KILLEEN, Texas (January 17, 2025) – An audit of the City of Killeen’s Civic and Conference Center (KCCC) Mixed Beverage Operation revealed notable operational and financial improvements since the last review, including increased revenue. According to the report, there are also areas that require attention, including inventory management.
The objectives of the audit were to determine the status of corrective actions on prior report recommendations, determine the Mixed Beverage Operation’s financial performance during the review period and assess the contractor’s inventory management performance.
City Auditor Matthew Grady conducted the independent review to analyze these areas and identify opportunities for further improvement.
The audit highlighted significant financial progress for the KCCC Mixed Beverage Operation. Revenue rebounded to pre-pandemic levels, reaching $264,000 in FY 2023 and $227,000 in FY 2024, compared to a low of $78,000 in FY 2020 during the pandemic's first year. The introduction of well drinks doubled spirits sales, contributing to this recovery. Additionally, the center addressed prior performance issues by strengthening security guard agreements.
Despite progress, inventory management remains a concern. The audit uncovered errors in FY 2023 and FY 2024 monthly inventory sheets, largely due to misapplied Excel formulas. These errors resulted in misstated beginning inventories and apparent, though not actual, losses. To address this, management implemented a redesigned Excel spreadsheet in November 2024, which appears to resolve prior design flaws.
The audit also revealed excessive inventory levels for certain spirits and beers. While industry standards recommend maintaining a month’s supply of spirits and 10–15 days of beer, KCCC held months’ worth of spirits and over a year’s supply of some beers. This overstocking contributed to inventory losses in July and August 2024 following a walk-in cooler malfunction.
The City Auditor recommended adopting an inventory ordering methodology aligned with industry best practices. This approach would optimize inventory levels, reduce waste, and enhance operational efficiency.
The City of Killeen remains committed to addressing these findings and ensuring continued improvements at the KCCC Mixed Beverage Operation.
The audit was completed in accordance with the City Charter. The full report can be viewed on our website at www.KilleenTexas.gov/Auditor.