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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Greene County Industrial Development Agency – Management Practices (2013M-95)


Released: March 4, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to evaluate the Greene County Industrial Development Agency’s (GCIDA) management practices for the period January 1, 2011, to September 4, 2012.

Background

GCIDA was established in 1972 and is governed by a Board which comprises six members who are appointed by the Greene County Legislature. GCIDA reported 10 active projects and processed 29 applications for assistance during our audit period.

Key Findings

  • GCIDA entered into contracts in which we believe former GCIDA Board members had prohibited conflicts of interest. Members of the Board served conflicting roles with businesses that received benefits from GCIDA. This includes lease and PILOT agreements related to the construction and renovation of a ski facility; a lease and PILOT agreement relating to the construction of an aircraft component assembly facility; and the sale of land, a line-of-credit and the issuance of bonds with a bank.
  • GCIDA had formal criteria for selecting which firms and businesses received sponsorship and economic development incentives. However, the Board cannot document that project incentives were consistently applied when approving projects because they did not prepare formal documented cost-benefit analyses.
  • GCIDA does have a process in place to monitor employment goals. However, it does not have a policy that would allow it to effectively hold businesses accountable when they do not comply with employment reporting requirements or meet specific employment goals. Four of 10 businesses receiving GCIDA benefits that we reviewed have not met their employment goals and one business did not comply with employment reporting requirements. In addition, six of 10 PILOT agreements reviewed did not have a recapture clause.

Key Recommendations

  • Establish and implement controls to help ensure that GCIDA does not enter into contracts in which an officer or employee has a prohibited interest.
  • Perform a documented cost-benefit analysis for each proposed project.
  • Ensure that all PILOT agreements contain a recapture clause that would allow GCIDA to recover the financial incentives if businesses do not produce the intended benefits. Consult with its legal counsel and determine whether some of the benefits that were provided to businesses that have not met their employment goals may be recouped.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236