The asphalt was scorching and the crowds were thin as Neumann Shim contemplated the bleak state of sales and oversight of the Aloha Stadium Swap Meet & Marketplace, the stadium’s No. 1 source of revenue.

Since 2007, Shim estimates that business at his family’s handbag and garment stall has plummeted 50 percent while promises of more customers have yet to materialize.

"It’s the economy, it’s the management," Shim said. "It’s just too slow."

Shim used to be president of the Aloha Swap Meet Vendors Association, which once represented some 450 vendors at the Wednesday-Saturday-Sunday swap meet. In good times it drew as many as 700 vendors.

But the vendors association eventually disbanded in what Shim described as disgust after years of complaints about how the swap meet was run.

Now, many of their criticisms have been validated in a blistering critique released by state Auditor Marion Higa last month that found mismanagement of Aloha Stadium’s major source of revenue and lax oversight by the Stadium Authority of its swap meet manager, Connecticut-based Centerplate.

The vendors were hardly spared in the audit, which found widespread tax cheating by one-third of the top 450 vendors.

Centerplate officials did not respond to repeated Star-Advertiser requests for comment.

Stadium Authority officials did not have updated attendance, sales and vendor figures for the swap meet and had no overall comments about the auditor’s report.

In response to questions about whether any changes in management or operations are expected after the audit, Samantha Spain, sales and marketing specialist for Aloha Stadium, told the Star-Advertiser in an email that, "Operational changes are discussed at weekly meetings held with the Aloha Stadium Swap Meet and Marketplace management."

The audit began in frustration in 2009, when Aloha Stadium Swap Meet vendors appeared at legislative confirmation hearings for Stadium Authority members and blasted both the stadium’s management and Centerplate. After getting an earful from vendors, legislators ordered Higa’s investigation.

The swap meet represents the single-biggest money maker for the Stadium Authority and generated more than $4.8 million in sales in the 2009-2010 fiscal year — representing 67 percent of all stadium revenue.

But vendors’ payments to the Stadium Authority had already been plummeting — from a high of $5.4 million in the 2007-2008 fiscal year.

In 2005, the swap meet saw 9,400 buyers before customer numbers dropped to 7,850 in 2007 — the last figures available in the audit.

Poor management of the swap meet also has the potential to hurt future stadium repairs — and could even harm the city’s plans to build a transit station near the stadium for its rail project, according to the audit.

"Our investigation found that the Stadium Authority is not providing needed leadership and oversight of its swap meet contractor," according to Higa’s audit. "When faced with the opportunity to effect change, the board and the stadium manager (Scott Chan) instead divested themselves of involvement and responsibility and surrendered oversight of its swap meet contractor.

"In addition, we found that the stadium manager ignored his contract administration responsibilities to ensure Centerplate is managing the swap meet operations effectively," the audit said. "Centerplate failed to adequately perform under the terms and conditions of the 2004-2009 contract and inconsistently enforced its swap meet rules and regulations. Yet, the stadium manager awarded a new contract to Centerplate without evaluating its past performance."

The Stadium Authority also has not received federal approval to operate its current swap meet, which violates the terms of the original deed for the land, according to the audit.

The U.S. Department of the Interior sold the land beneath Aloha Stadium to the city in 1967 before the city transferred the land to state control. Today, the failure to keep federal officials apprised of the swap meet’s current scope and operations could have serious ramifications, according to the audit.

"This violation of the original deed restrictions could lead to the land being reverted to the federal government," according to the audit. "While the likelihood of this action may seem remote, it is imperative that the Stadium Authority do everything in its power to ensure that its operations comply with all relevant laws and agreements. Moreover, unless the authority obtains approval from the federal government for future development projects, it will be unable to generate revenue needed to repair and rebuild the stadium and the city may not be able to build a proposed transit station for its rail project."

Stadium Authority officials told Higa that they conduct their operations in full compliance with all deed restrictions. But the audit found that "the authority ignores both the reality of present-day swap meet operations and the risks associated with possible noncompliance."

"This failure to manage proactively is consistent with what we found during our investigation," the report said.

While the audit validated many of the vendors’ complaints about Centerplate and stadium management, it also revealed widespread tax cheating among vendors.

Centerplate requires vendors to provide Centerplate with a copy of their general excise tax licenses and to display them at their stands.

But one-third of the top 450 vendors did not file general excise tax returns for 2007, 2008 and 2009 or were underpaying their taxes. State auditors also checked the general excise licenses with the state Tax Department and found that 26 licenses did not match tax records, suggesting the licenses were bogus. Another five vendors out of the top 50 highest-paying vendors had invalid licenses.

"Moreover, we found one vendor who paid more than $31,000 in rent and operated for a whole year at the swap meet before getting a general excise license," according to the audit.

Revelations about tax cheating irritated many vendors at Wednesday’s swap meet.

Julee Hansen stood in her empty ToeJam stall that sells Hawaii-themed toe rings and said it’s unfair for some vendors to dodge their 4.5 percent Oahu general excise tax obligations while law-abiding vendors pay their shares during a sluggish economy.

"I pay it," Hansen said. "We should all be on an even playing field."

Shim, the former president of the defunct vendors association, said he knows of one vendor who has since reached an agreement with tax officials to pay his back taxes.

"Some people really want to pay their taxes, but they’re already operating at losses," Shim said. "It’s more complicated than just not paying their taxes. Why are they having such a hard time? Where are the customers that management promised?"

So some vendors have simply given up and left the swap meet, he said.

"I’ve seen a lot of turnover because it’s just too slow," Shim said.

After 30 years selling plumeria and produce at Aloha Stadium, Clarence Nishikata hopes the audit leads to positive changes.

But so far, change has come slowly, Nishikata said.

Some vendors continue to operate illegally by not paying their general excise taxes, he said.

"They’re still here," Nishikata said. "I know because they tell me they don’t pay their taxes."

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On the Net:

» The state auditor’s report is available at www.state.hi.us/auditor/Reports/2012/12-02.pdf.