Municipal inspectors looking into accounting practices at a popular recreation facility in Eagle River found “deficiencies in recordkeeping and numerous inconsistencies within their financial records” during recent years.

The Anchorage Police Department confirmed there is an investigation connected with the facility, but declined to provide further details, citing the ongoing nature of the case.

Anchorage’s Office of Internal Audit released its report on the Harry J. McDonald Memorial Center on Dec. 31, 2025.

The facility, often referred to as the Mac Center, is owned by the Municipality of Anchorage, but run by a nonprofit, the Fire Lake Arena Management Inc., under the terms of a contract. Originally built in 1983, the McDonald Center has an Olympic-size ice rink, indoor walking track and large turf field, as well as meeting rooms.

The municipality routinely audits various departments, offices and facilities as part of its oversight of public resources. A previous audit of the McDonald Center in 2017 reported instances of financial mismanagement and accounting errors. A 2023 audit of the same facility found that the contract between the municipality and the nonprofit tasked with running it had lapsed, and as such, investigators couldn’t determine whether or not its terms were being observed.

Even before the latest audit began in 2025, Yoshiko Flanagan, the facility’s current general manager, said she alerted the city about “abuses” she spotted when she began working there as a part-time bookkeeper at the end of 2023.

“Honestly, when I first came in, it was a mess,” Flanagan said in an interview last week. “Lotta red flags.”

Upon raising the issue to Mike Braniff, then the head of the Department of Parks and Recreation, staff immediately took it seriously, Flanagan said.

When city inspectors looked into the facility’s financial records, they found a number of irregularities, shoddy practices and probable misconduct that have all made a comprehensive audit of recent fiscal years impossible, according to the report.

“When we started our review, we were provided the financial records in several file boxes,” wrote auditor Kevin Song in the final report. Files were mislabeled, missing or incomplete for a time period stretching from 2021 to 2025, he noted.

There were other problematic findings. Auditors were told by current staff that the former head of the McDonald Center “had privately re-registered the accounting system under their personal account, preventing the current management access to records prior to 2024.”

“The Center’s management informed us of a pending investigation involving a former employee related to alleged misappropriation of resources. The allegations include irregularities in payroll, corporate card expenditures, misuse of funds from facility-hosted events, and reregistering the financial system under their own personal account to manipulate data. A police report was filed, and the investigation is ongoing,” Song wrote in the audit.

According to figures cited in the audit and submitted to police, “the total potential financial impact was estimated to be $18,822.64 when it was reported; however, the exact amount remains unconfirmed pending the outcome of the investigation.”

In response to questions about the investigation, APD spokesperson Gina Romero declined to name the former employee, given that charges have not been filed and the case is ongoing.

One section of the audit details bonuses being paid out to employees even as the McDonald Center was operating in the red.

“In 2024, $8,600 in bonuses were paid to full-time employees despite reporting $90,025.41 over the salary/wage budget and ending the year at a loss of $67,687.87,” according to the audit. “In 2023, the total amount of bonuses was $10,100.”

Elsewhere, investigators found that expenses had been filed for things never approved by overseers on the Fire Lake Arena Management Inc. board in the center’s submitted budgets, including $5,893 one year for “vacation expenses for employees” and $7,000 in “moving expenses.”

“Our review found no justification provided for such expenses,” auditors wrote.

According to Flanagan, under her tenure as general manager at the facility, those sloppy accounting practices have since been replaced with standard industry measures bringing the facility into compliance with its contract terms.

“When I did come in, yes, it was very mom-and-pop, (revenue was) handled very irregularly,” she said.

She attributes some of the issues to the COVID-19 pandemic: The McDonald Center was navigating closures, loss of institutional knowledge among longtime staff and eventually an expansion in services quickly outgrew the old ways of doing things, creating opportunities for misconduct and mismanagement.

“There’s been a big turnaround,” Flanagan said, noting that after in 2024, under the previous general manager, the center ended its year with a deficit around $66,000. Last year, during which she was in charge, the McDonald Center was solidly above its revenue target.

A separate 2021 audit reported a “culture of excess” in procurement and spending practices at the Eagle River/Chugiak Parks and Recreation Division, a distinct entity under the municipality’s larger Parks and Rec Department that technically has oversight over the McDonald Center.