The Joint Legislative Audit & Review Commission (JLARC) has released a scathing report on the Virginia Economic Development Partnership (VEDP). JLARC had eight findings and 35 recommendations.<\/p>\n
Findings Summary<\/em><\/p>\n Fraud and Financial Loss<\/em> Staff Accountability<\/em> VEDP Agency Response Prompts Further JLARC Response<\/em> Official Comments<\/em> House Speaker William J. Howell has also released a statement on the report. \u201cToday\u2019s\u00a0JLARC\u00a0report on VEDP is extremely disappointing. VEDP lacks the basic practices necessary for effective management and marketing of Virginia\u2019s economic development activities. It is important that we do everything we can to get VEDP back on the right track so that Virginia can remain competitive when attracting new jobs and investment. I appreciate JLARC\u2019s work to uncover these problems and I look forward to working with my colleagues to fix them.\u201d<\/p>\n\n
\nJLARC found that 46% of 133 projects did not meet their individual requirements in the Commonwealth Development Opportunity Fund ($58.7 Million). “VEDP\u2019s approach to administering state incentive grants has been highly unstructured and has left the state exposed to avoidable risk of fraud and poor use of limited resources. VEDP staff responsible for administering incentives exercise an undue level of discretion when awarding, monitoring, verifying, and enforcing performance contract requirements such as clawbacks (repayments).”<\/p>\n
\nOne of the most surprising recommendations is that JLARC has included a recommendation for VEDP to track the time staff work and establish penalties for staff when they don’t come to work. “According to multiple staff, including staff in VEDP\u2019s administrative offices, an unknown but significant number of staff have routinely shown up for work late, left early, and have not reported their leave.” JLARC states the extent of this problem is unknown. “When a staff member was asked whether their most recent performance evaluation was a fair reflection of their performance, the staff member said, \u201cYou know what? I don\u2019t care.\u201d” JLARC further found that VEDP staff have higher salaries than similar economic developers.<\/p>\n
\nFurther, the agency response included in the report prompted JLARC to add a staff response that stated VEDP has made “misleading claims” and restate that one of the recommendations was for VEDP to hire an internal auditor. JLARC staff stated they disagreed with VEDP’s assessment in 23 items of 27 comments where VEDP provided a response.<\/p>\n
\nGovernor McAuliffe has stated “it is my hope that we can work collaboratively with members of the General Assembly and other stakeholders to reform VEDP to ensure better management of taxpayer dollars and more accountability throughout the organization. I have instructed Secretary of Commerce and Trade Todd Haymore and other members of my administration to review the JLARC report and identify opportunities, either through legislative or executive action, to maximize the impact of Virginia\u2019s economic development efforts.”<\/p>\n