State Marketing Efforts Lacked Documentation, Oversight


ANNAPOLIS (Nov. 20, 2008) - Poker tournaments. Catered cruises. Hollywood parties.

The events, bankrolled by the state, were held to boost business in Maryland. Their effectiveness, however, was never properly documented.

All together, the Department of Business and Economic Development spent $184,000 on marketing events in recent years that were not "adequately evaluated and documented," said a state audit. Released Wednesday, the report also said the department paid employees with no job duties, bought airline ticket upgrades without required approval and gave tax breaks to firms without verifying their eligibility.

The report from the Office of Legislative Audits gave a peak into the state's efforts to attract investment and grow local companies. However, as outlined in the report, which covered August 2004 to September 2007, some of these efforts lacked the required documentation and oversight.

For instance, the Maryland Film Office, a unit of the department, spent roughly $122,000 to host four parties at a bowling alley and bar in Hollywood, Calif., to promote the state's film industry. But the department "did not prepare a written report on the effectiveness of any of the four events," the audit said.

In addition, the department spent roughly $30,000 on a chartered yacht and two catered cruises on the Chesapeake Bay. The events were meant as networking opportunities for state employees and Maryland business people, but only a fraction of those invited actually attended, and "most" attendees were state workers, the audit said.

Two poker tournaments held in October 2005 cost the state roughly $32,000 and were also meant as networking opportunities. Only one report was written and it was deemed inadequate.

David Tillman, a department spokesman, said Wednesday that the agency agreed with the "lion's share" of the audit.

"The agency is looking forward to implementing some additional measures to make sure that when state money is invested to attract and grow companies, that those dollars are well spent," he said.

The findings were not limited to marketing efforts. According to the report, the department spent nearly $11,000 on office space for an out-of-state contractor, despite knowing the contractor had chosen to work from home.

The agency also spent $13,000 on airline ticket upgrades without departmental approval, and paid roughly $150,000 to a dozen workers who "were not accountable for performing or completing any [department]-related duties."

In a response enclosed in the audit, the department agreed with most of the report's recommendations and findings, including the need for better-documented promotional events. But it disputed others. For instance, it disagreed that the department regularly failed to verify the eligibility of companies receiving tax credits.

Still, the agency agreed that in 2006 it incorrectly issued a tax credit for $100,000. Upon learning of this mistake, the department said, it notified "both the applicant and the Comptroller that the credit was issued in error."

Capital News Service contributed to this report.

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