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Audit: Meet Minneapolis overstated impact by $196M over 3 years

The audit states that due to "likely double-counting," Meet Minneapolis overstated its economic impact by $121.7 million in 2015, $25 million in 2016 and $49.3 million in 2017, for a three-year total of $196 million.

MINNEAPOLIS - An audit of Meet Minneapolis, the organization the city contracts with to attract tourism and big events, revealed errors that resulted in a significantly overstated economic impact.

The audit, completed on June 11, said that the economic impact figures from Meet Minneapolis were overstated due to "unintentional inclusion of duplicates."

READ: Full Meet Minneapolis Audit

The audit committee also found that Meet Minneapolis relied on pre-event attendance estimates when determining impact, instead of using more accurate estimates made after the events had taken place. The post-event estimates were on average higher, so that led to underestimates, the audit said.

The audit stated that due to "likely double-counting," Meet Minneapolis overstated its economic impact by $121.7 million in 2015, $25 million in 2016 and $49.3 million in 2017, for a three-year total of $196 million. Auditors say Meet Minneapolis did exceed its goals each of those years, but overestimated its impact repeatedly.

Meet Minneapolis also failed to have a third-party audit done, which was required in its contract, according to the audit.

Auditors also found that the city of Minneapolis did not request or receive written documentation to confirm that Meet Minneapolis was meeting its Key Performance indicators, instead relying on verbal debriefs.

Minneapolis City Council Member Linea Palmisano, who chairs the audit committee, called the estimations "sloppy."

"I don’t think they were intentionally fudging those numbers, but we really need to trust these reports," she said. "I understand calculating economic impact is always going to be an estimate by nature, but if we are going to continue offering contracts with public dollars attached to places like Meet Minneapolis, then we need to get it right."

Mayor Jacob Frey also offered a statement.

“Thanks to the good work of Council Member Linea Palmisano and the Audit Committee, 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.”

Meet Minneapolis provided KARE 11 with the following statement:

The purpose of the audit was to learn more about what was working well and what could be improved, and we appreciate the feedback from the city in order to make changes and improve processes. You can read the full report online, including a more detailed response on page 21.

First and foremost, four key performance indicators measure the effectiveness of Meet Minneapolis in marketing and selling Minneapolis as the destination of choice for meetings, events and leisure travelers. We continue to meet and exceed those performance metrics.

Economic impact is not a key performance indicator in our contract with the city and, by nature of its compilation, is an estimation. Alongside other metrics, it provides an indicator – not an exact measurement – of the broader health of the tourism economy in our community. The estimated economic impact number was not used as a measurement for Meet Minneapolis contract incentive payments or bonuses.

Meet Minneapolis has met with the Minneapolis Convention Center and the City of Minneapolis Finance Department on numerous occasions to discuss the use of an industry economic impact calculator. Conversations are ongoing to establish an agreed upon method for validating the industry-accepted standard for calculated estimated economic impact. We want these numbers to accurately reflect the impact of the more the 600 events we, Meet Minneapolis, bring to the city annually.

As we worked through this process, we provided numbers as part of our report that included human error. As noted in the audit, this documented number contains both over and under stated amounts. In addition, our process dramatically decreased anomalies within a margin of error in 2016 (5%) and 2017 (7%).

We will continue our internal training to ensure that documented, estimated impact calculations minimize overstatements. Regardless of the overstatements, Meet Minneapolis still met its established measurement goal for this indicator during all three years.

We appreciate the insights and feedback and will work with the city to make changes and improve processes.

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