State Auditor Dave Vaudt has reviewed the state’s high-dollar grant program for new and expanding businesses and he’s urging Department of Economic Development officials to fix the way they calculate whether companies are meeting their job creation promises. Grants from the state’s Grow Iowa Values Fund have been handed to businesses that promise to create or retain jobs here.
"We have some recommendations for the department to improve their documentation…first of all to establish the baseline employment in Iowa by these companies and then to have the measurement that’s appropriate to track back to see if the increased employment’s really happening in Iowa," Vaudt says.
The auditor says the department is also confusing matters when it reports the number of jobs a company promises to create or retain when they first make an application for a state "Iowa Values" grant, but then when the company signs a contract with the state in order to receive that grant the number of promised jobs on that document is often different.
"I think their system definitely needs some improvement," Vaudt says. The Department of Economic Development issued a status report that covered the period through June 30th of last year, but Vaudt is also critical of the way officials tried to inflate the number of jobs added by companies that’ve gotten Values Fund grants. "When you take a look at some of the numbers, DED has actually included some things that happened after June 30th," Vaudt says. "If you’re going to give people a status report as of June 30th, give us a status report as of June 30th. If you want to tell me what happened after that, do that, but don’t combine the two."
The Grow Iowa Values Fund was created in 2002 and legislators planned to use the money the federal government was sending Iowa and all other states to stimulate the economy after 9/11. The Iowa Supreme Court struck down the program, however, and legislators re-established the Values Fund in 2005 — planning to set aside 50-million state tax dollars each year to hand out in grants to businesses.