An audit of Michigan's economic development agency has revealed oversight flaws, as the Michigan Economic Development Corporation (MEDC) reportedly doled out a $10 million grant payment without confirmation that the recipient met all the necessary requirements. The MEDC, which channels millions in state funds to aid job-creating projects, mistakenly distributed an additional $10 million to a grantee who hadn't used approximately $2.9 million of their initial grant, the recent audit highlighted deficits in the grant payment system, as reported by FOX 2.
After the snafu came to light, the Office of the Auditor General urged the MEDC to tighten its procedures concerning grant payment approvals the agency lacking in adequate checks and balances to ensure the state's funds were properly expended, according to the FOX 2 report. The MEDC is mandated to ensure that grantees hit specific markers before releasing any extra funds, however, the audit exposed at least one occurrence where cash was handed out prematurely. This has reportedly been chalked up to a misunderstanding with the grantee where 'verbal communication' was deemed enough to adjust contract terms without the necessity for written agreement.
State Rep. Ann Bollin responded firmly to the situation, pushing for greater accountability for the taxpayer dollars that are funneled into large corporations under the guise of fostering economic growth. Highlighting the audit's revelations, Bollin referred to the MEDC's oversight as a "betrayal of the public’s trust" and voiced that "this audit uncovered a disturbing lack of accountability from the MEDC; it’s unacceptable," as detailed by a statement on the Michigan House Republicans website.
Calling for a response to these findings, Bollin has put forward legislation aimed at ensuring robust checks on economic development spending, including House Bill 5136 which would call for an annual audit of the Strategic Outreach and Attraction Reserve (SOAR) fund she adamant that transparency and accountability must be integral when it comes to state investments made with taxpayer money. Citing an expensive agreement with Ford Motor Company that despite its scale-down, would still run Michigan taxpayers high, she stressed: "When the state invests taxpayer dollars on economic development, transparency and accountability are non-negotiable," as per the Michigan House Republicans statement.
