CVBs Ramp Up Audit Practices
By Gary Tufel -- Tradeshow Week, 6/13/2005
The best defense may be a good offense. At least that's the philosophy of some convention and visitors bureaus in the aftermath of investigations that led to the resignation of several bureaus' top executives.
To preempt problems before they arise, CVBs across the country are taking the initiative to go beyond their usual annual financial audits and conduct more extensive reviews of their operations — just in case.
"What happened in Cleveland, Memphis, Denver and elsewhere got a number of us thinking," said Greg Ortale, president and CEO of the Greater Minneapolis Convention & Visitors Assn. "Even though there's often smoke and no fire, this is a way to be preventative and protect the organization, so that if something was found, we could report it."
Ortale was referring to the special independent financial audit he had done last year. Unlike a regular annual financial audit, it reviewed all expense accounts in which funds went to individual staff members, including him.
When the Fort Worth (Texas) Convention & Visitors Bureau's contract with the city came up for renewal recently, in addition to its annual financial audit, bureau officials reviewed compliance with city-bureau agreements and booking and room-night accounting practices by convention groups.
Last year, the Durham (N.C.) Convention & Visitors Bureau voluntarily underwent a full performance review of all its operations. Bureau President Reyn Bowman called it an exhaustive examination of several hundred items, including marketing and business plans, benchmarking processes, performance measures, accounting procedures, financial reporting, organizational charts and standard operating procedures. It also conducted surveys and sessions where it got feedback from residents, civic and business leaders, and employees.
And the Irving (Texas) Convention & Visitors Bureau began an annual hotel booking audit in 2000 that has led to a two-level verification process still in place: one when a meeting is booked and another when the room nights are actually used.
The result of all this self-inflicted auditing and reviewing?
In May, the Fort Worth CVB board got a thumbs-up on its business practices from a review committee consisting of local hoteliers. FWCVB President and CEO Douglas Harman said this kind of self-examination is indicative of the new environment CVBs must work in — greater scrutiny by the public and media of CVBs' importance, provoking a demand for more accountability.
Doug Price, senior vice president of professional development for the Intl. Assn. of Convention & Visitor Bureaus, said his group provides members with a self-auditing tool, but it is not intended to replace outside audits.
"We positioned it in a way that CVBs could do a self-audit prior to considering having an outside audit done," Price said. "It is meant to be a cost-effective way to make sure things are in order."
