Audit Finds Meet Minneapolis Overstated Its Success by Nearly $200M
An audit determined that Meet Minneapolis, the convention and visitors association tasked with attracting tourists to the city, overstated its economic impact success throughout the last three years, by a total of nearly $200 million.
The audit, conducted by an independent city entity, sourced the overstatement to Meet Minneapolis relying on pre-event estimates instead of hard figures afterward, and to the inclusion of duplicate data, though that was deemed “unintentional.”
For 2015, the organization reported an economic impact of $430 million, instead of the actual figure of $308.3 million. For 2016, the discrepancy was $25 million – with a total actual impact of $435 million – and for 2017, instead of the correct total of $610.7 million, Meet Minneapolis reported an impact of $660 million. Significant events in this time period include the X Games in 2016 and 2017, though the audit does not include a review of Super Bowl figures.
In addition to duplicating figures and not using the most appropriate data, the audit determined Meet Minneapolis failed to arrange for a third-party auditor to assess the accuracy of its performance indicator model, as it was required to do. Other shortcomings include breakdowns in communication where discrepancies were identified but not properly relayed through the channels, or changes to procedures were made but not conveyed sufficiently, confusing both reports and readers’ interpretations of reports.
Although Meet Minneapolis did actually hit all of its goals, a key problem with overstated estimates still exists: It's a disservice to the city, as Council Member Linea Palmisano – who chairs the audit committee – told the Star Tribune that the city relies on the numbers to decide how to invest in the city, regarding, for example, the $140 million Target Center renovation.
The city has contracted Meet Minneapolis to provide genuine performance metrics to guide the city’s spending, and the city pays the organization about $10 million a year in budget allocation to do so.
“We rely on accurate performance metrics to know if our city investments are paying off and by how much. We need to know if we can trust their reports,” said Palmisano. “I just think that this was sloppy work by Meet Minneapolis.”
Another course of action taken by the city that might have been different had accurate numbers been reported is that Meet Minneapolis’ president and CEO Melvin Tennant received a salary bump in 2016 for helping bring in “$430 million in economic impact to Minneapolis,” as the Star Tribune noted. That number turned out to be off by $121.8 million.
However, in a statement sent to Twin Cities Business, Courtney Ries, vice president of branding for Meet Minneapolis, said economic impact is not one of four key performance indicators used to measure the effectiveness of Meet Minneapolis in its marketing endeavors, and economic impact is not linked to any contract incentive payments or bonuses. Economic impact is a measurement the organization has been looking to pin down a process for determination for some time.
“Conversations are ongoing to establish an agreed upon method for validating the industry-accepted standard for calculated estimated economic impact,” said Ries. “We want these numbers to accurately reflect the impact of the more than 600 events we, Meet Minneapolis, bring to the region annually.”
Ries also noted the purpose of the audit was simply to learn more about what was working well and what could be improved.
To explore Meet Minneapolis' data in full, the audit involved reviewing the contract between Meet Minneapolis and the city, interviewing staff members of the organization, looking at data from the Minneapolis Convention Center and looking at Meet Minneapolis’ dealings with the Minneapolis Visitor Information space, among other aspects.
Improper procedures were found with the MVI, in fact. Meet Minneapolis rented out space it purchased for itself to a third-party entity and misrepresented its subsequent resources by adding that revenue to its private revenue report.
Ries noted to the Strib that the audit classified its overall findings, though, as only “minor errors and missing elements,” and the success of the organization is not undermined by the audit results. In the statement to TCB, she added that human errors in their reporting also included under-statements.
The audit made recommendations to improve Meet Minneapolis' analysis process to minimize such discrepancies. Its suggestions included revising the process for economic impact indicator calculation – to better identify duplicate entities and require post-event attendance estimates instead of pre-event estimates – to revise the metric for private revenue amount and expenses incurred for the private revenue and implementing a strong communication process between Meet Minneapolis and the Minneapolis Convention Center.
Ries said they welcome the suggestions as great feedback going forward. Palmisano said the results of the audit may be a factor when the time comes in two years to consider renewing the city’s contract with the organization.