Dispute hits Mass. travel account

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The Massachusetts Office of Travel & Tourism and its ad agency, Houston Herstek Favat, Boston, were cited by the state inspector general for irregular handling of funds. The inspector general charged the travel office improperly advanced more than $5 million to the ad agency in 1995 and 1996, giving Houston Herstek interest-free access to the funds before bills had to be paid. Under state finance rules, payment by state agencies is made only following the delivery of services by contractors, the inspector general said. The travel office and Houston Herstek contend the pre-billing payment practice was in accordance with signed contracts. No penalties have been levied. The travel office is in the midst of reviewing agencies for its account, with future spending estimated at $4 million to $10 million a year. Houston Herstek is a finalist. The controversy may delay and alter the agency review process.

Copyright May 1997, Crain Communications Inc.

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