May 29, 2007 - KISSIMMEE -- An Osceola County audit of the Kissimmee Convention & Visitors Bureau's travel practices found the department lacked the oversight, policies and controls to ensure its $250,000 travel budget was spent properly or effectively on trips to promote the county.

Auditors wanted to measure the return-on-investment for trips taken by visitors-bureau staff to market Osceola as a destination. But documentation was so inconsistent that the auditors often couldn't figure out how much money was spent or what employees did on the trips.

"There was no central place that said, 'It cost us $10,000 to go to Brussels,' and then some analysis of how many contacts they made," County Auditor Kathy Wall said Friday. "They're the marketing arm, so that is very vital information to determine if this was a trip they would invest in again."

Released to county commissioners late last week, the travel audit was the first part of an in-depth review of how the visitors bureau spends an annual $20.5 million in tourist-development taxes.

It comes a few weeks after the sudden departure of visitors-bureau Director Tim Hemphill. County Manager Mike Freilinger said Hemphill's exit was unrelated to the audit.

Freilinger, who started his job in April, said the audit "shows a severe lack of controls and procedures that needs to be addressed."

He added, "I concur fully with the county auditor's assessment of the areas of deficiency. They will be addressed by this county, and quite frankly, there are other areas of the county operation that need to be tightened up as well."

Freilinger said he did not foresee any employee terminations as a result of the audit. No criminal investigation is expected, Wall said.

New procedures in place

Interim visitors-bureau director Maria Grulich said Friday that she has begun some new procedures to address the audit's findings and has set deadlines for when other policies will be instituted. The staff will prepare a visitors-bureau procedures guide within 90 days, she said.

The audit found:

There was no single place documenting how much the visitors bureau spent on each trip.

The auditors recommended that all spending items related to a trip be presented in one place, along with a list of all county staff who attended the event. The visitors bureau agreed that expenses should be consolidated.

There were no policies for making travel arrangements and no single travel-booking source. The auditors recommend the visitors bureau contract with a travel agency to reduce travel costs. The visitors bureau plans to review the merits of using a travel agent versus having a staff person coordinate travel.

There was no requirement that staff prepare reports about what they accomplished during the trips. As of May 22, staff are required to provide a full analysis of each trip so that the bureau can determine whether it's worth doing again.

Employees were given American Express cards for travel-related expenses, but there were no internal controls to prevent improper purchases, such as daily spending limits or merchant-card restrictions to guard against misuse of the cards.

Grulich plans to replace the cards with Visa cards that have spending guidelines specifically tailored for bureau staff travel.

The director of sales traveled 35 percent to 71 percent more than his sales staff. When asked by the auditor about the extent of his travel, he responded "that it is in his job description to travel," the audit says.

Personnel records show that Sales Director John Weed was told by supervisors in 2003, 2004 and 2005 that he needed to reduce his travel away from the office. Weed would not comment on the situation.

Since the audit, all directors have been instructed to "be in the office" in order to direct their staffs, Grulich said.

Employees did not always document how money was spent. In some instances, employees asked to be reimbursed for meals when their conference itineraries said meals were provided.

In one case, an employee traveled to Las Vegas two days before a conference began to perform "site inspections" but never documented what sites were visited.

The audit recommends that travelers provide a full accounting of money spent, as well as explanations for any changes to travel arrangements. Grulich said the visitors-bureau staff will be educated about proper expense recording and reporting within 30 days.

The sales department failed to update an annual travel calendar that industry partners, such as hotels, rely on to decide whether to participate in the events.

In one instance, Weed scheduled a $14,000 trip to China but did not list it on the calendar. The trip has since been canceled by the county manager. The sales department has been instructed to send calendar changes to industry partners every quarter.

Shipley: 'I am appalled'

Commission Chairman Ken Shipley said he asked for a business plan from the visitors bureau more than two years ago and finally requested the audit when he became concerned that no action had been taken.

He said the findings confirmed his suspicions that the visitors bureau lacked the internal controls to make sure tourist-tax dollars were being spent effectively.

"I found out exactly what I was afraid I would find, and I am appalled that it was allowed to go on. It basically was flaunted in our face," Shipley said. "There's more to come, and I'm really now concerned what else we are going to find."

Daphne Sashin can be reached at [email protected] or 407-931-5944.

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