Audit: Agency failed to keep adequate records of loan program | West Virginia News
CHARLESTON, Va. (AP) – A West Virginia agency failed to keep adequate records of a loan program intended to boost the state’s economy, according to a new report.
The West Virginia Post Audit Division noted the failures of the Economic Development Authority’s $ 25 million non-recourse loan program in a report released Tuesday, The Parkersburg News and Sentinel reported.
“It is the opinion of the legislative auditor that the lending program has not achieved the expected results and what has been achieved is difficult to quantify,” the report said.
The Economic Development Authority borrowed $ 25 million and used the money to fund seven venture capital firms that are supposed to put money into the state and create jobs.
More than $ 24 million was invested in seven companies from 2002 to 2016. Auditors found that two had never invested in West Virginia and four had been subject to receivership.
The state treasurer’s office attempted to close the loan in 2019, but found missing and incomplete records, which led to the audit.
Auditors said in the report that adequate records of the loan program were not kept, so it was not clear how many jobs or businesses had been created. He also said that $ 674,222 had been repaid on the main loan, leaving more than $ 24 million in arrears.
Caren Wilcher, associate director of the Economic Development Authority under Governor Earl Ray Tomblin, said the companies had raised more than $ 190 million, including nearly $ 25 million from the loan program. Wilcher said five companies have invested $ 41 million in 25 companies and helped create or retain more than 400 jobs. She said most of the issues identified in the audit occurred under the previous leadership.
“The current management and staff of WVEDA were not employed at the start of the program,” Wilcher wrote in his response to the audit. “The management and staff involved in creating the loan program have retired from WVEDA or left state government. “
The report recommended that all future programs have clear guidelines and benchmarks to assess their functioning.
“Whether the state received a fair return on investment in terms of job creation and economic development compared to the roughly $ 24.5 that remains in principal unpaid is not clear from the information available,” said The report.
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