Auditor: Export claims a sham

An office of the Missouri Department of Economic Development can't back up its successes, Claire McCaskill says.

JEFFERSON CITY, Mo. -- A state agency that assists Missouri companies in securing contracts to export goods to foreign countries can't back up many of its claims of success, a state auditor's report issued Thursday says.

State Auditor Claire McCaskill's report looked at 42 export sales totaling $1.6 billion that the Office of International Marketing says it helped secure. The report says no documentation was found to back up the claim for 60 percent of those sales. The marketing office is part of the Missouri Department of Economic Development.

Over a three-year period ending June 30, 2004, the marketing office took credit for $5.5 billion in export sales. The audit says the agency padded that number by counting sales in which a company seeking a foreign contract did all the work and marketing office officials simply provided encouragement to the buyer late in the process.

In the 2004 fiscal year, for example, the marketing office claimed credit for $1.3 billion in export sales. Of that amount, $1.2 billion was for sales in which the agency had little involvement, according to the audit.

The audit also says the marketing office is reporting export sale amounts without checking the accuracy of its figures. In one instance, a company was awarded only a portion of a $6 million project, but the marketing office counted the total amount.

In a response included in the audit, the Missouri Department of Economic Development agrees with the findings and says steps have already been taken to ensure more accurate reporting. Department spokesman Paul Sloca noted the department was under different leadership during the period in question.

"This is something that occurred under the previous administration," Sloca said. "We are reviewing the process and looking at ways to better track what our involvement is."

Sloca said the marketing office played an important role in helping Missouri to achieve a record level of exports last year, a mark the state is on track to break this year.

The marketing agency operates offices in Korea, Ghana, Japan, Mexico, England and Germany.

In a separate audit also issued Thursday, McCaskill's office criticized the Missouri Division of Tourism, another branch of the economic development department, for spending $95,000 over three years on promotional merchandise, such as T-shirts, hats and bumper stickers. The audit says the expenditures are an unnecessary and wasteful use of taxpayer resources. In the past, McCaskill has taken other state agencies to task for spending on promotional items.

In its response, the division says such spending is appropriate in its case because it is by nature a promotional agency. Spending on giveaway items and other efforts to increase tourism in Missouri reap an economic return by attracting more visitors to the state, the division says.

Sloca said a record 37 million people visited Missouri last year generating $13.5 billion in tourism-related economic activity.

mpowers@semissourian.com

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