Comptroller: Chenango IDA's oversight was insufficient
May 10—An audit from the New York State Comptroller's Office has faulted the Chenango County Industrial Development Agency's oversight of its projects.
The audit was conducted to see whether the IDA Board of Directors evaluated projects before approval and monitored the performance of businesses that received financial benefits.
The audit reviewed all of the projects the IDA board approved after June 15, 2016, and found the board "did not adequately establish and document its evaluation and approval process." The board also "did not properly monitor the performance of businesses receiving financial benefits," the audit report said.
It said the board didn't set uniform selection criteria, didn't develop the required cost-benefit analysis for each project, didn't track project investments, didn't verify that businesses were meeting their hiring goals, didn't track sales tax and mortgage tax exemptions and didn't track payments in lieu of taxes.
Kerri Green, president and CEO of Commerce Chenango, said the staff was "completely new" and the purpose of the audit was to help with training.
"There are a lot of rules IDAs have to adhere to," she said. "Since we have a young staff, the audit walked us through what should and should not be happening."
According to the audit, the board used some uniform selection criteria, but did not adopt the required uniform project evaluation and selection criteria to assess material information in a project application. Auditors reviewed the applications for all eight projects totaling about $285.5 million and found a standard application was used for each project. However, none of the applications had any documentation to support the projects' capital investments.
An IDA must also complete a cost-benefit analysis for each project. The audit said only one application had a cost-benefit analysis and it was prepared by the applicant and not the IDA. However, the board did discuss the benefits of the projects during its meetings, the audit said.
The audit also said the IDA did not confirm if companies hired the number of employees they said they would to meet agreed-upon job creation and retention goals. It said the IDA should require companies to submit quarterly New York State Combined Withholding, Wage Reporting and Unemployment Insurance returns, which indicate the number of employees.
The audit said the IDA did allow one company leeway in its job creation during the COVID-19 pandemic in 2020. One solar project reported hiring 19 construction employees, well short of the 80 employees it promised to create, according to the audit.
The audit also reviewed three projects that had payment-in-lieu-of-taxes, or PILOT, agreements. The county is responsible for billing the company for the county, towns and school districts, however, it is the responsibility of villages to do their own billing. One of the villages said it didn't know about the agreement and therefore, didn't bill the $620 for the first four years of the 10-year agreement, the audit said.
"That would never happen under me," Green said. "I don't know how it happened. Whenever there is a project, we bring in all the municipalities that are affected."
Green, who was hired about three years ago, said the audit focused on many projects that were implemented before she started. Most of the projects are solar farms, but there is one wind farm.
"The auditors were really great," she said. "We are in a good position and have taken steps to be doing what we're supposed to be doing."
Vicky Klukkert, staff writer, can be reached at vklukkert@thedailystar.com or 607-441-7221. Follow her @DS_VickyK on Twitter.
