Monday, October 2, 2000 A question of ethics   Audit: Convention board should publicly air the findings on sales figures. Last week, the board of directors of the Long Beach Area Convention and Visitors Bureau (CVB) received copies of a financial audit by Ernst & Young. To their credit, CVB board members promptly disclosed the complete contents of this audit, despite the fact that it exposed problems and shortcomings within the bureau. This audit showed that during the fourth quarter of the fiscal year, CVB management gave itself credit for thousands of room nights that were not supported by documentation, and thus overpaid commissions of $19,500 to its staff. These inflated sales statistics were then officially reported to the CVB board of directors, and passed along to city officials. Many local businesses rely on these statistics for their own planning and budgeting. However, because of the audit's narrow scope, auditors could not conclude whether the misrepresentations and overpayments occurred as a result of deliberate falsification of records, or as a result of just plain sloppy management and inadequate accounting procedures. Sloppy management is avoidable. It can often be solved with good training and careful monitoring of performance. Inadequate accounting procedures can be replaced by proper procedures. But deliberate misrepresentation of key performance measurements would represent a serious breach of mismanagement ethics that would not be tolerated by most companies. In the CVB, a quasi-public agency funded almost entirely from tax dollars, standards should be even tighter than in the private sector. Last week, a second audit of the CVB was concluded and released to the executive committee of the CVB. Unlike the earlier one, this was a "personnel" audit which contained information gleaned from interviews of dozens of former and current employees of the CVB. It presumably addresses issues that include not only employee attitudes and opinions regarding the quality and style of CVB management, but also the testimony of those employees regarding the circumstances surrounding the CVB management's misrepresentation of sales data and overpayment of commissions. Linda Howell DiMario, CEO of the Convention and Visitor's Bureau, has said that these misrepresentations were unintentional, and that the integrity and character of CVB management is unblemished. If so, she deserves to have her name and the names of her key executives cleared of any intentional wrongdoing, and she deserves an apology from anybody who has asserted otherwise. If CVB management was not involved in deliberately deceiving its board of directors (and subsequently, city officials and citizens whose tax dollars pay the bulk of CVB operating costs), nothing will do more to put this issue to rest once and for all than the release of a full and unedited version of this personnel audit. At the very least, City Manager Henry Taboada, City Auditor Gary Burroughs, Mayor Beverly O'Neill and members of the City Council should be given full and unabridged copies of the personnel audit. After all, these are the people responsible for making sure that all tax dollars which belong to the citizenry are managed and spent ethically and effectively. They deserve to know all of the details. Although they may have to swallow hard, the right thing for the CVB board to do is to disclose this audit intact. They should avoid any temptation to hide behind the cloak of being a "private" company, because where the public's money is concerned, full disclosure is always the right choice. Burying this audit would only appear to make the CVB board complicit in the problem. We hope that this personnel audit will wipe away any questions regarding the integrity of the management of the Convention and Visitor's Bureau. If it does, then the CVB board needs to fix any procedural insufficiencies and move forward with selling convention and tourism for the greater Long Beach area, with Linda Howell DiMario leading the charge. After full disclosure, if the ethical behavior of CVB management remains in serious question or doubt, the CVB board will have to make some hard decisions regarding the future effectiveness of its management team. We think city officials and the public will support the decisions, no matter how difficult, if the board continues to be open and forthcoming.