News: CJ Exclusives

Audit Slams State’s Major Jobs-Incentives Program

JDIG program criticized for not verifying jobs actually were created

A new state audit has hit the state’s primary jobs-incentives program for not following up to make sure promised new jobs actually are created.

The report released Monday by state Auditor Beth Wood cited the Job Development Investment Grant (JDIG) program for not independently verifying that jobs were created, for not presenting all potential projects to the Economic Investment Committee charged with making the grants, and for not providing measurable criteria for determining grant award amounts.

Wood said that the Commerce Department hadn’t verified that new jobs were actually created in North Carolina, not just transferred from one company’s North Carolina operation to another in-state plant.

“You can’t transfer jobs from one location to another in North Carolina and that job count as an eligible position for JDIG money,” Wood said.

Wood said that state government allowed companies to self-report.

“At least Commerce thought they had a methodology,” Wood said.

The audit covered JDIG grants and operations in 2010 and 2011, which was before the current administration of Gov. Pat McCrory came into power.

The audit recommended that the Commerce Department establish a method of verifying job creation independently. It also recommended that the department document with memos why applications never reached the Economic Investment Committee. And it recommended that the department establish measurable criteria for providing award amounts.

In the department’s response, Commerce Secretary Sharon Decker noted that she has been in her current role for six months.

“As in most cases with this type of review, we found areas of agreement with your recommendations and some areas of differences,” Decker wrote.

Decker wrote that the department would outline measures for providing grants by Aug. 15. She also said that quarterly lists of applicants would be provided to the committee.

And Decker said that her office would examine best practices in other states to find out how to best verify that new jobs were indeed eligible for awards.

Barry Smith is an associate editor of Carolina Journal.