Audit Documents Theft of $11,508 at the Southeastern Massachusetts Convention and Visitors Bureau
BOSTON - State Auditor Suzanne Bump today issued an audit of Southeastern Massachusetts Convention and Visitors Bureau, which found that inadequate safeguards lead to the theft of over $11,000 by a contracted accountant.
Today’s audit was initiated as a result of a Chapter 647 report filed with Office State Auditor (OSA) by the Massachusetts Office of Travel and Tourism (MOTT). Chapter 647 of the Acts of 1989 requires all state agencies to report the loss or theft of state property with the OSA.
The audit makes public that a consultant hired by the SMCVB to perform bookkeeping services stole $11,508 in Bureau funds over a fourth month period in 2011.
In May of 2011 the SMCVB was alerted that the contractor was terminated by another client for theft. After an internal review the SMCVB determined that $5,300 in checks had been fraudulently prepared and endorsed by the contractor. The SMCVB entered into an agreement with the contractor allowing her to continue performing bookkeeping services in order to repay the theft of funds, but she was terminated prior to fulfilling the agreement. A subsequent review conducted by the SMCB in the fall of 2011 identified an additional $6,200 in fraudulent checks prepared by the contractor.
At the time of the audit, the SMCVB filed a claim for this loss with its insurer but did not notify any law enforcement agencies of the theft.
Upon review, state auditors found that the SMCVB had not developed and documented any written policies, procedures, or guidelines over its operations to safeguard its resources against such theft.
The audit also found that the SMCVB did not comply with two requirements of a 2011 grant it received from MOTT. First, despite being required to match the funding provided by MOTT under this grant dollar-for-dollar with non-public funds, the SMCVB only matched $11,928 of the $62,431 it received, and further violated its agreement by not returning the unmatched funds totaling $50,503 to the Commonwealth. Secondly, the SMCVB did not have a comprehensive, independent audit conducted of the expenditure of grant funds, as required by its agreement with MOTT.
“We appreciate that MOTT was conscientious in its supervision of the SMCVB and brought this to our attention,” said Auditor Bump.
In addition, the audit found that the SMCVB has not established a comprehensive conflict-of-interest policy for its board members, and during the audit period, the Bureau hired one of its board members as a broker to sell one of its properties, creating a potential conflict-of-interest situation.
Among other recommendations, Auditor Bump has called on the SMCVB to review its internal control protections against theft, to return the $50,503 in unmatched grant funds to the Commonwealth, and to adopt an effective conflict-of-interest policy for its board members.
The SMCVB, originally incorporated in 1966 as the Tourist Council of Bristol County (TCBC), was established primarily to promote tourism and recreational activities within Bristol County. In 2005, the TCBC changed its name to the Southeastern Massachusetts Convention and Visitors Bureau, Inc. The New Bedford based tourism office has two part-time employees and is governed by a 12-member board. In 2010 SMCVB received $241,658 in revenue and its expenses totaled $437,938.
The Office of State Auditor Suzanne Bump conducts financial, performance, and technical assessments of state government’s programs, departments, agencies, authorities, contracts, and vendors. With its reports, the OSA issues recommendations to improve accountability, efficiency, and transparency.