We conclude that some Starmark expenditures are not reasonable and appropriate. We conclude that Starmark does not consistently comply with contract terms.
We found $549,925 in passthrough expenses which were routed to Starmark to pay, and then reimbursed to Starmark through their invoices to the County. This is a circumvention of the County’s payment processes and avoids the normal scrutiny that would be applied to County payments.
Questionable invoices totaling $284,188 were paid through Event Participation and Tradeshow Funds (Funds), which were collected from hoteliers and held and managed by Starmark at the request of CVB. However, there was no supporting documentation detailing how the fees collected from hoteliers were established and how the vendors were selected for the services paid by the Funds. These Funds should have been deposited into and paid from the County’s bank account.
Our review noted inadequate contract administration and management oversight over the Starmark contract in the areas of project proposal review and budget approval, passthrough expenses, and invoice review processes. We also noted that CVB assigned a new contract administrator to oversee the Starmark contract since November 2017. As advised by the new contract administrator, CVB started to request supporting documentation for estimated hours billed for non-retainer services and provide a written approval for project initiation and budget in early 2018. This constitutes an improvement in contract administration.
Our report contains a total of 17 recommendations for improvement. We appreciate the cooperation and assistance provided by CVB and Starmark throughout our review process.
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