Auditor questions spending by seafood promotion board

Advocate file photo by DERICK HINGLE -- A Legislative Auditor’s report released Monday finds a series of questionable financial practices in the operations of the Louisiana Seafood Promotion and Marketing Board. Show caption
Advocate file photo by DERICK HINGLE -- A Legislative Auditor’s report released Monday finds a series of questionable financial practices in the operations of the Louisiana Seafood Promotion and Marketing Board.

Group’s financial practices suspect

A Legislative Auditor’s report released Monday found a series of questionable financial practices in the operations of the Louisiana Seafood Promotion and Marketing Board.

The audit review covered spending related to $30 million BP agreed to provide for a seafood marketing program as part of Gulf recovery efforts after the 2010 oil disaster.

The report covered activity through June 30. As of then, $16.8 million of the BP money had been spent, the auditor said.

The auditor stated bills for media efforts and events promoting Louisiana seafood were paid without proper receipts, and contracts did not get the required approval by the state Office of Contractual Review. Additionally, board members and others received free New Orleans Saints tickets and other promotional items such as autographed Drew Brees T-shirts as part of a $650,000 sponsorship agreement. Adequate records were not kept on who got all the items, auditors said.

The report, issued by Legislative Auditor Daryl Purpera, also questioned actions taken by the board’s former executive director, Ewell M. Smith, including transactions he entered into without “effective oversight” from the board and event sponsorships in excess of amounts approved by the board.

The seafood board’s administrative functions moved from the state Department of Wildlife and Fisheries to the Department of Culture, Recreation and Tourism effective July 1.

Lt. Gov. Jay Dardenne requested the financial review as his office became responsible for the board’s activities.

Dardenne said his office already adopted procedures to resolve all the weaknesses identified in the report.

He said the office has also initiated “a full compliance review” of all contract payments made prior to the board’s transfer, as recommended by Purpera.

“We have been looking closely at monies they have been expending in the past. We have raised a number of questions about some of the spending that has been done. We are giving the vendors who no longer work for us a chance to address them,” said Dardenne. “We believe there may have been some overcharges and inappropriate expenditures.”

“If that review reveals funds were paid in violation of contract terms, our office will initiate recoupment,” Dardenne said.

Dardenne hired Karen Profita as the board’s new executive director.

In addition, a contract with GCR Inc., which had been paid $250,000 annually to manage contractors involved in the seafood marketing effort, has been canceled “as a matter of convenience, not (for) cause,” Dardenne said.

With that move, three subcontractors hired through the firm for work such as advertising and coordination of promotional events also are no longer being paid by the board, he said. The subcontractors were paid separately.

Dardenne said the work is now being done in-house and through the tourism department’s advertising agency, called Trumpet.

Wildlife and Fisheries Secretary Robert Barham said his agency had no real control over the board’s operations as it existed as a quasi-autonomous entity.

Smith, the board’s former executive director, filed a two-page response in which he said proper procedures were generally followed, including Wildlife and Fisheries procurement policies. The board was brought into the loop on marketing activities, he said.