Comptroller Maragos: Former County IDA Gave Financial Assistance with Little Regard for Taxpayer Benefits
May 3, 2011
An audit by Nassau County Comptroller George Maragos of the Nassau County Industrial Development Agency (NCIDA) found numerous deficiencies in management and the process used to grant financial assistance. The audit covered the period 1997 to March 31st, 2010 and was undertaken at the request of the new IDA Board.
“The Nassau County IDA is an important economic development engine for the County,” Comptroller Maragos said. “In 2009, it had 119 active projects totaling approximately $2.3 billion in investments. Unfortunately, the NCIDA records did not clearly describe the benefits to the taxpayers for the financial assistance granted on most projects. It appears that Nassau County IDA granted financial assistance without consistently evaluating the benefits to the taxpayers. ”
The audit team’s assessment of 21 projects prior to 2010 determined that in no case did the NCIDA obtain an independent cost benefit analysis prior to awarding financial assistance to the companies. Moreover, while the NCIDA reported that certain employment goals were met, they failed to verify job certification data provided on all projects.
The significant audit findings include:
- The NCIDA granted financial assistance to most projects without formal cost benefit analysis by an independent third party;
- The prior Executive Director received a salary increase without evidence of approval by the Board of Directors for such action;
- The NCIDA lacked written detailed guidelines for evaluating and granting project PILOTS as well as standardized agreements;
- The NCIDA did not sufficiently monitor applicants’ projected employment goals and other benefits;
- Prior to 2010, the NCIDA lacked policy on the treatment of recaptured project benefits; and
- Weaknesses were noted in the NCIDA Accounting, Administrative and Personnel Practices and Internal Controls.
Comptroller George Maragos commented that, “I am pleased that the current NCIDA Board has either implemented most of the audit recommendations or is in the process of doing so. The changes recommended in the operation of the NCIDA will significantly improve the economic development in the County, increase benefits to the taxpayers and enhance transparency.”
The full report is available by clicking on the link below
