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Financial Controls at Fresno Convention and Visitors Bureau Absent
 as More than $60,000 in Unauthorized Spending Charged
 to Bureau Credit Cards

By Matt Leedy, The Fresno Bee, Calif.McClatchy-Tribune Business News

Dec. 19, 2006 - Several Fresno City Council members want to know why $60,000 in taxpayer money was spent on shopping sprees charged to Fresno Convention and Visitors Bureau credit cards.

The council members also want to know how the public's money will be safeguarded in the future before more city funds are given to the bureau in April. The questions come in the wake of embezzlement allegations against a former bureau bookkeeper.

"It's taxpayers' money, and they deserve an explanation," Council Member Brian Calhoun said.

City officials and bureau leaders said Monday that they will attempt to answer the council's questions, but it's not clear when they will be able to give a detailed report on spending practices and financial oversight.

From June 2005 to July 2006 more than $60,000 in unauthorized charges were made to bureau credit cards, according to records obtained by The Bee.

Some of those charges were made at Victoria's Secret, Starbucks and a Fresno day spa. Purchases were made at clothing and retail stores across California. At Target alone, $9,500 was charged to the bureau's American Express corporate cards.

The bureau has an $850,000 annual budget. Of that, $735,000 is taxpayer money given to the bureau in quarterly payments. The city pays the bureau to attract conventions that generate hotel room taxes.

Bureau leaders say a former bookkeeper, who quit in November, used credit cards to embezzle money and also used the signature stamp of retired executive director Lloyd Kennedy Jr. to cash between $4,000 and $5,000 in checks.

Fresno police have confirmed a criminal investigation is under way involving the former bookkeeper and the bureau, but no charges have been filed.

The bureau is now attempting to strengthen financial controls.

If a thorough audit isn't finished by March, the bureau could be denied its quarterly city payment in April and be fired by SMG, the private company that manages the Fresno Convention and Entertainment Center for the city.

Calhoun, however, doesn't want to wait until March to learn why city money was spent on shopping sprees.

"We should have answers fast," Calhoun said. "I'm not waiting three months."

Calhoun said he will ask City Manager Andy Souza for an update on how city money is spent by the bureau at the council's next meeting on Jan. 9.

"And I'll wait 30 days, at the most," Calhoun said. "I don't care what kind of presentation we're given, but I want a completely reinvented bureau and a completely reinvented financial system for it. Because the system that's in place -- I don't need a detailed report to tell me it's broken."

Council Member Larry Westerlund wants city officials, SMG and the bureau to explain what policies and procedures are in place to regulate how taxpayer money is spent. Westerlund wants a report by March, before the bureau gets its April payment of city money.

He's particularly troubled that unauthorized spending on bureau credit cards continued after an auditor warned on Feb. 1 that the organization's financial oversight was lax.

"There's obviously some serious management and cash controls missing," Westerlund said. "I'd like to know how that happened and how that can be prevented in the future."

Council President Jerry Duncan said he wants a full report on the bureau's financial oversight after the criminal investigation is finished.

Souza said he could give the council a brief report in January. But Souza and the bureau's executive director, Wayne Bennett, said a more detailed presentation should wait until a complete audit is finished.

The bureau's books are nearly in good enough shape to be audited, Bennett said, but an auditor has not yet been hired. He added that he's not sure when that would happen.

The bureau has declined to comply with The Bee's Nov. 30 request under the California Public Records Act to produce checking account records and certain other documents. Bennett, in a Dec. 8 memo, told the newspaper that the bureau would not release those records because of the police investigation and the possibility of a civil lawsuit.

Katherine Keating, a lawyer at the San Francisco office of Holme, Roberts and Owen, general counsel for the California First Amendment Coalition, said those records should be public.

Under state law, Keating said, public records remain public even if they later become part of a criminal investigation.

The reporter can be reached at or (559) 441-6208.


Copyright (c) 2006, The Fresno Bee, Calif.

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