State tourism officials accepted high-priced meals and gifts from contractors, reimbursed an advertising firm for more than $350 worth of alcohol and cigarettes, and paid a guest speaker $44,000 for an hour-and-a-half-long appearance at a conference in October.
Those are just a few of the questionable expenses state auditors identified Friday in a scathing,
Auditors found the commission's director, Kathy McKillip, held what amounts to "unilateral control" over an entity that appears to have misused taxpayer dollars and may have violated state law, they say in the report.
McKillip, reached through a spokeswoman, did not immediately respond to a request for comment from the Journal Star.
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Lawmakers had already grown concerned about the Tourism Commission's financial integrity earlier this year, when it sought permission to spend an extra $750,000 each of the next two years.
The commission, which is primarily funded through the state's 1 percent lodging tax, appeared to be spending at a rate that outpaced its revenues, said Sen. John Stinner of Gering, a member of the Legislature's Appropriations Committee.
"We had really talked to them about having a budget that was sustainable," Stinner said.
The audit report, authored by state Auditor Charlie Janssen's office, was published online late Friday and covers a calendar year of activity on the commission's accounts from January to December 2015.
Much of the report centers on "significant issues" surrounding a nine-day, cross-state photo shoot in June aimed at promoting Nebraska to young people. That trip included commission staff, employees from the Omaha advertising firm Bailey Lauerman, and talent they hired for the shoot, including McKillip's daughter, who was paid $550 for her services.
Among the expenses noted by the auditors:
* $350 for alcohol, including several bottles of wine, three bottles of gin, a bottle of Canadian whisky, beer, cigarettes and other alcohol purchased during meals.
* $2,775 for use of the state airplane to fly a commission staffer from Lincoln to Valentine, then return a sick model and a Bailey Lauerman employee back home.
* $47,000 in staff time reimbursed to Bailey Lauerman at a rate of $115 per hour. One employee of the advertising firm was paid $11,397 for nine days' work, including days where the person reportedly worked more than 14 hours.
Auditors also questioned a series of expenses related to the commission's October conference in Columbus, including a single speaker who was paid $44,000 — greater than the annual salaries for more than half the commission's full-time staff.
Meanwhile, McKillip and other commission officials accepted thousands of dollars worth of meals, drinks and other perks from contractors, and McKillip herself billed the commission for lavish meals in Las Vegas and Lyons, France.
The audit report also takes aim at the commission's overall culture, portraying that the entity has operated essentially without rules since it was established by lawmakers in 2012.
State tourism used to be part of the Nebraska Department of Economic Development but was spun off into its own entity about four years ago and is now overseen by nine commissioners who are appointed by the governor.
Since then, the commission has failed in fulfilling two of its legally required duties: establishing internal regulations and forming a strategic plan, the auditors wrote.Â
The commission never set out to craft its own internal rules, instead following old rules established under its previous arrangement. And a strategic plan it paid a Texas firm $180,000 to craft does not meet statutory requirements, the auditors wrote.
Commission staff also made major purchasing decisions without following an open bidding process, which is standard for public entities, the auditors wrote.
The Journal Star was still reviewing the findings late Friday.Â