Audit Report on the New York Yankees Rental Credits for the Second Quarter of 2004

AUDIT REPORT IN BRIEF

The Comptroller’s Office is required to audit all rental credits claimed by the New York Yankees (Yankees) for the maintenance of City-owned Yankee Stadium. Under the terms of the lease, the Yankees are responsible for the care and upkeep of Yankee Stadium, and the costs incurred by the Yankees for maintaining the stadium are offset against any rental income due the City from the Yankees. Thus, every approved dollar spent and accounted for as a rental credit for the maintenance of the stadium results in a dollar-for-dollar decrease in the rent due the City.

Audit Findings and Conclusions

The audit found that Yankees rental credits submitted for the second quarter of 2004 were overstated by $117,800.02, as follows:

• $36,603.66 in excess payroll charges and salary expenses that should have been paid by the Yankees.

• $39,553.49 in payments to ADCO Electrical, consisting of labor and material costs that based on the terms of the agreement should not have been charged to the City.

• $5,746.74 in sales taxes and gross receipts taxes on fuel.

• $331 for purchases of supplies that are not chargeable to the City.

• $4,646.75 in Yankee Stadium repairs that are not chargeable to the City.

• $30,918.38 for expenses that 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 $117,800.02 from the total rental credits taken for maintenance pertaining to the second quarter of 2004, and ensure that all maintenance credits claimed are properly supported by sufficient documentation. In addition, we recommend that the New York City Department of Parks and Recreation (Parks) ensure that the Yankees comply with the report’s recommendations. In their response, the Yankees accepted the $117,800.02 as a Yankees cost.