Audit: Lax oversight in seafood marketing campaign

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Associated Press

Posted on December 23, 2013 at 2:32 PM

NEW ORLEANS (AP) — An audit released Monday identifies a host of weaknesses in a state board's oversight of a BP-funded seafood marketing campaign after the company's 2010 oil spill in the Gulf of Mexico.

A report issued by state Legislative Auditor Daryl Purpera's office says the Louisiana Seafood Promotion and Marketing Board's former executive director approved transactions without adequate board oversight. Ewell Smith resigned as executive director in August after lawmakers placed Lt. Gov. Jay Dardenne in charge of overseeing the program.

The audit also concluded that the board's staff did not keep adequate records for the use of tickets and other merchandise associated with a $650,000 advertising agreement with the New Orleans Saints.

In the aftermath of the April 2010 well blowout that led to the nation's worst offshore oil spill, BP agreed to pay $30 million to fund the marketing program through the Louisiana Wildlife and Fisheries Foundation.

The board and the Louisiana Department of Wildlife and Fisheries contracted with Gregory C. Rigamer & Associates Inc. to manage the program. The contract allowed the firm to hire subcontractors, including The Food Group, the Graham Group Inc. and Newsroom Ink LLC.

The audit says the firm increased "task order budgets" without board approval and failed to adequately monitor its subcontractors to ensure that their reimbursement requests adhered to contract provisions.

In response to the audit, the firm said its contract didn't specify a method for managing its subcontractors' activities. The firm also said it made "transparency and coordination a primary objective of the campaign activities from the start."

Dardenne's office terminated the firm's contract on Nov. 2.

The audit also found that Smith approved sponsorship payments above board-set limits. For instance, he approved a total of more than $419,000 in expenses for a Super Bowl sponsorship that the board had approved for only $200,000, according to the report.

In a letter responding to the audit, Smith defended his oversight of the program and said his small staff worked "under the most extreme crisis circumstances" after BP's spill.

"The staff and agencies acted with an absolute sense of urgency that never let up," he wrote.

Purpera's office said it reviewed subcontractor invoices and found roughly $3,500 in "unsupported and/or questionable purchases," including $811 in alcohol purchases, $278 for a limousine service and a $60 tip on a $23 restaurant bill.

In a letter to Purpera dated Nov. 25, Dardenne said his office already has adopted procedures that "resolve all of the weaknesses identified in your report."

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