Audit committee reviews draft report of Parrot Island Waterpark financial procedures

There were recommendations on different reporting methods and potential changes in how financial and other metrics are reported, but an almost two-hour review of a draft report on Parrot Island Waterpark financials and other metrics did not identify any serious concerns.

A draft report on reporting procedures by American Resort Management (ARM), the company managing Parrot Island Waterpark, was presented Thursday (May 28) to the city of Fort Smith Audit Advisory Committee. David Coleman, with Forvis Mazars, the accounting firm conducting the review, stressed that the report is not an audit of ARM, but is a review of accounting procedures requested by the city.

“This is not an audit,” Coleman said. “We are not rendering an opinion on the financial statements of this entity.”

The report was requested by the Fort Smith Board of Directors, and follows what has been a controversial plan to acquire and install five waterslides at the park. The report does not include the waterslide expansion, and is not the result of any allegations of wrongdoing.

Forvis Mazars – formerly BKD – began its review in early April of ARM finances related to the waterpark, which is jointly owned by Sebastian County and the city of Fort Smith, and has been open since 2015. The review is estimated to cost between $30,000 and $40,000, with ARM paying the fee from its 2026 Parrot Island operating budget.

Coleman said ARM officials have been cooperative and they were able to perform a “thorough” review of accounting procedures related to the waterpark.

Members of the audit committee, which includes Fort Smith Directors Christina Catsavis, André Good, and Neal Martin, asked for more details on expenses, especially with repair costs reported in 2024 and 2025. For example, leak repairs in 2024 and 2025 on the waterpark’s lazy river totaled a little more than $500,000. Committee member Lavon Morton, a former city director, said the city should receive timely reports on expenses that will have a “significant impact on an entire year’s budget.”

Reporting changes requested by the committee included more detail on cash receipts in the monthly report ARM provides to the city and county, add more information on the accounts payable process, adding an accounts payable aging report on future reports, better reporting on revenue from sales of season passes, more detail on concession sales and attendance, and more information from ARM about an $8,000 check from a parent-teacher organization that was not deposited for several months.

Gerald Cernak, a certified public accountant and director of financial services for ARM, attended the meeting virtually and said the company can provide details in any format requested by the city. He also noted that several requests for more info – such as attendance details – are already provided in ARM’s monthly reports to the city and county.

Coleman said he and others at Forvis will work with city of Fort Smith Auditor Amanda Strange to incorporate committee recommendations into a final report. Coleman said he was confident they could have a revised report ready for a June meeting.

Deana Infield, chair of the Audit Advisory Committee and a member and certified public accountant with Landmark CPAs, said the committee will review a final report, finalize a list of new procedures, and make necessary recommendations to the Fort Smith Board of Directors. Infield said the committee did have several recommended reporting changes, but she saw nothing financially inappropriate.

“It’s more of just getting an understanding of how things are working,” she said. “I didn’t see anything that was like, you know, this is money unaccounted for or anything like that.”

She also said ARM seems to be “on the same page as us in wanting that total transparency on things.”