Audit of Economic Development Incentive Fund Program, April 2019

7 |  A u d i t o f E c o n o m i c D e v e l o p m e n t I n c e n t i v e F u n d P r o g r a m  A p r i l 2 0 1 9 1. Grant Allocation Wage Observation  Per the Financial Incentive Grant Agreements reviewed, each agreement indicates that in order  to receive the maximum Economic Development Grant the Company must retain their current  jobs, create the specified new full time jobs, compensate employees hired at a specified  starting wage, and in any single year of the Job Creation Period, the average starting salary  wage for all full time employees hired in that year must, at a minimum, meet the Grant  Allocation Wage. If the average of the annual starting wages for the new full time jobs created  in any single year of the Job Creation Period does not meet or exceed the Grant Allocation  Wage, the new full time jobs created in that year will not qualify for a Grant allocation.  At the end of the job creation period, the company is then required to submit a job affidavit  and provide corresponding state Employer's Quarterly Reports  (RT‐6, formerly UCT‐6) to  support the job affidavit. The County reviews the information submitted, determines the net  jobs created during the job creation period, and ensures that the entity met the requirements  in order to receive grant funding.  The grant allocation is based on the number of net jobs created during the Job Creation Period  multiplied by the established rate per the agreement. The grant allocation for each Job Creation  Period is to be paid in equal payments over a future grant payout period as established by the  agreement.  The auditor identified and reviewed five Financial Incentive Grant Agreements that were  entered into after January 1, 2014 and two agreements that exceeded $100,000 for the period  of January 1, 2012 through December 31, 2013. There were a total of 19 payments made  against the agreements, totaling $878,226.  During review of the payment requests for the seven agreements, the auditor identified three  payments related to the first Job Creation Period of a specific agreement where the company  did not appear to be eligible for incentive grant funding.  In order for a new job to qualify, each new full time starting wage must meet or exceed  $32,008. In the first Job Creation Period (September 23, 2014 through September 23, 2015) the  entity created 12 new jobs and terminated three jobs (one job was created and terminated on  the same day) resulting in a total of nine net jobs that met or exceeded the starting wage  minimum of $32,008.