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Audit
New York City Comptroller William C. Thompson, Jr.
today issued an audit finding that the New York Yankees
owed the City $65,510 in rent for the First Quarter
of calendar year 2008.
Thompson also noted that the Yankees have a pattern
of not paying the City what is owed until it has been
audited. According to audits covering 2000 to 2008,
the Yankees overstated their rent deductions by more
than $3.7 million (see chart). According to the Department
of Parks and Recreation, the Yankees have paid the
agreed upon amounts following the Comptroller’s
audits.
Yankee Rental Credits
CY |
1st Q |
2nd Q |
3rd Q |
4th Q |
Total |
| 2008 |
$65,511 |
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$65,511 |
| 2007 |
$52,448 |
$81,146 |
$73,838 |
$90,292 |
$297,724 |
| 2006 |
$29,637 |
$69,881 |
$136,939 |
$157,997 |
$394,454 |
| 2005 |
$145,292 |
$72,492 |
$187,224 |
$107,892 |
$512,900 |
| 2004 |
$27,867 |
$117,800 |
$101,016 |
$163,860 |
$410,543 |
| 2003 |
$133,679 |
$77,012 |
$128,910 |
$74,236 |
$413,837 |
| 2002 |
$101,802 |
$280,793 |
$151,703 |
$477,217 |
$1,011,515 |
| 2001 |
$45,414 |
$124,698 |
$126,541 |
$148,244 |
$444,897 |
| 2000 |
$55,698 |
$44,660 |
$38,560 |
$48,142 |
$187,060 |
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| “The
Yankees consistently overstate their rent deductions,
effectively underpaying the City the proper rent
due,” Thompson said. “The Yankees
have understated the rent due to the City by more
than $3.7 million over 33 quarters, which indicates
a pattern that goes beyond an accounting error.”
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According to a 1972 lease agreement between the New
York Yankees and the City of New York that is overseen
by the Department of Parks and Recreation, the Yankees
are responsible for the care and upkeep of the City-owned
Yankee stadium, and must pay the City rental income.
The lease also allows the Yankees to offset costs
associated with maintaining the stadium. Therefore,
every dollar spent and accounted for as a maintenance
credit results in a dollar-for-dollar decrease in
the rent due the City.
Thompson’s audit, which can be viewed at www.comptroller.nyc.gov,
examined whether the Yankees accurately calculated
and documented all rental credits and did not deduct
charges that are not allowed from the rent due the
City for January to March 2008.
Auditors found that Yankee rental credits submitted
for the First Quarter of 2008 were overstated by $65,510.86.
The Yankees incorrectly deducted the following expenses
from their rent payment:
• $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, which
are not chargeable to the City, and
• $14,134.51 in expenses that lacked documentation
or are not City costs under the terms of the lease.
Thompson recommended 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.
Thompson also recommended that the Parks Department
ensure that the Yankees comply with the report’s
recommendations.
The Yankees generally make rental credit payments
either by incorporating the credits in the rent payments
they make annually, or by paying them at the end of
each calendar year and after all four quarters of
rental credit audits are completed. Therefore, the
Comptroller’s Office expects that the Yankees
will correct the First Quarter 2008 underpayment at
that time.
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