Job Development Authority
Internal Controls Over Procurement and Contracting Activities and Conflict of Interest The Job Development Authority (JDA) provides loans to companies seeking to expand facilities, build new plants, and acquire machinery and equipment. We assessed the adequacy of JDA’s system of internal controls over its procurement and contracting activities and its processes for identifying and preventing conflicts of interest. We found that improvements were needed in the oversight and governance provided by JDA’s Board of Directors, as the Board was not asked to approve JDA’s annual budget and was provided with no routine reports about JDA financial operations other than an independent auditor’s annual certification of JDA’s financial statements. In addition, even though loans of $11.9 million (10.6 percent of JDA’s aggregate principal balance of $111.9 million) were in default at the time of our audit, we found no evidence the Board was routinely informed about loan defaults.
We also found that improvements were needed in the conduct of Board meetings. Meetings were not held as frequently (monthly) as required by JDA’s by-laws, the required number of Board members was not always present when decisions were made, Board members did not always receive their informational packages seven days prior to their meetings, and Board members who attended meetings by telephone were allowed to vote even though this practice is considered by the Committee on Open Government to be contrary to provisions of the State’s Open Meeting Law. We recommended that a number of improvements be made in the operating practices of JDA’s Board of Directors.
For a complete copy of Report 2004-S-32 click here.
For a copy of the 90-day response click here.