The semi-independent Oregon agency overseeing tourism initiatives should be more transparent about managers' pay and strengthen controls on contracting, Secretary of State Bev Clarno said in an audit report released Thursday, Feb. 13.
The Oregon Tourism Commission, also known as Travel Oregon, is a small agency that is supposed to help boost Oregon's $11.8 billion tourism industry. While Travel Oregon is subject to government ethics and public records and meetings laws, it is exempt from some laws that govern public spending and pay.
"Travel Oregon is not subject to many of the existing mechanisms that provide oversight, transparency, and accountability for taxpayer dollars," auditors wrote. "With continuous funding, autonomy, and exemption from some state laws, it is therefore even more important for Travel Oregon to be independently transparent and accountable about its use of taxpayer dollars to ensure appropriate stewardship of public funds."
The agency's budget has tripled in the past decade, due in part an increase the lodging tax rate in 2016. That's where the agency gets its revenue. Oregon, at about $32 million per year, now has the eighth-largest state tourism budget in the country and ranks sixth among state governments spending on tourism per capita.
The agency could seek more competitive pricing for services like marketing, the auditors wrote. About half of the agency's two-year budget goes toward marketing. Auditors looked at 77 contracts the agency entered between 2017 and 2019, finding that Travel Oregon has "sufficient" procedures to oversee contracts. But some vendors didn't issue invoices that had the level of detail that the contracts required, and in two cases vendors sought reimbursement for travel expenses not allowed in their contracts.
Auditors also pointed to management salaries, finding that managers at Travel Oregon "are some of the highest compensated managers" compared to managers at state agencies who "oversee more expansive and complex budgets; manage large numbers of employees and contractors; and perform many diverse, technical and critical government services, including essential public health and public safety responsibilities."
Executive salaries at Travel Oregon have increased 76% since 2012. Chief Executive Officer Todd Davidson received gross pay of about $31,000 a month as of June 2019.
"While the Oregon Tourism Commission has the freedom to set the CEO's compensation and the CEO to set the employees' compensation, the agency should take steps to ensure it is accountable to taxpayers for how it decides to compensate staff with public monies," auditors wrote.
Auditors said the agency could improve its controls over contracts, should consider whether to put all contracts out for a competitive bid above a certain cost, and retain studies by consultants and other documents to "support compensation decisions" and provide compensation information to the nonpartisan Legislative Fiscal Office when the agency reports its revenues and expenses.
In a response to the audit, Davidson said the agency agreed with auditors' recommendations and would put them into place.
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