NASHVILLE, Tenn. - The General Assembly's joint subcommittee on commerce, labor, transportation and agriculture got their first look at a scathing audit of a program that was initially designed to lure film and television productions to Tennessee.

"I wanna stop you and have you go through it line by line that's how egregious this is," said State Senator Mike Bell.

The investigation by the State Comptroller details several issues with the program that began in 2006.

Auditor Vincent Finamore says the former administrators of the program, including former Revenue Commissioner Reagan Farr, didn't make sure the companies they were giving money to were actually based in Tennessee.

"Resulting in possibly the inappropriate refund of $7,536,498 in tax revenue," said Finamore.

Finamore says that's just the beginning too.

His office reviewed the program's work from 2006 to 2011 and found it gave money to 3 film projects with ties to the program's former Executive Director's spouse.

That's along with thousands of problems with expenses productions listed to qualify for incentive money.

Finamore detailed one memorable one.
    
"The allowance of the full retail price of a pick up truck for a film that had a 31 day production time," said Finamore.

The State Comptroller says it all adds up to wasted taxpayer money and it's unknown if Tennessee is going to be able to get any of it back.

The State Department of Economic and Community Development says it started making changes last year to address the concerns in the audit.

"Our department has worked aggressively since early 2012 when the Comptroller's staff shared preliminary audit details with the ECD to reform the state's film incentive program.  That reform included working with legislative leaders to repeal the film tax credit last year.  ECD has also hired an outside audit firm with expertise in the entertainment industry to audit more than a dozen different productions that were awaiting approval in early 2012," said Clint Brewer, assistant commissioner communications.

The State Department of Economic and Community Development changed the way it awards incentive money last year after learning of these problems. A spokesperson says those changes will prevent future mismanagement and will make the dealings open to the public.

(FOX NEWS' Eric Rasmussen)
SAN FRANCISCO, California - Next month the U.S. Postal Service is holding its national forum. Despite the fact the postal service is dealing with financial issues right now, officials are planning to spend $2 million on the forum. The National Postal Forum Conference in March will tee off with a golf outing at Harding Park in San Francisco. The 4-day conference will draw 4000 people to the Moscone Center. 400 of them will be staffers of the U.S. Postal Service, including the Postmaster General. Documents obtained by our Washington, D.C. bureau show the travel, $220,000 in exhibit space and other incidentals will cost the Postal Service $2.2 million. The advertised hotels, such as the Marriott Marquis and the Intercontinental, go for nearly $300 a night before the government discount. Internal Postal Service documents show beyond meetings and a golf tournament there will also be music entertainment and a Taste of San Francisco Banquet at the Marriott, featuring the foods of Fisherman's Wharf and Chinatown. At a time when the Postal Service is under fire for losing money and scrapping some Saturday mail service, one watchdog group says the government shouldn't pay to fly executives into town.

"They need to be concerned about the optics of this," says Citizens Against Government Waste's Leslie Paige. "They need to be concerned about ratcheting back some of what could be perceived as luxurious activities."

The Post Office says the conference in San Francisco will make money by creating future business and new sales leads. The other attendees are giants in the shipping world. The Postal Service says its execs would have to pay their own fees for the golfing, and will shoulder other costs. Organizers of the National Postal Forum say the event is designed to educate businesses about the services and products they offer. The Postal Service also says it earned $73,000 for every dollar it spent to send employees to a conference with clients at an Orlando resort last year.
WASTE WATCH SPECIAL Part 3