The Department of Economic and Community Development (DECD) under or over-reported tens of millions of dollars in grant funding and state assets, according to a recent audit report.
The audit offered a review of financial reports from Fiscal Years 2020, 2021, and 2022 and found three issues in need of attention.
One of the largest discrepancies was a $22 million over-reporting of state revenues from the Small Business Express Program in 2022, a full 18% of the total reported by DECD. Additionally, the report found that DECD had over-reported revenues from the state’s Film Infrastructure tax credits by more than $600,000 in the same year.
In another finding, DECD overstated the amount of Urban and Industrial Site Reinvestment tax credits that were awarded in all three years by $10 million and understated the level of investments and leverage.
The third finding stated that DECD failed to report on the economic impact of incentives administered by Connecticut Innovations, Incorporated (CI) and therefore did not properly indicate whether those programs were meeting their intended goals. In their response, DECD agreed with the finding and stated that CI-administered programs were a net benefit to the state and would be included in future reports.
According to the state auditors, these reporting issues force state lawmakers and program administrators to make decisions without all the necessary information. That lack of information can limit the General Assembly’s ability to approve, deny, or alter these programs in the future, or could lead to poor decision-making.
These reporting issues are also nothing new to DECD. According to the audit report, all three issues were also highlighted in previous audit reports – with some alterations for two of the recommendations – and had not been appropriately dealt with.
DECD is the state’s primary agency for supporting business growth in Connecticut and takes a role in promoting the state and its businesses across the country and around the world. In its capacity, it offers a number of resources and grant opportunities for business owners and local artists.