The AG's report was the result of an investigation into a recent concert scandal, in which the city lost $360,000 because of poor ticket sales. (CBC)

HRM's auditor general has raised serious questions about the city's relationship with Trade Centre Ltd. in his report on box office receipts.

The investigation was prompted by the recent concert scandal, in which the city lost $360,000 because of poor ticket sales. HRM Auditor General Larry Munroe's report finds that Trade Centre Ltd. took the box office service Ticket Atlantic out of the city's hands in 2006, without the city's approval.

When the city's CAO found out about the move later that year, he raised questions about it in a letter, but nothing was done about it.

Munroe says the city's profits for ticket sales remained the same after the move. But Trade Centre's profits increased drastically, with Trade Centre receiving 75 per cent of the profits, adding hundreds of thousands of dollars to the provincially-owned agency.

Speaking to the press Wednesday, Munroe said it's almost unheard of for those managing a venue to make more than those who own it.

"In my experience, no, that would not be the case. Normally, (the owner and manager) would agree on what is a reasonable fee for the management, what is expected within that fee," Munroe said. "I'm sure that when an owner would look at it and would look at their bottom line or their expectations, they would bill that all in and ensure they are getting adequate compensation for what they have invested in the business or what they expect back."

He said the agreement between Trade Centre and the city is too vague for HRM's interests to be properly protected. He doesn't think the city understands Metro Centre's operations, and he thinks there should be a review of HRM's ticket commissions.

The city's new CAO, Richard Butts, has agreed to do the review.