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Posted on: December 12, 2022

City audit results of Killeen Civic and Conference Center Mixed Beverage Operation

Analysis of the impact of Covid-19 and other issues on the Mixed Beverage Operation

KILLEEN, Texas (Dec. 12, 2022) – The City of Killeen’s auditor has conducted an independent review of the Killeen Civic and Conference Center (KCCC) Mixed Beverage Operation.  Matthew Grady has published his findings for public review. The audit focused on several areas, including assessing the impact of the Covid-19 Pandemic and Winter Storm Uri on the mixed beverage operation, assessing the contractor’s performance, inventory management in particular, and assessing opportunities to enhance mixed beverage operation revenues.

The City Auditor’s review found that KCCC’s Mixed Beverage Operation, much like the private sector’s hospitality sector, was deeply affected by the Covid-19 Pandemic. Revenues plummeted 67% in fiscal year 2020, from a near-record pre-pandemic high of almost $240,000, to just more than $78,000.  The path to recovery has been slow, but steady with fiscal year 2022 revenues reaching $129,000 or about half the operation’s pre-pandemic high.

The audit also found the contractor’s management of the KCCC’s alcohol inventory was markedly improved from the prior audit, except for wine losses, which continue to be problematic. Losses spiked in February 2022 at 300%, indicating that for every glass of wine sold, three were lost to waste. The losses, also referred to as inventory shrinkage, were attributed to open wine bottles left over after events, which must be discarded if they cannot be used within their three-to-five-day shelf life.  Both management and the contractor are aware of the issue and are considering options to improve efficiency.

The audit further noted that the cost data used in the Mixed Beverage Operation’s monthly financial reports were outdated, causing operational costs and inventories on hand to be understated. On average, the wholesale cost of products purchased had increased 13% since cost data was last updated in 2016.  In addition, drink prices had not been adjusted since 2016. The report recommended updating cost data and raising drink prices to adjust for cost increases. Management took corrective action with the help of contractor staff during the audit, by updating the cost data in the inventory system and implementing new drink prices, accordingly.    

Finally, the audit discussed the impact of security detail performance on the Mixed Beverage Operation. Specifically, chronic late arrivals and, in some instances, no-shows by contracted private security, had caused bar service to be delayed or canceled altogether.  In addition to lost revenue, the chronic nature of the performance issues runs the risk of reputational damage to KCCC as an event venue.   In response, management has initiated a process going forward for clearly delineating performance expectations and establishing removal procedures for repeated performance issues.

The scope of the audit focused on, but was not limited to, analysis of operations from October 2019 – September 2022. The entire KCCC Mixed Beverage Operation Audit is available at

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