One of the contracts allocated 1.75% of the lodgers tax to thebureau and expired at the end of 2003. In 2002, that amounted tonearly $4.9 million. The other contract allocated $470,000 in 2002and $418,000 in 2003 to the bureau to promote the ColoradoConvention Center.

The audit shows the bureau failed to maintain financial recordsin sufficient detail and in such a manner as to allow an accurateaccounting of how city funds received by the bureau had been spent,specifically, whether any of those funds had been spent on alcohol.The contracts prohibit the expenditure of city funds onalcohol.

The audit does note, however, that the bureau accepted therecommendations and has made the necessary changes to comply withall recommendations in the audit findings. Gallagher says thatwhile he was troubled that the Bureau had violated provisions ofthe contract, he was pleased that the necessary changes were beingmade.