State comptroller audits Chattanooga Convention and Visitors Bureau

State comptroller audits Chattanooga Convention and Visitors Bureau

June 24th, 2017 by Tim Omarzu in Business Around the Region

Chattanooga Convention and Visitors Bureau President and CEO Bob Oak speaks during a meeting with the Times Free Press editorial board in the newspaper's offices on Thursday, March 9, 2017, in Chattanooga, Tenn.

Photo by Doug Strickland /Times Free Press.

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Hamilton County isn't the only government to give more scrutiny to the Chattanooga Convention and Visitors Bureau.

Two auditors from the state Comptroller of the Treasury office arrived on June 14 at the CVB's office on the top floor of the 18-story SunTrust tower downtown to look through files, crunch numbers and talk with CVB officials.

"The results of our review will hopefully be released within the next few months," said John Dunn, spokesman for the comptroller's office. "For clarification, this is not an investigation. It is an audit that we are statutorily obligated to perform."

The comptroller's auditors came to Chattanooga because state Sen. Todd Gardenhire, R-Chattanooga, got Tennessee law changed to require the state comptroller to audit the CVB. Gardenhire said in March he was inspired to do so after he attended the CVB's annual luncheon, which Gardenhire described then as "very lavish."

"I think accountability is important," Gardenhire said Friday. "The taxpayers need complete transparency and accountability. That goes for any group receiving a large amount of taxpayer money."

"I hope it clears the air and it helps restore trust," Gardenhire added.

CVB President Bob Doak said he welcomed the state audit.

"They asked and we answered all of their questions," Doak said. "It's just very much the same [thing] that we do every single year with our independent third-party audit."

The tourism bureau has come under fire by Hamilton County Commissioner Tim Boyd, who cited an unofficial internal document from the county auditing department that says during the 2014 fiscal year, CVB employees stayed at four-star hotels, spent $289,589 on travel, and picked up the tab for $43,400 worth of meals at local restaurants, including such high-end restaurants as St. John's and Hennen's.

Doak, meanwhile, said the total spent that fiscal year on travel was $95,534, that CVB employees stay in the same hotels as everyone else during out-of-town conventions, and that meals to woo potential clients have a huge return on investment when clients decide to do business here.

County commissioners voted 6-3 Tuesday in support of Boyd's resolution to require nonprofit agencies that receive more than 25 percent of their annual operating budget from Hamilton County, such as the CVB, to adopt county travel and purchasing policies, provide all financial documents and records of expenses, and place a county commissioner on their governing boards. The CVB, a private, nonprofit organization, gets about 78 percent of its funding from the county hotel-motel tax, estimated at $8.2 million this upcoming fiscal year.

Gardenhire's bill to have the state audit the CVB passed unanimously in the state Senate. In the House, companion legislation passed with 93 "yes" votes, one "no" vote from Susan Lynn, R-Mt. Juliet, and an abstention from Tennessee House Majority Leader Gerald McCormick, R-Chattanooga.

"I did a blue light, which means present, not voting," said McCormick, who said he recused himself because he was on the CVB board of directors then, a position he resigned from about a month or so ago.

"I think it's good to have transparency anywhere taxpayer money is going," McCormick said. "I think [CVB will] come out just fine [in the state audit]."

Contact staff writer Tim Omarzu at tomarzu or or on Twitter @meetforbusiness or 423-757-6651.