DECD Must Be Held Accountable for Its Investment of Taxpayer Dollars

As a part-time legislature, we may be out of session and back at work in the private sector, but the legislature’s Finance Committee continues to have meetings. Today we had a hearing on a state audit report on the Department of Economic and Community Development (DECD).

Connecticut taxpayers fund this department with an expectation that it will produce business and job growth and retention for their investment. That is why grilled this agency about the audit report, which found inaccuracies in information provided by DECD, as well as under- and over-stating the numbers about businesses that received substantial investment dollars from the state.

The State Auditors of Public Accounts report found that the way DECD reports on its programs makes it look like they are more successful than they really are. The report’s concluding comments stated:

“(By) Including total project costs attributable to funding received from multiple programs in the economic impact analysis for each program provided funding, (it) would overstate the impact that each program had individually. In addition, even though the department does not report the aggregated amount of economic impact for all programs, a reader looking at the impact for all individual programs would conclude that the total impact of the DECD-administered business assistance and incentive programs is greater than it actually is.”

When asked about the audit’s finding of mistakes and incorrect information, DECD Commissioner Catherine Smith responded, “Yes, this is an unacceptable level of errors and inaccuracies.”

Some of the problems auditors find are overstated revenues, wrong inputs in calculations, lack of disclosure of write offs and loan forgiveness, and a lack of internal controls.

When asked about the process for recovering state funding from companies that don’t meet the terms of their agreement, Commissioner Smith was unable to provide an answer.

The auditor’s findings and Commissioner Smith’s responses demonstrate why such scrutiny is warranted and that even more oversight is needed. Connecticut taxpayers deserve to know that the state’s investment in economic development is producing measurable results that grow our state’s economy.