Visit Orlando bends rules in spending millions in public money, audit shows

ORLANDO, Fla. — A new audit of Visit Orlando, conducted at the urging of Orange County commissioners, found the destination marketing agency again failed to provide details of how it spends millions in public money, engaged in lobbying activities without county permission and did not follow rules as it promised five years ago, according to a memo issued Monday by Comptroller Phil Diamond.

In the three-page missive to commissioners, Diamond listed “significant issues” identified by his auditors and questioned some of the agency’s financial practices, while also alleging Visit Orlando wrongly treats interest earned from millions in tourist-tax money as if it were privately donated.

He termed the audit an interim report which is not finished.

Visit Orlando’s private funds face less scrutiny than its public funding, which comes from Orange County’s Tourist Development Tax, or TDT. Those public funds are the overwhelming bulk of its budget; Visit Orlando’s membership dues accounted for less than 3% of the agency’s $109 million funding stream, according to its 2022 federal tax return.

Diamond pointed out that Visit Orlando, last audited by the comptroller’s office in 2019, failed to follow through on about half the recommendations that its leadership had agreed to implement at that time to comply with obligations in its contract with the county.

The leadership changed in 2021 when Casandra Matej took over as president and CEO of the region’s tourism marketing giant.

“We are currently in the middle of a multi-month process as part of the Orange County Comptroller’s audit,” Matej said in an email provided by a spokesperson. “The memo was an initial status update we received on Monday. Our team is reviewing and will be clarifying items with the Comptroller’s Office, as we are committed to being good partners throughout this audit and beyond.”

Often credited with helping Orlando hold its title as the nation’s tourist capital, the not-for-profit agency did not provide the county with a complete monthly listing of all tourist-tax funding disbursements, including the payee’s name, as required, the auditors discovered.

Diamond’s memo noted Visit Orlando did not provide auditors with information for $6.3 million in TDT spending.

TDT, sometimes called a bed or hotel tax, is a 6% surcharge added to the cost of a hotel room or other short-term lodging like Airbnb or other home-sharing rental. The tax raked in $359 million in fiscal year 2022-23 and is on a similar pace in 2023-24, which ends Sept. 30.

By contract, Visit Orlando gets 30% of that haul to promote Orlando attractions to the nation and the world.

Commissioners questioned Visit Orlando’s spending in January with Commissioner Mayra Uribe proposing a “haircut” for its budget and Commissioner Emily Bonilla favoring a deeper cut of 25%. The board’s debate turned out a throng of Visit Orlando defenders and prompted state Sen. Linda Stewart to propose a bill to handcuff the board’s ability to cut the agency’budget.

Her bill died without a hearing but a county lobbyist who wrote the bill for Stewart was fired by Mayor Jerry Demings.

TDT funds have built, expanded and paid to operate the Pentagon-sized Orange County Convention Center on International Drive; financed the transformation of the former Citrus Bowl into Camping World Stadium; helped build The KIA Center, formerly known as The Amway Center; and provided funding for Harriet’s Orlando Ballet Centre, the Orlando Science Center, the Plaza Live and other venues.

In his memo, Diamond said county administrators and Visit Orlando leadership worked to clarify about a half-dozen issues raised by auditors before commissioners approved a contract amendment with the agency in May. That agreement left the agency’s TDT share at 30% of total receipts.

Diamond pointed out other issues in the memo.

Visit Orlando classifies all revenues it receives other than TDT as private funds. Auditors took issue with an agency practice to partner with tourism companies or hoteliers at trade shows, in which the agency pays the upfront fee for exhibition space with TDT funds and lets the partners pay it back later. The partners’ shares should replenish TDT funds “but are improperly classified as private funds” by Visit Orlando, they said.

Revenues collected in 2023 from partners totaling more than $700,000 for cooperative advertising or exhibition space were not included in Visit Orlando’s public funds until March 2024 — shortly after commissioners requested an audit, Diamond said in the memo.

He said Visit Orlando failed to reimburse the TDT Account about $605,000 for similar fees paid by partners in 2022.

Among other issues cited in the memo:

—In 2023, Visit Orlando held onto over $35 million in “reserve/carryover” funds without specific authority to do so.

—Visit Orlando officials participated in lobbying activities in front of state legislators in 2023 without contractually required prior commission approval.

TDT funds held in some accounts controlled by Visit Orlando earned interest at a rate of less than 1% while Visit Orlando’s private fund accounts earned interest at a rate of more than 5%. “Although not a breach of contract, this is a questionable financial practice,” Diamond wrote.

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