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DED tourism division nicked in audit

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The state auditor's office last week released its audit report of the Missouri Department of Economic Development's Division of Tourism for fiscal years 2009 and 2010, ranking its performance as fair, the second-lowest rating available.

In the report, the Show-Me State's tourism division was docked for management and financial controls and efficiency and compliance with legal provisions.

According to the report, the division's 10-member Tourism Commission has not established a policy for conflicts of interest, allowing three commission members to participate in funding decisions benefiting entities with which they were associated.

The report claims that Lt. Gov. Peter Kinder, who served as commission chairman, did not abstain from voting to approve commission budgets of $1.5 million in 2010 and $1 million in 2009 for Tour of Missouri Inc., a nonprofit organization for which Kinder served as board chairman when the funding decisions were made. He also did not disclose his relationship with Tour of Missouri on his personal financial disclosure statements filed with the Missouri Ethics Commission in 2008 or 2009, according to the report. The report also noted that Marcia Bennett-Hazelrigg, the current chairwoman, and former member James Divincen participated in discussions and program funding decisions benefiting local tourism agencies they represented.

For fiscal years 2010 and 2011, the division budgeted to spend more than was available, paying $4 million of its fiscal 2010 expenditures out of its fiscal 2011 appropriation with an expectation to pay $4 million of its fiscal 2011 expenditures out of the 2012 appropriation. According to the auditor's office, "Planning to spend more than you expect to have available in a year does not make financial sense, especially when additional budget cuts could occur."

In fiscal years 2009 and 2010, the division paid its advertising agency roughly $2.2 million to administer payments to vendors rather than doing so directly, reducing transparency for which organizations actually received funding. The ad agency, which wasn't named in the audit, paid $1.54 million to Tour of Missouri, $480,645 to subcontractors for Web site services and $141,340 to vendors for conferences, research and other services. According to the audit, the agency had no involvement in most of the services.

The state auditor's office gives four rankings on audit reports - excellent, good, fair and poor. Reports marked as fair indicate an entity needs improvement in myriad areas.

The 25-page audit is available in full at Missouri State Auditor Thomas Schweich's Web site.
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