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By Kristina Pritchett
During a recent audit report of the Ocean Institute, the Orange County Auditor-Controller’s office stated the Ocean Institute underpaid rent to the county.
The report was part of a series of audits occurring in the Dana Point Harbor Internal Audits.
The objective of the audit was to determine whether the Ocean Institute’s records adequately supported the monthly gross receipts and rent payments reported to the county, to determine whether the Institute complies with other provisions of the agreement between them and the county, and to identify any internal control weaknesses while performing the audit and provide suggestions for improvement.
According to the report, the Institute owes the county an additional $3,285 for rent.
The Institute also underreported rent owed to the county for the fiscal year ending on Feb. 29, 2016 by a total of $3,419, which equals 9.4 percent of the total rent paid to the county, according to the audit.
The report states the audit also found the Institute did not report other miscellaneous income as gross receipts subject to rent. According to the audit, there were several special event cruises recorded in the miscellaneous income accounts that should have been reported as “Boat Dock for Commercial Cruise” gross receipts.
Other findings include: the rental calendar which contained an error and was not reconciled to deposits, rent was not paid on gross receipts, a security deposit was not properly revised or maintained and a Form 990 was not submitted to the county.
The county entered into a 35-year agreement with Friends of the Marine Institute in Orange County in 1999. In January 2000, the organization was renamed the Ocean Institute.
The audit said since the amount of underpaid rent exceeded the agreement audit clause threshold of 2 percent, the Orange County Community Relations/OC Parks may require the Institute to pay for audit costs, if they determine the amounts are owed to the county.
To read the whole report, click here.