OMAHA, Neb. (AP) - The Nebraska Tourism Commission is “extremely concerned” about a new audit that uncovered questionable spending within the state’s tourism agency, the chairman said Tuesday, but members took no immediate action against their embattled executive director.
Commission Chairman John Chapo called the audit’s findings “alarming” in his first public comments since the report was released late last week. Chapo said the commission has formed a four-member subcommittee to review the audit and report back with recommendations.
“We are extremely concerned about the outcomes of the audit,” said Chapo, of Lincoln. “We take seriously our responsibility of being good stewards of the state’s financial resources.”
The commission went into closed session during its meeting Tuesday at the Henry Doorly Zoo and Aquarium, but took no action after the meeting was reopened. Chapo declined to comment on whether Director Kathy McKillip’s job was in jeopardy.
The audit released last week found that Nebraska tourism officials used state money to reimburse a marketing firm for alcohol and cigarettes, accepted meals from contractors and paid $44,000 in speaking fees for a 90-minute speech by a corporate executive.
In addition, a contractor for the agency hired the daughter of the commission’s director for a promotional photo shoot near Valentine.
Many of the auditors’ criticisms focused on McKillip and the photo shoot, which was intended to market the state to millennials. According to the report, Bailey Lauerman requested more than $5,200 in reimbursement for travel costs that weren’t properly documented. Because the state didn’t have adequate documentation, auditors obtained financial records directly from the firm.
Those records revealed that Bailey Lauerman requested more than $350 in repayment for alcohol and cigarettes, including bottles of wine, gin and Crown Royal Canadian whisky.
Assistant Deputy State Auditor Craig Kubicek urged the commission to create policies and procedures so they can more closely scrutinize the agency’s spending. Kubicek said some of Bailey Lauerman’s expense reports were one-page invoices with little detail about what work was done.
The commission should also talk more frequently about whether spending is “reasonable and necessary,” he said.
McKillip has said none of the activity was illegal or fraudulent, and the marketing firm has repaid all of the money that was not reimbursable under state rules. McKillip said the audit was a learning experience for her agency, which was created in 2012 to replace a similar operation within the Department of Economic Development.
On Tuesday, McKillip said no one had pressured her to resign. She acknowledged she had made mistakes with the budget but said she would work with auditors to make improvements.
“I’m a hard worker,” she said. “This is not the way I roll.”
Auditors also took issue with a nearly $19,000 payment to move a commission employee from Sidney to Kearney, about 215 miles away. The tourism commission said relocating the worker made more sense than hiring another full-time employee in that area to replace one who retired.
The audit also questioned a $44,000 payment to Shawn Achor, the CEO of GoodThink Inc., to speak for an hour and a half at an October tourism conference that included chair massages and extra meals. In a written response, commission officials said Achor had spoken at several other national tourism events, and argued that many national speakers wouldn’t consider Nebraska.
The state auditor’s office has forwarded its findings to the Nebraska attorney general’s office to see if any laws were violated.
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