terms of the lease, the Yankees must notify
the Comptroller’s Office of all claimed maintenance
credits, and provide supporting computations. The Comptroller’s
Office then determines whether any of the charges for which
credits are claimed are permissible.
Audit Findings and Conclusions
The audit found that Yankee rental credits submitted for
the First Quarter of 2008 were overstated by $65,510.86
as follows:
- $10,618.45 in excess payroll charges and salary expenses
that should have been paid by the Yankees. - $32,944.17 in payments to ADCO Electric consisting
of material and labor costs that should not have been
charged to the City. - $7,813.73 in Yankee Stadium repairs for which the expenses
are not chargeable to the City. - $14,134.51 in expenses that lacked documentation or
are not City costs under the terms of the lease and cannot
be offset against rental income.
Audit Recommendations
We recommend that the Yankees deduct $65,510.86 from the
total rental credits taken for maintenance pertaining to
the First Quarter of 2008, ensure that all maintenance credits
claimed are properly supported by sufficient documentation,
and ensure that appropriate approvals from the Department
of Parks and Recreation (Parks) are obtained prior to submitting
rental credits to the Comptroller’s Office. In addition,
we recommend that Parks ensure that the Yankees comply with
the report’s recommendations.