City audit finds $4.5M in account to be used by Sun Bowl

EL PASO, Texas ( KTSM ) — The City of El Paso has done an audit of the Sun Bowl Association and found an account with millions of dollars to be used by the association to help run the game.

That account is managed by the City of El Paso.

According to an audit done by the City of El Paso’s Internal Audit Department, it was found that the City had an escrow account with about $4.5 million in a certificate of deposit since Dec. 31, 2023.

This fund is generated by a 5 percent tax on car rentals in the City of El Paso and is to be used for the Sun Bowl game.

Bernie Olivas, the executive director of the Sun Bowl Association, said that the money in the account is only to be used as an emergency fund in case the association lost a sponsor so that they could pay the universities playing at the Sun Bowl Game.

“We know we had the money in the bank, but we don’t touch that unless something happens. That is the guarantee payments for when schools come,” Olivas said.

In 1997, City voters authorized a 5 percent tax on rental cars and vehicles. In 1998, an agreement was reached allowing the Sun Bowl Association to use the money collected by the City through the “motor vehicle rental tax.”

The tax is only to be used by the Sun Bowl Association “to pay for the costs associated with such an athletic event,” which is how the Sun Bowl Game is funded.

The City’s audit outlined how the funding can be used “including payment of the costs of planning, acquiring, establishing, developing, advertising, promoting, conducting, sponsoring or otherwise supporting the athletic event.”

According to the City’s audit, the Motor Vehicle Tax Venue Project fund balance, as of April 30, 2024, was $4,214,836.93.

It was concluded by a trend analysis that the motor vehicle tax was generating a little over $4 million each year, while based on agreements of team payouts, a total of $5.2 million is needed to fund the teams playing in the Sun Bowl game.

A review of both the motor vehicle tax fund and the association’s account, the association currently has $8,740,836.13 available for the Sun Bowl game, team payments and authorized expenses.

“So there’s two different accounts: one that we control and that we have and one that the City collects, that we request money for as needed for team payments,” Olivas said.

In the City’s audit, they are requiring the association to meet the following objectives to keep proper management of the funding for the Sun Bowl games:

• The association submits proper support documentation for reimbursements.
• The association uses only uses the motor vehicle rental tax funds to support the Sun Bowl games.
• The association is providing annual financial statements to the City.
• The Association accurately reports reimbursement payment amounts received from the City of El Paso in their financial statements.
• The association maintains proper insurance and fidelity bond coverage.

Throughout the audit, the City has highlighted that the association’s Office of the Comptroller does not provide user-friendly reports of the motor vehicle rental tax revenue or that the association doesn’t send quarterly reports.

In a response to the City’s requirements, the association will be complying to provide user-friendly reports of expenses for the Sun Bowl games.

However, the association did make a remark about the quarterly statements.

“As per the contract between the City of El Paso and the Sun Bowl Association, it states that the Association shall request payment before the 30th day of July, October, January and April.

“However, to avoid any confusion as to where the money is spent and to simplify the request, the association requests payment once a year and is only used for payment to teams that participate in the annual Sun Bowl football game. This request is made before March 31, when the team payments are due,” according to the Association.

The association asked the City to allow them to continue making one request a year and accepted the findings of the audit.

“That money was put someplace that we didn’t know what it was. I don’t think the City knew what it was until the audit was completed. That was a good thing that they (the City) did the audit. It was a surprise to us (the Sun Bowl Association). It will allow us to enhance our game and during the next cycle, we’ll get to pick at a higher level, which will always require us a bit more money,” Olivas said.

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