Nebraska Tourism Commission Spending Questioned

A state audit of the Nebraska Tourism Commission finds a host of 'significant issues' regarding the commission's spending of taxpayer dollars that in some cases, may have violated state law.

Nebraska State Auditor Charlie Janssen released the 79-page report late Friday, detailing a host of findings that include expensive meals, reimbursement for alcohol and cigarettes, and inadequate record keeping that often left spending unchecked.

Among the auditor's findings:

Questionable expenses for a photo shoot across Nebraska in June, 2015 that included alcohol, cigarettes, and mileage reimbursements for trips where gasoline was also billed to the state. The photo shoot also paid $550 to the daughter of Tourism Commission director Kathy McKillip to be one of the models.

$44,00 paid to one speaker at the 2015 State tourism conference. The state also paid for extra meals, and chair massages.
No procedures to review purchase orders against contracts, which resulted in expenses $4.4 million over the contracted amount with the advertising firm Bailey Lauerman over the course of three years.

Gifts including thousands of dollars meals and alcohol often provided by Bailey Lauerman, which were given to Commission director McKillip, Commission employees, commissioners, and their spouses. Many of the meals were paid for by the advertising firm Bailey Lauerman, which received
$18,511 spent to relocate an existing Commission employee from Sidney, Nebraska to Kearney.

Over-spending: The Commission exceeded its appropriation for the State Visitors Promotion Cash fund by more than $700,000 in fiscal year 2015, and failed to meet earmarks set by the Nebrsaka legislature for certain State Aid appropriation amounts.

“I thought it was, in many cases, irresponsible money spent,” Nebraska Auditor of Public Accounts Charlie Janssen said, “my tax money spent and your tax money spent.”

McKillip says the more than $350 spent on alcohol and cigarettes during the June photo shoot was never supposed to be submitted.

“We don’t know whether they fell through the cracks, but we know very good and well those are not reimbursable items as a state agency,” McKillip said.

As for paying $44,000 for their 2015 conference speaker, McKillip says the Commission works hard to bring in high-quality people to motivate their employees.

“That’s not an uncommon pay range for a nationally-known speaker,” McKillip said, “this speaker had spoken at several national tourism conferences in 2015.”

The auditor's report outlines a pattern of poor record-keeping, and undocumented travel expenses the auditor called "unreasonable" or not in compliance with state law. The report also found the Commission had failed to adopt rules and regulations set forth in state law, and outsourced its strategic plan, also in violation of state statute.

The Legislature made the Commission a stand-alone state agency in 2012.
Governor Pete Ricketts spoke to KETV Newswatch 7 Monday after signing a bike-riding proclamation. He says the audit is concerning, but there’s not much he can do.

“I think what this demonstrates is the problem when you create commissions that aren’t under the governor’s control, that there’s a difficulty in accountability here,” Gov. Ricketts said.

McKillip says many of the mismanaged funds have been reimbursed, and that the agency is working with the Department of Administrative Services to create a policies and procedures manual.

“Correct the errors, move forward, and do better,” McKillip said.

The 10-member tourism commission meets Tuesday afternoon at Omaha's Henry Doorly Zoo and Aquarium. A representative from the state auditor’s office will be there to answer questions.