The state's economic development director says he will remove himself from a private promotion group because of allegations of a conflict of interest.

Dave Adams was in the Orient on state business last week when the legislative auditor general released a report that questioned Adams' membership on the board of directors of the Utah Sports Foundation, a group aiming to bring major amateur sporting events, including the Winter Olympics, to Utah.The report said Adams may have violated the state's Employee Ethics Act. The foundation received a contract earlier this year from the state and receives $247,000 yearly in state money.

Adams, now back in Utah, said Tuesday he will follow the audit's recommendations. He also questioned whether there was a true conflict of interest.

The audit said the foundation and Better Utah Inc., another companion company with similar aims, may have obtained extra money by billing Salt Lake City for expenses already paid by the state. Adams also was an officer with Better Utah.

However, the audit uncovered no evidence that Adams was padding his own pockets with extra money. The money apparently was used to build the financial base of the companies. The attorney general's office is investigating the allegations. However, the audit did uncover evidence that foundation employees received a $7,500 bonus without the knowledge of the board of directors.

Adams said, "I've always understood that a conflict of interest means somebody received something in return. I received absolutely nothing for my involvement.

"We will have to wait until the attorney general's investigation is done before we know if there has been a conflict of interest."

Adams said the audit failed to note how much good the companies had done while working with the state. Among other things, they helped attract the Olympic gymnastics trials to Utah last year, he said.

The state audit followed on the heels of a Salt Lake City audit that uncovered the possible misuse of $20,000 in city money by Better Utah. The city audit said Better Utah may have billed both the city and the state for the same expenses. The legislative audit revealed the same problems, involving about $16,000.

The state audit also said state employees used state equipment to help type the Sports Foundation's bid proposal to the state earlier this year. The foundation was the only organization to bid on the contract.

The state Public Officers and Employees Ethics Act requires employees to avoid conflicts of interest in their state duties and in the releasing of bids.