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Toto's South Shore Country Club, Ltd. on Staten Island failed to report an estimated $1,829,320 in revenues on its gross receipts statements to the Department of Parks and Recreation and owes the City at least $256,872, according to an audit by New York City Comptroller William C. Thompson, Jr.

"Toto's failed to provide the City with critical documents to support its reported revenues," Thompson said. "There were also serious internal control weaknesses that prevented us from verifying to what extent Toto's reported all of its gross receipts to the Parks Department, and paid all of the appropriate fees to the City. These omissions indicate that Toto's unreported revenue was even greater than estimated."

The Department of Parks initially entered into a 10-year license agreement with Toto's for the maintenance and operation of a restaurant, catering facility, and snack bar at the South Shore Golf Course in 1989. The current, five-year license renewal ends September 30, 2004. Under this license agreement, Toto's must pay the City both a minimum annual fee, which would be $138,064 in its final year, and an annual percentage fee of 8.5 percent of its annual gross receipts over $3 million.

For the year that ended September 30, 2000, Toto's reported $3,225,343 in gross receipts and paid the City $270,454 in fees. However, the audit determined that Toto's did not include - at the very minimum - an estimated $1,829,320 in revenues on its gross receipts statements. Toto's did not report $1,727,000 in revenue from Thursday Night Deck Parties since 1997 and underreported other sources of income, including banquet revenue and unreturned deposits for canceled events.

Additionally, Thompson noted that Toto's did not provide banquet calendars from October 1, 1999 through August 18, 2000; 42 banquet contracts covering the six-month period reviewed; or any of its original source documentation to support reported snack bar revenue. The Comptroller's audit highlighted a number of problems with accounting and banquet contract procedures.

In response to the audit, Toto's said it would pay the City the $256,872 and has taken steps to ensure that all revenue is reported to the City. The Parks Department agreed with the audit's recommendations and has required Toto's to pay the total audit assessment under a three-month payment plan. The agency also said it would conduct a follow-up review as recommended by the audit after two months to ensure that Toto's has fully complied.

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