Comptroller advises sale of city-owned hotel property

April 13, 2000|By Gerard Shields | Gerard Shields,SUN STAFF

City Comptroller Joan M. Pratt urged the city yesterday to sell or rent out a city-owned inn that lost $120,000 last year and lacked proper fiscal controls.

Pratt made the recommendation, accepted by the city Board of Estimates yesterday, as part of an audit of the Inn at Government House, at 1125 N. Calvert St.

The city opened the inn in 1985 as a hotel with 19 dining rooms, rental space for parties and a two-room suite. The inn also served as an official guest house for visiting dignitaries. Until 1998, the Culinary Arts Institute of Maryland managed the operation for the city, which then hired a general manager.

City auditors found that inn managers failed to establish adequate business controls. Problems included:

Advancing inn money for personal use. A general manager advanced herself $2,122 from the inn's checking account in July, repaying the money in November, after the city audit began. The manager also advanced $2,200 to other inn employees, the audit showed.

Payments to noncity organizations. The review found that an inn manager donated $325 to charitable groups and $290 to a foreign embassy.

Sloppy recordkeeping. Cash receipts for $4,353 over two months could not be verified in the inn's checking account.

Credit card errors. Auditors discovered eight errors in 60 days, four of which consisted of undercharging or incorrectly crediting customers' credit cards. Two of the eight discrepancies amounted to $290 in customer overcharges.

Failure to pay state taxes. The inn collected $10,414 in state sales taxes last year but did not make sales tax payments to the state during the audit period, from May 1998 through September 1999.

City Auditor Yovonda D. Brooks recommended that the city Finance Department develop written policies and procedures, oversight and accounting of the inn. Finance Director Peggy J. Watson accepted those recommendations.

The city hopes to sell or lease the property before June 30, the end of the city's fiscal year.

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