THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER
BUREAU OF FINANCIAL AUDIT
AUDIT REPORT ON THE NEW YORK YANKEES RENTAL CREDITS FOR THE FIRST QUARTER OF 2008
JANUARY 1 – MARCH 31, 2008

FR09-089A
FEBRUARY 2, 2009

Download the Complete Audit Report (pdf 251kb)

According to a 1972 lease agreement between the New York Yankees (the Yankees) and the City of New York (the City) that is overseen by the Department of Parks and Recreation (Parks), the Yankees are responsible for the care and upkeep of the City-owned Yankee stadium, and must pay the City rental income. However, the lease also allows the Yankees to offset against any rental income due the City, costs incurred by the Yankees for maintaining the stadium. Thus, every dollar spent and accounted for as a maintenance credit results in a dollar-for-dollar decrease in the rent due the City.

Under the terms of the lease, the Yankees must notify the Comptroller’s Office of all claimed maintenance credits, and provide supporting computations. The Comptroller’s Office then determines whether any of the charges for which credits are claimed are permissible.

Audit Findings and Conclusions

The audit found that Yankee rental credits submitted for the First Quarter of 2008 were overstated by $65,510.86 as follows:

• $10,618.45 in excess payroll charges and salary expenses that should have been paid by the Yankees.
• $32,944.17 in payments to ADCO Electric consisting of material and labor costs that should not have been charged to the City.
• $7,813.73 in Yankee Stadium repairs for which the expenses are not chargeable to the City.
• $14,134.51 in expenses that lacked documentation or 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 $65,510.86 from the total rental credits taken for maintenance pertaining to the First Quarter of 2008, ensure that all maintenance credits claimed are properly supported by sufficient documentation, and ensure that appropriate approvals from the Department of Parks and Recreation (Parks) are obtained prior to submitting rental credits to the Comptroller’s Office. In addition, we recommend that Parks ensure that the Yankees comply with the report’s recommendations.