Sens. Martin & Harding Emphasize Importance of Evaluating Government Incentive Programs

Auditors Find State Venture Capital Firm Fails to Validate Job Creation Numbers

CT News Junkie

A new report released Wednesday by the state Auditors of Public Accounts found that the state’s venture capital firm failed to properly validate the number of jobs its efforts have created.

The 18-page report also found two other problems at CT Innovations (CI) and its subsidiary, CT Next. These include a failure to submit statutorily required reports on time, as well as failing to start a new fund required by the General Assembly.

State law requires that the Department of Economic and Community Development’s annual report include an analysis of the programs run by CI, including the number of jobs created by the program. CI reported that it created 31,950 jobs in fiscal year 2021 and 27.836 jobs the following year, the two years covered by the audit.

However, it was impossible to verify those numbers. CI does not require receipts of business assistance or incentive programs, which makes it extremely difficult for a third party to audit which companies have participated. Additionally, CI itself has not developed appropriate procedures to track two growth.

The auditor recommended that CI take special care in the future to verify the accuracy of its job creation numbers, because as it stands it is impossible to evaluate the effectiveness of programs from CI and CT Next.

CI did not dispute the finding.

Following the publication of this story, Sen. Henri Martin, Ranking Senator on the Commerce Committee, and Sen. Minority Leader Stephen Harding, released the following statement:

“A key measure of success for any taxpayer-funded government entity that is working to grow private sector jobs is: How many jobs did our tax dollars actually help create and retain? This finding from the state auditors is appreciated, as is CI’s pledge to take future corrective action steps. We are all focused on growing Connecticut’s innovation economy, but we must have processes in place to gauge our performance. Republicans will continue to emphasize the importance of evaluating government incentive programs. We must encourage and retain those programs that are working while quickly eliminating those programs that are not successful.”

Auditors Find State Venture Capital Firm Fails to Validate Job Creation Numbers