Content area
Full Text
CORRECTION: An article in Sunday's New York Newsday incorrectly stated the relationship between Bill Cosby and the Apollo Theatre and Inner City Broadcasting Corp. Cosby is not now and never has been an investor in either entity. (4/23/91 2 C)
Developers of the Apollo Theatre renovation project failed to keep any formal accounting records for more than two years, hired consultants without contracts and kept incomplete records of payments to vendors, contractors and company officials, according to state audits of the Apollo obtained by New York Newsday.
The Apollo Theatre Investor Group, headed by Percy Sutton, a former Manhattan borough president, "functioned from project inception through August 31, 1987, without benefit of a formal set of books of account," says a Dec. 24, 1987, internal audit conducted by the Apollo's lead lender, the state Urban Development Corp., which is now owed about $9 million, including interest. UDC's role in funding the landmark Harlem music hall's multimillion-dollar renovation began in 1985. The project was originally budgeted for about $10 million in 1983 and later was revised to $16.5 million. The project has now exceeded $20 million, according to Sutton.
Even after Apollo project officials hired accountants to reconstruct the books, auditors from another agency - the office of Comptroller Edward Regan - were still hampered by the lack of records when they conducted their own audit, according to their 1990 report. Sutton's file for reimbursement of expenses totaling $88,995.54, which he paid to vendors, was missing and no cancelled checks were found, auditors' worksheets show. Robert Hinckley, spokesman for Regan, said they received no response on their requests to project officials to find the missing file.
Hinckley said last week that the comptroller's look at the Apollo was limited in part because the audit was a broader one focused on four UDC-funded projects, including the Apollo renovation, and because there were so many missing records. "However, the lack of records, the loose accounting practices created an opportunity and always creates an opportunity for illegal acts to take...