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Audit critical of Nevada tourism contracts, says some awarded without competitive bids

CARSON CITY, Nev. - The Nevada Division of Tourism awarded contracts without following proper procedures and made payments exceeding maximum amounts, legislative auditors said Monday.

The audit presented to a panel of lawmakers found that in half of the contracts examined, payments exceeded maximums outlined in the contracts by more than $660,000.

Auditors said that 37 per cent of payments tested lacked adequate supporting documentation. For instance, the report said the division prepaid $485,000 for television commercial production costs and the invoice stated merely, "television advertising production." The audit noted that the contract does not allow for prepayment of services.

Other invoices included similar, vague language to describe services performed, the audit said, and two vendors that acted as brokers for purchasing traditional and digital advertising were paid a combined $7 million but did not have state contracts.

"This audit is anything but hazy and indistinct," said Assemblywoman Maggie Carlson, D-Las Vegas, chairwoman of the legislative audit subcommittee. "A number of issues in this audit I believe were very serious and need to be addressed."

A lot of the criticism centred on contracts tied to the state's campaign to develop a state brand and international marketing campaign unveiled a year ago by Gov. Brian Sandoval. The brand, "Nevada: a world within, a state apart," includes television and web advertisements featuring a rendition of Cole Porter's 1940s song, "Don't Fence Me In," sung by The Killers, a Las Vegas rock band.

Claudia Vecchio, director of the Department of Tourism and Cultural Affairs, said most of the problems cited in the audit have been resolved. She also blamed some of the problems on former administrators and past practices at the agency.

But the agency rejected an audit recommendation that future contracts include deliverable requirements and payments based on meeting those objectives.

"Being stuck to a measure or a tactic erases flexibility and does not allow marketers to take an opportunistic approach to the ever-evolving ways our target audience receives information about travel destinations," the agency said in its written response.

Vecchio was named to the cabinet-level post in late 2011. She told committee members that she takes full responsibility for the audit results.

The agency was given 60 days to submit a plan for corrective action.

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