The Casino Reinvestment Development Authority failed to monitor the actual cost and the economic impact of the Miss America Competition when it negotiated the second contract with the organization in 2016, according to an audit of the state agency.
“The CRDA was unable to provide documentation to support any efforts on their part to monitor the actual costs related to the Miss America Competition,” according to the report. Without documentation, proper planning and oversight, “it appears that the CRDA did not effectively manage these contracts nor have the ability to determine if the funds were spent in an efficient manner.”
The 29-page report is the first performance audit of the 34-year-old state agency, which was created to spur economic and community development in Atlantic City and New Jersey with funding from a portion of casino taxes.
The Miss America Organization did not respond with a comment on the state’s findings. The state agency has been the primary sponsor of the Miss America pageants since returning to Atlantic City in 2013.
A three-year contract was approved in May 2013 to fund the 2014, 2015 and 2016 competitions. According to the audit, the CRDA agreed to pay 50 percent of the pageant’s production costs and 50 percent of the annual building operations for the 2014, 2015 and 2016 competitions. The CRDA was also contracted to cover transportation and meals for the contestants and chaperones during the two weeks of the pageant. The estimated costs totaled an annual payment of $2,267,000.
In February 2016, the CRDA entered into a second contract with the MAO that guaranteed payments of $12,536,000 over a three-year period, representing an 80 percent increase from the prior contract cost, according to the audit.
In total, the CRDA has provided more than $19 million to the pageant the last six years.
According to the report, the new contract did not require the MAO to provide written reports supporting production costs. The only document provided to state auditors was a 2015 year-end settlement, claiming the CRDA was due a $61,650 credit from MAO, which was never received.
As part of the contract, Dick Clark Productions was required to air a live remote performance in Atlantic City to be incorporated in the 2017, 2018, and 2019 New Year’s Eve telecasts.
The 2017 performance never happened.
“The CRDA was required to cover all costs related to the performance but did not sign a performer for the 2017 event and was unable to provide us documentation of a search effort,” according to the report.
Last December, Dick Clark Productions severed ties with MAO, following an email scandal involving former CEO Sam Haskell and the board of directors.
Sunday’s Miss America 2019 Competition was the last pageant under the contract. The CRDA previously said they would not comment on the status of a new contract.