The head of a nonprofit hired by the city of Minneapolis to promote tourism and hospitality said Tuesday that an audit showing the organization overestimated its financial success by nearly $200 million revealed “minor errors,” which are being addressed.
In an e-mail to the board of Meet Minneapolis, President and CEO Melvin Tennant said the errors stem from challenges in determining how to best estimate economic impact.
“We will continue to work with the city to develop an accepted formula and process for calculating economic impact, and will ensure that our reporting is within an acceptable margin based on these agreed upon standards,” wrote Tennant.
The city audit, presented Monday, found that Meet Minneapolis overstated its impact by $121.7 million in 2015, $25 million in 2016 and $49 million in 2017 — for a total of almost $196 million. The audit said Meet Minneapolis double-counted money, used pre-event estimates instead of readily available final counts and failed to fulfill its contractual mandate to procure an independent audit in at least one case.
Meet Minneapolis is a nonprofit tasked with promoting the city as a global destination, and drawing meetings and conferences to Minneapolis, along with major sport events like the Super Bowl and X Games. Though it’s independent from city government, Meet Minneapolis receives about $10 million annually from Minneapolis taxpayers — the bulk of its budget — and its board of directors includes seven City Council members.
Council Member Linea Palmisano, who chairs the audit committee, on Monday called the errors the result of sloppy bookkeeping. She said the city relies on Meet Minneapolis’ estimates to know where to invest money into the city.
Several members of the board, including City Council members, did not respond Tuesday to requests for comment.
Tennant also declined to comment, but he has publicly touted the economic success of Meet Minneapolis over his tenure.
“Remember how we called 2014 the ‘Best. Year. Ever.’?” Tennant said in a 2016 news release. “Well, 2015 was even better. Through the efforts of the Meet Minneapolis team and the entire hospitality industry, 2015 is one for the record books. Again!”
In the e-mail to the board, Tennant said the Minneapolis Convention Center requested the audit “to gain knowledge about what was working well and what could be improved” before Meet Minneapolis’ next contract renewal. He said Meet Minneapolis overestimated and underestimated its economic success over the years “based on industry standards.” He said the incorrect estimate “declined significantly after we identified the error in 2016.”
Tenant quoted a portion of the audit that states, “Meet Minneapolis provided services in line with its contract but had minor errors and missing elements in its reports to the City.”
The city awarded Meet Minneapolis $500,000 in bonuses last year for completing specific goals, but the auditor and Tennant said they were not tied to the broad year-by-year economic impact. The goals included private money spent in Minneapolis and revenue coming through the Minneapolis Convention Center.
According to the audit, the city failed to request the documentation showing Meet Minneapolis completed those goals and instead relied entirely on verbal reports.
Mayor Jacob Frey thanked the audit committee and Palmisano for making sure “transparency will be front and center for our city contractors. Obviously, the methodologies used to forecast the economic impact were flawed, and this information will help ensure accountability in our processes moving forward.”