Department of Economic Development

Skip to Content

Login   Subscribe   Site Index   Contact Us   Google Translate™

NYS Comptroller

THOMAS P. DiNAPOLI

Department of Economic Development
Examination of Center for Economic Growth, Inc.
(Issued: 08/14/2018)


Purpose

The objective of our examination was to determine if the Center for Economic Growth, Inc.’s (CEG) claims for grant funds and associated matching expenses, reporting of revenue, and procurements complied with the terms and conditions of contract C110087.


Background

The claims for payment we examined were for CEG’s activities under the Hollings Manufacturing Extension Partnership (MEP) program that occurred during the period July 1, 2014 through December 31, 2014.  The MEP program is a federal program that provides financial and technical assistance to create and support Regional Centers for the Transfer of Manufacturing Technology (Regional Centers).  DED, the Regional Center for New York State, entered into a $2.9 million contract with CEG in October 2011 to provide MEP program services, most often consisting of training classes, to small- and medium-sized manufacturers, science and technology based businesses, and start-up businesses in the Capital Region.


Key Findings

We found DED’s oversight practices were inadequate, thus resulting in CEG receiving reimbursement for: ineligible expenses; expenses not substantiated with sufficient documentation; expenses that may not have been reasonably priced; and improperly reported expenses.  DED officials told our auditors CEG would not have met the contract’s matching requirements if the items identified in our report were disallowed.  As such, it is critical that DED review the ineligible, unsupported, and improperly reported expenses identified in the report and recover any inappropriate reimbursements.

DED also failed to implement sufficient controls to recognize that CEG improperly reported revenue it earned from the MEP program.  Without a system in place to account for MEP program income, DED does not have reasonable assurance that CEG met its requirement to spend MEP program revenues on program related activities.


Key Recommendations

  • Continue to use the monitoring procedures reported to our Office in response to our preliminary audit findings and subsequent inquiries to oversee CEG, and periodically reassess the need to amend the procedures.
  • Ensure CEG provides sufficient, appropriate evidence for expenses incurred and revenues earned under the contract, and recover unsupported expenses, ineligible expenses, and unexpended revenues accordingly.


For a complete copy of Report 2015-BSE4-001, click here.


Division of Contracts and Expenditures
Bernard J. McHugh, Director of State Expenditures

Phone: (518) 474-4868 Email: stexpend@osc.state.ny.us
Address: Office of the State Comptroller, Division of Contracts and Expenditures
110 State Street, 10th Floor; Albany, NY 12236