Visitors Bureau Will Respond With Corrective Action Plan Within 60 Days
A five month WTSB News investigation into the Johnston County Visitors Bureau (JCVB) in Smithfield prompted the County of Johnston to conduct their own internal audit of the JCVB. The audit has been completed and has now been made public.
While the WTSB News investigation focused on questionable spending over a 5 year period, an audit ordered by Johnston County Commissioners only focused on the past fiscal year. Despite the limited 12 month period, a number of problems were uncovered in the 16-page report.
The audit determined there were at least five areas of concern.
JCVB Has No Clear Understanding Of ‘Conflict Of Interest’
During the 12 month audit, the County found “there is not a clear understanding by management, board and committee members of what constitutes a conflict of interest.” The County said the JCVB should institute a formal process “to acknowledge any conflicts of interest and abstain, if necessary, from certain voting.”
Auditors also recommended the JCVB create a conflict of interest policy and employees and members disclose any conflicts of interest annually to Johnston County Commissioners. Additional action should also be taken to ensure there are “no direct or indirect conflicts prior to taking action or approving agenda items during the Tourism Authority meetings.
Among the potential conflicts found during the WTSB investigation was JCVB Board member Warren Stancil, the co-owner of two billboard companies, whose businesses receives approximately 82% of the billboard advertising budget of the JCVB or about $119,210 annually. Stancil resigned Aug. 13, 2015 during our investigation.
Three days before being sworn in to the JCVB Board on Oct. 27, 2014, Stancil’s businesses received a new billboard contract, valued at $45,000, and signed by the JCVB and President-CEO Donna Bailey Taylor.
Another potential conflict was the hiring of the JCVB Board Chairman’s daughter. Chairman Ernie Brame of Kenly voted to give Bailey-Taylor a 10 percent pay raise on April 8, 2015 just seven weeks after Bailey-Taylor hired Brame’s daughter, Ashby Brame to a newly created position as marketing and public relations manager.
Ms. Brame was given a starting salary of $39,999.96 and on July 1st received a pay increase to $40,899.96. Bailey-Taylor’s 10 percent salary increase brought her salary from $78,151.32 to $86,000.04
Alcohol Purchases With Tax Dollars Not Allowed
The County Audit determined JCVB alcohol purchases uncovered during the WTSB investigation should not have been paid for with public funds.
WTSB found a $98 bar tab at the Double Barley Brewery was part of a $870 bill for the JCVB Christmas Party in Dec. 2014. Bailey-Taylor admitted, “Several board members did taste and sample craft beers, and the charge was placed on the ticket, which was closed out on the credit card.” The JCVB was forced to repay the money. WTSB News also uncovered wine purchases at a December 2010 board meeting that cost $639. That alcohol purchase was not reimbursed.
The County’s internal CPA recommended the JCVB adopt an Unallowable Purchases Policy, which would not allow alcohol purchases to be paid for with taxpayer money. The report urged management and employees to adhere to the policy.
Missing Receipts
JCVB officials were also criticized for the lax review and approval of invoices. Bailey-Taylor had only approved 2 of 19 charges on a Dec. 2014 credit card statement. “Written approval was not included on the backup documentation for numerous charges…” the audit found.
Bailey-Taylor told the auditor she gave verbal approval. The audit said, “We reiterate that verbal approval that is not supported by documentary evidence is not sufficient proof of approval and does not provide an adequate audit trail for expenditure transactions.”
The audit was for only 1 year. The WTSB News 5 year review uncovered over 200 purchases that lacked receipts including a $95 charge for a rental car, $231.40 for Southwest Airlines,$85.94 at Food Lion, along with meal tabs, hotel room service, and a $27.35 missing receipt for Cascata Bar in New York.
No Basic Documentation
Wal-Mart, Meal Purchases Labeled As Marketing, Office Supplies
The JCVB lacked basic documentation when it came to purchases. Check request forms to pay for invoices did not always have the reason for purchase and backup documents, the audit concluded.
“Other items noticed during the audit were for Wal-Mart (reason for purchase as supplies for office) and various restaurants (reason for purchase as marketing meetings and lunch meetings.”
The auditor found several charges with no supporting documentation as to why certain purchases were made. The auditor said any purchase made should have supporting documentation including how the expense would fall into a specific category, such as meals for staff being charged as marketing expenses.
WTSB uncovered 117 trips to Wal-Mart costing taxpayers $11,487. $100 or more was spent on 55 of those trips for items billed as marketing expenses. Most of the purchases were for candy, peanut butter, apple pie, bananas, ice cream, and pop tarts. They were labeled as office supplies.
$15,647 was spent by the JCVB for meals for board members. 85 of the meals cost $100 or more. Some less expensive meals included a $29 pizza party as a “research study incentive.” The report did not mention who attended the pizza party. Most of the food purchases were labeled as marketing expenses.
Gift Cards???
Johnston County auditors could find no clear record of what happened to at least three gift cards totaling $328.95 purchased last year.
A $53.95 gift card at Carolina Premium Outlets, $50.00 gift card from Simple Twist and a $225 gift card from Simple Twist indicated they were for prizes or employee gifts but they lacked “proper documentation.”
The auditor said the JCVB should provide a copy of the contest advertisement and the winner’s information. Other documentation should be provided if the gift cards are given to other agencies or for employees.
The audit did not address a number of potential improperly held closed meetings of the JCVB Board, which may have violated the NC Open Meeting Law.
The findings of the audit were presented to Johnston County Commissioners who in turn immediately notified Donna Bailey Taylor and her executive board to issue a written statement within 60 days of how they plan to correct the issues found by the auditor.
The JCVB collected $1,065,128 in revenue last year from the 2 percent motel occupancy tax. The majority of the money comes from taxes collected in Smithfield and Selma.
