A report from the Auditor’s office says the Division of Tourism has been spending money it doesn’t have, and paying off the difference later.

The review found the Division of Tourism and the Tourism Commission budgeted to spend more than available in fiscal years 2010 and 2011. It paid $4 million dollars of fiscal year 2010 expenditures with its fiscal year 2011 appropriation, and plans to pay $4 million of fiscal year 2011 expenditures from its 2012 appropriation.

Deputy State Auditor Harry Otto says that isn’t sustainable for an agency whose total budget has already gone from about 20 million dollars to about 13 million dollars in the last 3 years. He says if that annual budget amount continues to decline, the amounts being carried over will become harder and harder to pay off.

Division Director Katie Steele Danner says that current payment arrangement stems the Division being in a constant, 3 year fiscal cycle. She explains, Tourism does not reimburse any media for advertising until it runs, resulting in the carry-over of expenses from fiscal year to fiscal year. She notes, the Commission recently voted to move from an accrual to a cash-based accounting system under direction from the Office of Administration. The Commission is currently getting dual reports, of the cash basis and the accrual basis which is where obligations are made but not being reimbursed.

Otto is recommending the Division quit forward spending and pay off the remaining 4 million dollars of its 2011 expenditures incrementally in the next few fiscal years’ appropriation.