The private contractor who built nearly $12 million worth of no-bid infrastructure work at Rock Chalk Park “did not provide a complete accounting for the project,” a city-hired auditor has determined.

But the audit firm of McDonald & Associates is recommending that the city of Lawrence proceed with an approximately $1 million payment that had been withheld from the contractor as questions had arisen about the public-private sports complex.

“Based on audit work, M&A determined that the construction work delivered met or exceeded the established specifications and the costs were compliant with the terms and conditions found in the development agreement,” the auditors say in their report to city commissioners.

Mayor Mike Amyx said commissioners will discuss the audit at a special 5:45 p.m. meeting on Monday at Lawrence City Hall. An auditor from the Tennessee-based auditing firm is expected to be at Monday’s meeting.

“I will spend the next few days reviewing the report and I’m sure I’ll ask questions about its contents,” Amyx said. “I’ll want to determine whether it has given us what we asked for. Right now it is just very early to say.”

The report does create a mixed bag for the city. It recommends the city pay the remaining $1.02 million that has been submitted for payment on the project. But the report also highlights shortcomings in the partnership between the city, Kansas University Endowment and the private development firm of Bliss Sports II. Among those findings:

• The Thomas Fritzel-led company Bliss Sports II “could not provide a formal job cost ledger” to auditors. The auditing firm sought access to a job cost ledger in an attempt to verify certain costs of the project. In the absence of the ledger, the auditors created “an estimated job cost ledger.” Auditors, based on those estimates, found that Bliss Sports II did make payments that were in excess of what is being requested for reimbursement from the city.

• Bliss Sports II allowed some subcontractors to perform work on the project without engaging in formal contracts with the company. The auditors found Alpha Omega Geotech performed inspection work, and Gould Evans performed site plan and other such work without having contracts with Bliss Sports II. Alpha Omega was found to have conducted work on both the city-funded infrastructure project and the privately funded work to build various stadiums and sports facilities at the site.

The auditors did not recommend the city withhold any payments as a result of the lack of contracts but said: “The lack of agreements makes it difficult to determine if costs were properly applied between the stadium and infrastructure projects.”

• The auditor found that the city of Lawrence and KU Endowment and Bliss Sports II had a fundamental difference in how the parties viewed the project. The auditors found that the city viewed the project as one where the city would reimburse actual costs of Bliss Sports II, up to a $22.5 million maximum amount. KU Endowment and Bliss Sports II did not view the project in that manner, the auditors found. Instead, those two parties “see the contract as a lump sum agreement,” auditors found.

Auditors found there was more the city could do to ensure transparency in future projects.

“In the future, if transparency is desired throughout the construction process, specific audit language should be added to construction contracts to examine all records proving cost and installed quantities,” the auditors wrote in their report. “In addition, steps should be taken to assure the contract is fully understood and that task assignment is addressed.”

The audit report also left several questions unanswered. Those include:

• It was unclear whether the audit included work to match submitted expenses with actual receipts. The audit report references the “attested” construction cost of the project on several occasions. The Kansas University Endowment Association created a process where contractors were required to sign documents attesting to the amount of money Bliss Sports II had paid them for work on the project. Many of the signed documents were accompanied by canceled checks, but not all. About $1.4 million worth of work by DFC Company of Lawrence does not have canceled checks matching that total. The company is a Fritzel-controlled entity, and KU Endowment leaders have explained that because the two companies were related, checks were not exchanged. Instead, the amount was noted as payables and receivables on the company’s financial records.

• The audit did not address several discrepancies in the signed documents attesting to the costs. On several occasions, contractors signed documents saying they had been paid by Bliss Sports II, when canceled checks showed that they had been paid by other Fritzel-related entities. A previous review found that at least three contractors on the project had not signed the documents attesting to the costs. It was not clear whether the auditor found those discrepancies and omissions to be significant.

• It wasn’t clear whether the audit included work to examine whether the infrastructure construction loan for the project was used solely to pay for infrastructure-related costs. The city is responsible for paying the interest costs on the loan.

The auditors were not available for comment on Thursday. Amyx said he expects to ask them several questions about the scope of their work at Monday’s meeting.

“I know this report probably won’t answer everybody’s questions,” Amyx said. “We’ll have the chance to ask additional question, and I know I’ll have some. But I do want people to know that I think this audit process has been extremely important.”