Audit critical of Nevada tourism contracts

By Cy Ryan

Monday, April 28, 2014 | 5:30 p.m.

A legislative audit says that millions of dollars in contracts that were awarded by the state Division of Tourism didn’t follow the law.

The audit released today found that there were payments to contractors without invoices or documents to show that services were performed. About $600,000 in payments to international firms exceeded maximum amounts outlined in original contracts.

Failure to have formal state contracts “could leave the state exposed to unnecessary liabilities and costs,” Deputy Legislative Auditor Todd Peterson said.

The examination, covering fiscal years 2012-13, said the division gave two firms $7 million without going through a competitive process.

Agency Director Claudia Vecchio identified the firms as Creative Concepts and Centro Media, which purchased television and digital advertisements. Outside the meeting, Vecchio told reporters these contracts were not awarded for political favors to Gov. Brian Sandoval.

She said many of the problems cited have been corrected. She must submit a correction plan within 50 to 60 days.

Vecchio said that in some cases the division went through the purchasing division in choosing contractors.

But the audit said the division “cannot demonstrate millions of dollars in contracts for professional services were awarded fairly.”

Assemblywoman Maggie Carlton, chairwoman of the Legislative Commission’s Audit Subcommittee, said these were serious issues and it is very important that taxpayer dollars are spent wisely.

She said that in some of the contracts, the division paid twice as much as the original contract called for. She complained the division paid some contractors without documentation to back up the work performed.

“We should not be paying for something we didn’t get,” said Carlton, D-Las Vegas.

The audit showed the tourism division paid about $1.8 million in fiscal 2013 to one firm for public relations and marketing services without documentation.

The examination found that the agency contracted for $972,575 for promotions in France, Germany, Mexico, England and Mexico. But it paid out $1.6 million or $655,534 above the contract amount.

In one case the auditors found the division paid a contractor for chauffeured car services that were used by the staff of contractor. However, the division reduced the contractor’s reimbursement for first-class air fares to economy class.

In another case the division overpaid the international contractor $543 due to an error in the currency conversion formula.

Vecchio told the subcommittee the office is following procedures “every step of the way.”