Hotel Bookings Inflated, Long Beach Audit Says

The Long Beach convention bureau overstated its hotel bookings in fiscal year 1998-1999 and overpaid employees $23,000 in performance bonuses based on those inflated figures, a preliminary report revealed Thursday.

Long Beach City Auditor Gary L. Burroughs, who released the findings, said the initial conclusions are part of an ongoing internal audit of questionable accounting practices at the Long Beach Area Visitors and Convention Bureau.

The agency, which receives about $3 million a year from the city’s hotel bed tax, helps groups and businesses locate hotel accommodations and municipal facilities for events and banquets.

Last month, convention bureau officials began an investigation after discrepancies in sales figures surfaced for August and September of fiscal year 1998-1999. They hired the accounting firm of Ernst & Young to conduct an internal audit. Burroughs assisted.

After meeting with Ernst & Young officials, Burroughs concluded that hotel room sales were inflated for fiscal year 1998-1999 and that the bureau actually fell far short of its original report of 384,000 bookings, by 25,000 to 40,000.

As a result of the exaggerated sales figures, the agency paid $23,000 in unwarranted bonuses and incentive pay to 10 sales people, the report stated. Staff members can receive bonuses up to 10% of their annual sales.

Burroughs further concluded that the convention bureau lacked the accounting procedures to maintain the accuracy of the reporting system. He said the fiscal controls were so poor that it is impossible to determine how or why the figures were inaccurate.

Linda Howell DiMario, the bureau’s chief executive officer, could not be reached for comment Thursday. DiMario has said she welcomed the review.

In an Aug. 4 memo to her staff, DiMario said she believed that some current or former employees made the accusations of falsified bookings to other bureau officials.

Burroughs said Ernst & Young will release a final written report next week.