Despite ongoing concerns about the financial operations and situation of the Nebraska State Fair, there have been a number of positive indicators on advance ticket sales for the 2020 fair after suffering large financial losses due to weather-related difficulties last year, said Lori Cox, State Fair executive director.
A Christmas promotion for the sales of carnival wrist bands and gate admissions did very well, bringing in about $35,000.
“That is the most we have ever sold for a Christmas sale,” Cox said.
She said the initial reactions and sales of the State Fair’s country concert bundle that includes Dustin Lynch, Jon Pardi and a dual show featuring Clay Walker and Clint Black have also been positive, especially since the fair has yet to spend money on media promotion and the fair board made a substantial cut in the fair’s entertainment budget — by more than a half million dollars — as a cost-savings measure.
“People are already responding to the 2020 State Fair,” Cox said.
She said sign-ups of commercial and food vendors are up 40% from the year before. She complimented Jaime Parr, State Fair facilities director, for the successful sales drive.
“Vendor sales and campground sales have gone on very strong,” she said. “That is a great vote of confidence going into the 2020 State Fair.”
New board leadership
The Nebraska State Fair board met in Lincoln on Friday. It chose new board leadership, with Beth Smith of Lincoln, who was appointed to the board by Gov. Pete Ricketts in 2017, elected chairman to replace Chris Kircher of Omaha.
Smith won in a close vote, 6-5, over Jeremy Jensen of Grand Island, who joined the fair board last year.
Jensen, a former Grand Island mayor, is chairman of the State Fair board’s financial committee and has been a strong advocate of fair financial reform.
Dawn Caldwell of Edgar, who joined the fair board at the same time as Jensen, was elected vice chairwoman. Bob Haag of Indianola was elected secretary and new board member Boyd Strop of O’Neill was elected treasurer. Each of them was elected by a 6-5 vote.
According to an article in the Lincoln Journal Star, with four new members, the board has now turned over more than half its seats in the past year either through resignations or retirements.
Whenever there is a change on a board, Cox said on Saturday, especially when all the leadership positions change, there is a new vision of the board concerning the organization it represents.
“From my standpoint, I have a lot of unknowns going forward,” she said. “There have been no conversations yet about what expectations they have from me and my staff. I’m sure they will let me know what that is very shortly.”
Turning the finances around
Last year, the State Fair went all out to celebrate its 150th anniversary, but heavy rain prior to and during the fair in August created problems, including making parking at Fonner Park on its grass fields impossible. Weather impacted fair attendance, which hurt its return on investment with the heavy concert schedule. There were also many unplanned and sudden expenses created by the weather that had not been budgeted for, such as chartering extra buses to bring fairgoers to Fonner Park from various locations in Grand Island.
That forced the fair into a financial deficit, and the board had to take out a temporary line of credit to pay the fair’s bills. It also laid off nearly half of the fair’s staff. The financial problems have resulted in the board creating more transparency, accountability and better lines of communication about how expenses are handled by Cox and her staff.
“My board has been important to me, as with any executive director, when it comes to the process of putting good policy and strategy up in front of the board for vote when necessary,” she said. “Ultimately, it is their State Fair and they drive the wheels of the mission and it is our responsibility to respond to that.”
Cox said it has been her function as executive director to be as “transparent as possible.”
“That is partly what I have been bothered with, internally, by my former finance team,” she said. “That transparency was not forthcoming to me and I couldn’t deliver any further information to the board. That has been a problem. We are fixing it now.”
While the fair is still ironing out its accounting issues, Cox said she is working close with the board to set new standards of transparency when it comes to the financial operation of the fair. They are continuing to look at what caused the financial problems experienced last year.
Financial records lost
During the board meeting Friday, Cox reported that past financial information had been wiped from their computer system. The Lincoln Journal Star reported from Friday’s meeting that, because the computer hard drives of two former financial officers were wiped clean without permission, the lack of records has interfered with the fair’s efforts to authenticate payments to vendors who provided services and goods to the fair. This does not include the commercial and food vendors that provide an important venue stream for fair operations.
“I think our finance committee chair, Jeremy Jensen, was accurate when he said that we have some issues of the State Fair being taken advantage of from the vending side,” Cox said. “That has been a concern of mine also.”
One concern that she has had is the growth of some vendors’ contracts, sometimes exponentially. She said without detailed reports being filed to the finance division, there was a lack of financial accountability.
“Labor was a good example,” Cox said. “In my professional opinion, it was something that was overlooked and I have to get to the bottom of that and find out more information.”
One of the reforms that the board and Cox have implemented is the hiring of a new accounting service.
“We have a lot to wade through,” she said. “With the help of our new accounting service, it has been eye-opening, I can tell you that, and we will get to the bottom of it.”
Cox said it was in December, when looking into the financial reporting of the fair, that they discovered the two computer hard drives had been wiped clean. The computers with the wiped drives were from the office of the chief of financial operations and the controller’s office, which is responsible to ensure the integrity of the financial statements and accuracy of payments made to vendors.
She said the fair’s IT provider was unable to recover the deleted files.
Cox said if their continued investigation uncovers any evidence of malicious activities that might have been erased from those hard drives, the fair could hire forensic accountants to recover the lost files.
She also said they are looking into a possible criminal investigation of the matter.
Cox takes over financial oversight
Going forward, Cox said, she will become more involved in the fair’s finances than before when she delegated that responsibility to the financial staff.
A previous duty of Cox’s that took her a lot of time and travel was securing fair sponsorships. That job will now be handled by a staff member so she will have more time to concentrate on fair finances.
In the previous management regime, the State Fair had employees who handled State Fair sponsorships with the private sector, while the State Fair manager concentrated more on fair finances.
“I take full responsibility for it, but going into this year, we need to put those measures in place,” Cox said. “We are going to have a fully transparent accounting system.”