Report 2023-133 Recommendation 4 Responses

Report 2023-133: City of Anaheim: It Has Not Properly Managed Tourism-Related Contracts and Millions of Dollars in Related Funds (Release Date: January 2024)

Recommendation #4 To: Anaheim, City of

To improve Anaheim's oversight of the tourism district assessment contract with Visit Anaheim, the city should by January 2025 seek to renegotiate with Visit Anaheim to revise the contract to ensure that the contract does the following:

-Requires that Visit Anaheim separately track all expenditures related to the contract and prohibits Visits Anaheim from comingling tourism district assessment funds with other revenue sources.

6-Month Agency Response

At the City's request, Visit Anaheim has engaged with an industry finance expert to assist in the move to "fund accounting". A meeting was held in June 2024 where Visit Anaheim discussed their priorities which included the following:

- Increase bandwidth of their finance department;

- Determine correct fund balances for Anaheim Tourism Improvement District, Garden Grove Tourism Improvement District, and Private Revenue;

- Establish processes and policies for allocating funds to the appropriate revenue source;

- Develop a suite of policies and processes to address state audit recommendations;

- Reformatting financial statements to ensure clarity and transparency in reporting; and

- Sourcing and transitioning accounting software along with other technology upgrades.

The City will continue to be a part of these discussions with Visit Anaheim to ensure that their funds will not be comingled. The City will also implement this as a requirement under the amended and restated agreement which is currently in discussion with Visit Anaheim. A proposed amended agreement will come before City Council for their review and consideration in Fall 2024.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

At the City's request, Visit Anaheim has already engaged with an industry expert to assist in the move to "fund accounting". The City will further engage with Visit Anaheim to add the requirement of tracking all expenditures and prohibiting funds from being comingled.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2023-133

Agency responses received are posted verbatim.