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Audit Objective

Determine whether Washington County Local Development Corporation (Corporation) officials provided adequate approval and oversight of the revolving loan program.

Key Findings

Corporation officials did not provide adequate approval and oversight of the revolving loan program:

• Six of the 11 loans reviewed were approved and paid but lacked required documentation of a commercial loan denial letter.
• The Director did not adequately follow up with seven of the 14 businesses in order to verify that funds were used for the approved purpose.
• Loan agreements do not have job creation or retention enforcement mechanisms.
• Business job creation and retention numbers were not verified.

Key Recommendations

Officials should:

• Ensure commercial loan denial letters are on file.
• Ensure businesses are creating and retaining jobs and using loan funds in compliance with the terms of the agreements.
• Develop written policies and procedures outlining the actions to be taken when job creation and retention goals are not met.

Corporation officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.